EXHIBIT 99.1
TRANSGENOMIC INC. REPORTS FIRST QUARTER 2005 RESULTS
CONTINUED SEQUENTIAL BIOSYSTEMS REVENUE GROWTH, SIGNIFICANT IMPROVEMENT IN
OPERATING RESULTS
OMAHA, Neb., May 17 /PRNewswire-FirstCall/ -- Transgenomic Inc.
(Nasdaq: TBIO) today announced financial results for the quarter ended
March 31, 2005. The Company's financial results are presented in the tables
attached.
First Quarter 2005
First quarter 2005 BioSystems revenue increased 8 percent to $6.9 million
from $6.4 million in the first quarter of 2004. First quarter 2005 Nucleic Acids
revenue decreased to $0.4 million from $2.2 million in the first quarter of
2004. Total revenue decreased 14 percent to $7.4 million from $8.6 million in
the first quarter of 2004. On a sequential basis, BioSystems revenue increased 2
percent from $6.8 million in the fourth quarter of 2004, and Nucleic Acids
revenue decreased 62 percent from $1.2 million in the fourth quarter of 2004.
Total revenue decreased 8 percent from $8.0 million in the fourth quarter of
2004.
Loss from operations for the first quarter of 2005 was $1.2 million compared
to a loss from operations of $3.3 million in the first quarter of 2004. Loss
from operations for the fourth quarter of 2004 was $6.2 million.
Net loss for the first quarter of 2005 was $2.9 million, representing a loss
of $0.10 per share compared to a net loss of $3.9 million, or $0.13 per share,
in the first quarter of 2004. The net loss for the first quarter of 2005 and
2004 included amortization of discounts and premiums, and other non-cash charges
of $1.4 million and $0.5 million, respectively, associated with the conversion
of the Company's convertible debt. Net loss in the fourth quarter of 2004 was
$6.9 million, or $0.24 per share. The prior quarter loss included a gain on
facility disposal of $1.5 million, restructuring charges of $3.4 million, and
non-cash interest charges associated with the conversion of the Company's
convertible debt of $0.9 million.
Comment and Outlook
CEO Collin D'Silva commented that recent actions taken by the Company are
having the desired effect on financial results. "We chose a path of transition
in 2004, restructuring our entire business and exiting from oligonucleotide
manufacturing. Our first quarter results reflect the positive impact of this
transition, especially the operating income and cash flow measures." D'Silva was
pleased with the continued growth in BioSystems revenue, including Discovery
Services, and noted that the decrease in Nucleic Acids revenues was consistent
with the exit from oligonucleotide manufacturing. Regarding the remaining
nucleic acids building block manufacturing operation in Glasgow, Scotland,
D'Silva stated, "Glasgow was restructured along with the rest of the company,
and during the first quarter we continued our investment to complete the build
out of our state-of-the-art facility. We are now positioned to service the
worldwide research community with nucleic acid building blocks in a
cost-effective manner."
Mike Summers, Transgenomic's CFO, pointed out that the fourth quarter of
2004 Restructuring Plan and exit of the oligonucleotide manufacturing business
were having the expected beneficial impact on cash flows. According to Mr.
Summers, "Our loss from operations of $1.2 million and cash flows used by
operations of $0.2 million rank among the best quarters since our initial public
offering in 2000. Achieving these levels demonstrates significant progress
toward our goal of generating positive operating and net cash flows." Mr.
Summers acknowledged that funding of the 2004 Restructuring Plan during the
quarter used $0.94 million of cash, but added that these expenses had been
previously accrued and that future quarterly funding for restructuring costs
will be significantly below this amount.
Turning to liquidity and working capital, Mr. Summers stated that the
Company enhanced its position during the quarter due primarily to the previously
disclosed conversions of portions of its loans with Laurus Master Fund, Ltd.
into shares of common stock. He then addressed the accounting effects these
conversions had on the Company's reported results. "Interest paid or accrued
totaled $0.17 million during the quarter. However, amortization of discounts and
premiums, and other non-cash charges associated with the conversions raised our
reported other expense significantly." He concluded, "We continue to evaluate
alternatives to simplify our capital structure and enhance the transparency of
our reported results."
Lastly, Mr. Summers indicated that the Company's Quarterly Report on Form
10-Q was not filed by the May 16 deadline. He said that the Company expects to
file the 10-Q no more than five days after the prescribed due date.
Earnings Call
The company will host a live broadcast of its first quarter 2005 financial
results via conference call over the Internet on Tuesday, May 17, at 8:30 a.m.
Eastern time. 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 listed. 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 from 10:30 a.m. ET on Tuesday, May 17, through Tuesday, May 31, 2005,
midnight ET. Simply dial 402-220-1122 or 800-938-2243 from any telephone.
About Transgenomic
Transgenomic provides versatile and innovative research tools and related
consumable products. Transgenomic's BioSystems segment offers its WAVE(R)
Systems and associated consumables. These systems are specifically designed for
use in genetic variation detection and single- and double-strand DNA/RNA
analysis and purification. These systems have broad applicability to genetic
research and molecular diagnostics. To date there have been approximately one
thousand systems installed in over 30 countries around the world. In addition,
the BioSystems segment offers WAVE-based biomarker discovery and validation
services in support of translational research, pre-clinical and clinical
studies. Through its Nucleic Acids business segment, Transgenomic provides
specialty chemicals, including advanced nucleic acid building blocks and
associated reagents used in the manufacture of synthetic oligonucleotides. For
more information about the innovative genomics research tools developed and
marketed by Transgenomic, please visit the company's Web site at
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 achieving positive operating cash
flows or profitability. 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.
TRANSGENOMIC, INC.
SUMMARY FINANCIAL RESULTS
(In thousands, except per share amounts)
STATEMENTS OF OPERATIONS
Three Months Ended March 31,
----------------------------
2005 2004
------------ ------------
Net Sales $ 7,373 $ 8,629
Cost of Goods Sold 4,400 5,768
Gross Profit 2,973 2,861
Operating Expenses:
Selling, General and Administrative 3,593 4,245
Research and Development 606 1,929
Loss from Operations (1,226) (3,313)
Other Income (Expense) (1,663) (643)
Loss Before Income Taxes (2,889) (3,956)
Current Income Tax Expense (Benefit) 4 (97)
Net Loss $ (2,893) $ (3,859)
Basic and Diluted Net Loss Per Share $ (0.10) $ (0.13)
Basic and Diluted Weighted Average
Shares Outstanding 29,984 28,728
TRANSGENOMIC, INC.
SUMMARY FINANCIAL RESULTS
(In thousands)
BALANCE SHEETS
March 31, December 31,
2005 2004
------------ ------------
Cash, Cash Equivalents and
Short-term Investments $ 1,498 $ 1,002
Other Current Assets 14,426 16,906
Current Assets 15,924 17,908
Net Property and Equipment 12,709 13,525
Other Assets 5,703 6,025
Total Assets $ 34,336 $ 37,458
Current Liabilities 15,157 18,724
Long-term Debt 1,761 2,199
Stockholders Equity 17,418 16,535
Total Liabilities and Stockholders Equity $ 34,336 $ 37,458
SOURCE Transgenomic Inc.
-0- 05/17/2005
/CONTACT: Mitchell L. Murphy, +1-402-452-5418, mmurphy@transgenomic.com,
or Robert J. Pogulis, Ph.D., +1-845-782-9617, rpogulis@transgenomic.com, both
of Transgenomic, Inc./
/Web site: http://www.transgenomic.com /
/Audio: http://www.transgenomic.com/events.asp?id=6