SEATTLE, WA--(Marketwire - November 16, 2010) - Pacific Biomarkers, Inc. (OTCBB: PBMC) ("PBI" or "the Company"), a leading provider of clinical biomarker testing and novel biomarker development services, today announced its operating results for the first quarter of FY2011.
For the three months ended September 30, 2010, revenues increased 24% to $2,853,533, compared with $2,301,375 in the first quarter of the previous fiscal year. The Company posted an operating loss of $47,524 in the most recent quarter, versus an operating loss of $213,708 in the prior-year period. The Company reported a net loss of $202,363, or $0.01 per share, in the most recent quarter, versus a net loss of $273,150, or $0.01 per share, in the corresponding period of the previous fiscal year. The decrease in net loss was primarily due to higher revenues, which also drove the reduction in operating loss. The reduction in net loss was somewhat offset by higher interest cost of our debt financing.
"This is the second fiscal year in a row where we have shown over a twenty percent increase in revenue for the first quarter of the fiscal year. We are pleased that our first quarter revenues were 24% above last year's levels," commented Ron Helm, Chairman and Chief Executive Officer of Pacific Biomarkers, Inc. "Having said that, while we did reach our internal revenue goal this quarter, we did not reach our net income goal because of lower margins and higher expenses experienced during the quarter. We also continued to see early termination of several clinical studies for reasons unrelated to our performance. This is simply a characteristic element of our business. We also cannot ignore the ongoing economic difficulties that continue to impact the clinical trials industry, our primary market." Mr. Helm added, "In light of demanding market trends and persistent economic difficulties that exist in our industry we find it necessary to continue with further cost cutting measures in order to address these challenges."
"Although our gross profit margins improved from the last fiscal year and our SG&A expense ratio declined relative to the prior-year period, we still recorded an operating loss in this year's first quarter. This reflects, in part, the significant and ongoing investments we are making in both our organ injury biomarker initiative and expansion of our clinical biomarker testing and novel biomarker development services business, which we continue to see as a major growth opportunity going forward.
We recently received good news that the IRS approved our application requesting certification for our PBI Organ Injury Biomarker Initiative, as a qualified therapeutic discovery project under section 48D of the Internal Revenue Code. This certification entitles us to a future cash grant of up to $244,479, as reimbursement of certain qualified expenses. We expect to receive this grant later in FY2011 or FY2012, after filing of our 2009 and 2010 tax returns. See our 10-Q filing under "Subsequent Events" for additional details on this grant.
"Based on our internal financial metrics, we remain cautious in our assessment of our potential for success in fiscal 2011. We believe it is likely that FY2011 will exceed the revenue levels achieved in fiscal 2010," Mr. Helm continued. "We are encouraged by our first quarter results, but remain concerned about cancellations and margins. We will continue to focus on novel biomarkers and expect to gain increasing traction in a market that is experiencing significant growth in outsourced lab services. To capitalize on these trends, we are investing in new instrument platforms that will be partially funded by the monies received from the 48D grant as noted above. This will allow us to broaden our therapeutic areas of expertise and open up additional growth opportunities."
For additional information, see Pacific Biomarkers' Annual Report on Form 10-K for the fiscal year ended June 30, 2010 and the Quarterly Report on Form 10-Q for the three months ended September 30, 2010, available on the SEC's website at www.sec.gov.
About Pacific Biomarkers, Inc. (PBI)
Established in 1989, PBI provides specialized central laboratory 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 disease, diabetes, osteoporosis, arthritis, 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 ligand-binding assays for novel clinical biomarkers, immunogenicity testing, 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 growth opportunities for the future, market developments, future revenues and operating results, and expansion of our 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, our ability to bid on and win services contracts, client changes or early terminations of studies, results of our marketing and business development efforts, market acceptance of our services, competition in the industry, general economic factors in the industry, and our ability to manage growth and manage our expenses and margins. Additional risks factors that affect our business are described in our periodic filings with the U.S. Securities and Exchange Commission (including our Form 10-K for the year ended June 30, 2010).
PACIFIC BIOMARKERS, INC.
CONSOLIDATED BALANCE SHEETS
September 30, June 30,
ASSETS 2010 2010
(unaudited)
------------ ------------
Current assets:
Cash and cash equivalents $ 1,505,736 $ 1,861,155
Short-term bank deposits 461,824 468,619
Accounts receivable, net 1,935,243 1,852,987
Other receivable, net 6,500 6,500
Inventory 136,204 239,863
Prepaid expenses and other assets 263,622 229,802
------------ ------------
Total current assets 4,309,129 4,658,926
Property and equipment, net 1,219,372 1,309,764
Total assets $ 5,528,501 $ 5,968,690
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 799,312 $ 605,944
Accrued liabilities 473,381 632,429
Advances from customers 353,620 408,455
Capital lease obligation - current portion 205,289 200,806
Secured note - current portion, net of
discount 1,049,486 1,015,603
------------ ------------
Total current liabilities 2,881,088 2,863,237
Capital lease obligations - long - term
portion 337,178 389,820
Secured note - long - term portion, net of
discount 2,408,983 2,676,969
------------ ------------
Total liabilities 5,627,249 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 September 30, 2010,
16,669,856 shares issued and outstanding
at June 30, 2010 166,840 166,699
Additional paid-in-capital 27,787,834 27,723,024
Accumulated deficit (28,053,422) (27,851,059)
------------ ------------
Total stockholders' equity (deficit) (98,748) 38,664
Total liabilities and stockholders'
equity $ 5,528,501 $ 5,968,690
============ ============
PACIFIC BIOMARKERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
September 30,
--------------------------
2010 2009
------------ ------------
Revenues $ 2,853,533 $ 2,301,375
------------ ------------
Laboratory expenses and cost of sales 1,678,809 1,393,700
------------ ------------
Gross profit 1,174,724 907,675
------------ ------------
Operating expenses:
Selling, general and administrative 1,222,248 1,121,383
------------ ------------
Operating loss (47,524) (213,708)
------------ ------------
Other expense:
Interest expense (139,961) (53,100)
Amortization of discount on debt (18,811) (5,958)
Other income (expense) 3,933 (384)
------------ ------------
Total other expense (154,839) (59,442)
Net loss before tax expense (202,363) (273,150)
------------ ------------
Tax expense - -
Net loss $ (202,363) $ (273,150)
============ ============
Net loss per share $ (0.01) $ (0.01)
============ ============
Weighted average common shares outstanding,
basic and diluted: 16,909,501 18,832,061
============ ============
PACIFIC BIOMARKERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
September 30,
--------------------------
2010 2009
------------ ------------
Cash flows from operating activities:
Net loss $ (202,363) $ (273,150)
Reconciliation of net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 98,528 75,609
Amortization of discount on debt 18,811 5,958
Income on deposits 6,795 1,713
Compensation expense from restricted shares
and options 64,951 72,774
Changes in assets and liabilities:
Accounts receivable (82,256) 550,526
Other receivable - 2,500
Inventory 103,659 44,206
Prepaid expenses and other assets (33,820) 47,661
Advances from customers (54,835) 19,308
Accounts payable 193,368 (167,736)
Accrued liabilities (159,048) (238,760)
------------ ------------
Net cash provided by (used in) operating
activities (46,210) 140,609
------------ ------------
Cash flows from investing activities:
Purchases of capital equipment (8,136) (76,977)
Purchases of investments - (506,033)
Net cash used in investing activities (8,136) (583,010)
------------ ------------
Cash flows from financing activities:
Payments on notes payable (252,913) -
Proceeds from loan - 4,000,000
Repurchases of common stock - (1,674,334)
Payments on capital lease obligations (48,160) (14,883)
------------ ------------
Net cash provided by (used in) financing
activities (301,073) 2,310,783
------------ ------------
Net increase (decrease) in cash and cash
equivalents (355,419) 1,868,382
Cash and cash equivalents, beginning of period 1,861,155 1,365,406
------------ ------------
Cash and cash equivalents, end of period $ 1,505,736 $ 3,233,788
============ ============
Supplemental Information:
Cash paid during the period for interest $ 87,002 $ 85,846
Cash paid during the period for income tax $ - $ -
Contact
Pacific Biomarkers, Inc.
Ron Helm
CEO
(206) 298-0068
The Investor Relations Group
Janet Vasquez
(212) 825-3210
