Exhibit 99.01
CEPHEID REPORTS FIRST QUARTER 2005 RESULTS
TOTAL REVENUES INCREASE BY 169% DRIVEN BY 182% INCREASE IN PRODUCT SALES
GROSS MARGIN DOLLARS ON PRODUCT SALES INCREASE BY 134%
SUNNYVALE, Calif., May 4 /PRNewswire-FirstCall/ -- Cepheid (Nasdaq: CPHD)
today announced financial results for the quarter ended March 31, 2005.
Product sales for the quarter ended March 31, 2005 increased 182% to
approximately $18.8 million from approximately $6.6 million for the
corresponding prior year period. The increase in product sales for the quarter
ended March 31, 2005 as compared to the corresponding prior year period was due
to a 597% increase in reagent and disposable sales and a 31% increase in
instrument sales.
Total revenues for the quarter ended March 31, 2005 increased 169% to
approximately $19.6 million compared to approximately $7.3 million for the
corresponding prior year period. The increase in total revenue for the quarter
ended March 31, 2005 as compared to the corresponding prior year period was due
primarily to the increase in product sales. Contract revenue of $0.6 million for
the quarter ended March 31, 2005 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 ended March 31, 2005 increased by 134% as
compared to the corresponding prior year period. The gross margin percentage on
product sales for the quarter ended March 31, 2005 was 45% compared to 55% for
the corresponding prior year period. Gross margin percentage in the prior year
period did not include the amortization of up front license fees and higher
ongoing royalty costs associated with the company's patent license agreements
entered into with Applera Corporation and F. Hoffman-LaRoche Ltd in the second
and third quarter of 2004, respectively and included the impact of favorable
product pricing. Gross margin on product sales for future quarters in 2005 is
expected to be in the range of 45% - 49%, which is consistent with the Company's
previous guidance of an expected improvement over our 2004 total margin of 45%.
Net loss for the quarter ended March 31, 2005 was approximately $3.5
million, or $0.08 per share, compared to a net loss of approximately $4.1
million, or $0.11 per share for the corresponding prior year period.
"We progressed in developing our test menu pipeline during the quarter with
the initiation of our Customer Specified Reagent (CSR) program. The CSR program
enables customer-developed assays to take advantage of Cepheid's proprietary
bead technology wherein the customer's reagents are processed at Cepheid. These
customer developed tests are expected to provide near-term revenues while at the
same time contributing to our Analyte Specific Reagent (ASR) product menu for
selected CSR's. Presently, CSR programs have been initiated for Leishmania,
Avian Influenza, E. coli STEC/O157:H7, Salmonella and Listeria, as well as B.
bruxellensis, L. brevis, and L. hilgardia, which are organisms encountered in
the production of wine. The ASR product menu has been expanded with two new
ASR's in addition to the four released in the fourth quarter of 2004."
"GeneXpert module shipments were completed for Phase I BDS installations
during the quarter and shipments of modules to be used with Phase II BDS
installations were initiated. Purchase orders were received during Q1 2005 for
over 600 GeneXpert modules to be shipped during 2005 for Phase II installation
of BDS units. To date, over 650,000 anthrax tests have been completed on
installed BDS systems with no false positives," stated John Bishop, Cepheid's
CEO.
2005 Outlook
Commenting on Cepheid's outlook for the remainder of 2005, Mr. Bishop
stated:
"We expect to release our first ASR product for use on the GeneXpert system
during the second quarter. This will represent the first use of the GeneXpert
system in the clinical market and will mark the first time that ultra sensitive
Nested PCR has been run on an automated system. The use of Nested PCR has
enabled the GeneXpert system to detect pico gram levels versus nano gram levels
on other systems representing a potential increase in sensitivity of up to 1000
times."
"Development of our initial FDA product for detection of Group B Strep
(GBS) continues on the GeneXpert system and a second generation version of GBS
on the SmartCycler system is also being developed. We have modified our
development and clinical plans to potentially enable simultaneous introduction
of both the GeneXpert and SmartCycler versions of the product at the end of this
year or early 2006. A product for the detection of Enterovirus is also expected
to enter clinical trials at the end of Q2 or early Q3 this year. Research has
also been initiated on a GeneXpert version of Methicillin Resistant Staph aureus
(MRSA) and a second generation MRSA for the SmartCycler system. Both tests are
expected to be simultaneously released to the market during the first half of
2006."
"We reaffirm that we expect our 2005 product sales to be in the range of
$80.0 million to $84.0 million, based on anticipated Phase II sales for the USPS
program and sales expected from other existing products. We also reaffirm that
we expect our 2005 net loss to be in the range of $9.0 million to $11.0 million
or $0.21 to $0.26 per share based on actual weighted average shares outstanding
of 42.2 million as of March 31, 2005. Our net loss projections do not include
any stock compensation expense associated with SFAS 123R for which mandatory
implementation has been delayed until January 1, 2006 by the Securities and
Exchange Commission."
As of March 31, 2005, the Company had $54.9 million in unrestricted cash
and marketable securities.
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 800-257-1927 (domestic) or 303-262-2141
(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, through May 4, 2006. A replay of the conference call
will be available at 800-405-2236 (domestic) or 303-590-3000 (international)
through May 11, 2005; the conference ID is 11029640. 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, product performance, future revenues, future net losses and
the status of the USPS BDS program. 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 United States Postal
Service (USPS) funding and deployment of the Biohazard Detection System (BDS);
the occurrence of delays with respect to the BDS, the rate of environmental
testing using the BDS conducted by the USPS, which will affect the amount of
consumable products sold, and whether the BDS performs to specifications;
development and manufacturing problems, including with respect to the GeneXpert
system and reagents; the need for additional licenses for new tests and other
products and the terms of such licenses; our ability to complete clinical trials
in a timely manner for products to be marketed in clinical markets; our ability
to successfully commercialize our stand-alone GeneXpert system; lengthy sales
cycles in certain markets; the performance and market acceptance of new
products; our reliance on distributors to market, sell and support our products;
the occurrence of unforeseen expenditures, acquisitions or other transactions;
our success in increasing direct sales; the impact of competitive products and
pricing; our ability to manage geographically-dispersed operations; underlying
market conditions worldwide. Readers should also refer to the section entitled
"Risk Factors" in Cepheid's Annual Report on Form 10-K for 2004 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.
CONTACTS:
At the Company:
John L. Bishop John R. Sluis
CEO, Cepheid CFO, Cepheid
408-541-4191 408-541-4191
john.bishop@cepheid.com john.sluis@cepheid.com
At Financial Relations Board:
Tim Grace Tricia Ross
Media Contact Investor/Analyst Information
312-640-6667 617-520-7064
tgrace@financialrelationsboard.com tross@financialrelationsboard.com
CEPHEID
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (in thousands, except per share data)
Three Months Ended March 31,
----------------------------
2005 2004
------------- -----------
Revenues:
Instrument sales $ 6,360 $ 4,871
Reagent and disposable sales 12,392 1,777
Total Product Sales 18,752 6,648
Contract revenues 646 613
Grant and government sponsored
research revenues 168 --
Total revenues 19,566 7,261
Operating costs and expenses:
Cost of product sales 10,274 3,018
Collaboration profit sharing 3,606 425
Research and development 4,506 3,630
Selling, general and administrative 4,555 3,067
Expense for patent related matter -- 1,264
Total costs and operating expenses 22,941 11,404
Loss from operations (3,375) (4,143)
Other income (expenses), net (83) (4)
Net loss $ (3,458) $ (4,147)
Basic and diluted net loss per share $ (0.08) $ (0.11)
Shares used in computing basic and diluted
net loss per share 42,245 38,710
CEPHEID
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2005 2004
----------- ------------
(unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $ 21,391 $ 23,189
Marketable securities 33,475 34,250
Accounts receivable 12,521 14,584
Inventory 7,962 6,544
Prepaid expenses and other current assets 1,859 402
Total current assets 77,208 78,969
Property and equipment, net 10,338 9,756
Restricted cash 688 688
Intangible assets, net 30,335 30,902
Total assets $ 118,569 $ 120,315
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,842 $ 8,074
Accrued compensation 1,837 2,836
Accrued royalties 2,830 2,113
Accrued other liabilities 4,567 4,517
Current portion of deferred revenue 3,289 3,847
Current portion of licensing fees payable 10,580 10,476
Current portion of equipment financing 1,681 1,889
Total current liabilities 35,626 33,752
Long term portion of deferred revenue 5,714 6,190
Long term portion of licensing fees payable 7,636 8,561
Equipment financing, less current portion 1,246 1,604
Line of credit 4,000 4,000
Deferred rent 621 599
Commitments
Shareholders' equity:
Preferred stock -- --
Common stock 153,644 152,136
Additional paid-in capital 7,521 7,517
Accumulated other comprehensive loss (74) (137)
Accumulated deficit (97,365) (93,907)
Total shareholders' equity 63,726 65,609
Total liabilities and shareholders' equity $ 118,569 $ 120,315
(1) The balance sheet at December 31, 2004 has been derived from the Company's
audited financial Statements, which are included in the Company's 2004
Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
See accompanying notes.
SOURCE Cepheid
-0- 05/04/2005
/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, +1-312-640-6667, tgrace@financialrelationsboard.com, or
Investor/Analyst Information, Tricia Ross, +1-617-520-7064,
tross@financialrelationsboard.com, both of Financial Relations Board, for
Cepheid/
/Web site: http://www.cepheid.com