here's the last q report for reference point...
Cepheid Reports Second Quarter 2005 Results
Thursday August 4, 4:01 pm ET
Total Revenues Increase by 89% Driven by 93% Increase in Product Sales
Gross Margin Dollars on Product Sales Increase by 94%
SUNNYVALE, Calif., Aug. 4 /PRNewswire-FirstCall/ -- Cepheid (Nasdaq: CPHD - News) today announced financial results for the quarter and six months ended June 30, 2005.
Product sales for the quarter ended June 30, 2005 increased 93% to approximately $20.2 million from approximately $10.5 million for the corresponding prior year period while product sales for the six months ended June 30, 2005 increased 128% to approximately $39.0 million from approximately $17.1 million for the corresponding prior year period. The increase in product sales for the quarter and six months ended June 30, 2005 as compared to the corresponding prior year periods was primarily due to a 371% and 459% increase in reagent and disposable sales, respectively.
Total revenues for the quarter ended June 30, 2005 increased 89% to approximately $21.4 million compared to approximately $11.3 million for the corresponding prior year period while total revenues for the six months ended June 30, 2005 increased 121% to approximately $41.0 million from $18.5 million for the corresponding prior year period. The increase in total revenue for both the quarter and six months ended June 30, 2005 as compared to the corresponding prior year period was due primarily to the increase in product sales. Contract revenue of $0.7 million and $1.4 million for the quarter and six months ended June 30, 2005 was primarily derived from the amortization of up-front license fees in connection with the Company's collaboration with bioMerieux.
Gross Margin Dollars on product sales (total product sales less cost of product sales) for the quarter and six months ended June 30, 2005 increased by 94% and 112%, respectively as compared to the corresponding prior year periods. The gross margin percentage on product sales for the quarter ended June 30, 2005 was consistent at 42% when compared to the corresponding prior year period and decreased to 43% for the six months ended June 30, 2005 as compared to 47% for the corresponding prior year period. The decline in gross margin on product sales for the six months ended June 30, 2005 as compared to the corresponding prior year period was due primarily to the amortization of up front license fees and higher ongoing royalty costs associated with the Company's patent license agreements entered into with Applera Corporation and F. Hoffman-La Roche Ltd in the second and third quarter of 2004 as well as one time favorable pricing achieved in the first quarter of 2004 which did not occur in the six months ended June 30, 2005. Gross margin on product sales for the full year 2005 is expected to be in the range of 43% to 45%. Previous guidance was for gross margin on product sales to be in the range of 45% to 49%.
Net loss for the quarter and six months ended June 30, 2005 was approximately $3.6 million, or $0.09 per share and $7.1 million, or $0.17 per share, respectively, compared to a net loss of approximately $3.7 million, or $0.09 per share and $7.9 million, or $0.20 per share, respectively, for the corresponding prior year periods.
"The Company is continuing to show progress in developing the individual segments of our overall business plan. Three ASR's were released during the second quarter covering gene expression and bacterial targets. Two additional ASR's for bacterial targets were released subsequent to the close of the quarter. These releases bring the total number of ASR's currently available from the Company to 10. In addition, a new general use PCR master mix product was released for use in both our ASR and Industrial markets."
"Collaborations and CSR programs were initiated with the FDA for Salmonella and E. coli O157:H7/STEC, the University of North Carolina for recreational water testing of E. coli, Enterococcus, Vibrio, Bacteroides and the Public Health Research Institute (PHRI) for Methicillin Resistant Staph aureus (MRSA) and VRE."
"The biothreat program with the United States Postal Service (USPS) continues to move forward with installation of Biohazard Detection Systems (BDS). At this time over 800 BDS units have been installed. In addition, a significant testing milestone has been passed with over 1,000,000 tests now having been run with no false positives while simultaneously maintaining a very high level of sensitivity. This result is equivalent to a specificity of greater than 99.9999%. This was achieved using our patented testing system that includes our closed cartridge, with integrated automated sample processing."
"Subsequent to the close of the quarter, we made a significant addition to the management team with the appointment of David Persing M.D., Ph.D., currently a member of the Company's Board of Directors, to the position of Executive Vice President, Chief Medical and Technical Officer. Dr. Persing is a noted authority in the field of infectious diseases and he brings a unique combination of practical clinical experience along with a familiarity of industry research and development models, which should immediately benefit the team and our programs in the Clinical, Biothreat and Industrial markets," stated John Bishop, Cepheid's CEO.
2005 Outlook
Commenting on Cepheid's outlook for the remainder of 2005, Mr. Bishop stated:
"Work is continuing on our BCR/ABL ASR product for use on the GeneXpert® system and we continue to expect to initiate product shipments in the second half of this year. Development of our initial FDA product for detection of Group B Strep (GBS) continues on the GeneXpert system along with a second generation version of GBS on the SmartCycler® system. We expect to simultaneously introduce both products in early 2006 in Europe with subsequent release in the United States. The key issue has been to insure optimization of the test sensitivity in the GeneXpert system and to simultaneously make available a product with the same level of sensitivity for our existing SmartCycler customers. Our product for the detection of Enterovirus is also expected to enter clinical trials this year."
"Research also continues on a GeneXpert version of MRSA and a second generation MRSA test for the SmartCycler system. Both tests are expected to be simultaneously released in 2006."
"We continue to expect deployment of BDS units to be completed in all 282 USPS processing centers by the end of this year. As we have previously discussed, we expect to continue to supply GeneXpert anthrax test cartridges to the USPS for use in the installed base of BDS units. In this regard, we recently received an Authorization Letter from Northrop Grumman for the purchase of 2.3 million anthrax cartridges to be delivered over a 14 month period commencing in August of 2005 and running through September of 2006. We have also announced our development plans for an expanded biothreat product menu, which is expected to include the following cartridge configurations in sequential order: 3 agent cartridge including anthrax, Y. pestis and F. tularensis; 4 agent cartridge including anthrax, Y. pestis, F. tularensis and Smallpox; 4 agent viral cartridge including Ebola, Marburg, Crimean-Congo hemorrhagic fever (CCHF) and Venezuelan equine encephalitis (VEE); 6 agent cartridge including anthrax, Y. pestis, F. tularensis, Smallpox, Burkolderia, and Brucella; a 10 agent array cartridge including anthrax, Y. pestis, F. tularensis, Smallpox, Burkolderia, Brucella, Ebola, Marburg, CCHF and VEE."
"Our market focus will continue to be in the Clinical Genetic Assessment market, along with the Biothreat and Industrial markets. In response to market demand, we are expanding what was previously the Life Science market to a broader Industrial market, which will encompass Food, Agricultural and Environmental testing in addition to research use generally associated with the Life Science market. As a part of this program, we recently participated in a head-to-head third party evaluation of water tests for E. Coli and Enterococcus against other competitors. Early indications are that the Cepheid tests, utilizing our licensed Scorpions technology, will be found to be superior to the competitor products. These water testing products are expected to be released for environmental recreational water testing before the end of 2005."
"While we continue to make significant progress in product development, we are also addressing issues associated with automated high volume production which have negatively impacted our manufacturing gross profit margins. We expect to make significant progress in resolving these issues by the end of this year. However, we will be realizing less gross profit dollars on product sales than we had previously expected in the near term."
"We also recently had our first Customer Corrective Action Notice involving a software bug associated with our SmartCycler Diagnostic software. The Company moved expeditiously to notify customers and has not received any indication of adverse patient events. We do not expect this customer corrective action to have any material financial impact to the Company."
"We reaffirm that we expect our 2005 product sales to be in the range of $80.0 million to $84.0 million, based on anticipated sales for the USPS program and sales expected from other existing and new products. However, given the near-term impact on our manufacturing gross margins, we are increasing our expected 2005 net loss to be in the range of $12.0 million to $14.0 million or $0.28 to $0.33 per share based on actual weighted average shares outstanding of 42.5 million as of June 30, 2005. Previous guidance was an expected 2005 net loss of $9.0 million to $11.0 million or $0.21 to $0.26 per share. Our net loss projections do not include any stock compensation expense associated with SFAS 123R for which mandatory implementation has been delayed until January 1, 2006 by the Securities and Exchange Commission."
As of June 30, 2005, the Company had $52.4 million in unrestricted cash and marketable securities.
Conference Call Information
Cepheid's CEO, John Bishop, and Senior V.P. and CFO, John Sluis will host a conference call today at 4:30 pm (Eastern) to discuss Cepheid's financial results, business highlights and outlook. The call will be simultaneously broadcast over the Internet. Interested participants and investors may access the teleconference call by dialing 800-366-7417 (domestic) or 303-262-2141 (international). There will also be a live webcast of the call on the Investor Relations section of Cepheid's web site at www.cepheid.com. Web participants are encouraged to go to the web site at least 15 minutes prior to the start of the call to register, download, and install any necessary audio software.
After the live webcast, the call will remain available on Cepheid's website, www.cepheid.com, through August 4, 2006. A replay of the conference call will be available at 800-405-2236 (domestic) or 303-590-3000 (international) through August 11, 2005; the conference ID is 11034949. The replay will be available after 6:30 pm (Eastern).
About Cepheid
Cepheid (Nasdaq: CPHD - News), based in Sunnyvale, Calif., is a leading developer, manufacturer and marketer of fully integrated systems that enable genetic assessment when and where it is needed. Founded in 1996, the company is commercializing its technology and products worldwide for research, medical, and industrial applications requiring assessment of the human genome, infectious disease and biothreat agents. See www.cepheid.com for more information. |
