Navigation Links
Cepheid Reports Fourth Quarter and Full Year 2008 Results

Announces Actions to Reduce 2009 Spending

SUNNYVALE, Calif., Feb. 5 /PRNewswire-FirstCall/ -- Cepheid (Nasdaq: CPHD) today reported revenue for the fourth quarter of 2008 of $37.8 million. Net loss was $5.9 million, or $(0.10) per share, which compares to revenue of $40.4 million and a net loss of $5.3 million, or $(0.10) per share, in the fourth quarter of fiscal 2007. Excluding amortization of purchased intangible assets and stock compensation expenses, non-GAAP net loss for the fourth quarter of fiscal 2008 was $2.3 million, or $(0.04) per share. This compares to a non-GAAP net loss of $1.2 million, or $(0.02) per share, in the fourth quarter of fiscal 2007.

Fiscal 2008 Overview

For the full fiscal year ended December 31, 2008, Cepheid reported record revenue of $169.6 million, representing an increase of 31% from 2007 associated with the widespread adoption of the company's GeneXpert(R) system for on-demand, random access molecular testing.

Net loss for the full year was $21.7 million, or $(0.38) per share, which compares to a net loss of $21.4 million, or $(0.39) per share in 2007. Excluding amortization of purchased intangible assets and stock compensation expenses, non-GAAP net loss for the full year was $6.5 million, or $(0.11) per share. This compares to a non-GAAP net loss of $9.3 million, or $(0.17) per share, for the full year 2007.

"Despite a challenging selling environment driven by increasing economic uncertainty as the year ended, continued adoption of our GeneXpert systems and Xpert(TM) tests drove full year growth of 112% in our Core Clinical business," said John Bishop, Cepheid's Chief Executive Officer. "Full year growth of more than 400% for our Xpert MRSA test positions us as the leader in molecular testing for Healthcare Associated Infections, and we enter 2009 with a broadened - and expanding - test menu that we believe will enable continued adoption of our GeneXpert system even in today's tough economic environment."

"With the potential for on-going economic uncertainty, we have executed a series of actions designed to optimize our opportunity for growth in our Core Clinical sales while reducing our 2009 spending levels and supporting our profitability improvement objectives. These actions included: a reduction-in-force totaling 47 positions that impacted employees, contractors and replacement positions; the implementation of a hiring freeze with the exception of specified positions in sales, marketing and manufacturing; and the suspension of annual salary increases for 2009."

"Without detriment to our near-term strategic imperatives, we have postponed certain facility expansions and selectively slowed development of some of our longer term strategic projects. Our near-term projects were not impacted by these actions. Notably, development of our Clostridium difficile test, our vanA/vanB Xpert test for vancomycin-resistant enterococci (or VRE), and our MRSA/SA nasal pre-surgical test are on-track and are expected to be released in the United States in the second half of 2009. In addition, in the first half of the year, we expect the European release of our Xpert TB test which simultaneously detects TB along with multi-drug resistance."

Operational Overview

  • Fourth quarter of fiscal 2008 Core Clinical sales of $24.7 million grew 53% from $16.1 million in the fourth quarter of 2007, while total fourth quarter of fiscal 2008 product sales of $36.1 million were down 2% from the same quarter a year ago due to anticipated declines in our biothreat business. For the full year 2008, total product sales of $159.4 million grew 37% from $116.5 million reported for the full year 2007. By market, product sales were, in millions:

                         Three Months Ended       Full Year Ended
                             December 31             December 31
                         2008  2007 Change       2008   2007 Change
                         ----  ---- ------       ----   ---- ------

    Core Clinical       $24.7 $16.1     53%     $91.7  $43.4    112%
    Clinical Partner      2.3   6.1    -62%      16.5   17.6     -6%
        Total Clinical   27.0  22.2     22%     108.2   61.0     77%
    Industrial            3.9   3.3     18%      15.4   14.7      5%
    Biothreat             5.2  11.4    -54%      35.8   40.8    -12%
    Total Product Sales $36.1 $36.9     -2%    $159.4 $116.5     37%

  • By geography, product sales were, in millions:

                         Three Months Ended       Full Year Ended
                             December 31             December 31
                         2008  2007 Change       2008   2007 Change
                         ----  ---- ------       ----   ---- ------

    North America       $28.3 $29.1     -3%    $125.3  $92.8     35%
    International         7.8   7.8      0%      34.1   23.7     44%
    Total Product Sales $36.1 $36.9     -2%    $159.4 $116.5     37%

  • During the fourth quarter of fiscal 2008, Cepheid placed a total of 99 GeneXpert systems and 598 modules. For the full year 2008, 458 GeneXpert systems and 2,518 modules were installed. As of December 31, 2008, a cumulative total of 947 GeneXpert systems and 5,107 modules have been placed worldwide.

  • For the fourth quarter of fiscal 2008, GAAP gross margin on product sales was 45.8% and non-GAAP gross margin on product sales was 46.5%, which compares to 41.8% and 43.1%, respectively, in the fourth quarter of fiscal 2007. For the full year 2008, GAAP gross margin on product sales was 44.1% and non-GAAP gross margin on product sales was 45.4%, which compares to 40.6% and 42.1%, respectively, for the full year 2007.

  • Cash, cash equivalents, restricted cash and investments, net of associated debt, were $34.9 million as of December 31, 2008.

  • DSOs increased to 46 days, within the Company's target range.

Business Outlook

For the fiscal year ending December 31, 2009, the Company expects:

  • Total revenue to be in the range of $164 to $174 million;

  • Net loss in the range of $(0.42) to $(0.47) per share;

  • Non-GAAP net loss in the range of $(0.11) to $(0.17) per share.

Non-GAAP net loss excludes approximately $16 million related to stock compensation expense, $1 million related to the amortization of acquired intangibles, and $0.8 million related to restructuring expenses.

Accessing Cepheid's Fourth Quarter and Full Year 2008 Results Conference Call

The company will host a management presentation at 2:00 p.m. Pacific Time on Thursday, February 5, 2009 to discuss the results. To access the live webcast, please visit Cepheid's website at at least 15 minutes before the scheduled start time to download any necessary audio or plug-in software. A replay of the webcast will be available shortly following the call and will remain available for at least 90 days.

Interested participants and investors may also listen to the live teleconference call by dialing 888-396-2298 (domestic) or 617-847-8708 (international), and entering participant code 81765966. A replay will be available for seven days beginning at about 4 p.m. Pacific Time. Access numbers for this replay are 888-286-8010 (domestic) and 617-801-6888 (international), with passcode 18804591.

About Cepheid

Cepheid (Nasdaq: CPHD), based in Sunnyvale, Calif., is an on-demand molecular diagnostics company that develops, manufactures, and markets fully-integrated systems and tests for genetic analysis in the clinical, industrial and biothreat markets. The Company's systems enable rapid, sophisticated genetic testing for organisms and genetic-based diseases by automating otherwise complex manual laboratory procedures. Cepheid's easy-to-use systems integrate a number of complicated and time-intensive steps, including sample preparation, DNA amplification and detection, which enable the analysis of complex biological samples in its proprietary test cartridges. Through its strong molecular biology capabilities, the Company is focusing on those applications where rapid molecular testing is particularly important, such as identifying infectious disease and cancer in the clinical market; food, agricultural, and environmental testing in the industrial market; and identifying bio-terrorism agents in the biothreat market.

Use of Non-GAAP Measures

The Company has supplemented its reported GAAP financial information with non-GAAP measures that do not include employee share-based compensation expense and amortization of purchased intangible assets, and with respect to the Company's outlook for 2009, restructuring charges. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. The Company's management uses the non-GAAP information internally to evaluate its ongoing business, continuing operational performance and cash requirements, and believes these non-GAAP measures are useful to investors as they provide a basis for evaluating the Company's cash requirements and additional insight into the underlying operating results and the Company's ongoing performance in the ordinary course of its operations.

These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with its results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.

As described above, the Company excludes the following items from one or more of its non-GAAP measures when applicable:

Employee share-based compensation expense. These expenses consist primarily of expenses for employee stock options and employee restricted stock under SFAS 123(R). The Company excludes employee share-based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses that the Company does not believe are reflective of ongoing operating results. Further, as the Company applies SFAS 123(R), it believes that it is useful to investors to understand the impact of the application of SFAS 123(R) on its results of operations.

Amortization of purchased intangible assets. The Company incurs amortization of purchased intangible assets in connection with acquisitions. The Company excludes these items because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Company's prior acquisitions and have no direct correlation to the operation of the Company's business.

Restructuring expenses. The Company also excluded expenses associated with its restructuring in computing its outlook for non-GAAP net loss for 2009. The Company excluded these items as it currently anticipates that such amounts are non-recurring in nature, and do not have a direct impact on the operation of the Company's core business.

Forward-Looking Statements

This press release contains forward-looking statements that are not purely historical regarding Cepheid's or its management's intentions, beliefs, expectations and strategies for the future, including those relating to potential growth in clinical product sales, product pipeline, future revenues and gross margin and demand for certain products, future net income and other future operating results. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the Company's current expectations. Factors that could cause actual results to differ materially include risks and uncertainties such as those relating to: the uncertain impact of the significant global economic downturn on our business, and that of our customers, potential customers and business partners; our success in increasing direct sales and the effectiveness of new sales personnel; the performance and market acceptance of new products; sufficient customer demand; our ability to develop and complete clinical trials successfully in a timely manner for new products; uncertainties related to the FDA regulatory and European regulatory processes; the level of testing at clinical customer sites; changes in the protocols or levels of testing for MRSA and other Healthcare Associated Infections (HAIs); the Company's ability to successfully introduce and sell products in clinical markets other than HAIs; the mix of products sold, which can affect gross margins; the rate of environmental biothreat testing conducted by the USPS, which will affect the amount of consumable products sold to the USPS; unforeseen development and manufacturing problems; the potential need for additional intellectual property licenses for tests and other products and the terms of such licenses; lengthy sales cycles in certain markets; the Company's ability to continue to realize manufacturing efficiencies, which are an important factor in improving gross margins; the Company's reliance on distributors in some regions to market, sell and support its products; the occurrence of unforeseen expenditures, acquisitions or other transactions; the impact of acquisitions; the impact of competitive products and pricing; the Company's ability to manage geographically-dispersed operations; and underlying market conditions worldwide. Readers should also refer to the section entitled "Risk Factors" in Cepheid's Annual Report on Form 10-K for 2007 and its other reports filed with the Securities and Exchange Commission.

All forward-looking statements and reasons why results might differ included in this release are made as of the date of this press release, based on information currently available to Cepheid, and Cepheid assumes no obligation to update any such forward-looking statement or reasons why results might differ.



                      (in thousands, except per share data)

                            Three Months Ended               Year Ended
                                December 31,                 December 31,
                              2008        2007            2008         2007
       System sales        $11,058     $15,597         $51,766      $47,739
       Reagent and
        disposable sales    25,059      21,268         107,617       68,793
                            ------      ------         -------       ------
          Total product
           sales            36,117      36,865         159,383      116,532
       Other revenues        1,712       3,562          10,244       12,941
                             -----       -----          ------       ------
    Total revenues          37,829      40,427         169,627      129,473
                            ------      ------         -------      -------
    Costs and operating
       Cost of product
        sales               19,561      21,452          89,040       69,174
       Collaboration profit
        sharing              2,119       3,299          11,089       12,256
       Research and
        development         10,837       8,717          43,310       31,449
       Sales and marketing   7,511       6,841          29,757       22,812
       General and
        administrative       5,079       5,851          20,861       18,269
       Gain from legal
        settlement          (1,454)          -          (1,454)           -
                           -------          --         -------           --
          Total costs and
           expenses         43,653      46,160         192,603      153,960
                            ------      ------         -------      -------
    Loss from operations    (5,824)     (5,733)        (22,976)     (24,487)
    Other income (expense),
     net                      (215)        658             352        3,277
                             -----         ---             ---        -----
    Net loss, before income
     tax benefit (expense)  (6,039)     (5,075)        (22,624)     (21,210)
    Income tax benefit
     (expense)                 161        (213)            911         (213)
                               ---       -----             ---        -----
    Net loss               $(5,878)    $(5,288)       $(21,713)    $(21,423)
                          ========    ========       =========    =========
    Basic and diluted net
     loss per share         $(0.10)     $(0.10)         $(0.38)      $(0.39)
                          ========    ========        ========     ========
    Shares used in
     computing basic and
     diluted net loss per
     share                  57,648      55,529          57,101       55,263
                            ======      ======          ======       ======


                              (in thousands)

                                                    December 31,  December 31,
                                                         2008          2007
    Current assets:
       Cash and cash equivalents                        $23,478       $16,476
       Restricted cash                                    1,500             -
       Marketable securities                                  -        27,550
       Accounts receivable, net                          18,952        21,263
       Inventory                                         33,498        23,821
       Prepaid expenses and other current assets          4,636         2,565
                                                          -----         -----
    Total current assets                                 82,064        91,675
    Property and equipment, net                          24,109        17,174
    Investments                                          24,539             -
    Other non-current assets                                920           923
    Intangible assets, net                               36,932        40,629
    Goodwill                                             18,556        14,844
                                                         ------        ------
    Total assets                                       $187,120      $165,245
                                                       ========      ========

    Current liabilities:
       Accounts payable                                  $9,669       $10,587
       Accrued compensation                               7,919         8,573
       Accrued royalties                                  5,953         6,913
       Accrued collaboration profit sharing               2,023           522
       Accrued other liabilities                          6,816         4,953
       Current portion of deferred revenue                2,834         4,016
       Current portion of note payable                   14,639             2
                                                         ------             -
    Total current liabilities                            49,853        35,566
    Long-term portion of deferred revenue                 1,753         2,054
    Other liabilities                                     3,549           690
                                                          -----           ---
    Total liabilities                                    55,155        38,310
                                                         ------        ------
    Shareholders' equity:
       Common stock                                     266,991       254,807
       Additional paid-in capital                        41,619        26,697
       Accumulated other comprehensive loss                 (23)          340
       Accumulated deficit                             (176,622)    (154,909)
                                                      ---------     ---------
    Total shareholders' equity                          131,965       126,935
                                                        -------       -------
    Total liabilities and shareholders' equity         $187,120      $165,245
                                                       ========      ========


                                 (in thousands)

                                                                Year Ended
                                                                December 31,
                                                              2008       2007
    Cash flows from operating activities:
       Net loss                                           $(21,713)  $(21,423)
       Adjustments to reconcile net loss to net
        cash used in operating activities:
       Depreciation and amortization                         7,632      5,506
       Amortization of intangible assets                     5,075      4,263
       Amortization of prepaid compensation expense            252        302
       Stock-based compensation related to employees and
        consulting services rendered                        14,064     11,120
       Unrealized loss on auction rate securities            9,899          -
       Unrealized gain on put option                        (9,438)         -
       Deferred rent                                           231       (110)
       Changes in operating assets and liabilities:
          Accounts receivable                                2,495     (4,555)
          Inventory                                         (8,580)   (11,279)
          Prepaid expenses and other current assets         (2,520)      (880)
          Other non-current assets                            (676)       169
          Accounts payable and other current liabilities     1,080      2,313
          Accrued expense for patent-related matter              -     (3,350)
          Accrued compensation                                (663)     3,967
          Deferred revenue                                  (1,476)      (748)
                                                           -------      -----
             Net cash used in operating activities          (4,338)   (14,705)
                                                           -------   --------
    Cash flows from investing activities:
       Capital expenditures                                (14,936)    (7,098)
       Acquisition of leasehold improvements                   327          -
       Payments for technology licenses                       (418)    (4,945)
       Cost of acquisition, net of cash acquired            (2,153)   (27,637)
       Proceeds from maturities of marketable securities     2,550     55,000
       Proceeds from the sale of fixed assets                  125         23
       Purchases of marketable securities and investments        -     (4,800)
       Transfer from (to) restricted cash                     (983)         -
                                                             -----         --
             Net cash provided by (used in) investing
              activities                                   (15,488)    10,543
                                                          --------     ------
    Cash flows from financing activities:
       Net proceeds from the issuance of common shares
        and exercise of stock options and awards            12,183      3,675
       Proceeds from note payable                           14,700          -
       Principal payments under equipment financing              -       (316)
       Principal payments of note payable                      (65)       (48)
                                                              ----       ----
             Net cash provided by financing activities      26,818      3,311
                                                            ------      -----
    Effect of exchange rate change on cash                      10        141
                                                                --        ---
    Net increase (decrease) in cash and cash
     equivalents                                             7,002       (710)
    Cash and cash equivalents at beginning of period        16,476     17,186
                                                            ------     ------
    Cash and cash equivalents at end of period             $23,478    $16,476
                                                           =======    =======


                       (in thousands, except per share data)

                                   Three Months Ended          Year Ended
                                      December 31,             December 31,
                                   2008          2007        2008       2007
    Total Product Sales          $36,117       $36,865    $159,383   $116,532
    Total Revenues               $37,829       $40,427    $169,627   $129,473

    Cost of product sales        $19,561       $21,452     $89,040    $69,174
       Stock compensation
        expense                        -          (263)     (1,016)      (794)
       Amortization of acquired
        Inventory step-up in
        basis                          -             -           -       (170)
       Amortization of purchased
        intangible assets           (240)         (198)       (963)      (694)
    Non-GAAP measure of cost of
     product sales               $19,321       $20,991     $87,061    $67,516

    Gross margin on product
     sales per GAAP                   46%           42%         44%        41%
    Gross margin on product
     sales per Non-GAAP               47%           43%         45%        42%

    Research and development     $10,837        $8,717     $43,310    $31,449
       Amortization of
        Purchased intangible
        assets                       (24)          (23)        (95)       (95)
       Stock compensation expense (1,245)       (1,184)     (5,407)    (4,294)
    Non-GAAP measure of cost of
     research and development     $9,568        $7,510     $37,808    $27,060

    Sales and marketing           $7,511        $6,841     $29,757    $22,812
       Amortization of purchased
        intangible assets            (64)          (14)       (127)       (51)
       Stock compensation expense   (835)         (723)     (3,457)    (2,221)
    Non-GAAP measure of cost of
     sales and marketing          $6,612        $6,104     $26,173    $20,540

    General and administrative    $5,079        $5,851     $20,861    $18,269
       Stock compensation expense (1,146)       (1,650)     (4,183)    (3,811)
    Non-GAAP measure of cost of
     general and administrative   $3,933        $4,201     $16,678    $14,458

    Income (Loss) from
     Operations                  $(5,824)      $(5,733)   $(22,976)  $(24,487)
       Stock compensation
        expense                    3,226         3,820      14,063     11,120
       Amortization of acquired
         Inventory step-up in
          basis                        -             -           -        170
       Amortization of purchased
        intangible assets            328           235       1,185        840
                                     ---           ---       -----        ---
    Non-GAAP measure of Income
     (Loss) from Operations      $(2,270)      $(1,678)    $(7,728)  $(12,357)

    Net Income (Loss)            $(5,878)      $(5,288)   $(21,713)  $(21,423)
       Stock compensation expense  3,226         3,820      14,063     11,120
       Amortization of acquired
        Inventory step-up in
        basis                          -             -           -        170
       Amortization of purchased
        intangible assets            328           235       1,185        840
    Non-GAAP measure of Net
     Income (Loss)               $(2,324)      $(1,233)    $(6,465)   $(9,293)

    Basic and Diluted net income
     (loss) per share             $(0.10)       $(0.10)     $(0.38)    $(0.39)
       Stock compensation expense   0.06          0.08        0.26       0.20
       Amortization of purchased
        intangible assets              -             -        0.01       0.02
    Non-GAAP measure of Net
     Income (Loss)                $(0.04)       $(0.02)     $(0.11)    $(0.17)

    Shares used in computing
     basic and diluted net income
     (loss) per share             57,648        55,529      57,101     55,263

    For Media Inquiries:                For Investor Inquiries:
    Jared Tipton                        Jacquie Ross
    Cepheid Corporate Communications    Cepheid Investor Relations
    Tel: (408) 400 8377                 Tel: (408) 400 8329  

SOURCE Cepheid
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Cepheid to Present at ThinkEquity Partners 5th Annual Growth Conference
2. Cepheid Schedules Teleconference and Webcast for Third Quarter 2007 Results
3. Cepheid and Broadlane Sign Group Purchasing Contract for GeneXpert(R) Systems and Xpert(TM) Molecular Diagnostic Tests, Including Xpert MRSA
4. Cepheid to Present at the Needham Tenth Annual Growth Stock Conference
5. Cepheid Comments on Study Regarding MRSA Surveillance Reported in the Journal of the American Medical Association
6. Cepheid Selected as Vendor of Choice by Connecticut Hospital Association Shared Services Program for Molecular MRSA Surveillance Testing
7. Cepheid Reports Record Revenue of $44.8 Million
8. Cepheid Signs Group Purchasing Contract With Premier Healthcare Alliance, One of the Largest U.S. Group Purchasing Organizations
9. Cepheid Launches First On-Demand Molecular Diagnostic Test for Clostridium Difficile Into European Market
10. Cepheid Receives Health Canada License for First Molecular Diagnostic Test for MRSA and S. aureus Soft Tissue Infections
11. New Study Reports High Injury Rates for Hotel Workers, Even Higher Rates for Women and Nonwhites
Post Your Comments:
(Date:8/23/2017)... , ... August 23, 2017 , ... Drs. Steven White ... in Cornelius, NC. By taking advantage of this offer, valued at more than ... regular six-month hygiene cleaning from the dentist, patients receive a complimentary professional whitening procedure. ...
(Date:8/23/2017)... ... August 23, 2017 , ... ... to prove the safety and efficacy of HBOT in treating and helping to ... US, points to research showing the similarities of the wounds to the brain ...
(Date:8/23/2017)... (PRWEB) , ... August 23, 2017 , ... The Stevie® Awards have announced the winners ... Awards , the world’s premier business awards competition. , Nominees in the 2017 IBAs were ... by a points system based on the total number of awards won in the IBAs ...
(Date:8/23/2017)... ... August 23, 2017 , ... PreCheck, Inc., a ... 2017 Inc. 5000 with a three-year sales growth of 49 percent . The ... comprises the most comprehensive look at America’s independent entrepreneurs. This represents PreCheck’s fifth ...
(Date:8/23/2017)... ... August 23, 2017 , ... Arizona Spine ... nationally that earned the designation of High Performing Hospitals by U.S. News & World ... indicates a hospital was significantly better than the national average in a given ...
Breaking Medicine News(10 mins):
(Date:8/7/2017)... 7, 2017 Zimmer Biomet Holdings, Inc. (NYSE and ... that its Board of Directors has approved the payment of ... of 2017. The cash ... about October 27, 2017 to stockholders of record as of ... of dividends are subject to approval of the Board of ...
(Date:8/7/2017)... Inc. (NYSE: DPLO), the nation,s largest independent specialty pharmacy, announced ... comparisons, unless otherwise noted, are to the quarter ended June ... Quarter 2017 Highlights include: Revenue of ... Total prescriptions dispensed of 220,000, compared to ... Gross profit per prescription dispensed of ...
(Date:8/4/2017)... -- The search for test results that can be ... long been the goal of healthcare providers and the ... largest meeting of lab professionals and IVD firms this ... Kalorama Information.  The firm said scores of companies with ... and software were at the American Association for Clinical ...
Breaking Medicine Technology: