Exhibit 99
THURSDAY, MARCH 8, 2007
COMPANY PRESS RELEASE
TRANSGENOMIC, INC. REPORTS FOURTH QUARTER AND FISCAL YEAR 2006 RESULTS
OMAHA, Neb., March 8, 2007 - Transgenomic, Inc. (the "Company") (OTC BB:
TBIO.OB) today announced financial results for the fourth quarter and year ended
December 31, 2006. The Company's financial results are presented in the tables
that follow.
FOURTH QUARTER 2006
The Company reported a net loss of $1.0 million or $0.02 per share for the
fourth quarter of 2006 as compared to a net loss of $11.2 million or $0.26 per
share for the fourth quarter of 2005. The 2006 net loss was comprised of a loss
from continuing operations of $877,000 or $0.02 per share and a loss from
discontinued operations of $164,000. The 2005 net loss was comprised of a loss
from continuing operations of $1.8 million or $0.04 per share and a loss from
discontinued operations of $9.4 million or $0.22 per share.
Net sales from continuing operations were $5.8 million during the fourth quarter
2006, compared to $5.3 million during the comparable period of 2005. Gross
profit from continuing operations was $3.0 million or 52 percent gross margin
during the fourth quarter of 2006 compared to $2.3 million or 44 percent gross
margin during the comparable period of 2005. Operating expenses from continuing
operations were $3.9 million during the fourth quarter of 2006 compared to $3.6
million during the same period of 2005. The Company used cash flows from
operations of $1.7 million during the fourth quarter of 2006, comparable to cash
flows used in operations of $1.7 million during the same period in 2005. Cash
and cash equivalents totaled $5.9 million at December 31, 2006.
YEAR ENDED DECEMBER 31, 2006
The Company reported a net loss of $3.4 million or $0.07 per share for the year
ended December 31, 2006 as compared to a net loss of $15.0 million or $0.42 per
share during the comparable period of 2005. The 2006 net loss was comprised of a
loss from continuing operations of $3.0 million or $0.06 per share and a loss
from discontinued operations of $468,000 or $0.01 per share. The 2005 net loss
was comprised of a loss from continuing operations of $5.0 million or $0.14 per
share and a loss from discontinued operations of $10.0 million or $0.28 per
share.
Net sales from continuing operations were $23.4 million for the year ended
December 31, 2006, compared to $25.8 million during the comparable period of
2005. Gross profit from continuing operations was $11.4 million or 49 percent
gross margin for the year ended December 31, 2006 compared to $12.3 million or
48 percent gross margin in 2005. Operating expenses from continuing operations
were $14.5 million for the year ended December 31, 2006 compared to $14.8
million during the comparable period of 2005. The Company used cash flows from
operations of $1.2 million for the year ended December 31, 2006 compared to cash
flows used in operations of $3.6 million during the same period in 2005.
COMMENT AND OUTLOOK
The Company's President and Chief Executive Officer, Craig Tuttle, noted, "I am
pleased that our fourth quarter sales ended very close to forecast and
substantially improved over third quarter. Fourth quarter net sales included
continued strong growth for our Discovery Services group as well as a good level
of OEM system sales. We are maintaining our WAVE business consumables net sales
and increased WAVE system unit placements over Q3. We added some very
distinguished clients to our CLIA reference lab business for mitochondrial
disease testing including ARUP, a leading national reference laboratory as well
as several additional prominent hospital systems. Revenue grew over $100K
quarter-over-quarter for our reference lab and we anticipate growth to continue
similarly in the future."
Mr. Tuttle continued, "Our most significant success in the quarter, although not
revenue generating at the moment, is the completion of 10 patent disclosures for
novel DNA mutation discoveries that are strongly linked to a significant number
of different cancer types. Our goal is to submit patent applications for up to a
total of 30 different groups of mutations that were discovered in several key
cellular pathways that are responsible for cancer growth and treatment targets.
With this emerging intellectual property, we anticipate using these mutations to
develop drug target collaborations with key pharma companies, develop the
ability to target therapies based on each drug's pathway treatment mechanism,
predict reoccurrence based on a mutation profile and even monitor patients for
treatment effectiveness based on a diagnostic evaluation of their mutation-load.
We hope to begin forming collaborations on this intellectual property as early
as Q2 in 2007."
Finally, Mr. Tuttle noted, "Continued focus on aligning our expenses with our
net sales is an integral part of our day-to-day management. Our recent
announcement regarding additional consolidation of facilities will drive
significant improvement in this area."
EARNINGS CALL
Company management will discuss fourth quarter and full year 2006 financial
results via teleconference on Thursday, March 8, 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 Thursday, March 22, 2007. Simply dial 800-839-1229 or
402-220-0459 from any telephone.
ABOUT TRANSGENOMIC: A DECADE OF DISCOVERY 1997 - 2007
Transgenomic is a global biotechnology company that provides unique systems,
products, discovery and laboratory testing services to the academic and medical
research, clinical and pharmaceutical markets for automated high sensitivity
genetic variation and mutation analysis in the fields of pharmacogenomics and
personalized medicine. This is accomplished through their offerings of WAVE(R)
DHPLC Systems, reagents, consumables and assay kits, automated cytogenetics
systems and Transgenomic Discovery and CLIA Lab Services. To date there have
been over 1,200 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.
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 YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- ----------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
NET SALES $ 5,810 $ 5,349 $ 23,415 $ 25,828
COST OF GOODS SOLD 2,784 3,018 12,046 13,497
------------ ------------ ------------ ------------
Gross profit 3,026 2,331 11,369 12,331
OPERATING EXPENSES:
Selling, general and administrative 3,304 2,934 12,138 12,218
Research and development 641 502 2,362 2,199
Impairment charge -- 178 -- 425
------------ ------------ ------------ ------------
3,945 3,614 14,500 14,842
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (919) (1,283) (3,131) (2,511)
OTHER INCOME (EXPENSE):
Interest expense (4) (54) (11) (1,978)
Loss on debt extinguishment -- (541) -- (541)
Other, net 52 55 209 72
------------ ------------ ------------ ------------
48 (540) 198 (2,447)
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (871) (1,823) (2,933) (4,958)
INCOME TAX EXPENSE 6 -- 30 26
------------ ------------ ------------ ------------
LOSS FROM CONTINUING OPERATIONS (877) (1,823) (2,963) (4,984)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS,
NET OF TAX (164) (9,391) (468) (10,009)
------------ ------------ ------------ ------------
NET LOSS $ (1,041) $ (11,214) $ (3,431) $ (14,993)
============ ============ ============ ============
BASIC AND DILUTED LOSS PER SHARE:
From continuing operations $ (0.02) $ (0.04) $ (0.06) $ (0.14)
From discontinued operations -- (0.21) (0.01) (0.28)
------------ ------------ ------------ ------------
$ (0.02) $ (0.25) $ (0.07) $ (0.42)
============ ============ ============ ============
BASIC AND DILUTED WEIGHTED AVERAGE SHARES
OUTSTANDING 49,189,672 44,366,132 49,188,451 35,687,580
TRANSGENOMIC, INC.
SUMMARY FINANCIAL RESULTS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
YEAR ENDED
DECEMBER 31,
------------------------
2006 2005
---------- ----------
NET CASH FLOWS USED IN OPERATING ACTIVITIES (1,218) (3,627)
NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES (195) 1,646
NET CASH FLOWS FROM FINANCING ACTIVITIES 5 7,917
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH 540 (202)
---------- ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS (868) 5,734
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6,736 1,002
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,868 $ 6,736
========== ==========
TRANSGENOMIC, INC.
SUMMARY FINANCIAL RESULTS
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
DECEMBER 31, DECEMBER 31,
2006 2005
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,868 $ 6,736
Accounts receivable (net of allowances for bad debts of $444 and $615,
respectively) 6,525 7,542
Inventories 2,672 2,990
Prepaid expenses and other current assets 540 653
Current assets of discontinued operations -- 197
------------ ------------
Total current assets 15,605 18,118
PROPERTY AND EQUIPMENT, NET 1,498 2,577
OTHER ASSETS:
Goodwill 638 638
Other assets 853 1,074
Non-current assets of discontinued operations 2,773 2,933
------------ ------------
$ 21,367 $ 25,340
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,558 $ 1,796
Other accrued expenses 2,898 3,114
Accrued compensation 689 602
Current liabilities of discontinued operations 184 1,922
------------ ------------
Total current liabilities 5,329 7,434
Long-term debt -- --
------------ ------------
Total liabilities 5,329 7,434
STOCKHOLDERS' EQUITY 16,038 17,906
------------ ------------
$ 21,367 $ 25,340
============ ============