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Pacific Biomarkers, Inc. Reports Third Quarter Operating Results


5/16/2011 9:19:38 AM

SEATTLE, WA--(Marketwire - May 16, 2011) - Pacific Biomarkers, Inc. (OTCBB: PBMC) ("PBI"), a leading provider of biomarker laboratory services and contract research services, today announced its operating results for the third quarter and first nine months of FY2011.

For the three months ended March 31, 2011 (the third quarter of FY2011), revenue decreased 3% to $2,159,014, compared with $2,233,698 for the third quarter of FY2010. Operating loss totaled $381,538 in the third quarter of FY2011, versus operating loss of $238,047 in the prior-year period. The Company reported a net loss of $430,575, or $0.03 per share, for the three months ended March 31, 2011, compared with a net loss of $393,259, or $0.02 per share, for the three months ended March 31, 2010.

Revenue for the nine months ended March 31, 2011 increased 13% to $7,544,616, compared with $6,648,868 during the corresponding period of the previous fiscal year. An operating loss of $631,790 was recorded in the first nine months of FY2011, versus an operating loss of $758,792 in the same period last year. Net loss for the nine months ended March 31, 2011 totaled $982,156, or $0.06 per share, compared with a net loss of $1,124,038, or $0.06 per share, for the year-earlier period.

For additional information, see Pacific Biomarkers' quarterly report filed with the SEC on Form 10-Q for the fiscal quarter ended March 31, 2011 and its annual report filed with the SEC on Form 10-K for the fiscal year ended June 30, 2010.

About Pacific Biomarkers, Inc. (PBI)

Established in 1989, PBI provides biomarker laboratory services and contract research services to support pharmaceutical and diagnostic manufacturers conducting human clinical trial research. The Company provides expert services in the areas of cardiovascular and musculoskeletal diseases, diabetes, obesity, and nutrition. The PBI laboratory is accredited by the College of American Pathologists, New York State, and the Lipid Standardization Program. PBI's clients include many of the world's largest pharmaceutical, biotech, and diagnostic companies. PBI also provides clinical biomarker services focusing on the emerging field of biomarker assay development and testing. Services include validating and performing custom assays for novel clinical biomarkers, immunogenicity testing, cell-based assays, mass spectrometry, and multiplex testing.

PBI is headquartered in Seattle, Washington, and its common stock trades on the OTC Bulletin Board under the symbol "PBMC". For more information about PBI, visit the company's web site at www.pacbio.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release includes forward-looking statements including, but not limited to, the following: growth in revenues and backlog; results of business development activities; financial results; future growth; and the viability and acceptance of its established and new services, including the Company's biomarker services. These forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those described in the forward-looking statements. These risks include, but are not limited to, the following: the Company's ability to enter into contracts for its laboratory testing or biomarker services; client changes or early terminations of studies; variability in backlog; the success of marketing and business development efforts, and competitive factors; the Company's ability to manage growth; and other risks and uncertainties set forth in periodic filings with the U.S. Securities and Exchange Commission (including Form 10-K for the year ended June 30, 2010).

                          PACIFIC BIOMARKERS, INC.                          
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                                                                            
                                                   March 31,     June 30,   
                     ASSETS                          2011          2010     
                                                  (unaudited)               
                                                 ------------  ------------ 
Current assets:                                                             
  Cash and cash equivalents                      $  1,276,418  $  1,861,155 
  Short-term bank deposits                            200,479       468,619 
  Accounts receivable, net                          1,182,177     1,852,987 
  Other receivable, net                                 6,500         6,500 
  Inventory                                           231,985       239,863 
  Prepaid expenses and other assets                   378,773       229,802 
                                                 ------------  ------------ 
    Total current assets                            3,276,332     4,658,926 
                                                                            
  Property and equipment, net                       1,134,168     1,309,764 
  Restricted cash                                     150,172             - 
                                                 ------------  ------------ 
    Total non-current assets                        1,284,340     1,309,764 
                                                                            
    Total assets                                 $  4,560,672  $  5,968,690 
                                                 ============  ============ 
                                                                            
      LIABILITIES AND STOCKHOLDERS' EQUITY                                  
Current liabilities:                                                        
  Accounts payable                               $    404,578  $    605,944 
  Accrued liabilities                                 410,816       632,429 
  Advances from customers                             647,715       408,455 
  Capital lease obligations - current portion         348,906       200,806 
  Secured note - current portion, net of                                    
   discount                                           889,428     1,015,603 
                                                 ------------  ------------ 
    Total current liabilities                       2,701,443     2,863,237 
                                                                            
  Capital lease obligations - long-term portion       353,970       389,820 
  Secured note - long-term portion, net of                                  
   discount                                         2,262,698     2,676,969 
                                                 ------------  ------------ 
    Total liabilities                               5,318,111     5,930,026 
                                                 ------------  ------------ 
                                                                            
Commitments and contingencies                               -             - 
                                                                            
Stockholders' equity:                                                       
  Common stock, $0.01 par value, 30,000,000                                 
   shares authorized, 16,909,501 shares issued                              
   and outstanding at March 31, 2011, 16,669,856                            
   shares issued and outstanding at June 30,                                
   2010                                               169,095       166,699 
  Additional paid-in-capital                       27,906,681    27,723,024 
  Accumulated deficit                             (28,833,215)  (27,851,059)
                                                 ------------  ------------ 
    Total stockholders' equity (deficit)             (757,439)       38,664 
                                                 ------------  ------------ 
                                                                            
    Total liabilities and stockholders' equity   $  4,560,672  $  5,968,690 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                          PACIFIC BIOMARKERS, INC.                          
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
                                (unaudited)                                 
                                                                            
                            Three Months Ended         Nine Months Ended    
                                 March 31,                 March 31,        
                         ------------------------  ------------------------ 
                             2011         2010         2011         2010    
                         -----------  -----------  -----------  ----------- 
                                                                            
                                                                            
Revenues                 $ 2,159,014  $ 2,233,698  $ 7,544,616  $ 6,648,868 
                         -----------  -----------  -----------  ----------- 
                                                                            
Laboratory expenses and                                                     
 cost of sales             1,460,284    1,381,248    4,654,667    4,155,405 
                         -----------  -----------  -----------  ----------- 
    Gross profit             698,730      852,450    2,889,949    2,493,463 
                         -----------  -----------  -----------  ----------- 
                                                                            
Operating expenses:                                                         
  Selling, general and                                                      
   administrative          1,080,268    1,090,497    3,521,739    3,252,255 
                         -----------  -----------  -----------  ----------- 
                                                                            
Operating loss              (381,538)    (238,047)    (631,790)    (758,792)
                         -----------  -----------  -----------  ----------- 
                                                                            
Other expense:                                                              
  Interest expense          (136,655)    (146,204)    (410,877)    (338,155)
  Amortization of                                                           
   discount on debt          (13,806)     (18,756)     (46,371)     (36,846)
  Other income               101,424        9,748      106,882        9,755 
                         -----------  -----------  -----------  ----------- 
    Total other expense      (49,037)    (155,212)    (350,366)    (365,246)
                         -----------  -----------  -----------  ----------- 
                                                                            
Net loss before tax                                                         
 expense                    (430,575)    (393,259)    (982,156)  (1,124,038)
                                                                            
Tax expense                        -            -            -            - 
                         -----------  -----------  -----------  ----------- 
                                                                            
Net loss                 $  (430,575) $  (393,259) $  (982,156) $(1,124,038)
                         ===========  ===========  ===========  =========== 
                                                                            
  Net loss per share     $     (0.03) $     (0.02) $     (0.06) $     (0.06)
                         ===========  ===========  ===========  =========== 
                                                                            
Weighted average common                                                     
 shares outstanding,                                                        
 basic and diluted:       16,909,501   16,628,576   16,909,501   17,742,801 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
                          PACIFIC BIOMARKERS, INC.                          
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
                                (unaudited)                                 
                                                       Nine Months Ended    
                                                           March 31         
                                                   ------------------------ 
                                                       2011         2010    
                                                   -----------  ----------- 
Cash flows from operating activities:                                       
  Net income (loss)                                $(1,124,038) $ 1,168,742 
                                                                            
  Reconciliation of net income (loss) to net cash                           
   provided by operating activities:                                        
    Depreciation and amortization                      243,447      192,000 
    Accretion of fair value assigned to conversion                          
     feature and warrants                                    -       88,134 
    Amortization of deferred financing costs on                             
     secured convertible note                                -       18,447 
    Gain from embedded and freestanding derivative                          
     liabilities relating to secured convertible                            
     note                                                    -     (675,691)
    Amortization of fair value assigned to                                  
     repurchased shares of common stock                 36,846            - 
    Discount accretion and premium amortization of                          
     held-to-maturity securities                         6,710            - 
    Warrant expense for equipment lease and                                 
     financing                                               -        3,940 
    Compensation expense from restricted shares                             
     and options                                        73,694      101,218 
    Changes in assets and liabilities:                                      
      Accounts receivable                            1,035,860      363,064 
      Other receivable                                   2,500      444,791 
      Inventory                                       (107,346)      34,418 
      Prepaid expenses and other assets                (19,975)     (35,134)
      Advances from customers                           46,490      (72,380)
      Accounts payable                                 (14,662)    (221,355)
      Accrued liabilities                             (273,207)     (61,060)
                                                   -----------  ----------- 
        Net cash provided by (used in) operating                            
         activities                                    (93,681)   1,349,134 
                                                   -----------  ----------- 
                                                                            
Cash flows from investing activities:                                       
  Purchases of capital equipment                       (95,103)     (42,159)
  Purchases of investments                            (506,710)           - 
  Maturities of investments                            500,000            - 
                                                   -----------  ----------- 
      Net cash used in investing activities           (101,813)     (42,159)
                                                   -----------  ----------- 
                                                                            
Cash flows from financing activities:                                       
  Payments on notes payable                                  -     (869,136)
  Proceeds from loan                                 4,000,000            - 
  Repurchases of common stock                       (1,674,335)           - 
  Restricted stock transferred for employee                                 
   withholding tax liability                           (65,614)           - 
  Payments on capital lease obligations               (119,002)     (32,291)
                                                   -----------  ----------- 
      Net cash provided by (used in) financing                              
       activities                                    2,141,049     (901,427)
                                                   -----------  ----------- 
                                                                            
Net increase in cash and cash equivalents            1,945,555      405,548 
Cash and cash equivalents, beginning of period       1,365,406    1,196,310 
                                                   -----------  ----------- 
                                                                            
Cash and cash equivalents, end of period           $ 3,310,961  $ 1,601,858 
                                                   ===========  =========== 
                                                                            
Supplemental Information:                                                   
Cash paid during the period for interest           $   264,850  $    61,993 
                                                   ===========  =========== 
                                                                            
Non-cash investing and financing activities:                                
  Capital expenditures funded by capital lease                              
   borrowings                                      $   470,458  $   142,058 
                                                   ===========  =========== 
                                                                            
                                                                            
                                                                            

For additional information, please contact:
Ron Helm
CEO
(206) 298-0068
Or
The Investor Relations Group
Janet Vasquez
(212) 825-3210


Read at BioSpace.com


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