Exhibit 99.1
Transgenomic Inc. Reports Second Quarter and Year-to-Date 2004 Results
Continued Sequential Revenue Growth
OMAHA, Neb., Aug. 12 /PRNewswire-FirstCall/ -- Transgenomic Inc.
(Nasdaq: TBIO) today announced financial results for the three- and six-month
periods ended June 30, 2004.
Second Quarter 2004
Second quarter revenues increased on a sequential basis to $9.0 million
from $8.6 million in the first quarter of 2004, in line with guidance. On a
year-over-year basis, second quarter revenues represented a 6% increase over
second quarter 2003 revenues of $8.5 million.
Gross profit margin was 35% in the second quarter of 2004 representing the
third consecutive quarter of sequential improvement; this compares to 33% in
the prior quarter. Gross margin continues to be negatively impacted by
manufacturing expenses at our Boulder, Colo., facility. In the second
quarter, this operation generated $711,000 in revenues with associated cost of
sales of $1.6 million.
The net loss for the quarter, which included non-cash impairment charges
of $12.0 million related to the Company's Nucleic Acids Operating Segment, was
$15.1 million, representing a loss of $0.52 per share. This compares to a net
loss of $3.9 million, or $0.13 per share, in the first quarter of 2004, which
included a non-cash finance charge of $503,000. Net loss for the current
quarter compares to a net loss of $4.7 million, or $0.20 per share, in the
second quarter of 2003, which included a restructuring charge of $474,000.
Six Months Ended June 30, 2004
For the six months ended June 30, 2004, revenues were $17.6 million
compared to $18.0 million in 2003, a decrease of 2%. Net loss for the same
period was $19.0 million, including non-cash charges of $12.5 million,
representing a loss of $0.66 per share, as compared to a net loss of
$8.3 million, or $0.35 per share, which included restructuring charges of
approximately $700,000, in 2003.
Non-Cash Impairment of the Nucleic Acids Operating Segment
Toward the end of the first quarter of 2004, the Company's Board of
Directors directed management to explore strategic alternatives for the
Nucleic Acids Operating Segment. The ongoing process has included significant
due diligence by management, its advisors, prospective independent buyers and
other interested parties. Based upon information obtained during the second
quarter of 2004, management determined that the assets of the Nucleic Acids
Operating Segment were impaired. Accordingly, the Company engaged an external
valuation firm to assist with the completion of a mid-year impairment test.
As a result, the second quarter results included a non-cash charge of
$12.0 million, which consisted of $9.9 million related to the impairment of
goodwill and $2.1 million related to the impairment of other tangible assets.
Comment and Outlook
CEO Collin D'Silva commented, "Our core BioSystems business continues to
show signs of increasing strength, with revenue from this segment sequentially
increasing for the third consecutive quarter. Our installed base of WAVE(R)
Systems continues to expand, and second quarter consumables growth represented
a 17% increase over the comparable quarter of 2003." D'Silva continued, "We
believe several factors will contribute to the strengthening of our BioSystems
Business Unit. We continue to work diligently to expand instrument and
consumables sales through expansion of our product offerings. We have also
recently launched a new version of our WAVE platform, the WAVE MD Model 4000,
which we believe will aid in expansion of our installed base and entry into
new market segments."
Earnings Call
The Company will host a live broadcast of its second quarter 2004
financial results via conference call over the Internet on Thursday, August
12, at 5 p.m. Eastern time. To listen to the Webcast, investors should log on
to http://phx.corporate-ir.net/playerlink.zhtml?c=120897&s=wm&e=923785 and
follow the instructions listed. A link to this site will also be located on
the Company's Investor Relations' Shareholder Information Web page at
http://www.transgenomic.com/default.asp?pgid=31&cyid=1. An archived recording
of the conference call will be available and can be accessed via the web using
the same links listed above for 14 days after the call. Investors can also
listen to a replay via telephone from 8 p.m. ET on August 10 through August
24, 2004, midnight ET. Simply dial 800-839-4013 or 402-220-2982 from any
telephone.
About Transgenomic
Transgenomic provides versatile and innovative research tools and related
consumable products to the life sciences industry for the synthesis,
separation, analysis and purification of nucleic acids and a wide variety of
nucleic acid-based specialty chemicals. Transgenomic's BioSystems segment
offers its WAVE Systems(R) and associated consumables. These systems are
specifically designed for use in genetic variation detection and single- and
double-strand DNA/RNA analysis and purification. These systems have broad
applicability to genetic research and molecular diagnostics. To date there
have been over one thousand systems installed in over 30 countries around the
world. In addition, the BioSystems segment offers WAVE-based biomarker
discovery and validation services in support of translational research,
pre-clinical and clinical studies.
Through its nucleic acids business segment, Transgenomic provides
specialty chemicals, including advanced nucleic acid building blocks and
associated reagents, used in applications such as genetic diagnostics and
therapeutics, as well as a comprehensive menu of services, including nucleic
acid chemistry R&D, process development, analytical methods development, cGMP
oligonucleotide manufacturing, quality control and regulatory support.
For more information about the innovative genomics research tools
developed and marketed by Transgenomic, please visit the company's Web site at
www.transgenomic.com.
Forward-Looking Statement
Certain statements in this press release constitute "forward-looking
statements" of Transgenomic within the meaning of the Private Securities
Litigation Reform Act of 1995, which involve known and unknown risks,
uncertainties and other factors that may cause our actual results to be
materially different from any future results, performance or achievements
expressed or implied by such statements. Forward-looking statements include,
but are not limited to, those with respect to management's current views and
estimates of future economic circumstances, industry conditions, company
performance and financial results. The known risks, uncertainties and other
factors affecting these forward-looking statements are described from time to
time in Transgenomic's reports to the Securities and Exchange Commission. Any
change in such factors, risks and uncertainties may cause the actual results,
events and performance to differ materially from those referred to in such
statements. Accordingly, the company claims the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995 with respect to all statements contained in this press
release. All information in this press release is as of the date of the
release and Transgenomic does not undertake any duty to update this
information, including any forward-looking statements, unless required by law.
TRANSGENOMIC INC.
SUMMARY FINANCIAL RESULTS
(In thousands, except per share amounts)
STATEMENTS OF OPERATIONS
Three Months Three Months Six Months Six Months
Ended June 30, Ended June 30, Ended June 30, Ended June 30,
2004 2003 2004 2003
Net Sales $9,011 $8,481 $17,640 $17,986
Cost of Sales 5,858 5,925 11,627 11,739
Gross Margin 3,153 2,556 6,013 6,247
Operating
Expenses:
Selling,
General and
Administrative 4,268 4,265 8,513 8,908
Research and
Development 1,672 2,362 3,601 4,688
Goodwill
impairment
charge 9,864 -- 9,864 --
Asset
impairment
charge 2,100 -- 2,100 --
Restructuring
Charge -- 474 -- 738
Operating Loss (14,751) (4,545) (18,065) (8,087)
Other Income/
(Expenses) (379) (115) (1,022) (156)
Loss Before
Income Taxes (15,130) (4,660) (19,087) (8,243)
Income Tax
Expense
(Benefit) 2 10 (95) 24
Net Loss $(15,132) $(4,670) $(18,992) $(8,267)
Shares Used
in Computing
Net Loss
Per Share
Basic and
Diluted 29,053 23,540 28,887 23,529
Basic and
Diluted Net
Loss Per
Share $(0.52) $(0.20) $(0.66) $(0.35)
TRANSGENOMIC INC.
SUMMARY FINANCIAL POSITION
(In thousands)
BALANCE SHEETS
June 30, December 31,
2004 2003
Cash, Cash Equivalents and Short-term
Investments $2,061 $1,241
Other Current Assets 24,394 23,137
Current Assets 26,455 24,378
Net Property and Equipment 15,859 18,704
Other Assets 3,994 14,224
Total Assets $46,308 $57,306
Current Liabilities $15,350 $12,248
Long-term Debt 1,862 --
Stockholders Equity 29,096 45,058
Total Liabilities and Stockholders' Equity $46,308 $57,306
SOURCE Transgenomic Inc.
-0- 08/12/2004
/CONTACT: Mitchell L. Murphy, +1-402-452-5418, mmurphy@transgenomic.com,
or Robert J. Pogulis, Ph.D., +1-845-782-9617, rpogulis@transgenomic.com, both
of Transgenomic Inc./
/Web site: http://www.transgenomic.com /
(TBIO)
CO: Transgenomic Inc.
ST: Nebraska
IN: HEA MTC BIO
SU: ERN ERP CCA