Total revenues were $14.0 million for the first quarter of 2009 compared to $14.5 million for the first quarter of 2008, despite the adverse impact of foreign exchange rates which reduced U.K. revenues by 27%. On a constant dollar basis, total revenues for the first quarter of 2009 increased 13% compared to the first quarter of 2008. U.S. and U.K. forensic casework revenues increased 40% and 26% respectively on a dollar basis over the first quarter of 2008. The growth in forensic case work revenues was offset by a substantial decrease in the federal CODIS (Combined DNA Index System) and state DNA databases business.

In British pounds, U.K. revenues for the first quarter of 2009 rose 39% compared to the first quarter of 2008, primarily as a result of a 74% increase in U.K. forensic casework revenues. The revenue gains were partially offset by decreased revenues for PACE (Police and Criminal Evidence Act) and paternity testing, and the expected lower volumes of animal DNA testing for scrapie susceptibility. In dollars, total U.K.-based revenues for the first quarter of 2009 increased by approximately 1% over the first quarter of 2008.

In the U.S., the company revenues were driven by a 40% increase in forensic casework business and a 4% increase in revenues for paternity testing. These gains were offset by a 68% decrease in CODIS business, which the company believes to be a temporary decline as state backlogs continue to build. The company believes a contributing factor to these backlogs is the transition in the bidding process that has given the states a more decisive role in deciding to whom they can outsource their CODIS business. Total U.S. based revenues for the first quarter of 2009 decreased less than 8% compared to the first quarter of 2008. Excluding CODIS revenues, U.S. revenues were up 12% in the first quarter of 2009 as compared to the first quarter of 2008.

Operating expenses, excluding cost of service revenue, for the first quarter of 2009 declined to $5.8 million from $7.0 million for the first quarter of 2008 as a result of continued management focus on reducing G&A, marketing and sales expenses, as well as the foreign exchange rate impact on U.K. based expenses.

Operating loss for the first quarter of 2009 was $1.0 million compared to a $2.9 million loss for the first quarter of 2008. The operating loss decrease was principally due to an increase in gross profit as a result of improved gross margins. The company's gross margin percentage was 34% for the first quarter of 2009 as compared to 28% for the first quarter of 2008.

Orchid Cellmark reported a net loss of $1.2 million, or $(0.04) per share, for the first quarter of 2009, compared to a net loss of $2.3 million, or $(0.08) per share, for the first quarter of 2008. Net losses for the first quarters of 2009 and 2008 include charges of $1.0 million and $1.2 million, respectively, for depreciation and amortization.

At March 31, 2009, cash and cash equivalents were $14.4 million.

Thomas Bologna, president and chief executive officer of Orchid Cellmark commented, "Our first quarter 2009 results reflect significant growth in our forensic casework business in both the U.S. and U.K. Although overall revenue declined because of adverse exchange rates and what we believe is a temporary decline in U.S. CODIS revenue, the increases in worldwide forensic casework revenues demonstrate the strength of this core business."

Mr. Bologna added, "Our results for the first quarter of 2009 continue to validate an important growth driver for the company - the successful transition of our company in the U.K. market from a sub-contractor to a direct provider of forensic services. Our U.K. forensic casework revenue grew by 26% in the first quarter over the first quarter of last year. In British pounds, U.K. forensic casework revenues for the first quarter of 2009 rose 74% compared to the first quarter of 2008. With the initial tender filed this quarter under the National Procurement Plan, we expect, on a local currency basis, to continue to grow our U.K. forensic casework business in 2009. Another key metric is the transformation of our U.S. casework business. That business increased 40% over the first quarter of last year and, while we experienced lower average casework prices, the gross margin for our U.S. casework business serviced from our Dallas facility increased significantly."

Mr. Bologna continued: "The first quarter of 2009 also showed a solid improvement in our overall gross margin, another primary metric. The increase in the company's gross margin percentage to 34% for the first quarter of 2009 as compared to 28% for the first quarter of 2008 demonstrates that our continuing productivity enhancements and cost containment efforts are favorably impacting results."

Mr. Bologna concluded: "We believe there is significant momentum in the forensics markets that can benefit our business. The U.K. forensics market is relatively mature with all forensics work expected to be tendered by the U.K. police forces over the next few years. We believe our success last year in the North West/South West and Wales regional tender bodes well for the tendering under the National Procurement Plan.