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Caliper Life Sciences Reports Third Quarter 2008 Results; Sharpens Growth Focus, Strengthens Balance Sheet and Reduces Costs

- Completes Restructuring and Two Divestitures of Non-Core Product Lines -

HOPKINTON, Mass., Nov. 10 /PRNewswire-FirstCall/ -- Caliper Life Sciences, Inc. (Nasdaq: CALP) today reported third quarter financial results for 2008 and the completion of two product line divestitures: the sale of its AutoTrace(R) product line to Dionex Corporation for $5.0 million and the sale of its Pharmaceutical Development and Quality Analysis (PDQ) product line to SOTAX Corporation for $15.8 million. Revenues for the quarter were $34.0 million, in line with the company's guidance, compared to $36.7 million in the third quarter of 2007. Caliper's top-line performance reflected growth in the product and service lines comprising its core ongoing strategic business areas, as well as an anticipated decrease in non-recurring collaboration-based license and contract revenues which were lower by $4.8 million compared to the third quarter of 2007. Net loss for the quarter was $5.4 million ($0.11 per share), including restructuring charges of $2.7 million and severance charges of $0.3 million, compared to a net loss of $2.4 million ($0.05 per share) in the same quarter of 2007.

Total product and service revenues were $30.5 million during the quarter, an increase of 6% from the third quarter of 2007. This improvement was driven predominantly by continued growth of the company's optical molecular imaging product line, which grew 54% compared to the third quarter of 2007. While overall gross margins declined 800 basis points, primarily due to the non-recurring license and contract revenues discussed above, operating expenses for the quarter declined by $3.9 million, or 20%, compared to the third quarter of 2007. This decline included, among other changes, the cumulative impact of cost saving initiatives implemented over the previous twelve months, lower accrued compensation costs, and a recovery of previously incurred legal expenses as a result of a mediation settlement.

Adjusted earnings per share on a non-GAAP basis, as explained below under the heading "Use of Non-GAAP Financial Measures," was $0.01 compared to $0.03 for third quarter of 2007, reflecting the decrease of an estimated $4.5 million of contribution margin related to the non-recurring contract and license revenues, which was partially offset by cost improvements.

"Caliper's strategic transformation to higher growth, higher profit product lines continues to progress. We have divested two product lines, sharpened our focus, consolidated operations, reduced costs, and strengthened our balance sheet," said Kevin Hrusovsky, President and CEO of Caliper Life Sciences. "These advances, coupled with reconfiguring our resources into three strategic business areas, should accelerate our crossover to profitability."

Key Highlights:

-- Non-core Product line Divestitures Strengthen Balance Sheet. Earlier today Caliper completed the sale of two non-core product lines in transactions netting approximately $18.8 million in cash proceeds and the assumption by the purchasers of such product lines of approximately $2.0 million of liabilities.

-- In a transaction both announced and completed today, Caliper sold its AutoTrace product line to Dionex Corporation for approximately $5.0 million. The AutoTrace instrument is designed for water sample clean-up by solid phase extraction prior to the analysis of the sample for contaminants, and is generally sold for automating water testing in the environmental market.

-- The previously announced PDQ product line sale to SOTAX Corporation was completed for $15.8 million, including cash proceeds of approximately $13.8 million. The parties also intend to enter into a long-term lease agreement, pursuant to which Caliper will sublease approximately 10,000 square feet of manufacturing and office space to SOTAX on a market-rate basis starting in 2009.

-- Caliper Completed a Restructuring into Three Strategic Business Units to Sharpen Focus on Core Product Lines. During the third quarter, Caliper reorganized its various products and services along three core business areas -- Discovery Research (Research), Optical Molecular Imaging (Imaging), and Caliper Discovery Alliances and Services (CDAS) -- with the goal of creating a more scalable infrastructure while putting increased focus on growth and profitability.

-- Research is responsible for utilizing Caliper's core automation and microfluidic technologies to address an expanding array of opportunities in drug discovery and life science research, including molecular biology sample preparation for genomics, proteomics, cellular screening and forensics.

-- Imaging is responsible for expanding Caliper's global leadership position in the high growth optical molecular imaging market through expansion of therapeutic area applications of Caliper's IVIS(R) imaging platform, addressing critical discovery workflows and facilitating additional imaging modalities.

-- CDAS is responsible for expanding drug discovery collaborations and alliances, and increasing sales of drug discovery services. The focus of CDAS is to capitalize on market "outsourcing" trends and to maximize the large contract opportunity with the Environmental Protection Agency under its ToxCast screening program.

-- Reduced Operating Costs and Increased Productivity. The company benefited from cost savings initiatives implemented over the previous twelve months, including actions taken in the third quarter.

-- Upon the closing of the PDQ sale, approximately 23 Caliper employees transferred their employment positions to SOTAX. The total estimated annual cost associated with these employees is approximately $2.0 million.

-- In connection with the business realignment implemented in the third quarter, Caliper reduced its current workforce, including several senior management positions, and eliminated other open positions. In addition to achieving future cost savings with this realignment, the company believes its revised management structure will result in increased customer focus. This initiative is expected to achieve approximately $2.6 million of annualized savings and should begin to benefit operations in the fourth quarter of 2008.

-- The company completed the previously announced relocation of its research and development operations previously conducted in Mountain View, CA to its west coast R&D headquarters in Alameda, CA. In completing this move, an idle facility charge of $2.7 million was recorded during the third quarter, in line with previously communicated estimates. The company believes that the consolidation of these resources is improving R&D synergies in the formation of new technologies to address the company's I-I-H strategy vision.

-- As previously announced, the leases for two previously closed facilities in Mountain View expired in June, 2008, resulting in annualized cash savings of approximately $3.6 million.

2008 GAAP Guidance

Caliper reported that its revenue outlook for the fourth quarter of 2008 is $34.0 million to $37.0 million, reflecting the company's recent product line divestitures and the expected impact from foreign currency exchange rate movements compared to the US Dollar.

Use of Non-GAAP Financial Measures

Caliper supplements its GAAP financial reporting with certain non-GAAP financial measures. Caliper uses certain non-GAAP financial measures, including adjusted earnings per share, which exclude restructuring charges, including severance charges; amortization of acquired intangibles; asset impairment charges; and amortization of stock compensation. Caliper believes the presentation of non-GAAP financial measures provides useful information to management and investors regarding various financial and business trends relating to our financial position and results of operations, and that when these non-GAAP measures are viewed in conjunction with GAAP financial measures, investors are provided with a more meaningful understanding of our ongoing operating performance. In addition, Caliper uses these non-GAAP measures to evaluate its performance, allocate resources, set incentive compensation targets, and for planning and forecasting future periods. Non-GAAP measures are not intended to substitute for GAAP financial measures. To the extent that this release contains non-GAAP financial measures, Caliper has provided a reconciliation of such measure to the corresponding GAAP financial measure, and provided the corresponding GAAP financial measures for comparative purposes.

Caliper will discuss its third quarter results in a conference call to be held today, November 10 at 5:00 p.m. EST. To participate in the call, please dial 888.679.8034 five to ten minutes prior to the call and use the participant passcode 71318859. International callers can access the call by dialing 617.213.4847 and entering the same passcode. You may also pre-register for the call at

A live webcast including presentation materials can be accessed at or on the Caliper website at in the Events section of the Investor Relations page. A webcast replay of the call will remain available until Caliper's earnings call for the fourth quarter of 2008.

Telephone replays of the conference call will be available approximately two hours after the completion of the call. To access a telephone playback of the proceedings from November 10 through November 17, dial 888.286.8010 and use the participant passcode of 97542638. International callers can access the playback by dialing 617.801.6888 and using the same participant passcode.

About Caliper Life Sciences

Caliper Life Sciences is a premier provider of cutting-edge technologies enabling researchers in the life sciences industry to create life-saving and enhancing medicines and diagnostic tests more quickly and efficiently. Caliper is aggressively innovating new technology to bridge the gap between in vitro assays and in vivo results and then translating those results into cures for human disease. Caliper's portfolio of offerings includes state-of-the-art microfluidics, lab automation & liquid handling, optical imaging technologies, and discovery & development outsourcing solutions. For more information please visit

The statements in this press release regarding future events, including statements regarding Caliper's expected revenue outlook for the fourth quarter ending December 31, 2008, Caliper's expectations regarding its ability to improve top-line growth and margins to accelerate its crossover to profitability, Caliper's belief that it will achieve annualized cost savings of approximately $2.7 million from a recently implemented realignment of management, and Caliper's belief that its consolidation of R&D operations will improve R&D synergies in the formation of new technologies, are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements as a result of a number of factors, including that Caliper's expectations regarding demand for its products and services may not materialize if capital spending by Caliper's customers declines, if competitors introduce new competitive products, or if Caliper is unable to convince potential customers regarding the superior performance of its drug discovery and imaging systems and other products, and unanticipated difficulties may be encountered in Caliper's planned implementation of certain changes designed to reduce operating expenses, enhance gross margins and improve efficiencies within Caliper. Further information on risks faced by Caliper are detailed under the caption "Risks Related To Our Business" in Caliper's Annual Report on Form 10-K for the year ended December 31, 2007. Our filings are available on a web site maintained by the Securities and Exchange Commission at Caliper does not undertake any obligation to update forward-looking or other statements in this release or the conference call.

NOTE: AutoTrace, IVIS and Caliper are registered trademarks of Caliper Life Sciences, Inc.





(In thousands, except per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

2008 2007 2008 2007


Product revenue $19,965 $18,504 $59,655 $54,787

Service revenue 10,563 10,172 28,860 28,044

License fees and

contract revenue 3,513 8,045 8,844 17,620

Total revenue 34,041 36,721 97,359 100,451

Costs and expenses:

Cost of product revenue 11,983 11,278 36,321 33,800

Cost of service revenue 6,590 5,511 19,134 16,600

Cost of license revenue 588 971 1,154 2,238

Research and development 4,953 5,666 15,526 19,088

Selling, general and

administrative 10,256 13,399 36,945 39,312

Amortization of

intangible assets 1,742 2,522 6,721 7,593


charges, net 2,686 22 2,666 30

Total costs and expenses 38,798 39,369 118,467 118,661

Operating loss (4,757) (2,648) (21,108) (18,210)

Interest expense, net (227) (205) (584) (321)

Other income

(expense), net (411) 446 (92) 365

Provision for income taxes (1) (21) (229) (180)

Net loss $(5,396) $(2,428) $(22,013) $(18,346)

Net loss per share,

basic and diluted $(0.11) $(0.05) $(0.46) $(0.39)

Shares used in

computing net loss

per common share,

basic and diluted 48,378 47,425 47,987 47,212

Reconciliation of GAAP to Non-GAAP Financial Measure

Adjusted Basic Earnings per Share (see explanation of adjustments below)

Three Months Ended Nine Months Ended

September 30, September 30,

2008 2007 2008 2007

GAAP EPS - Basic $(0.11) $(0.05) $(0.46) $(0.39)




expense (1) 991 1,236 2,988 3,970

Purchase accounting

adjustments to revenue,

net of costs (2) - 26 23 879

Acquisition related


amortization (3) 1,742 2,522 6,721 7,593

Restructuring and

severance costs (4) 2,997 22 3,667 689

Total Adjustments $5,730 $3,806 $13,399 $13,131

Per share effect of

adjustments 0.12 0.08 0.28 0.28

Adjusted earnings per

share - Basic $0.01 $0.03 $(0.18) $(0.11)

We use the term "adjusted earnings per share" or "adjusted EPS" to refer to GAAP earnings per share excluding share-based compensation, purchase accounting revenue and cost of sales fair value adjustments due to business combination accounting rules, amortization of intangible assets, and restructuring and severance costs. Adjusted earnings per share is calculated by subtracting the total per share effect of these adjustments from GAAP EPS.

The adjustments are as follows:

1) We exclude share-based compensation from this measure because

share-based compensation plans involve sensitive measures and

assumptions in calculating the expense that could vary dramatically

between us and our peers, which we believe makes comparisons of

long-range trends difficult for management or investors, and could

result in overstating or understating the costs of developing,

producing, supporting and selling our products and the costs to support

our internal operating structure.

2) We exclude purchase accounting revenue fair value adjustments (net of

associated costs) from this measure due to business combination

accounting rules that would otherwise result in such revenues (and

associated costs) to be recognized on a continuing GAAP basis because

management expects the contractual arrangements underlying these

revenues will be renewed and that our investors will use this

adjustment as a basis for measuring our ongoing performance, although

there can be no assurance that such contractual arrangements will be


3) We exclude amortization of intangible assets from this measure because

we believe intangible asset amortization charges do not represent what

our management and our investors believe are the costs of developing,

producing, supporting and selling our products and the costs to support

our internal operating structure.

4) We exclude restructuring and severance costs from this measure because

they tend to occur as a result of specific events such as acquisitions,

divestitures, repositioning our business or other unusual events that

could make comparisons of long-range trends difficult for management or

investors and could distort performance measures involving our internal

investments and the costs to support our operating structure.




(in thousands)

September 30, December 31,

2008 2007

(unaudited) *


Current assets:

Cash, cash equivalents and marketable

securities $8,897 $18,955

Accounts receivable, net 27,260 30,248

Inventories 21,391 19,572

Other current assets 3,306 2,353

Total current assets 60,854 71,128

Property and equipment, net 11,466 11,477

Intangible assets, net 36,028 42,862

Goodwill 80,590 80,836

Other assets 1,008 1,626

Total assets $189,946 $207,929

Liabilities and stockholders' equity

Current liabilities $56,826 $45,391

Loans payable and other long-term obligations 10,553 21,352

Stockholders' equity 122,567 141,186

Total liabilities and stockholders' equity $189,946 $207,929

*Note: Derived from audited financial statements for the year ended

December 31, 2007.

SOURCE Caliper Life Sciences, Inc.
Copyright©2008 PR Newswire.
All rights reserved

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