Genoptix Reports Operating Results for the Second Quarter 2010

GENOPTIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

Six Months EndedJune 30,

2010

2009

Net income

$10,945

$13,816

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

1,890

1,666

Provision for doubtful accounts

2,764

2,230

Stock-based compensation expense

6,336

4,761

Excess tax benefits from stock-based compensation awards

(2,956)

(1,585)

Amortization of premium on investment securities, net

1,167

78

Deferred taxes

-

(29)

Realized gain on sale of investment securities

(6)

-

Loss on sale of property and equipment

3

6

Changes in operating assets and liabilities:

Accounts receivable

(11,594)

(8,024)

Other current and long-term assets

(260)

(159)

Accounts payable and accrued expenses

1,287

559

Accrued compensation

3,217

2,191

Income taxes

2,213

2,414

Deferred revenues

(35)

1,644

Deferred rent

141

7

15,112

19,575

Purchase of property and equipment

(17,323)

(2,347)

Purchase of investment securities

(69,751)

(80,620)

Proceeds from sales and maturities of investment securities

62,526

43,958

Purchase of intangibles

(1,520)

(150)

Release of restricted cash

90

90

(25,978)

(39,069)

Proceeds from issuance of common stock, net

1,476

1,175

Payment of taxes for issuance of restricted stock units

(526)

(390)

Excess tax benefits from stock-based compensation awards

2,956

1,585

Repurchase of common stock

(22)

-

3,884

2,370

(6,982)

(17,124)

27,945

38,108

$20,963

$20,984