Exhibit 99.01
Cepheid Reports Third Quarter and Nine Months 2004 Results
Nine Month Total Revenues Increase by 146% Driven by
179% Increase in Product Sales
Nine Month Gross Margin Dollars on Product Sales Increase by 208%
SUNNYVALE, Calif., Nov. 2 /PRNewswire-FirstCall/ -- Cepheid (Nasdaq: CPHD)
today announced financial results for the quarter and nine months ended
September 30, 2004.
Product sales for the quarter ended September 30, 2004 increased 190% to
approximately $13.4 million from approximately $4.6 million for the
corresponding prior year period while product sales for the nine months period
ended September 30, 2004 increased 179% to approximately $30.6 million from
$11.0 million for the corresponding prior year period. The increase in
product sales for both the quarter and nine months ended September 30, 2004 as
compared to the corresponding prior year periods was due to a 848% and 551%
increase, respectively, in reagent and disposable sales and to a 98% and 119%
increase, respectively, in instrument sales.
Total revenues for the quarter ended September 30, 2004 increased 162% to
approximately $14.1 million compared to approximately $5.4 million for the
corresponding prior year period, while total revenues for the nine months
ended September 30, 2004 increased 146% to $32.6 million from $13.3 million
for the corresponding prior year period. The increase in total revenue for
both the quarter and nine months ended September 30, 2004 as compared to the
corresponding prior year periods was due to the increase in product sales,
which was driven in large part by sales related to the United States Postal
Service (USPS) Bio-hazard Detection System (BDS), and, to a lesser extent,
Life Sciences and Clinical Genetic Assessment product sales. Other revenues
of $0.6 million and $2.1 million for the quarter and nine months ended
September 30, 2004, respectively, was primarily derived from the amortization
of up-front license fees in connection with the Company's collaboration with
bioMerieux.
Gross Margin Dollars on product sales (total product sales less cost of
product sales) for the quarter and nine months ended September 30, 2004
increased by 218% and 208%, respectively, as compared to the corresponding
prior year periods. The gross margin percentage on product sales for the
quarter ended September 30, 2004 was 44% as compared to 40% for the
corresponding prior year period and increased to 46% for the nine months ended
September 30, 2004 as compared to 41% for the corresponding prior year period.
The increase in product gross margin in the quarter and nine months ended
September 30, 2004, as compared to the corresponding prior year periods was
primarily due to a change in product mix to higher gross margin products,
partially offset by the increase in royalty and license costs resulting from
the recent license agreements with Applera Corporation (Applera) and F.
Hoffmann-La Roche Ltd. (Roche). Gross margin on product sales for future
quarters is expected to continue to be impacted by higher royalties related to
these license arrangements and is expected to be consistent with the product
gross margin of 45% achieved for the full year 2003.
Net loss for the quarter and nine months ended September 30, 2004 was
approximately $2.9 million, or $0.07 per share and $10.8 million, or $0.26 per
share, respectively, compared to a net loss of approximately $3.9 million, or
$0.11 per share and $13.0 million, or $0.40 per share for the corresponding
prior year periods.
"Based on the completion of our previously announced license arrangements
with Applera, through Applied Biosystems (ABI) and Celera Diagnostics, and
with Roche, the Company initiated during the quarter shipment of the first of
our ASR products which identifies B. pertussis, followed by our second ASR
product which identifies HSV in October," stated John Bishop, Cepheid's Chief
Executive Officer. "We further expect to initiate shipment of up to four
additional ASR products before the end of the year."
"Sales within the Clinical market segment continue to grow with additional
institutions adopting GBS testing utilizing the IDI-Step B product on the
SmartCycler. As a subsequent event, in October Infectio Diagnostics, Inc.
(IDI) announced that it was merging with GeneOhm Sciences, of San Diego. We
do not expect the merger to affect our non-exclusive distribution rights nor
license rights to IDI's GBS, MRSA and potential VRE products. IDI began
shipments of the IDI-MRSA product for use on the SmartCycler in October."
"Deployment of the Northrop Grumman BDS within various processing centers
of the USPS continues to progress. BDS unit installations have been completed
at over 35 different USPS sites. We expect approximately 700 BDS units to be
installed by the completion of phase 1 in the first quarter of 2005. The
systems and the test cartridges continue to perform well. We expect there
will be a phase 2 and continue to expect to be notified concerning the timing
and magnitude of the phase 2 program either at the end of the fourth quarter
this year or in early 2005. We currently do not expect to see an interruption
in deployment of BDS units upon the completion of phase 1 and the initiation
of phase 2."
"We continued to expand our worldwide distribution of products into the
Life Sciences market with the announcement of a new distributor in China
during the quarter."
2004 Outlook
Commenting on Cepheid's outlook for the remainder of 2004, Mr. Bishop
stated:
"As previously stated, we expect to see continued growth in the Life
Sciences and Clinical Genetic Assessment markets. We expect to initiate
shipment of up to four additional ASR products which identify infectious
disease organisms on the SmartCycler System in the fourth quarter. Further,
we expect to be in clinical trials for our first 510k product, for Group-B
Strep (GBS) on the GeneXpert System. Market launch of the GeneXpert GBS is
expected in the first half of 2005."
"We are increasing our expected range of 2004 product sales to,
$46.0 million to $48.0 million, based on Phase I sales for the USPS program
and sales expected from other existing and new products. We expect our gross
profit margin on product sales for 2004 to be consistent with that achieved in
2003 at 45%. Based on an increase in R&D investment to accelerate delivery of
our ASR and Clinical products and manufacturing scale up variances, we now
expect our 2004 net loss to be in the range of $13.7 million to $14.7 million
or $0.33 to $0.35 per share based on actual weighted average shares
outstanding of 41.9 million as of September 30, 2004."
As of September 30, 2004, the Company had $58.2 million in unrestricted
cash.
Conference Call Information
Cepheid's CEO, John Bishop, and Senior V.P. and CFO, John Sluis will host
a conference call today at 4:30 pm (Eastern) to discuss Cepheid's financial
results, business highlights and outlook. The call will be simultaneously
broadcast over the Internet. Interested participants and investors may access
the teleconference call by dialing 800-257-7063 (domestic) or 303-275-2170
(international). There will also be a live webcast of the call on the
Investor Relations section of Cepheid's web site at www.cepheid.com. Web
participants are encouraged to go to the web site at least 15 minutes prior to
the start of the call to register, download, and install any necessary audio
software.
After the live webcast, the call will remain available on Cepheid's
website, www.cepheid.com, for 12 months. A replay of the conference call will
be available at 800-405-2236 (domestic) or 303-590-3000 (international)
through November 9, 2004; the conference ID is 11013887. The replay will be
available after 6:30 pm (Eastern).
About Cepheid
Cepheid (Nasdaq: CPHD), based in Sunnyvale, Calif., is a leading
developer, manufacturer and marketer of fully integrated systems that enable
genetic assessment when and where it is needed. Founded in 1996, the company
is commercializing its technology and products worldwide for research,
medical, and industrial applications requiring assessment of the human genome,
infectious disease and biothreat agents. See www.cepheid.com for more
information.
This press release contains forward-looking statements that are not purely
historical regarding Cepheid's or its management's intentions, beliefs,
expectations and strategies for the future, including those relating to future
product releases, future revenues, future gross margin, future net losses and
other financial data, the status of the USPS BDS program, contractual
relationships and business prospects. Because such statements deal with
future events, they are subject to various risks and uncertainties, and actual
results could differ materially from the company's current expectations.
Factors that could cause actual results to differ materially include risks and
uncertainties such as those relating to: the scope and timing of actual USPS
funding and deployment of the BDS; uncertainties relating to the timing of any
approval of future deployments by government agencies; the rate of
environmental testing using the BDS conducted by the USPS, which will affect
the amount of consumable products sold, whether the BDS performs to
specifications; unforeseen research, development and manufacturing problems,
including with respect to the GeneXpert system and reagents; unforeseen
manufacturing costs; the need for additional licenses for new tests and other
products and the terms of such licenses; our ability to successfully
commercialize our stand-alone GeneXpert system; lengthy sales cycles in
certain markets; our ability to successfully obtain regulatory approvals and
introduce new products in the clinical market; the performance and market
acceptance of new products; our reliance on distributors to market, sell our
products; the occurrence of unforeseen expenditures, acquisitions or other
transactions; the effect of acquisitions in our industry on relationships with
partners; our success in increasing direct sales; the impact of competitive
products and pricing; our ability to manage geographically-dispersed
operations; and underlying market conditions worldwide. Readers should also
refer to the section entitled "Risk Factors" in Cepheid's Annual Report on
Form 10-K for 2003 and "Factors that Might Affect Future Results" in its most
recent quarterly report on Form 10-Q, each filed with the Securities and
Exchange Commission.
All forward-looking statements and reasons why results might differ
included in this release are made as of the date of this press release, based
on information currently available to Cepheid, and Cepheid assumes no
obligation to update any such forward-looking statement or reasons why results
might differ.
For further information please contact: John L. Bishop, CEO,
john.bishop@cepheid.com, or John R. Sluis, CFO, john.sluis@cepheid.com, both
of Cepheid, +1-408-541-4191; or media, Tim Grace, +1-312-640-6741,
tgrace@financialrelationsboard.com, or investors/analysts, Tricia Ross,
+1-617-520-7064, tross@financialrelationsboard.com, both of Financial
Relations Board for Cepheid.
(FINANCIAL STATEMENTS FOLLOW)
CEPHEID
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
Quarter Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenues:
Instrument sales $8,064 $4,074 $20,648 $9,433
Reagent and
disposable sales 5,385 568 9,918 1,523
Product sales 13,449 4,642 30,566 10,956
Contract revenues 624 106 2,044 426
Grant and government
sponsored research
revenue 4 619 13 1,868
Total revenues 14,077 5,367 32,623 13,250
Costs and
operating expenses:
Cost of product sales 7,494 2,768 16,625 6,433
Research and development 4,037 3,861 11,531 11,430
Selling, general and
administrative 3,984 2,646 11,485 8,364
Expense contingency
for patent related
matter -- -- 1,264 --
Collaboration profit
sharing 1,474 -- 2,506 --
Total costs and
operating expenses 16,989 9,275 43,411 26,227
Loss from operations (2,912) (3,908) (10,788) (12,977)
Other expenses, net (3) 7 15 (34)
Net loss $(2,915) $(3,901) $(10,773) $(13,011)
Basic and diluted
net loss per share $(0.07) $(0.11) $(0.26) $(0.40)
Shares used in
computing basic and
diluted net loss per
share 41,889 33,985 40,775 32,596
CEPHEID
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2004 2003
ASSETS (unaudited) (1)
Current assets:
Cash and cash equivalents $58,239 $18,510
Accounts receivable 9,091 3,504
Collaboration receivable -- 5,000
Inventory 6,760 5,088
Prepaid expenses and other
current assets 687 650
Total current assets 74,777 32,752
Property and equipment, net 9,561 8,071
Intangible assets, net 31,244 47
Restricted cash 688 688
Total assets $116,270 $41,558
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,524 $1,823
Accrued compensation 1,652 1,604
Accrued other liabilities 4,224 2,350
Current portion of deferred revenue 4,658 3,239
Current portion of license fees payable 10,89898 --
Current portion of equipment financing 2,129 1,897
Total current liabilities 29,085 10,913
Long-term portion of deferred revenue 6,667 8,095
Long-term portion of license fees payable 9,477 --
Equipment financing, less current portion 1,954 1,978
Deferred rent 576 497
Commitments
Shareholders' equity:
Preferred stock -- --
Common stock 151,923 92,694
Additional paid-in capital 7,513 7,501
Accumulated other comprehensive loss (45) (13)
Accumulated deficit (90,880) (80,107)
Total shareholders' equity 68,511 20,075
Total liabilities and shareholders'
equity $116,270 $41,558
(1) The balance sheet at December 31, 2003 has been derived from the
Company's audited financial statements, which are included in the
Company's 2003 Annual Report on Form 10-K filed with the Securities
and Exchange Commission.
SOURCE Cepheid
-0- 11/02/2004
/CONTACT: John L. Bishop, CEO, john.bishop@cepheid.com, or John R. Sluis,
CFO, john.sluis@cepheid.com, both of Cepheid, +1-408-541-4191; or media, Tim
Grace, +1-312-640-6741, tgrace@financialrelationsboard.com, or
investors/analysts, Tricia Ross, +1-617-520-7064,
tross@financialrelationsboard.com, both of Financial Relations Board for
Cepheid/
/Web site: http://www.cepheid.com /
(CPHD)
CO: Cepheid; bioMerieux; Applera Corporation; F. Hoffmann-La Roche Ltd.;
Roche; Applied Biosystems; ABI; Celera Diagnostics
ST: California
IN: CPR BIO HEA MTC
SU: ERN CCA ERP