Orchid Cellmark Reports Fourth Quarter and Full Year 2007 Financial Results
Total revenues were essentially flat at $15.0 million for the fourthquarter of 2007 compared to $14.9 million for the fourth quarter of 2006. Forthe full year of 2007, revenues were $60.3 million compared to $56.9 millionfor the full year of 2006. Revenues for the fourth quarter of 2007 ascompared to the fourth quarter of 2006 increased slightly due to increasedrevenue associated with the acquisition of ReliaGene in October 2007, offsetby lower volume of U.K. agricultural testing services and U.S. forensiccasework. Revenues for the full year of 2007 increased by $3.4 million ascompared to 2006 due to increases in U.S. and U.K. forensic revenues and theimpact of the ReliaGene acquisition partially offset by decreases in U.K.agricultural and government and private paternity revenues in the U.S.
Gross margin for the fourth quarter of 2007 was 30% compared to a grossmargin of 36% for the fourth quarter of 2006. Gross margin for the fourthquarter of 2007 as compared to the fourth quarter of 2006 was negativelyimpacted by decreased testing volumes in U.K. agricultural testing servicesand U.S. forensic casework and costs associated with expanding our U.K.capabilities and capacity in anticipation of new tender awards. Gross marginfor the full year of 2007 was 33% compared to a gross margin for the full yearof 2006 of 30%. The increase in gross margin for the full year of 2007compared to 2006 primarily reflects improved pricing in U.S. forensic caseworkand CODIS testing services and operating cost efficiencies, partially offsetby reduced gross margin contribution associated with the reduced U.K.agricultural testing services.
Total operating expenses, excluding cost of service revenue, for thefourth quarter of 2007 were $5.8 million compared to $6.3 million for thefourth quarter of 2006. Operating expenses, excluding cost of servicerevenue, decreased from $29.2 million in 2006 to $24.2 million in 2007. Thesedeclines were primarily due to a decline in U.S. general and administrative,marketing and sales, and restructuring expenses resulting from our continuedfocus on reducing expenses.
The company's operating loss for the fourth quarter of 2007 was $1.3million, compared to an operating loss of $956 thousand for the fourth quarterof 2006. The operating loss for the full year of 2007 was $4.1 millioncompared to $12.0 million in 2006. The increase in operating loss for thefourth quarter of 2007 compared to the fourth quarter of 2006 was principallydue to the reduction in gross margin for the quarter compared to the sameperiod in 2006 partially offset by a reduction in operating expenses,primarily reduced general and administrative expenses. The $7.9 milliondecrease in the operating loss for the full year of 2007 compared to 2006primarily reflects stronger gross margins for the full year of 2007 coupledwith lower operating expenses.
Orchid Cellmark reported net income of $168 thousand, or $0.01 per share,for the fourth quarter of 2007, compared to a net income of $885 thousand, or$0.03 per share, for the fourth quarter of 2006. The net loss for the fullyear of 2007 was $3.0 million, or $(0.10) per share, compared to a net loss of$11.3 million in 2006, or $(0.45) per share. The fourth quarters of 2007 and2006 include proceeds from the sale of state net operating losses of $1.1million and $749 thousand, respectively, which are reflected as reductions ofincome tax expense in the respective quarters and which positively impactedour net results.
At December 31, 2007, cash and cash equivalents were $20.9 million andrestricted cash was $958 thousand. In the fourth quarter of 2007, cashprovided by operations was $1.9 million a
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