Business Editors & Medical Writers
ANN ARBOR, Mich.--(BW HealthWire)--Oct. 24, 2000--Genomic
Solutions Inc. (Nasdaq NM:GNSL), a leading global supplier of
automated solutions for genomic and proteomic research, today
announced financial results for the three and nine months ended
September 30, 2000.
Owing primarily to increased sales of the Company's GeneTAC(TM)
Biochip and Investigator(TM) Proteomic Systems to new and existing
customers, third quarter 2000 revenue increased 59% to a record $5.0
million from $3.2 million in the third quarter of 1999. Revenue for
the first nine months of 2000 grew 56% to $13.5 million. Gross margin
improved to 50% for the third quarter from 46% last year.
For the quarter, selling, general and administrative expenses rose
49% to $3.0 million, while research and development costs increased
26% to $1.5 million. Total costs and expenses for the quarter were up
32% to $7.0 million while operating expenses increased 41% to $4.5
million. The Company reported a third quarter 2000 net loss of
$869,000, or $0.03 per share, compared with a net loss of $3.9
million, or $1.31 per share last year. For the quarter, other income
and expenses included a gain of $484,000 as a result of a sale of
assets. For the third quarter of 1999, the net loss attributable to
common stockholders for that period was $2.8 million, or $0.92 per
share, excluding a $1.2 million non-cash common stock warrant charge.
"I am pleased to report that our financial performance continues
to be very strong," said Jeffrey S. Williams, president and chief
executive officer. "This is the eighth consecutive quarter of
excellent top-line growth. Perhaps more impressively, third quarter
revenue growth has historically tended to be light due to customer
vacations and timing of budgets. However, this year we experienced
very strong growth with revenue up 12% when compared with the second
quarter of this year. Also, we are extremely pleased with our progress
regarding operating income and EPS. We are confident that we remain on
track to achieve profitability late next year."
Mr. Williams added that the Company expects continued improvement
in financial performance primarily as a result of five factors.
First, the Company's customer base is expanding rapidly due to the
continued success of the GeneTAC(TM) Biochip System and the
Investigator(TM) Proteomic System. The number of large systems and
instruments sold, defined as a value of $50,000 or more, now stands at
266, including 51 added during the third quarter, 51 added during the
second quarter and 39 added during the first quarter of 2000.
Previously, the Company had anticipated reaching 400 large system
sales by the end of 2001. That estimate is now being raised to exceed
500 by the end of 2001 due to the significant increase in large orders
experienced during the first nine months of this year.
Second, the Company has seen increased demand for its reagents and
consumables, which carry higher gross margins. This trend is expected
to accelerate for several reasons, including:
|
| -- | Sales of Investigator Proteomic Systems and GeneTAC Biochip
Systems increases the demand for the consumables and reagents that
are used to operate these systems.
|
| -- | A collaboration was recently formed with Invitrogen's Research
Genetics subsidiary whereby Genomic Solutions is provided access
to Invitrogen's proprietary libraries of human, rat and mouse cDNA
clones. Using PCR products from these libraries will allow the
Company to rapidly create new preprinted GeneMAP(TM) Arrays. In
addition, Genomic Solutions plans to launch its first
oligonucleotide-based microarray later this year. Several
additional oligo-based preprinted arrays will follow in 2001.
|
| -- | The Company invested early this year in the infrastructure
required to grow and support its consumables business, including
additional staff and a purpose-built, GLP manufacturing and
development facility located at the Company's Ann Arbor
headquarters. Genomic Solutions anticipates recurring revenues
from all sources (consumables, reagents, research services and
field service) to reach at least 20% of total revenues by the end
of 2001, and to reach 50% of revenues by 2004.
|
Third, the Company brought its new Proteomic Center on line during
the third quarter. This world-class facility was designed and built to
conduct high throughput proteomic research by isolating and
identifying thousands of proteins per week. Demand for the company's
proteomic research services has been strong and contracts are now in
place with many pharmaceutical and biotech companies as well as
academic and government institutions. Additional contracts are in
various phases of negotiations. Demand for the Company's gene
expression services also continues to grow rapidly, with business up
more than 20% compared with the second quarter of 2000. A backlog of
orders exists for both research services businesses.
Fourth, Genomic Solutions launched its GeneTAC(TM) G3
multi-function genomic robot and its Investigator ProPic(TM) during
the third quarter. Currently, there is a backlog for both of these
products. In addition, several new systems and instrumentation
products are in development for launch in the first half of next year,
including product line extensions to meet the needs of the rapidly
developing segments in the DNA microarray and proteomics markets.
These product line extensions include a bench top version of the
GeneTAC Biochip System, higher throughput instrumentation for the
Investigator Proteomic System and a protein chip system.
And fifth, the Company experienced an increase in sales to
PerkinElmer during the third quarter, and demand from PerkinElmer is
expected to continue to increase in the future. Genomic Solutions and
PerkinElmer formed a strategic alliance earlier this year whereby
PerkinElmer is responsible for the sales and distribution of all
Genomic Solutions products outside of the United States, the United
Kingdom and Japan.
"While strong revenue growth remains a priority, we are also very
focused on the bottom line. We are pleased with our progress in this
regard, including our results for this quarter," Mr. Williams noted.
"In addition to strong financial performance and the ability to
deliver high value products to customers, several developments
indicate our progress toward the goal of profitability. Gross margins
continue to improve, and while marketing, sales and research and
development are being expanded, revenue growth rates exceed increases
in operating expense," he added.
The Company will hold a conference call to discuss these results
beginning at 10:00 a.m. Eastern Time today. Individual investors are
invited to listen to the conference call over the Internet at
www.genomicsolutions.com, or at www.vcall.com. In addition, a replay
will be available at both Websites beginning shortly after the call
has ended.
Genomic Solutions Inc. designs, develops, manufactures, markets
and sells instruments, software, consumables and services used to
determine the activity level of genes and to isolate, identify and
characterize proteins. The Company's products and systems enable
researchers to perform complex, high volume experiments at a lower
cost and in less time compared with traditional techniques. As a
result, the Company's products and systems facilitate more rapid and
less expensive drug discovery. Genomic Solutions markets products
through its corporate headquarters in Ann Arbor, and through offices
in the United Kingdom and Japan. Distribution throughout the rest of
the world is provided by PerkinElmer Life Sciences through a strategic
alliance with Genomic Solutions. The two companies also cooperate to
sell co-branded products and collaborate to leverage their
intellectual property and technologies.
Statements in this press release that are not strictly historical
are "forward-looking" statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These statements involve a high degree of risk and
uncertainty that exist in the Company's operations and business
environment. Such statements are predictions only and actual events or
results may differ materially from those projected in such
forward-looking statements. Factors that could affect actual events or
results include risks associated with performance under the Company's
agreements with third parties, research and development progress,
competitive products and the strength of the Company's patent
portfolio. These factors and others are more fully described under
"Risk Factors" in the Final Prospectus included in the Company's
Registration Statement on Form S-1 (File No. 333-30246) as filed with
the Securities and Exchange Commission and declared effective by the
SEC on May 4, 2000, and in the Company's most recent quarterly report
on Form 10-Q. The Company expressly disclaims any obligation or
undertaking to release publicly any updates for revisions to any
forward looking statements contained herein to reflect any change in
the Company's expectations with regard thereto or any change in
events, conditions, or circumstances on which any such statements are
based.
Genomic Solutions Inc.
Consolidated Statements Of Operations
(unaudited; in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2000 1999 2000 1999
---- ---- ---- ----
Revenue $ 5,038 $ 3,163 $13,533 $ 8,670
Costs and expenses:
Cost of revenue 2,535 1,697 6,871 4,650
Selling, general and
administrative 3,009 2,014 8,916 6,036
Research and development 1,453 1,152 4,067 3,627
Unusual charge - 438 600 438
------ ------ ------ ------
Total costs and expenses 6,997 5,301 20,454 14,751
------ ------ ------ ------
Loss from operations (1,959) (2,138) (6,921) (6,081)
Other income (expense), net 1,090 (629) 341 (1,223)
------ ------ ------ ------
Loss before taxes and
extraordinary loss (869) (2,767) (6,580) (7,304)
Income taxes - - - -
------ ------ ------ ------
Loss before extraordinary loss (869) (2,767) (6,580) (7,304)
Extraordinary loss on
extinguishment of
subordinated debt - - 1,050 -
------ ------ ------ ------
Net loss (869) (2,767) (7,630) (7,304)
Non cash common stock warrant
benefit (charge) - (1,164) 1,059 (1,941)
Deemed dividend upon issuance
of Series P preferred stock - - (8,000) -
------ ------ ------ ------
Net loss attributable to
common stockholders $ (869) $(3,931) $(14,571) $(9,245)
====== ====== ====== ======
Net loss per share:
------------------
Net loss per share $ (0.03) $ (0.92) $ (0.51) $ (2.47)
====== ====== ====== ======
Net loss per share
attributable to common
stockholders $ (0.03) $ (1.31) $ (1.97) $ (3.13)
====== ====== ====== ======
Weighted average shares
outstanding 24,881 2,992 15,017 2,954
====== ====== ====== ======
Genomic Solutions Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2000 1999
(unaudited) (audited)
------------- -------------
Assets
Current Assets:
Cash and cash equivalents $ 75,746 $ 1,328
Accounts receivable, net 6,840 3,812
Inventories 5,099 3,645
Prepaid expenses and other 1,178 285
------------- -------------
Total current assets 88,863 9,070
Property and equipment, net 4,081 3,105
Goodwill and other assets 1,257 1,683
------------- -------------
Total assets $ 94,201 $ 13,858
============= =============
Liabilities and stockholders'
equity (deficit)
Current liabilities:
Lines of credit $ 31,800 $ 1,800
Current portion of long term
debt 793 712
Accounts payable and accrued
liabilities 6,732 4,335
Deferred revenue 346 173
------------- -------------
Total current liabilities 39,671 7,020
------------- -------------
Long-term liabilities:
Subordinated debt - 7,526
Long-term debt, less current
portion 1,377 1,152
Other long-term liabilities 103 100
------------- -------------
Total long-term liabilities 1,480 8,778
------------- -------------
Commitments:
Common stock warrants - 7,441
Stockholders' Equity (Deficit) 53,050 (9,381)
------------- -------------
Total liabilities and
stockholder equity
(deficit) $ 94,201 $ 13,858
============= =============
For more information, contact the company at
info@genomicsolutions.com or visit the company's Website,
www.genomicsolutions.com .
CONTACT:
Company Investor Contact:
Genomic Solutions
Steve Richvalsky
888/447-4675
Steve@genomicsolutions.com
www.genomicsolutions.com
or
Investor Relations Contacts:
Lippert/Heilshorn & Associates, Inc.
Kim Golodetz (Kim@lhai.com)
212/838-3777
Bruce Voss (Bruce@lhai.com)
310/575-4848
www.lhai.com
or
Company Media Contact:
Genomic Solutions
Kathleen Murphy
888/447-4675
Kathleen.Murphy@genomicsolutions.com
www.genomicsolutions.com
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