Tuesday, August 14, 2007
COMPANY PRESS RELEASE
Transgenomic, Inc. Reports Second Quarter 2007 Results
OMAHA, Neb., August 14 - Transgenomic, Inc. (the "Company") (OTCBB: TBIO.OB)
today announced financial results -------- for the quarter ended June 30, 2007.
The Company's financial results are presented in the tables that follow.
Second Quarter 2007
The Company reported a net profit of $0.2 million or $0.00 per share for the
second quarter of 2007 as compared to a net loss of $0.4 million or $0.01 per
share for the second quarter of 2006. The 2007 net profit was primarily from
continuing operations. Included in the net profit from operations was a $0.9
million gain from the sale of an investment in equity securities and $0.6
million of restructuring charges. The second quarter 2006 net loss was comprised
of a loss from continuing operations of $0.3 million or $0.01 per share and a
loss from discontinued operations of $0.1 million or $0.00 per share.
Net sales from continuing operations were $6.3 million during the second quarter
2007, compared to $6.2 million during the comparable period of 2006. Gross
profit from continuing operations was $3.4 million or 54 percent during the
second quarter of 2007 compared to $3.0 million or 49 percent of net sales
during the comparable period of 2006. Operating expenses from continuing
operations were $4.2 million during the second quarter of 2007 compared to $3.4
million during the same period of 2006. The second quarter 2007 operating
expenses included $0.6 million of restructuring charges. Cash flows used in
operating activities totaled $0.8 million during the second quarter of 2007
compared to cash flows generated from operations of $0.7 million during the same
period of 2006. Cash and cash equivalents totaled $7.9 million at June 30, 2007.
Six Months Ended June 30, 2007
The Company reported a net loss of $1.0 million or $0.02 per share for the six
months ended June 30, 2007 as compared to a net loss of $0.7 million or $0.01
per share during the comparable period of 2006. The 2007 net loss was comprised
of a loss from continuing operations of $1.0 million or $0.02 per share and a
gain from discontinued operations of $66,000. The 2007 loss from continuing
operations included a $0.9 million gain from the sale of an investment in equity
securities and $0.6 million of restructuring charges. The 2006 net loss was
comprised of a loss from continuing operations of $0.6 million or $0.01 per
share and a loss from discontinued operations of $0.1 million or $0.00 per
share.
Net sales from continuing operations were $11.5 million for the six months ended
June 30, 2007, compared to $12.7 million during the comparable period of 2006.
Gross profit from continuing operations was $6.1 million or 53 percent for the
six months ended June 30, 2007 compared to $6.0 million or 48 percent in 2006.
Operating expenses from continuing operations were $8.2 million for the six
months ended June 30, 2007 compared to $6.7 million during the comparable period
of 2006. Cash flows used in operating activities totaled $1.6 million for the
six months ended June 30, 2007 compared to cash flows generated in operating
activities of $0.7 million used during the same period in 2006.
Comment and Outlook
The Company's President and Chief Executive Officer, Craig Tuttle, noted, "We
are very pleased with second quarter net sales. We experienced a substantial
improvement over first quarter. Our instrument and consumables revenues met our
internal projections and our molecular diagnostics laboratory business grew by
more than $200,000 over first quarter. Second quarter net sales in our
Pharmaceutical Research Services business were slightly behind our internal
projections due to timing issues with receiving samples from some of our key
pharmaceutical partners. We believe that we will continue to grow in our
research services business and that, combined with our ongoing cost reduction
efforts, will support our goal of reaching break even performance by the end of
the fiscal year."
Mr. Tuttle continued, "Our Pharmaceutical Research Services group performed work
for six pharmaceutical companies so far this year, and we signed several new
contracts with these and other new partners which will result in continued
growth for this division. We are also in the process of increasing resources in
our clinical molecular diagnostics lab to further drive growth similar to what
we have been experiencing for this business over the last few quarters. Finally,
we expect to realize the full impact of the ongoing consolidations and other
cost reduction by the fourth quarter of the year. This is a very exciting time
for the company as we enjoy the results of our refocusing on strong financial
performance in our traditional mutation discovery tools business and substantial
growth in our diagnostics laboratory business and Pharmaceutical Research
Services business."
Earnings Call
Company management will discuss second quarter 2007 financial results via
teleconference on Tuesday, August 14, 2007 at 5:00 p.m. Eastern Time. To access
the call via telephone, dial 800-896-8445 or 785-830-1916. The company will also
host a live broadcast of the call over the Internet. To listen to the webcast,
investors should log on to the company's Investor Relations web page at
http://www.transgenomic.com/events.asp?id=6 and follow the instructions
provided. An archived recording of the conference call will be available and can
be accessed via the web using the same link listed above for 14 days after the
call. Investors can also listen to a replay via telephone until 11:59 p.m.
Eastern Time on Tuesday, August 28, 2007. Simply dial 800-839-9881 or
402-220-3100 from any telephone.
About Transgenomic: A decade of discovery 1997 - 2007
Transgenomic is a global biotechnology company that provides unique products and
services for automated high sensitivity genetic variation and mutation analysis.
Their offerings include systems, products, discovery and laboratory testing
services to the academic and medical research, clinical laboratory and
pharmaceutical markets in the fields of pharmacogenomics and personalized
medicine. Specific offerings include WAVE(R) DHPLC Systems, related consumables
and assay kits, cytogenetics automated systems, and Transgenomic Discovery and
CLIA Lab Services. Transgenomic Discovery and Lab Services utilize their
technology and expertise to provide a menu of mutation scanning tests for over
700 cancer-associated genes and more than 60 validated diagnostic tests to meet
the needs of pharmaceutical and biotech companies, research and clinical
laboratories, physicians and patients. For more information about the innovative
systems, products and services offered by Transgenomic, please visit:
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,
including the ability of the Company to grow its involvement in the diagnostic
products and services markets. 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.
For confirmation of release or further information contact:
Debra Schneider
Chief Financial Officer
Transgenomic, Inc.
12325 Emmet Street
Omaha, NE 68164
Phone: 402.452.5400
Fax: 402.452.5461
investorrelations@transgenomic.com
Transgenomic, Inc.
Summary Financial Results
Unaudited Condensed Consolidated Statements of Operations
(dollars in thousands except per share data)
Three Months Ended Six Months Ended
June 30 June 30
2007 2006 2007 2006
----------- ----------- ----------- -----------
NET SALES $ 6,272 $ 6,189 $ 11,494 $ 12,686
COST OF GOODS SOLD 2,859 3,140 5,373 6,654
----------- ----------- ----------- -----------
Gross profit 3,413 3,049 6,121 6,032
OPERATING EXPENSES:
Selling, general and administrative 3,067 2,820 6,047 5,529
Research and development 492 531 1,550 1,135
Restructuring costs 624 -- 624 --
----------- ----------- ----------- -----------
4,183 3,351 8,221 6,664
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (770) (302) (2,100) (632)
OTHER INCOME (EXPENSE):
Interest income, net of interest expense 79 44 141 88
Other, net -- -- 4 --
Gain on sale of investment 938 -- 938 --
----------- -----------
1,017 44 1,083 88
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 247 (258) (1,017) (544)
INCOME TAX EXPENSE 14 -- 19 17
----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS 233 (258) (1,036) (561)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX (7) (125) 66 (139)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 226 $ (383) $ (970) $ (700)
=========== =========== =========== ===========
BASIC AND DILUTED INCOME (LOSS) PER SHARE:
From continuing operations $ 0.0 $(0.0$) (0.0$)
0.00 00 0.00
----------- ----------- -----------
From discontinued operations 0.00 0.
----------- -----------
$ 0.0 $(0.0$) (0.0$)
===========
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 49,189,672 49,189,672 49,189,672 49,187,211
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 62,141,863 49,189,672 49,189,672 49,187,211
Transgenomic, Inc.
Summary Financial Results
Unaudited Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
Six Months Ended
June 30,
----------------
2007 2006
---- ----
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES (1,564) 665
NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES 3,572 (179)
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES -- 5
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH 7 135
------- -------
NET CHANGE IN CASH AND CASH EQUIVALENTS 2,015 626
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 5,868 6,736
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,883 $ 7,362
======= =======
Transgenomic, Inc.
Summary Financial Results
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands except per share data)
June 30,
2007 December 31,
(unaudited) 2006
----------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,883 $ 5,868
Accounts receivable (net of allowances for
doubtful accounts of $476 and $444, respectively) 6,474 6,525
Inventories 3,243 2,672
Prepaid expenses and other current assets 571 540
Current assets of discontinued operations 4 --
------- -------
Total current assets 18,175 15,605
PROPERTY AND EQUIPMENT, NET 1,230 1,498
OTHER ASSETS:
Goodwill 638 638
Other assets 733 853
Non-current assets of discontinued operations -- 2,773
------- -------
$20,776 $21,367
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,386 $ 1,558
Other accrued expenses 3,454 2,898
Accrued compensation 491 689
Current liabilities of discontinued operations 176 184
------- -------
Total current liabilities 5,507 5,329
Other long-term liabilities 129 --
------- -------
Total liabilities 5,636 5,329
STOCKHOLDERS' EQUITY 15,140 16,038
------- -------
$20,776 $21,367
======= =======