SUNNYVALE, Calif., Oct. 28 /PRNewswire-FirstCall/ -- Cepheid today reported revenue for the third quarter of 2009 of $41.6 million. Net loss was $3.8 million, or $(0.07) per share, which compares to revenue of $44.9 million and a net loss of $6.6 million, or $(0.12) per share, in the third quarter of 2008.
Excluding amortization of purchased intangible assets and stock compensation expense, non-GAAP net loss for the third quarter was $0.1 million, or $(0.00) per share. This compares to a non-GAAP net loss of $2.5 million, or $(0.04) per share, in the third quarter of 2008.
“Cepheid continued to deliver against its aggressive development pipeline during the third quarter, with the commercial release of our high-throughput GeneXpert(R) Infinity-48 System, our Xpert(R) test for Clostridium difficile, and our Xpert test for HemosIL Factor II and Factor V,” said John Bishop, Cepheid’s Chief Executive Officer. “With our broadest test menu and system offering to date, Cepheid is defining the meaning of molecular diagnostics for labs of all sizes. This is highlighted by the rapid expansion of our Clinical Reagent business that is in a large part driven by continued adoption among our expanding GeneXpert system installed base of more than 1200 systems globally.”
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 Q309 Results Conference Call
The company will host a management presentation at 2:00 p.m. Pacific Time on Wednesday, October 28, 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 may also listen to the live teleconference call by dialing (866) 783-2142 (domestic) or (857) 350-1601 (international), and entering participant code 30186203. A replay will be available for seven days beginning at 4 p.m. Pacific Time. Access numbers for this replay are (888) 286-8010 (domestic) and (617) 801-6888 (international), with participant code 49827607.
About Cepheid
Based in Sunnyvale, Calif., Cepheid 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. The company’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. See www.cepheid.com for more information.
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 Q109 restructuring from its results for non-GAAP net loss for the first nine months 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.
Patent License Amortization
Our internal periodic review of our patent license useful lives during the second quarter of 2009 identified that the useful lives of certain patents were miscalculated at the time those patents were acquired, thus those patent licenses were being amortized over incorrect useful lives. This error resulted in the understatement of amortization expense over several reporting periods, starting in 2004.
On October 1, 2009, the Company filed a Form 10-K/A which restated the consolidated balance sheets as of December 31, 2008 and 2007 and the consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2008, and provided supplementary financial data for each of the eight quarters in the period ended December 31, 2008 correcting the patent license errors.
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, product pipeline, demand for certain products, future revenues and future net loss. 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 Healthcare Associated Infections (HAIs); the company’s ability to successfully introduce and sell products in clinical markets other than HAIs; 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 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, its most recent Quarterly Report on Form 10-Q, 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, Corporate Communications, +1-408-400 8377,
jared.tipton@cepheid.com, or Investors, Jacquie Ross, Investor Relations,
+1-408-400 8329, investor.relations@cepheid.com, both of Cepheid
Web site: http://www.cepheid.com/