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"The third quarter marked the three-year anniversary for our managementteam's arrival, and I am extremely proud of the outstanding progress we havemade over this period," Andrews said. "The divestiture of our instrumentsystems business in March has allowed us to focus all of our organizationalenergy on rapidly expanding our technology empowered service business. Giventhe traditional third quarter seasonality in our industry, posting anotherquarter of sequential, double-digit growth during this period is veryencouraging."
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Testing volumes for the third quarter increased over the second quarter of2007 as follows: breast prognostics/solid tumor testing volumes increased 6percent, leukemia/lymphoma volumes increased 16 percent, and PCR/moleculartesting increased 16 percent. Testing volumes have grown 48 percent in thequarter when compared to the third quarter of 2006.
Gross profit in the third quarter of 2007 was $6.3 million, an increase of79 percent as compared to $3.5 million in the third quarter of 2006. Grossmargin in the third quarter 2007 was 52 percent, as compared to 45 percent inthe 2006 third quarter. Andrews noted that gross margins are improving as aresult of volume growth and better use of the Company's capacity, a betterrevenue mix, process efficiencies and improved pricing with vendors.
Total operating expenses were $8.7 million for the third quarter of 2007,an increase of 37 percent compared to $6.4 in the third quarter of 2006. Thegrowth in expense was primarily due to restructuring charges incurred duringthe quarter relating to changes in management, increased professional fees andincreased selling, bad debt and collection expenses due to the Company'srevenue growth.
Operating loss was $2.4 million, compared to a loss of $2.8 million in thethird quarter 2006, a reduction of 14 percent. Net loss from continuingoperations in the 2007 third quarter was $2.9 million or $0.04 loss per shareas compared to $3.1 million or $0.05 loss per share in the comparable 2006period. Net loss, including discontinued operations, for the third quarter of2007 was $2.8 million, or a net loss per share of $0.04, as compared to a netloss of $4.0 million or net loss per share of $0.06 in the third quarter 2006.
Commenting further, Andrews said, "Another significant milestone in thequarter was the first revenue achieved from services related to our novelmarker strategy. Along with continued growth from existing cancer diagnosticservices, we believe our novel marker program can provide us with additionalhigh-growth revenue streams, which are the foundation of our new businessmodel. While revenue in novel markers is modest now, we are currently invarious stages of development with key programs in each of the areas of cancerin which we have franchises. We expect to begin commercialization of a numberof additional novel markers in the coming 12 months."
At September 30, 2007, the Company's cash and cash equivalents were $2.0million compared to $0.4 million at December 31, 2006. Including cash, cashequivalents and existing debt lines the Company ende
