Eighth Quarter of Consecutive Growth in Clinical Reagents; Up 79% From 2008 First Quarter
SUNNYVALE, Calif., April 23 /PRNewswire-FirstCall/ -- Cepheid today reported revenue for the first quarter of 2009 of $38.8 million. Net loss was $7.4 million, or $(0.13) per share, which compares to revenue of $44.8 million and a net loss of $1.9 million, or $(0.03) per share, in the first quarter of fiscal 2008.
Excluding amortization of purchased intangible assets, stock compensation and restructuring expenses, non-GAAP net loss for the first quarter was $2.9 million, or $(0.05) per share. This compares to a non-GAAP net income of $1.7 million, or $0.03 per share, in the first quarter of fiscal 2008.
“Despite broader economic uncertainty, sales for our Clinical tests continued to grow at a significant rate, running over 79% ahead of the first quarter of 2008, and in large part offsetting the anticipated declines in the Partner and Biothreat businesses,” said John Bishop, Cepheid’s Chief Executive Officer. “Despite the tough sales environment, we placed 95 systems worldwide during the first quarter. Additionally, we achieved an important milestone for Cepheid with the placement of our 1,000th GeneXpert(R) System, highlighting that its ease-of-use and flexibility continue to be compelling.”
“Account utilization of our test menu continued to grow during the first quarter, along with our pipeline of available tests,” continued Bishop. “We recently released our Xpert(R) MRSA/SA-nasal product in Europe for pre-surgical testing, and expect to release our Xpert(R) TB/RIF for multi-drug resistant tuberculosis in Europe next week. Additionally, I am pleased to announce that we have submitted our Clostridium difficile assay to the FDA for 510(k) market clearance. These product developments further demonstrate that Cepheid is executing well on its vision of providing a broad test menu thereby helping the GeneXpert System to become the molecular testing platform of choice.”
Operational Overview
Business Outlook
For the fiscal year ending December 31, 2009, the Company expects:
Non-GAAP net loss excludes approximately $16 million related to stock compensation expense, $1 million related to the amortization of acquired intangibles, and $0.7 million related to restructuring expenses.
Accessing Cepheid’s Q109 Results Conference Call
The Company will host a management presentation at 2:00 p.m. Pacific Time on Thursday, April 23, 2009 to discuss the results. To access the live webcast, please visit Cepheid’s website at www.cepheid.com/investors at least 15 minutes before the scheduled start time to download any necessary audio or plug-in software. A replay of the webcast will be available shortly following the call and will remain available for at least 90 days.
Interested participants and investors may also listen to the live teleconference call by dialing 866-700-6067 (domestic) or 617-213-8834 (international), and entering participant code 21782083. A replay will be available for seven days beginning at about 4:00 p.m. Pacific Time. Access numbers for this replay are 888-286-8010 (domestic) and 617-801-6888 (international), with passcode 78028998.
About Cepheid
Cepheid , based in Sunnyvale, Calif., is an on-demand molecular diagnostics company that develops, manufactures, and markets fully-integrated systems and tests for genetic analysis in the clinical, industrial and biothreat markets. The Company’s systems enable rapid, sophisticated genetic testing for organisms and genetic-based diseases by automating otherwise complex manual laboratory procedures. Cepheid’s easy-to-use systems integrate a number of complicated and time-intensive steps, including sample preparation, DNA amplification and detection, which enable the analysis of complex biological samples in its proprietary test cartridges. Through its strong molecular biology capabilities, the Company is focusing on those applications where rapid molecular testing is particularly important, such as identifying infectious disease and cancer in the clinical market; food, agricultural, and environmental testing in the industrial market; and identifying bio-terrorism agents in the biothreat market.
Use of Non-GAAP Measures
The Company has supplemented its reported GAAP financial information with non-GAAP measures that do not include employee share-based compensation expense and amortization of purchased intangible assets and restructuring charges. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. The Company’s management uses the non-GAAP information internally to evaluate its ongoing business, continuing operational performance and cash requirements, and believes these non-GAAP measures are useful to investors as they provide a basis for evaluating the Company’s cash requirements and additional insight into the underlying operating results and the Company’s ongoing performance in the ordinary course of its operations.
These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with its results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures.
As described above, the Company excludes the following items from one or more of its non-GAAP measures when applicable:
Employee share-based compensation expense. These expenses consist primarily of expenses for employee stock options and employee restricted stock under SFAS 123(R). The Company excludes employee share-based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses that the Company does not believe are reflective of ongoing operating results. Further, as the Company applies SFAS 123(R), it believes that it is useful to investors to understand the impact of the application of SFAS 123(R) on its results of operations.
Amortization of purchased intangible assets. The Company incurs amortization of purchased intangible assets in connection with acquisitions. The Company excludes these items because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Company’s prior acquisitions and have no direct correlation to the operation of the Company’s business.
Restructuring expenses. The Company excluded expenses associated with its restructuring from its results for non-GAAP net loss for the first quarter of 2009 and also from its outlook for non-GAAP net loss for fiscal 2009. The Company excluded these items as it believes such amounts are non-recurring in nature, and do not have a direct impact on the operation of the Company’s core business.
Forward-Looking Statements
This press release contains forward-looking statements that are not purely historical regarding Cepheid’s or its management’s intentions, beliefs, expectations and strategies for the future, including those relating to potential growth in clinical product sales, regulatory developments, product pipeline, demand for certain products, future revenues, future net income and other future operating results. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the Company’s current expectations. Factors that could cause actual results to differ materially include risks and uncertainties such as those relating to: the uncertain impact of the significant global economic downturn on our business, and that of our customers, potential customers and business partners; our success in increasing direct sales and the effectiveness of new sales personnel; the performance and market acceptance of new products; sufficient customer demand; our ability to develop and complete clinical trials successfully in a timely manner for new products; uncertainties related to the FDA regulatory and European regulatory processes; the level of testing at clinical customer sites; changes in the protocols or levels of testing for MRSA and other Healthcare Associated Infections (HAIs); the Company’s ability to successfully introduce and sell products in clinical markets other than HAIs; the mix of products sold, which can affect gross margins; the rate of environmental biothreat testing conducted by the USPS, which will affect the amount of consumable products sold to the USPS; unforeseen development and manufacturing problems; the potential need for additional intellectual property licenses for tests and other products and the terms of such licenses; lengthy sales cycles in certain markets; the Company’s ability to continue to realize manufacturing efficiencies, which are an important factor in improving gross margins; the Company’s reliance on distributors in some regions to market, sell and support its products; the occurrence of unforeseen expenditures, acquisitions or other transactions; the impact of acquisitions; the impact of competitive products and pricing; the Company’s ability to manage geographically-dispersed operations; and underlying market conditions worldwide. Readers should also refer to the section entitled “Risk Factors” in Cepheid’s Annual Report on Form 10-K for 2008 and its other reports filed with the Securities and Exchange Commission.
All forward-looking statements and reasons why results might differ included in this release are made as of the date of this press release, based on information currently available to Cepheid, and Cepheid assumes no obligation to update any such forward-looking statement or reasons why results might differ.
CONTACT: Media, Jared Tipton, Cepheid Corporate Communications,
+1-408-400-8377, jared.tipton@cepheid.com, or Investors, Jacquie Ross,
Cepheid Investor Relations, +1-408-400-8329,
investor.relations@cepheid.com, both of Cepheid
Web site: http://www.cepheid.com/
