Wednesday, November 7, 2007
COMPANY PRESS RELEASE
Transgenomic, Inc. Reports Third Quarter 2007 Results
OMAHA, Neb., November 7, 2007 - Transgenomic, Inc. ("The Company")
(OTCBB:TBIO.OB) today announced financial results for the quarter ended
September 30, 2007. The Company's financial results are presented in the tables
that follow.
Third Quarter 2007
The Company reported a net loss of $1.3 million or $0.03 per share for the third
quarter of 2007, compared to a net loss of $1.7 million or $0.03 per share for
the third quarter of 2006. The 2007 net loss was comprised of a loss from
continuing operations of $1.3 million or $0.03 per share. The 2006 net loss was
comprised of a loss from continuing operations of $1.5 million or $0.03 per
share and a loss from discontinued operations of $0.2 million or $0.00 per
share.
Net sales from continuing operations were $5.2 million during the third quarter
2007, compared to $4.9 million during the comparable period of 2006. Gross
profit from continuing operations was $2.7 million or 51 percent during the
third quarter of 2007, compared to $2.3 million or 47 percent during the
comparable period of 2006. Operating expenses from continuing operations were
$4.1 million during the third quarter of 2007, compared to $3.9 million during
the same period of 2006. The third quarter 2007 operating expenses included $0.7
million of restructuring changes. The Company used cash flows in operations of
$1.1 million during the third quarter of 2007, compared to cash flows used in
operations of $0.2 million during the same period of 2006. Cash and cash
equivalents totaled $6.5 million at September 30, 2007.
Nine Months Ended September 30, 2007
The Company reported a net loss of $2.3 million or $0.05 per share for the nine
months ended September 30, 2007, compared to a net loss of $2.4 million or $0.05
per share during the comparable period of 2006. The 2007 net loss was comprised
of a loss from continuing operations of $2.4 million or $0.05 per share and
income from discontinued operations of $0.1 million or $0.00 per share. The 2006
net loss was comprised of a loss from continuing operations of $2.1 million or
$0.04 per share and a loss from discontinued operations of $0.3 million or $0.01
per share.
Net sales from continuing operations were $16.6 million for the nine months
ended September 30, 2007, compared to $17.6 million during the comparable period
of 2006. Gross profit from continuing operations was $8.8 million or 53 percent
for the nine months ended September 30, 2007, compared to $8.3 million or 47
percent in 2006. Operating expenses from continuing operations were $12.3
million for the nine months ended September 30, 2007, compared to $10.6 million
during the comparable period of 2006. Operating expenses for the nine months
ended September 30, 2007 included $1.3 million of restructuring changes. The
Company used cash flows in operations of $2.7 million for the nine months ended
September 30, 2007, compared to cash flows generated from operations of $0.5
million during the same period in 2006.
Comment and Outlook
The Company's President and Chief Executive Officer, Craig Tuttle, commented "we
are pleased with the year-over-year improvement in third quarter revenue, which
primarily reflects continued growth in our molecular diagnostics reference lab
and Pharmaceutical Services businesses. During the quarter, we signed a Phase II
clinical trial with a major biopharma company that will begin in the fourth
quarter and worked on projects for seven pharmaceutical customers, as well as
research projects with NIH, NCI and several academic centers. Some key
instrument sales did fall out of the quarter, but are expected to be realized in
the fourth quarter. We also experienced the typical affects of a summer slowdown
in European sales, as well as a small impact from a summer slowdown in our
molecular diagnostics reference lab revenue. However, we have completed our
European consolidation efforts and made some key hires in our sales team during
the quarter to help grow our reference lab business and generate new contracts
with key pharmaceutical companies. We believe these changes will have a positive
impact in the current quarter and as such, we are forecasting to reach
break-even performance for the fourth quarter of 2007."
Earnings Call
Company management will discuss third quarter 2007 financial results via
teleconference on Wednesday, November 7, at 5:00 p.m. Eastern Time. To access
the call via telephone, dial 800-895-0198 or 785-484-1053. 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 Wednesday, November 21, 2007. Simply dial 800-839-4017 or
402-220-2984 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, Transgenomic Clinical Reference
Laboratory and Genomic Research Services. Transgenomic Clinical Reference
Laboratory and Genomic Research 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.
Transgenomic Cautionary Statements
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, please 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 Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
NET SALES $ 5,151 $ 4,919 $ 16,645 $ 17,605
COST OF GOODS SOLD 2,500 2,607 7,872 9,261
----------- ----------- ----------- -----------
Gross profit 2,651 2,312 8,773 8,344
OPERATING EXPENSES:
Selling, general and administrative 2,672 3,305 8,719 8,834
Research and development 720 586 2,270 1,721
Restructuring charge 681 -- 1,305 --
----------- ----------- ----------- -----------
4,073 3,891 12,294 10,555
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (1,422) (1,579) (3,521) (2,211)
OTHER INCOME (EXPENSE):
Interest income (expense) 75 (7) 215 149
Gain on sale of investment -- -- 938 --
Other, net 4 68 8 --
----------- ----------- ----------- -----------
79 61 1,161 149
----------- ----------- ----------- -----------
LOSS BEFORE INCOME TAXES (1,343) (1,518) (2,360) (2,062)
INCOME TAX EXPENSE 6 7 25 24
----------- ----------- ----------- -----------
LOSS FROM CONTINUING OPERATIONS (1,349) (1,525) (2,385) (2,086)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX -- (164) 66 (304)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (1,349) $ (1,689) $ (2,319) $ (2,390)
=========== =========== =========== ===========
BASIC AND DILUTED LOSS PER SHARE:
From continuing operations $ (0.03) $ (0.03) $ (0.05) $ (0.04)
From discontinued operations 0.00 0.00 (0.00) (0.01)
----------- ----------- ----------- -----------
$ (0.03) $ (0.03) $ (0.05) $ (0.05)
=========== =========== =========== ===========
BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 49,189,672 49,189,672 49,189,672 49,188,040
Transgenomic, Inc.
Summary Financial Results
Unaudited Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
Nine Months Ended
September 30,
-----------------
2007 2006
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,319) $(2,390)
Adjustments to reconcile net loss to net cash flows
used in operating activities:
Depreciation and amortization 978 1,361
Impairment charge -- 437
Non-cash stock based compensation 87 152
(Gain) Loss on sale of investment and assets (1,034) 15
Changes in operating assets and liabilities:
Accounts receivable 1,041 2,585
Inventories (1,800) 805
Prepaid expenses and other current assets (344) 26
Accounts payable 124 (820)
Accrued expenses 615 (1,691)
------- -------
Net cash flows from (used in) operating activities (2,652) 480
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchase of property and equipment (523) (228)
Change in other assets (133) (54)
Proceeds from asset sales 3,935 95
------- -------
Net cash flows from (used in) investing activities 3,279 (187)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock -- 5
------- -------
Net cash flows from financing activities -- 5
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH 48 271
------- -------
NET CHANGE IN CASH AND CASH EQUIVALENTS 675 569
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,868 6,736
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,543 $ 7,305
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 5 $ --
Income taxes, net 25 24
Transgenomic, Inc.
Summary Financial Results
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands except per share data)
(unaudited)
September 30, December 31,
2007 2006
------------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,543 $ 5,868
Accounts receivable (net of allowances for
bad debts of $585 and $376, respectively) 5,646 6,525
Inventories 4,492 2,672
Prepaid expenses and other current assets 905 540
------- -------
Total current assets 17,586 15,605
PROPERTY AND EQUIPMENT, NET 1,566 1,498
OTHER ASSETS:
Goodwill 638 638
Other assets 725 853
Non-current assets of discontinued operations -- 2,773
------- -------
$20,515 $21,367
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,964 $ 1,558
Other accrued expenses 3,882 2,898
Accrued compensation 575 689
Current liabilities of discontinued operations -- 184
------- -------
Total current liabilities 6,421 5,329
Long-term debt 129 --
------- -------
Total liabilities 6,550 5,329
STOCKHOLDERS' EQUITY 13,965 16,038
------- -------
$20,515 $21,367
======= =======