Exhibit 99.2
Reconciliation of GAAP to Non-GAAP Financial Measures
The following tables present pro forma versions of our (i) revenues, gross profit, net income and earnings per share (basic and diluted) for the three months and year ended December 31, 2005 and (ii) fiscal 2006 guidance for earnings per share in order to illustrate our historical and projected results from operations excluding non-cash sales discounts relating to warrants held by Quest Diagnostics. The tables present the most comparable GAAP measure to each non-GAAP measure, as well as the reconciliation to the corresponding GAAP measure. Our management believes that these non-GAAP financial measures provide a useful measure of our results of operations, excluding non-cash sales discounts that are not necessarily reflective of, or directly attributable to, our operations. We believe that these non-GAAP measures will allow investors to monitor our ongoing operating results and trends, gain a better understanding of our period-to-period performance, and gain a better understanding of our business and prospects for future performance. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from similar non-GAAP measures used by other companies.
Reconciliation of GAAP to Non-GAAP Financial Measures for the Three months
and Year Ended December 31, 2005
| | | | | | | | | | | |
| | | | | | | Three months ended December 31, | | | |
| | | | | | | 2005 | | | |
| | | | | | | Reconciliation: Add Back | | | |
| | | | | | | Non-Cash Sales Discount | | | |
| | | GAAP | | | | | Non-GAAP | |
| Revenues | | $ | 23,856 | | | $195 | | $ | 24,051 | |
| Gross profit | | | 16,464 | | | 195 | | | 16,659 | |
| Net income | | | 2,279 | | | 195 | | | 2,474 | |
| Earnings per share: | | | | | | | | | | |
| Basic | | $ | 0.06 | | | $195 to revenues used in calculation | | $ | 0.06 | |
| Diluted | | $ | 0.06 | | | $195 to revenues used in calculation | | $ | 0.06 | |
| | | | | | | | | | | |
| | | | | | | Year ended December 31, 2005 | | | |
| | | | | | | Reconciliation: Add Back | | | |
| | | | | | | Non-Cash Sales Discount | | | |
| | | GAAP | | | | | Non-GAAP | |
| Revenues | | $ | 85,961 | | | $1,278 | | $ | 87,239 | |
| Gross profit | | | 59,926 | | | 1,278 | | | 61,204 | |
| Net income | | | 6,500 | | | 1,278 | | | 7,778 | |
| Earnings per share: | | | | | | | | | | |
| Basic | | $ | 0.17 | | | $1,278 to revenues used in calculation | | $ | 0.20 | |
| Diluted | | $ | 0.17 | | | $1,278 to revenues used in calculation | | $ | 0.20 | |
Reconciliation of fiscal 2006 guidance for GAAP Earnings Per Share and Non-GAAP Earnings Per
Share
| | | | | | | | | |
| | | Low end of range | | | High end of range | |
| Non-GAAP Earnings Per Share | | $ | 0.23 | | | $ | 0.26 | |
| Non-cash sales discount | | $ | 0.04 | | | $ | 0.04 | |
| | | | | | | |
| GAAP Earnings Per Share | | $ | 0.19 | | | $ | 0.22 | |
The fiscal 2006 guidance constitutes forward-looking statements that involve risks and uncertainties that could cause actual results and outcomes to differ from what is expressed in those forward-looking statements. Please see the factors discussed relating to forward-looking statements contained in the press release filed as Exhibit 99.1 to this Report on Form 8-K.
