Exhibit 99.1
Contacts:
Maneesh Arora Rod Hise
Third Wave Technologies Third Wave Technologies
608 663-7070 608 663-4010
For Immediate Release
Third Wave Announces Strong Second-Quarter 2006 Financial Results
32% first-half growth in clinical molecular diagnostics;
Company raises 2006 revenue guidance
MADISON, Wis., July 25, 2006--Third Wave Technologies Inc. (Nasdaq: TWTI) today
reported its financial results for the second quarter ended June 30, 2006.
Third Wave reported clinical molecular diagnostic revenue of $5.1 million
for the second quarter of 2006, an increase of 18% and 7% from the prior-year
quarter and the previous quarter, respectively. The company reported $1.6
million of research revenue during the second quarter, including nearly $1
million of Agbio revenue. Total revenues for the quarter ended June 30, 2006,
were $6.8 million, an increase of more than 15% from $5.8 million during the
same period of 2005.
Clinical molecular diagnostic revenue for the six-month period ended June
30, 2006, increased 32% to $9.8 million, compared to $7.4 million during the
same period of 2005. Total revenue for the six-month period ended June 30, 2006,
increased 13% to $14.6 million, compared to total revenue of $12.9 million for
the same period of 2005.
Third Wave reported a net loss of $4.7 million, or ($0.11) a share, for
the quarter ended June 30, 2006, compared to a net loss of $5.5 million, or
($0.13) a share, for the same period of 2005. The company's second-quarter 2006
net loss improved 35% from its pro forma net loss of $7.2 million, or ($0.18) a
share, for the comparable period of 2005, with FAS No. 123(R) stock compensation
costs included in both periods.
The company's net loss for the six-month period ended June 30, 2006, was
$9.1 million, or ($0.22) a share, compared to a net loss of $9.9 million, or
($0.24) a share for the same period of 2005. Including FAS No. 123(R) stock
compensation costs, the company's pro forma net loss for that six-month period
of 2005 was $13.1 million, or ($0.32) a share.
Third Wave reported gross margins of 72% for the quarter ended June 30,
2006, compared to 69% for the same period of 2005. Total operating expenses were
$11.9 million for the second quarter, compared to $11.5 million for the same
period of 2005. The company's pro forma total operating expenses for the second
quarter of 2005, including FAS No. 123(R) stock compensation costs, were $13.2
million. Total operating expenses for the six-month period ended June 30, 2006,
were $24.4 million, compared to $23.1 million for the same period of 2005. The
company's pro forma total
operating expenses for the six-month period ended June 30, 2005, including FAS
No. 123(R) stock compensation costs, were $26.3 million.
Third Wave ended the second quarter of 2006 with cash, cash equivalents
and short-term investments of $36.2 million, compared to $38.7 million at Dec.
31, 2005.
Third Wave said the company's product development efforts continue to
progress well. All of the company's current pipeline products remain on track or
ahead of schedule, including the submission of its high-value HPV products to
the U.S. Food and Drug Administration in 2007. The company anticipates
submitting two HPV products to the FDA: a 14-type, high-risk screening test and
a genotyping test for types 16 and 18 of the virus.
Third Wave announced that it would continue its focus on the highest-value
molecular diagnostic markets by launching reagents for the detection of
chlamydia and gonorrhea in 2007. These products will complement Third Wave's HPV
offering. Taken together, testing for HPV, chlamydia, and gonorrhea accounts for
more than 20% of the molecular diagnostic testing market.
The company also said that it will launch its Universal Invader(R) Plus
program earlier than anticipated. External evaluations of the program by
customers have progressed well and generated outstanding results.
2006 Outlook Update
Third Wave raises its guidance on clinical molecular diagnostic revenue to
$20-21 million for the year 2006. The company anticipates continued growth in
its Agbio revenue, but does not expect any material contribution of genomic
research revenue during the balance of 2006. It is maintaining its previous
guidance of approximately $7 million in total research revenue and, as a result,
anticipates total revenue of $27-28 million for the year 2006.
"Third Wave continued to make outstanding progress towards our 2006 goals,
with excellent, ongoing revenue growth in our core clinical molecular diagnostic
business that exceeded our expectations," said Kevin T. Conroy, president and
chief executive. "All of us at Third Wave are dedicated to building on the
growth of the first half of the year to meet or exceed our expectations for
2006."
Conference Call & Webcast with PowerPoint Presentation
Company management will host a conference call and webcast on Tuesday,
July 25, 2006, at 10 a.m. EDT to discuss second-quarter results. The webcast
will include a PowerPoint slide presentation highlighting the company's
first-half 2006 accomplishments and ongoing corporate activities. The webcast
will be available at www.twt.com. Domestic callers should dial (866) 831-6247
and international callers should dial 617 213-8856. The access code for both
domestic and international callers is
40046514. Please dial in five to 10 minutes prior to the start of conference
call. A replay of the conference call will be available at the company's
website. The conference call, webcast and replay are open to all interested
parties.
About Third Wave Technologies
Third Wave develops and markets molecular diagnostic reagents for a
variety of DNA and RNA analysis applications to meet the needs of our customers.
The company offers a number of products based on its Invader(R) chemistry for
clinical testing. Third Wave offers in vitro diagnostic kits, and analyte
specific, general purpose, and research use only reagents for nucleic acid
analysis. For more information about Third Wave and its products, please visit
the company's website at http://www.twt.com.
All statements in this news release that are not historical are forward-looking
statements within the meaning of the Securities Exchange Act of 1934 as amended.
Such forward-looking statements are subject to factors that could cause actual
results to differ materially for Third Wave from those projected. Those factors
include risks and uncertainties relating to the company's ability to bring new
products to market as anticipated, the current regulatory environment in which
the company sells its products, the market acceptance of those products,
dependence on partners and customers, successful performance under collaborative
and commercial agreements, competition, the strength of the Third Wave
intellectual property, the intellectual property of others and other risk
factors identified in the documents Third Wave has filed, or will file, with the
Securities and Exchange Commission. Copies of the Third Wave filings with the
SEC may be obtained from the SEC Internet site at www.sec.gov. Third Wave
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in Third Wave's expectations with regard thereto or any
change in events, conditions, or circumstances on which any such statements are
based. Third Wave Technologies, Invader and the Third Wave logo are trademarks
of Third Wave Technologies, Inc.
--Financial Tables Follow--
Third Wave Technologies, Inc
Statements of Operations
(In thousands, except for per share amounts)
(Unaudited)
Three
Months
Ended
June 30, 2005
2006 2005 Pro-forma*
---- -------- ----------
Revenues:
Clinical Product $ 5,059 $ 4,274 $ 4,274
Research Product 1,632 1,300 1,300
License & royalty 27 90 90
Grant 41 108 108
-------- -------- --------
6,759 5,772 5,772
-------- -------- --------
Operating expenses:
Cost of goods sold
Product cost of goods sold 1,198 1,313 1,385
Intangible and
long-term asset amortization 700 498 498
-------- -------- --------
Total cost of goods sold 1,898 1,811 1,883
Research and development 3,033 2,040 2,504
Selling and marketing 2,892 3,182 3,593
General and administrative 3,885 2,554 3,341
Litigation 181 1,714 1,714
Impairment 0 203 203
-------- -------- --------
9,991 9,693 11,355
-------- -------- --------
Total operating expenses 11,889 11,504 13,238
-------- -------- --------
Loss from operations (5,130) (5,732) (7,466)
Other income (expense):
Interest income 374 393 393
Interest expense (51) (95) (95)
Other 39 (80) (80)
-------- -------- --------
362 218 218
-------- -------- --------
Net loss before taxes
and minority interest ($4,768) ($5,514) ($7,248)
-------- -------- --------
Minority interest
in subsidiary 41 -- --
-------- -------- --------
Net loss ($4,727) ($5,514) ($7,248)
======== ======== ========
Net loss per share ($0.11) ($0.13) ($0.18)
Weighted average shares
outstanding 41,460 41,088 41,088
* 2005 Pro-forma amounts include the stock based compensation expense that
would have been recorded if FAS No. 123( R) had been applied.
Third Wave Technologies, Inc
Statements of Operations
(In thousands, except for per share amounts)
(Unaudited)
Six
Months
Ended
June 30, 2005
2006 2005 Pro-forma*
---- -------- ----------
Revenues:
Clinical Product $ 9,768 $ 7,375 $ 7,375
Research Product 4,628 5,113 5,113
License & royalty 55 183 183
Grant 183 227 227
-------- -------- --------
14,634 12,898 12,898
-------- -------- --------
Operating expenses:
Cost of goods sold
Product cost of goods
sold 2,668 2,852 2,963
Intangible and
long-term asset
amortization 1,393 959 959
-------- -------- --------
Total cost of goods
sold 4,061 3,811 3,922
Research and development 5,335 4,506 5,363
Selling and marketing 5,921 6,546 7,289
General and administrative 7,946 5,568 7,070
Litigation 1,183 2,479 2,479
Impairment 0 203 203
-------- -------- --------
20,385 19,302 22,404
-------- -------- --------
Total operating expenses 24,446 23,113 26,326
-------- -------- --------
Loss from operations (9,812) (10,215) (13,428)
Other income (expense):
Interest income 747 740 740
Interest expense (106) (184) (184)
Other 20 (275) (275)
-------- -------- --------
661 281 281
-------- -------- --------
Net loss before taxes
and minority interest ($9,151) ($9,934) ($13,147)
-------- -------- --------
Minority interest
in subsidiary 41 -- --
-------- -------- --------
Net loss ($9,110) ($9,934) ($13,147)
======== ======== ========
Net loss per share ($0.22) ($0.24) ($0.32)
Weighted average shares
outstanding 41,384 41,105 41,105
* 2005 Pro-forma amounts include the stock based compensation expense that
would have been recorded if FAS No. 123(R) had been applied.
Third Wave Technologies, Inc
Balance Sheets
(In thousands)
(Unaudited)
June 30, December 31,
2006 2005
----------- ------------
Assets:
Cash, cash equivalents, and
short-term investments $36,231 $38,717
Other current assets 8,295 6,249
Equipment and leasehold
improvements, net 4,305 4,717
Intangible assets, net
of amortization 1,889 2,642
Goodwill and indefinite lived
intangible assets 1,497 1,497
Other assets 4,128 4,583
------- -------
Total assets $56,345 $58,405
======= =======
Liabilities and shareholders'
equity
Accounts payable, accrued expenses
and other liabilities $16,810 $16,739
Deferred revenue 213 267
Debt 1,129 1,325
Minority interest in
subsidiary 663 0
Shareholders' equity 37,530 40,074
------- -------
Total liabilities and
shareholders' equity $56,345 $58,405
======= =======