Clarient Announces Fourth Quarter and Year-End 2007 Financial Results
Total patient case volume for the fourth quarter of 2007 was approximately21,500, an increase of 52 percent compared to the comparable period in 2006.Sequential total patient test volume in comparison to the third quarter of2007 increased 10 percent, including a 6 percent increase in breastprognostics/solid tumor testing, an 18 percent increase in leukemia/lymphomavolumes, and a 12 percent increase in PCR/molecular testing volumes.
Clarient reported $6.4 million in gross profit for the fourth quarter of2007, an increase of 78 percent as compared to $3.6 million for the comparableperiod in 2006. Reported gross margin in the fourth quarter of 2007 was 52percent as compared to 45 percent for the same period 2006. Gross marginsimproved as a result of increased total patient volume, better use of theCompany's capacity, improved revenue mix, improved process efficiencies andimproved pricing with vendors.
Commenting on the year end results, Ron Andrews, President and CEO, said,"Our business model continued to validate that we can produce sustainablegrowth as we completed the quarter with a 53 percent increase in revenue overthe fourth quarter of 2006. Our 10 percent sequential growth in test volumeversus third quarter is again indicative of our solid trajectory and hasprovided a strong foundation for continued growth in 2008. We believe that ourrevenues for the first quarter of 2008 will exceed our revenues for thecomparable period in 2007 by more than 50 percent. This base businessmomentum, combined with the pending launch of Clarient's Insight(TM) Dx BreastCancer Profile, provides solid reasons to remain very encouraged with ourdirection. Assuming we maintain our current commercial velocity, we believe wewill be able to achieve our 2008 goals of growing revenue between 30-40percent this year versus the fiscal year ended December 31, 2007."
Total operating expenses were $9.6 million for the fourth quarter of 2007,an increase of 49 percent compared to $6.4 million in the fourth quarter of2006. The growth in expense was primarily due to increased professional fees,selling expenses and collection expenses. Also the Company recorded bad debtexpense and increased its allowance for doubtful accounts by $1.8 million inthe fourth quarter of 2007 (as compared to bad debt expense of $300,000 in thefourth quarter of 2006) based on an analysis of its most recent historicalcollection information.
Operating loss was $3.2 million for the fourth quarter of 2007, anincrease of 14 percent from the same period in 2006. Loss from continuingoperations in the fourth quarter of 2007 was $3.8 million or $0.05 loss pershare, compared to $3.2 million or $0.05 loss per share in the fourth quarterof 2006, an increase of 19 percent.
At December 31, 2007, the Company's cash and cash equivalents were $1.5million compared to $0.4 million at December 31, 2006. As previouslyreported, on March 14, 2008 the Company entered into a credit facility withaffiliates of Safeguard Scientifics, Inc. pursuant to which Safeguard hasagreed to provide the Company with a total of up to $21 million (subject toadjustment) in debt financing via a revolving credit facility. Furtherinformation regarding the Safeguard facility is set forth in the Company'scurrent reports on Form 8-K filed with the Securities and Exchange Commissionon March 17, 2008 and March 21, 2008, respectively. The Company currently has$12.4 million of borrowings outstanding under th
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