Exhibit 99
TRANSGENOMIC, INC. REPORTS THIRD QUARTER 2006 RESULTS
OMAHA, Neb., Nov. 14 /PRNewswire-FirstCall/ -- Transgenomic, Inc.
(Nasdaq: TBIO) today announced financial results for the quarter ended
September 30, 2006. The Company's financial results are presented in the
tables that follow.
Third Quarter 2006
The Company reported a net loss of $1.7 million or $0.03 per share for the
third quarter of 2006 as compared to a net income of $111,000 or $0.00 per share
for the third quarter of 2005. 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 $164,000. The 2005 net income was comprised of a loss
from continuing operations of $526,000 or $0.02 per share and an income from
discontinued operations of $637,000 or $0.02 per share.
Net sales from continuing operations were $4.9 million during the third
quarter 2006, compared to $6.7 million during the comparable period of 2005.
Gross profit from continuing operations was $2.3 million or 47 percent during
the third quarter of 2006 compared to $3.1 million or 47 percent during the
comparable period of 2005. Operating expenses from continuing operations were
$3.9 million during the third quarter of 2006 compared to $3.4 million during
the same period of 2005. The Company used cash flows in operations of $185,000
during the third quarter of 2006 compared to cash flows used in operations of
$804,000 during the same period of 2005. Cash and cash equivalents totaled $7.3
million at September 30, 2006.
Nine Months Ended September 30, 2006
The Company reported a net loss of $2.4 million or $0.05 per share for the
nine months ended September 30, 2006 as compared to a net loss of $3.8 million
or $0.12 per share during the comparable period of 2005. 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 $304,000 or $0.01 per share.
The 2005 net loss was comprised of a loss from continuing operations of $3.2
million or $0.10 per share and a loss from discontinued operations of $618,000
or $0.02 per share.
Net sales from continuing operations were $17.6 million for the nine months
ended September 30, 2006, compared to $20.5 million during the comparable period
of 2005. Gross profit from continuing operations was $8.3 million or 47 percent
for the nine months ended September 30, 2006 compared to $10.0 million or 49
percent in 2005. Operating expenses from continuing operations were $10.6
million for the nine months ended September 30, 2006 compared to $11.2 million
during the comparable period of 2005. The Company generated positive cash flows
from operations of $480,000 for the nine months ended September 30, 2006
compared to cash flows used in operations of $2.0 million during the same period
in 2005.
Comment and Outlook
The Company's President and Chief Executive Officer, Craig Tuttle, noted
that this quarter's results were well below expectations and resulted from
softness in both the European and Asia Pacific markets compared to historical
sales levels. Tuttle noted, "We are very disappointed in our sales result for
the quarter. The typical market slowdown during summer in Europe was larger this
year for our WAVE system than in years past and coincided with an unusual
shortfall in system sales in Asia. Several system sales that occurred at the end
of the quarter could not be recognized but will be in the fourth quarter.
Therefore, we expect our fourth quarter sales level to return to that of the
first two quarters of the year." He further added, "Our Discovery Services group
grew an additional $100,000 compared to the second quarter and we are very
optimistic about the upcoming launch of our mutation discovery product
Surveyor(R) with its new application for standard sequencing platforms. Also, we
are developing new intellectual property for a large number of cancer-linked
mutations that were recently discovered internally. We believe developing this
intellectual property would position us for future cancer screening and
prediction diagnostic opportunities. In addition, we have also engaged the
investment banking firm of Thomas Weisel Partners as an advisor to help the
Company maximize shareholder value for both short and long-term benefit."
Earnings Call
Company management will discuss third quarter 2006 financial results via
teleconference on Tuesday, November 14, at 5:00 p.m. Eastern Time. To access the
call via telephone, dial 877-707-9628 or 785-832-1523. 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, November 28, 2006. Simply dial 800-839-4014 or
402-220-2983 from any telephone.
About Transgenomic
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(TM) DHPLC systems, reagents,
consumables and assay kits, Hanabi automated cytogenetics systems, and
Transgenomic Discovery and CLIA Lab Services. To date there have been over 1,300
Wave systems installed in over 600 customer sites in over 35 countries and
approximately 1,500 publications utilizing Transgenomic products or 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.
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.
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,
-------------------------------- --------------------------------
2006 2005 2006 2005
-------------- -------------- -------------- --------------
NET SALES $ 4,919 $ 6,663 $ 17,605 $ 20,480
COST OF GOODS SOLD 2,607 3,548 9,261 10,480
Gross profit 2,312 3,115 8,344 10,000
OPERATING EXPENSES:
Selling, general
and administrative 3,305 2,692 8,834 9,284
Research and
development 586 510 1,721 1,697
Impairment charge -- 247 -- 247
3,891 3,449 10,555 11,228
LOSS FROM OPERATIONS (1,579) (334) (2,211) (1,228)
OTHER INCOME (EXPENSE):
Interest expense (7) (181) (7) (1,921)
Other, net 68 (3) 156 14
61 (184) 149 (1,907)
LOSS BEFORE INCOME TAXES (1,518) (518) (2,062) (3,135)
INCOME TAX EXPENSE 7 8 24 26
LOSS FROM CONTINUING
OPERATIONS (1,525) (526) (2,086) (3,161)
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS,
NET OF TAX (164) 637 (304) (618)
NET INCOME (LOSS) $ (1,689) $ 111 $ (2,390) $ (3,779)
BASIC AND DILUTED LOSS
PER SHARE:
From continuing
operations $ (0.03) $ (0.02) $ (0.04) $ (0.10)
From discontinued
operations 0.00 0.02 (0.01) (0.02)
$ (0.03) $ (0.00) $ (0.05) $ (0.12)
BASIC AND DILUTED
WEIGHTED AVERAGE SHARES
OUTSTANDING 49,189,672 34,242,966 49,188,040 32,837,078
Transgenomic, Inc.
Summary Financial Results
Unaudited Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
Nine Months Ended
September 30,
------------------------
2006 2005
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,390) $ (3,779)
Adjustments to reconcile net loss to net
cash flows used in operating activities:
Depreciation and amortization 1,361 3,294
Impairment charge 437 247
Non-cash financing costs -- 1,298
Non-cash stock based compensation 152 --
Gain on sale of securities -- (9)
Loss on sale of assets 15 --
Other -- 2
Changes in operating assets and liabilities:
Accounts receivable 2,585 (626)
Inventories 805 960
Prepaid expenses and other current assets 26 650
Accounts payable (820) (912)
Accrued expenses (1,691) (3,101)
Net cash flows from (used in) operating
activities 480 (1,976)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the maturities and sale of
available for sales securities -- 617
Purchase of property and equipment (228) (554)
Change in other assets (54) 34
Proceeds from asset sales 95 139
Net cash flows from (used in) investing
activities (187) 236
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in credit line -- 2,519
Payments on term note -- (178)
Issuance of common stock 5 (35)
Net cash flows from financing activities 5 2,306
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES
ON CASH 271 (207)
NET CHANGE IN CASH AND CASH EQUIVALENTS 569 359
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6,736 1,002
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,305 $ 1,361
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ -- $ 491
Income taxes, net 24 27
Non-cash transactions:
Available for sale securities acquired
for goods and services -- 2,099
Conversions of debt to equity -- 2,535
Transgenomic, Inc.
Summary Financial Results
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands except per share data)
September 30, December 31,
2006 2005
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,305 $ 6,736
Accounts receivable (net of allowances for
bad debts of $376 and $615, respectively) 5,349 7,542
Inventories 2,336 2,990
Prepaid expenses and other current assets 732 653
Current assets of discontinued operations -- 197
Total current assets 15,722 18,118
PROPERTY AND EQUIPMENT, NET 1,761 2,577
OTHER ASSETS:
Goodwill 638 638
Other assets 923 1,074
Non-current assets of discontinued
operations 2,668 2,933
$ 21,712 $ 25,340
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,437 $ 1,796
Other accrued expenses 2,800 3,114
Accrued compensation 684 602
Current liabilities of discontinued
operations 280 1,922
Total current liabilities 5,201 7,434
Long-term debt -- --
Total liabilities 5,201 7,434
STOCKHOLDERS' EQUITY 16,511 17,906
$ 21,712 $ 25,340
SOURCE Transgenomic, Inc.
-0- 11/14/2006
/CONTACT: Craig J. Tuttle of Transgenomic, Inc., +1-402-452-5400,
InvestorsRelations@Transgenomic.com/
/Web site: http://www.transgenomic.com/events.asp?id=6 /
/Web site: http://www.transgenomic.com /