BURLINGTON, N.C., Nov. 8 /PRNewswire-FirstCall/ -- TriPath Imaging, Inc. today reported third quarter revenues of nearly $26.0 million, a 21% increase from the third quarter of 2005, gross profit of $17.6 million, a 16% increase from the third quarter of 2005, and net income of $68,000 or $0.00 per diluted share. During the third quarter of 2006, the Company incurred transaction-related expenses of approximately $1.8 million, or approximately $0.05 per diluted share, in connection with the process that culminated in the proposed acquisition of TriPath Imaging by BD (Becton, Dickinson and Company) . In addition, for the three months ended September 30, 2006, the stock-based compensation expense recorded in accordance with SFAS 123( R ) totaled $328,000 or approximately $0.01 per diluted share.
On September 8, 2006, the Company signed a definitive merger agreement with BD, pursuant to which BD agreed to acquire the approximately 93.5% of the outstanding shares of TriPath Imaging, Inc. that BD does not currently own. The agreement provides that BD will pay $9.25 in cash for each share of TriPath Imaging common stock, and provides for the cash-out of all existing options and stock appreciation rights based on the same per share consideration. The antitrust waiting period under the Hart-Scott Rodino Act for the proposed acquisition was terminated on October 26, 2006. The closing of the transaction remains subject to customary conditions, including approval of TriPath Imaging's stockholders. The special meeting of stockholders of TriPath Imaging to consider and vote on the adoption of the merger agreement is scheduled for December 19, 2006.
In the first nine months of 2006, revenues were $74.5 million, a 20% increase from the same period in 2005, gross profit was $50.9 million, a 17% increase from the same period in 2005, and net income was $3.4 million or $0.09 per diluted share. During the first nine months of 2006, the Company incurred transaction-related expenses of approximately $2.2 million, or approximately $0.06 per diluted share, in connection with the process that culminated in the proposed acquisition of TriPath Imaging by BD. In addition, for the nine months ended September 30, 2006, the stock-based compensation expense recorded in accordance with SFAS 123(R) totaled $742,000 or approximately $0.02 per diluted share.
Cash and cash equivalents at March 31, 2006 were $27.5 million. In the third quarter of 2006, the Company generated positive cash flow for the ninth consecutive quarter.
The Company filed its Quarterly Report on Form 10-Q with the Security and Exchange Commission today. In light of the pending transaction with BD, the Company will not be hosting a conference call to review its third quarter results.
Paul R. Sohmer, M.D., Chairman, President and CEO of TriPath Imaging, Inc. commented, "We are very pleased with our performance to date and look forward to bringing our transaction with BD to closure."
TriPath Imaging, Inc., headquartered in Burlington, North Carolina, develops, manufactures, markets and sells innovative solutions to improve the clinical management of cancer, including detection, diagnosis, staging and treatment. TriPath Oncology, a wholly owned subsidiary of TriPath Imaging, develops molecular diagnostic products for malignant melanoma and cancers of the cervix, breast, ovary and prostate.
IMPORTANT ADDITIONAL INFORMATION FILED WITH THE SEC
TriPath Imaging filed a Definitive Proxy Statement with the Securities and Exchange Commission ("SEC") on October 31, 2006 in connection with the proposed merger with BD. The Definitive Proxy Statement was mailed to TriPath Imaging's stockholders on or about November 1, 2006. The Definitive Proxy Statement contains important information about BD, TriPath Imaging, the transaction and related matters. Investors and security holders are urged to read the Definitive Proxy Statement carefully.
Investors and security holders may obtain free copies of the Definitive Proxy Statement and other documents filed with the SEC by BD and TriPath Imaging through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders may obtain free copies of the Definitive Proxy Statement from TriPath Imaging by contacting TriPath Imaging, Inc., Investor Relations, 780 Plantation Drive, Burlington, NC 27215.
TriPath Imaging and its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the merger agreement. Information regarding TriPath Imaging's directors and executive officers is contained in the Definitive Proxy Statement filed with the SEC on October 31, 2006. As of October 9, 2006, TriPath Imaging's directors and executive officers beneficially owned approximately 2,099,959 shares, or 5.4%, of TriPath Imaging's common stock.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Investors are cautioned that statements in this press release that are not strictly historical statements constitute forward-looking statements which involve risks and uncertainties that could cause actual results and outcomes to differ materially from what is expressed in those forward-looking statements. Such forward-looking statements include, without limitation, those related to the anticipated timetable for completing the proposed merger with BD. Important factors that may affect TriPath Imaging's operating results include, without limitation: the need for TriPath Imaging stockholder approval of the proposed merger with BD; the ability to consummate the transaction; and other risks detailed in TriPath Imaging's filings with the Securities and Exchange Commission, including those described in TriPath Imaging's Annual Report on Form 10-K for the year ended December 31, 2005 and its most recent Quarterly Report on Form 10-Q.
Stephen P. Hall
Chief Financial Officer
TriPath Imaging, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
2006 2005 2006 2005
Revenues $25,998 $21,525 $74,500 $62,105
Cost of revenues 8,417 6,349 23,604 18,642
Gross profit 17,581 15,176 50,896 43,463
Research and development 2,995 2,890 9,330 9,253
Regulatory 2,847 834 5,637 2,422
Sales and marketing 6,810 6,457 20,336 17,189
General and administrative 5,116 3,222 12,592 10,638
17,768 13,403 47,895 39,502
Operating income/(loss) (187) 1,773 3,001 3,961
Interest income 348 154 847 411
Interest expense (3) - (13) (5)
Income before income taxes 158 1,927 3,835 4,367
Income taxes 90 148 398 148
Net income $68 $1,779 $3,437 $4,219
Earnings per common share
Basic $0.00 $0.05 $0.09 $0.11
Diluted $0.00 $0.05 $0.09 $0.11
Weighted average shares
Basic 38,596 38,236 38,456 38,184
Diluted 39,469 39,393 39,302 39,321
TriPath Imaging, Inc.
Condensed Consolidated Balance Sheets
September 30, December 31,
Cash and cash equivalents $27,462 $22,457
Accounts and notes receivable, net 19,952 15,647
Net investment in sales-type leases 1,698 828
Inventory 10,049 12,564
Other current assets 2,146 1,676
Total current assets 61,307 53,172
Customer use assets 9,627 8,044
Property and equipment 5,285 4,556
Net investment in sales-type leases, net
of current portion 3,402 1,807
Intangible assets 6,369 7,027
Other assets 1,783 2,362
Total assets $87,773 $76,968
Liabilities and stockholders' equity
Current liabilities and deferred revenue $14,544 $10,911
Long-term liabilities 135 98
Common stock and additional paid-in capital 295,257 291,944
Accumulated deficit (222,478) (225,915)
Accumulated other comprehensive income 396 11
Treasury stock (81) (81)
Total stockholders' equity 73,094 65,959
Total liabilities and stockholders' equity $87,773 $76,968
TriPath Imaging, Inc.