Cepheid Reports Fourth Quarter and Full Year 2009 Results
Fiscal 2009 Overview
For the full fiscal year ended December 31, 2009, Cepheid reported revenue of $170.6 million. Net loss for the full year was $22.5 million, or $(0.39) per share, which compares to a net loss of $22.4 million, or $(0.39) per share in 2008. Excluding amortization of purchased intangible assets and stock compensation expenses, non-GAAP net loss for the full year was $5.0 million, or $(0.09) per share. This compares to a non-GAAP net loss of $7.1 million, or $(0.13) per share, for the full year 2008.
"Increasing recognition of the accuracy and ease of use of our GeneXpert® System, coupled with one of the broadest menus of rapid molecular tests available on the market, resulted in year-over-year growth of 28% in our Clinical business," said John Bishop, Cepheid's Chief Executive Officer. "During 2010, we expect our Clinical business will continue to grow rapidly, as we build on our leadership position in molecular diagnostic testing for Healthcare Associated Infections and further extend our women's health test menu and our menu for other critical infectious diseases."
For the fiscal year ending December 31, 2010, the Company expects:
Expected non-GAAP net income/loss excludes approximately $16.5 million related to stock compensation expense and approximately $1.5 million related to the amortization of acquired intangibles.
Accessing Cepheid's Fourth Quarter and Full Year 2009 Results Conference Call
The company will host a management presentation at 2:00 p.m. Pacific Time on Thursday, January 28, 2010 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 and investors may also listen to the live teleconference call by dialing 800-299-9086 (domestic) or 617-786-2903 (international), and entering participant code 23247524. A replay will be available for seven days beginning at about 4 p.m. Pacific Time. Access numbers for this replay are 888-286-8010 (domestic) and 617-801-6888 (international), with passcode 33489639.
Based in Sunnyvale, Calif., Cepheid (Nasdaq: CPHD) 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 stock-based compensation expense. These expenses consist primarily of expenses for employee stock options and employee restricted stock under ASC 718 (formerly SFAS 123(R)). The company excludes employee stock-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 ASC 718, it believes that it is useful to investors to understand the impact of the application of ASC 718 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.
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 particularly in the clinical market, 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: 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, including the uncertain impact of the significant global economic downturn on our business, and that of our customers, potential customers and business partners. Readers should also refer to the section entitled "Risk Factors" in Cepheid's Annual Report on Form 10-K, 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.
-- Fourth quarter of fiscal 2009 Clinical sales of $35.6 million grew 46% from $24.4 million in the fourth quarter of 2008, and total fourth quarter of fiscal 2009 product sales of $48.2 million grew 34% from the same quarter a year ago. For the full year 2009, total product sales of $165.2 million compared to $159.4 million reported for the full year 2008. By industry, product sales were, in millions:
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