Immunotec Announces Positive Second Quarter Earnings Results

Active Distributors Up 15% to 28,700 after six months
Second Quarter Net Earnings of $193 thousand, compared to a loss of ($618) thousand for 2009.

Immunotec Inc. (TSX VENTURE:IMM), a Canadian based company and a leader in the wellness industry (the "Company"), today reported positive results with second quarter 2010, Net Earnings of $193 thousand for the quarter ending April 30, 2010, compared to a loss of ($618) thousand for 2009. After six month, Net Earnings achieved $403 thousand compared to a loss of ($819) thousand last year.

The Company's consolidated revenues totalled $9.8M for the second quarter of Fiscal 2010, as compared to $12.3M in the same period last year a decrease of 20% overall. Year-to-Date, consolidated revenues totalled $20.3M for the second quarter of Fiscal 2010, as compared to $23.0M in the same period last year a decrease of 12% after six months. This decrease in consolidated revenues is primarily due to the strengthening of the Canadian dollar over the US currency, using an average conversion rate ($1USD to CAD) of 1.0405 during second quarter of 2010 compared with an average rate of 1.2264 for the same period of 2009. This translated to fluctuations of approximately $1.0M for the quarter and $1.5M year to date.

For the quarter ended April 30, 2010, Non-GAAP adjusted EBITDA totalled $594 thousand or 6% of revenues compared to $67 thousand or 1% of revenues for Fiscal 2009. Importantly, after six months, the Company was able to maintain this non-GAAP adjusted EBITDA totalled $1.4M or 7% of revenues compared to $214 thousand or 1% of revenues for Fiscal 2009.

"Recurrent profitability for a second consecutive quarter is a demonstration that our business model is able to build shareholder value especially given the continued macro-economic downturn", said James A. Northrop, President and CEO of Immunotec Inc. "Our geographic expansion in Mexico, France and Germany will create growth opportunities in the near term".

Fiscal 2010 Financial Results Highlights:

During the quarter, Network sales reached $8.5M in 2010 compared to $10.3 for the same period in 2009, a decline of $1.8M or a 17% decrease. After six months, Network sales reached $17.3M in 2010 compared to $19.5 for the same period in 2009, a decline of $1.8M or a 11% decrease. This decrease is in large, part attributable to foreign exchange stemming from a much stronger Canadian dollar in 2010. The average Canadian dollars value used during the period was 1.0405 during fiscal 2010 compared to 1.2264 for the same period of 2009.
Other revenues reached $1.3M in 2010 compared to $2.0M for the same period in 2009. After six months, Other Revenues reached $3.0M in 2010 compared to $3.4M for the same period in 2009, a decline of $0.4M. Both the quarterly and year-to-date decline result of timing of purchasing and weaker export into the Southeast Asia and potentially lasting impact of global economic conditions explains this situation.
Margin before expenses, as a percentage of net sales improved to 32% compared to only 26% for year 2009. This improvement, despite the lower revenues, is attributed to changes made on the sales incentive program launched in 2009. Sales incentives – Network is the largest segment of the variable expenses of the Company. As a percentage of Network sales, the incentive program represented, after six months, an average of 48%, an improvement from the 55% level in 2009.
Expenses defined below as being the cumulative amounts of Administration, Marketing, Sales, Quality Control and Research & Development expenses were $2.6M for the three-month period ended April 30, 2010 and stable with the previous period representing 26% of total revenues. Importantly, the Company has been prudent in the area of marketing and sales expenditure during the first six months of fiscal 2010 demonstrating an improvement of 2%, when compared to the same period last year over the ratio of 27% in 2009.
The total basic and fully diluted earnings per share for the second quarter and year-to-date of Fiscal 2010 was respectively $0.003 and $0.006, compared to a basic and fully diluted loss per share of ($0.009) and ($0.012) for the same period in Fiscal 2009.

About Immunotec Inc.

Immunotec is a Network Marketing Company involved in the direct selling of scientifically validated natural health products and dietary supplements. The Company offers a lucrative business opportunity to its independent distributors. This business model provides Immunotec's network of people with an opportunity to earn a steady and recurring income, directly based on their level of involvement and performance. Individual distributors build their business by conveying product information and selling product to customers and by building teams of distributors to expand geographic penetration and market coverage to larger populations of customers.

Headquartered with manufacturing facilities near Montreal, Canada, the Company also subcontracts certain distribution logistics and capacity to support its activities in the United States, Europe, Mexico and The Caribbean.

The Company files its consolidated financial statements, its management and discussion analysis report, its press releases and such other required documents on the SEDAR database at [ www.sedar.com ] and on the Company's website at [ www.immunotec.com ]. The common shares of the Company are listed on the TSX Venture Exchange under the ticker symbol IMM.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For information identifying known risks and uncertainties and other important factors that could cause actual results to differ materially from those anticipated in the forward- looking statements, please refer to the heading Risks and Uncertainties in Immunotec's most recent Management's Discussion and Analysis, which can be found at [ www.sedar.com ]. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.

INTERIM CONSOLIDATED BALANCE SHEET
(UNAUDITED)
		As at April 30,		As at October 31,
		2010		2009
		$		$
ASSETS
Current
	Cash	2,597,940		2,262,821
	Accounts receivable	600,148		201,841
	Income taxes receivable	20,158		70,306
	Inventories	3,055,448		3,941,847
	Prepaid expenses	875,406		436,251
	Future income taxes	101,281		90,133
		7,250,381		7,003,199
Long-term
	Property, plant and equipment	5,858,454		6,068,313
	Intangible assets	2,324,335		2,505,937
	Goodwill	499,541		499,541
	Future income taxes	1,829,125		1,969,403
	Other assets (note 3)	656,397		699,839
		18,418,233		18,746,232
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Accounts payable	2,770,140		2,629,247
	Accrued liabilities	824,386		1,881,390
	Customer deposits	416,442		308,557
		4,010,968		4,819,194
Shareholders' Equity (Deficit)
	Share capital (note 4)	3,465,548		3,465,548
	Other equity - Stock options (note 5)	1,847,609		1,770,093
	Contributed surplus	11,337,796		11,337,796
	Deficit	(2,243,688	)	(2,646,399	)
		14,407,265		13,927,038
		18,418,233		18,746,232

Consolidated Statements of Changes in Shareholders' Equity (Deficit)

			Other
	Number of		equity		(Deficit)
	common	Share	-Stock	Contributed	Retained
(UNAUDITED)	shares	capital	options	surplus	earnings		Total

		$	$	$	$		$

Balance - October 31, 2008	69,994,300	3,465,548	1,414,885	11,332,143	1,898,637		18,111,213

Net loss	-	-	-	-	(818,741	)	(818,741	)
Stock- based compensation (note 5)	-	-	193,160	5,653	-		198,813

Balance - April 30, 2009	69,994,300	3,465,548	1,608,045	11,337,796	1,079,896		17,491,285



Balance - October 31, 2009	69,994,300	3,465,548	1,770,093	11,337,796	(2,646,399	)	13,927,038

Net profit	-	-	-	-	402,711		402,711
Stock- based compensation (note 5)	-	-	77,516	-	-		77,516

Balance - April 30, 2010	69,994,300	3,465,548	1,847,609	11,337,796	(2,243,688	)	14,407,265





INTERIM CONSOLIDATED STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME		For the three-month period ended April 30th				For the six-month period ended April 30th
(UNAUDITED)		2010		2009		2010		2009
		$		$		$		$
REVENUES
	Network sales	8,476,671		10,278,428		17,342,315		19,513,295
	Other revenue	1,341,812		1,988,074		2,957,238		3,444,716
		9,818,483		12,266,502		20,299,553		22,958,011
VARIABLE COSTS
	Cost of goods sold (excluding amortization)	1,615,846		2,016,652		3,638,097		3,746,114
	Sales incentives - Network	4,148,842		5,933,487		8,397,171		10,802,136
	Other variable costs	892,362		1,108,781		1,792,934		2,065,670
	Margin before expenses	3,161,433		3,207,582		6,471,351		6,344,091

Expenses
	Administrative	1,312,699		1,606,417		2,723,011		3,056,525
	Marketing and Selling	966,449		1,265,188		1,827,051		2,557,496
	Quality and Development costs	288,301		269,414		540,204		515,993
	Amortization	288,282		265,578		575,311		529,406
	Other non cash expenses	27,913		76,497		77,516		198,813
		2,883,644		3,483,094		5,743,093		6,858,233
Earnings (Loss) from continuing operations before
income taxes		277,789		(275,512	)	728,258		(514,142	)

Income taxes (Recovery)
	Current	30,175		(21,451	)	55,161		38,001
	Future	46,237		(94,264	)	129,130		(191,141	)
Earnings (Loss) from continued operations		201,377		(159,797	)	543,967		(361,002	)

Loss from discontinued operations		(7,967	)	(457,739	)	(141,256	)	(457,739	)
(loss)		193,410		(617,536	)	402,711		(818,741	)

Basic and diluted net earnings (loss) per share
	Continuing operations	0.003		(0.002	)	0.008		(0.005	)
	Discontinued operations	(0.000	)	(0.007	)	(0.002	)	(0.007	)
Total basic and diluted net earnings (loss) per share		0.003		(0.009	)	0.006		(0.012	)

Weighted average number of common shares outstanding
during the period
Basic and diluted		69,994,300		69,994,300		69,994,300		69,994,300





CONSOLIDATED STATEMENT OF CASH FLOWS		For the three-month period ended April 30th				For the six-month period ended April 30th
(UNAUDITED)		2010		2009		2010		2009
		$		$		$		$
Operating activities
Net earnings (loss)		193,410		(617,536	)	402,711		(818,741	)
Loss from discontinued operations		(7,967	)	(457,739	)	(141,256	)	(457,739	)
Earnings (Loss) from continuing operations		201,377		(159,797	)	543,967		(361,002	)
Add (deduct) non cash items:
	Amortization of property, plant and equipment	152,577		132,829		293,723		265,237
	Amortization of intangible assets	135,705		132,749		281,588		264,169
	Other receivable	-				43,442
	Future income taxes	46,237		(94,264	)	129,130		(191,141	)
	Stock- based compensation	27,913		76,497		77,516		198,813
Cash received prior to working capital variation		563,809		88,014		1,369,366		176,076
Net change in non- cash working capital		(162,191	)	(1,721,266	)	(709,141	)	(2,078,265	)
Cash (used) received in operating activities		401,618		(1,633,252	)	660,225		(1,902,189	)
Investing activities
Additions to property, plant and equipment		(56,175	)	(48,900	)	(83,864	)	(84,205	)
Additions to intangible assets		(84,367	)	(184,489	)	(99,986	)	(311,663	)
Research and development tax credits		-		(13,272	)	-		(26,544	)
Cash used in investing activities		(140,542	)	(246,661	)	(183,850	)	(422,412	)
Net increase (decrease) in cash from continuing activities		261,076		(1,879,913	)	476,375		(2,324,601	)
Net (decrease) in cash from discontinued activities
	Operating activities	(7,967	)	(466,135	)	(141,256	)	(466,135	)
	Investing activities	-		(123,165	)	-		(123,165	)
		(7,967	)	(589,300	)	(141,256	)	(589,300	)
Net increase (decrease) in cash during the quarter		253,109		(2,469,213	)	335,119		(2,913,901	)
Cash at the beginning of the quarter		2,344,831		5,693,766		2,262,821		6,138,454
Cash at the end of the quarter		2,597,940		3,224,553		2,597,940		3,224,553

Supplemental information
Income taxes (recovered) paid during the quarter		19,937		42,383		11,414		76,322

The TSX Venture does not accept responsibility for the adequacy or accuracy of this release.

Contributing Sources

Market Wire

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Immunotec Announces Positive Second Quarter Earnings Results