Third Wave reports, beating revenue estimates, but not earnings because certain expenses were up per the PR. I was wondering why it was getting beaten up lately; the latter is likely the cause. Not sure what to make of the guidance, as they talk of revenue growth in specific numbers for two businesses -- genomics and personalized medicine -- but do not break them out so we can do the arithmetic. Another conference call to listen to . . .
>>MADISON, Wis., Feb. 26 /PRNewswire-FirstCall/ -- Third Wave Technologies Inc. (Nasdaq: TWTI - news) today reported total revenues for the year ended Dec. 31, 2001, of $34.1 million, an increase of 199 percent from $11.4 million in 2000. Sales of Third Wave's Invader genetic analysis products increased to $30.4 million for fiscal year 2001, up from $10.9 million in 2000. Revenue for the fourth quarter of 2001 was essentially flat compared to the prior year due to the timing of consumable product shipments.
``We are very pleased to have exceeded initial revenue expectations for 2001. We are particularly encouraged by the fact that our revenues were generated primarily by the sale of Third Wave's consumable genetic analysis products in both the research and patient settings,'' said Lance Fors, Ph.D., chairman and chief executive officer of Third Wave. ``2001 was a pivotal year for Third Wave. We supported the largest gene-based medical association study ever done. This allowed us to make the necessary investments and further perfect our capabilities in the market place on a real time basis, while validating the strength of our value proposition in large-scale disease association studies.''
``More importantly, we are extremely well positioned to leverage our initial success in the personalized patient care markets to gain increased market share and higher margins,'' said Dr. Fors. ``Third Wave's accomplishments during 2001 clearly show that our company has the product platform to serve a growing base of customers. The unique advantage of Third Wave is that we are not locked on a certain market-we are not just a tools company. Therefore, in 2002, we will focus more intently on marketing our products in the 'application markets' that yield higher returns. This commitment will be demonstrated in our future revenue and customer mix, which spans the health care continuum from discovery to the patient.''
Total operating expenses increased to $72.6 million for the year ended Dec. 31, 2001, from $37.9 million in 2000. Third Wave's gross margin was lower than expected due to transitioning a major customer relationship from a former alliance partner. Additionally, as the company focused on operational efficiencies and moved into higher value-added products, legacy project assets stemming from the original partner alliance were no longer necessary. Accordingly, certain project assets were written off.
``One of my main goals since joining the Third Wave team has been to ensure that we are maximizing our long-term value and utilizing our resources in the most efficient manner possible,'' said John J. Puisis, chief financial officer of Third Wave. ``Though we had incremental transition costs in 2001, we successfully laid the foundation for more efficient operations going forward. Furthermore, as we broaden our customer base and move into higher margin businesses, the company anticipates additional efficiencies.''
Third Wave reported a net loss attributable to common shareholders of $36.8 million, or ($1.03) per diluted share, for the year ended Dec. 31, 2001, compared to a net loss attributable to common shareholders of $42.6 million, or ($2.83) per diluted share, for 2000. On a pro forma basis, the net loss was ($0.98) for both 2001 and 2000.
Excluding exceptional, non-cash charges detailed in the attached financial statements, the pro forma net loss would have been $27.4 million, or ($0.73) per diluted share, for the year ended Dec. 31, 2001, compared to a pro forma net loss of $13.6 million, or ($0.52) per diluted share, for 2000.
2001 Highlights
* Successfully launched its initial public offering in February, raising
$82.5 million, the largest biotech IPO in 2001.
* Established two business units: Genomics and Personalized Patient Care.
This segmentation is designed to ensure that the company is efficiently
allocating its internal and external resources to capture near- and
long-term opportunities and improve shareholder value.
* Announced the appointment of John J. Puisis as chief financial officer
in October. Mr. Puisis brings two decades of strategic planning,
business execution and financial experience to Third Wave, including an
integral role in Dekalb Genetics' initiative to improve its strategic
and equity value, which culminated in its acquisition by Monsanto for
$2.3 billion.
* The company also announced that Ivan Trifunovich, Ph.D., formerly the
vice president of research strategy and operations at Pharmacia
(NYSE: PHA - news), will direct the company's Genomics business unit.
Genomics
* The Japanese government's SNP Initiative in May formally confirmed its
commitment to collaborate with Third Wave on the largest disease
association study in the world. The project will perform more than 100
million genotypes using 120,000 unique Invader SNP analysis products.
Important medical associations have already been discovered in the
areas of arthritis and asthma.
* Third Wave launched its ground breaking Invader panel product format.
This one-step, "just add patient sample" format has been proven in
genomic studies and has the ease of use that will be necessary for
DNA-based tests to reach the doctor's office and point of care.
* In January, Third Wave was chosen to collaborate with the University of
Minnesota on the largest NIH-sponsored disease association study to
date. The study is validating associations between specific single
nucleotide polymorphisms (SNPs) and predisposition to hereditary
hemochromatosis, a common genetic disease that causes iron to
accumulate to toxic levels in the body.
Personalized Patient Care
* Kaiser Permanente, the world's largest managed care organization, in
May adopted Third Wave products for routine clinical use in the early
diagnosis of deep-vein thrombosis risk. Kaiser serves more than
5.9 million patients throughout California.
* Third Wave in November announced that it had secured the worldwide
license for research and clinical diagnostic applications to patents
covering more than 3,300 newly discovered markers within 200 genes that
regulate drug metabolism. The company's portfolio encompasses
approximately two-thirds of the world's known drug-utilization markers.
These markers can be used immediately in Third Wave products in both
pharmaceutical company clinical trials and several patient care
situations.
* Third Wave launched a total of nine products for clinical use during
2001, including reagents for the genetic analysis of deep-vein
thrombosis and cardiovascular disease risks. Third Wave DNA reagents
allow simple, fast and highly accurate genotyping directly from genomic
DNA.
2002 Outlook
Third Wave foresees continued revenue growth and improving cash flow in 2002. The company's growth will be driven by its focus on increasing revenues and broadening the revenue mix, improving margins, reducing costs and managing cash. The company's financial performance will be predicated on increasing penetration in the U.S. and European markets, as well as expanding its market leadership position in Japan through increased customer adoption.
In order to achieve its goals in 2002, Third Wave will focus on commercializing its core technology through its two business units: Genomics and Personalized Patient Care. The genomics unit, which is expected to generate approximately 80 percent of the company's total revenues and have a growth rate of 25 percent, will focus on large-scale disease association studies and medically relevant drug response programs. The faster-growing personalized patient care unit, which will generate roughly 16 percent of the company's total revenues and have a growth rate of 200 percent, will focus on the rapidly expanding applications for disease and drug response markers with clinical reference laboratories and managed care organizations.
Conference Call
Company management will host a conference call on Tuesday, Feb. 26, at 10 a.m. EDT to discuss fourth quarter and 2001 results and guidance for 2002. Domestic callers should dial (888) 482-2239 and international callers should dial (800) 2517-5110. The access code for both domestic and international callers is 1492411. Please dial in five to 10 minutes prior to the start of conference call. A live webcast and a replay of the conference call will be available at twt.com. The conference call, webcast and replay are open to all interested parties.
About Third Wave Technologies
Third Wave Technologies develops, manufactures and markets genetic analysis products used in the discovery and validation of the genetic basis of disease and the delivery of personalized medicine.
The company's patented Invader® product platform is highly accurate, sensitive, easy to use and cost-effective, enabling the acceleration of genome and pharmaceutical research and clinical patient analysis.
Third Wave's product commercialization strategy is rooted in a simple concept: drive value creation by leveraging any one of its tens of thousands of unique research products into increasingly larger revenue and market opportunities as it moves from basic research to medical genetic to routine clinical applications. The company has established strategic collaborations in the U.S. and abroad with government agencies, pharmaceutical and biotechnology companies, academic research centers, clinical reference labs and major healthcare providers. Through these partnerships and ongoing research and development, Third Wave will continue to expand its menu of products and drive their transition from the research market to the clinical market.
For more information about Third Wave and its products, please visit the company's website at twt.com.
The company's financial results may vary significantly from quarter to quarter due to fluctuations in the demand for the company's products, timing of new product introductions and deliveries made during the quarter, the timing of research, development and grant revenues, and increases in spending, including expenses related to the company's ongoing scale up to its product development and manufacturing capabilities.
All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934 as amended. Such forward-looking statements are subject to factors that could cause actual results to differ materially for Third Wave from those projected. Those factors include risks and uncertainties relating to technological approaches of Third Wave and its competitors, product development, manufacturing, market acceptance, cost and pricing of Third Wave products, dependence on collaborative partners and commercial customers, successful performance under collaborative and commercial agreements, competition, the strength of the Third Wave intellectual property, the intellectual property of others and other risk factors identified in the documents Third Wave has filed, or will file, with the Securities and Exchange Commission. Copies of the Third Wave filings with the SEC may be obtained from the SEC Internet site at www.sec.gov. Third Wave expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Third Wave's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based. Third Wave Technologies, Invader and the Third Wave logo are trademarks of Third Wave Technologies, Inc.
Third Wave Technologies, Inc
Statement of Operations
(In thousands, except for per share amounts)
(Unaudited)
Three Months Ended For Year Ended
December 31, December 31,
2001 2000 2001 2000
Revenues:
Product $5,100 $6,239 $30,405 $10,891
Grant 187 158 577 424
Development 750 83 3,110 102
6,037 6,480 34,092 11,417
Operating expenses:
Cost of goods sold 9,621 5,061 32,930 11,518
Research and development 4,610 2,558 15,995 7,337
Selling and marketing 2,125 1,617 9,200 4,983
General and
administrative 6,343 3,297 14,521 7,408
Impairment loss -- -- -- 5,789
Merger costs -- 29 -- 833
Total operating
expenses 22,699 12,562 72,646 37,868
Loss from operations (16,662) (6,082) (38,554) (26,451)
Other income (expense):
Interest income 455 640 3,350 1,500
Interest expense (381) (268) (1,347) (674)
Equity in losses from
joint venture (241) -- (241) --
Other (48) 9 -- 51
(215) 381 1,762 877
Net loss $(16,877) $(5,701) $(36,792) $(25,574)
Deemed dividend upon
issuance of
convertible preferred
stock 0 0 0 (17,023)
Net loss attributable
to common
shareholders $(16,877) $(5,701) $(36,792) $(42,597)
Net loss per share -
basic and diluted $ (0.44) $(0.37) $(1.03) $ (2.83)
Weighted average shares
outstanding, basic
and diluted 38,580 15,292 35,714 15,078
Pro forma, net loss per
share - basic and
diluted $ (0.44) $(0.19) $(0.98) $ (0.98)
Pro forma weighted
average shares outstanding,
basic and diluted 38,580 29,586 37,483 26,120
* The pro forma disclosure assumes the shares associated with preferred
stock and the convertible note payable were converted to common stock
upon issuance. Additionally, the pro forma disclosure excludes
interest of $164,000 and $74,000 on the convertible note payable. The
pro forma disclosure is presented for illustrative purposes only and is
not prepared in accordance with accounting principles generally
accepted in the United States.
Third Wave Technologies, Inc
Reconciliation of Net Loss to Pro Forma Net Loss
(In thousands, except for per share amounts)
(Unaudited)
Three Months Ended For Year Ended,
December 31, December 31,
2001 2000 2001 2000
Net loss attributable to
common
shareholders $(16,877) $(5,701) $(36,792) $(42,597)
Exceptional charges
Stock compensation
Cost of goods sold 97 343 540 891
Research and development 50 173 271 229
Selling and marketing 22 262 124 469
General and
administrative 343 1,512 1,878 1,986
Total stock compensation
charges 512 2,290 2,813 3,575
Amortization of agreements 483 420 1,931 1,673
Impairment loss -- -- -- 5,789
Fixed asset charge 2,970 -- 2,970 --
Excess inventory charge 1,500 -- 1,500 --
Merger costs -- 29 -- 833
Interest on convertible
note payable -- 74 164 74
Deemed dividend on issuance
of convertible
preferred stock -- -- -- 17,023
Total exceptional
charges 5,465 2,813 9,378 28,967
Net loss excluding
exceptional
charges $(11,412) $(2,888) $(27,414) $(13,630)
Pro forma, net loss
per share
- basic and diluted $ (0.30) $(0.10) $(0.73) $ (0.52)
* The pro forma disclosure is for illustrative purposes only, and is not
prepared in accordance with accounting principles generally accepted in
the United States.
Third Wave Technologies, Inc
Balance Sheets
(In thousands, except for per share amounts)
(Unaudited)
December 31 December 31
2001 2000
Assets:
Cash, cash equivalents,
and short-term
investments $73,299 $47,179
Other current assets 10,587 3,886
Equipment and leasehold improvements, net 27,581 17,245
Intangible assets 15,432 11,071
Other assets 4,716 3,812
Total assets $131,615 $83,193
Liabilities and shareholders' equity
Accounts payable, accrued expenses and
other liabilities $13,454 $13,635
Deferred revenue 2,453 3,628
Debt 10,955 8,891
Convertible note payable -- 10,000
Shareholders' equity 104,753 47,039
Total liabilities and shareholders' equity $131,615 $83,193<<
Cheers, Tuck |
