Exhibit 99.1
DATE: December 5, 2000
FROM: FOR:
Padilla Speer Beardsley Inc. MEDTOX Scientific, Inc.
224 Franklin Avenue West 402 West County Road D
Minneapolis, MN 55404 St. Paul, MN 55112
John Mackay (612) 871-8877 James Lockhart (651) 286-6225
FOR IMMEDIATE RELEASE
MEDTOX SCIENTIFIC TO TAKE $500,000 CHARGE AGAINST FOURTH-QUARTER EARNINGS
o Reflects Reserve Against Bankruptcy Filing by Two Large Customers
o Medtox Comfortable With Operating Earnings Estimate of $4.1 million in 2001
ST. PAUL, December 5 - MEDTOX Scientific, Inc. (AMEX-TOX) today announced that
it will take a $500,000 charge against earnings in the quarter ended December
31, 2000. The reserve is for potential losses attributable to the Chapter 11
bankruptcy filings reported earlier in 2000 by both Safety-Kleen Corp and
Southern Medical Arts Companies. Neither company has filed its Plan of
Reorganization at this time. This charge will more then likely eliminate any
potential profits for the fourth quarter.
Richard Braun the company's CEO said "The company's receivables remain
solid with the days sales outstanding ("DSO") on gross revenues still below 60
days even including the receivables from these two customers, which is
consistent with the DSO for the previous two years. At the same time, the
company's bad debt expense (including the charge for these two receivables) is
still less the 2% of gross sales, which is also consistent with prior periods."
Both these metrics are well below those reported by other national laboratories
in their public filings.
Braun also noted that "The company does not anticipate these charges
negatively affecting revenues and earnings in 2001. In fact, both customers
remain as clients, and subsequent to bankruptcy filings, are current on their
obligations to the company. We continue to be very comfortable with the
operating earnings estimate of $4.1 million that has been reported by the
analysts for calendar 2001."
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MEDTOX Scientific, Inc., headquartered in St. Paul, Minn., is a
provider of high quality laboratory and on-site/ point-of-care testing devices.
The company also supports customers with complete logistics, data and program
management services. MEDTOX develops and manufactures diagnostic devices for
quick and economical on-site/ point-of-care analysis for drugs of abuse,
therapeutic drugs and agricultural toxins and provides employment drug screening
and occupational health testing. MEDTOX is also a leader in providing esoteric
toxicology services to hospitals and laboratories nationwide. For more
information see http//www.medtox.com.
Note: Forward-looking statements contained in this press release are made under
the Private Securities Reform Act of 1995. Actual results may differ due to a
number of factors including a change in the employment pattern of client
companies, the ability of MEDTOX to acquire new business, and changes in the
competitive environment. A fuller discussion of factors that may cause such
results to differ are identified on page three of the Company's 1999 annual
report on Form 10-K and incorporated herein by reference.
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