Forensic Casework Revenue Increases Significantly; Cash Grows to $16.6 Million
PRINCETON, N.J., July 30, 2009 (GLOBE NEWSWIRE) -- Orchid Cellmark Inc. (Nasdaq:ORCH), a leading international provider of identity DNA testing services, today reported its financial results for the second quarter of 2009.
Total revenues were $14.7 million for the second quarter of 2009 compared to $15.2 million for the second quarter of 2008. On a constant dollar basis, total revenues for the second quarter of 2009 increased 9% to $16.6 million, compared to the second quarter of 2008. The exchange rate movement of the British pound as compared to the U.S. dollar negatively impacted total revenue by approximately $1.4 million. U.S. forensic casework revenues increased 51% over the second quarter of 2008. U.K. forensic revenues increased by 21% and, on a constant dollar basis, by 54% compared to the second quarter of 2008.
In British pounds, total U.K. revenues for the second quarter of 2009 rose 35% compared to the second quarter of 2008, primarily as a result of the increase in U.K. forensic 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.
U.S. based revenues for the second quarter of 2009 decreased approximately 11% compared to the second quarter of 2008. Excluding CODIS revenues, U.S. revenues were up 13% in the second quarter of 2009 as compared to the second quarter of 2008. U.S. revenues for the second quarter were driven by the significant increase in forensic casework business and a 5% increase in revenues for government paternity testing. These gains were offset by a significant decrease in CODIS business, which the company continues to believe to be a temporary decline as state backlogs continue to build.
Operating expenses, excluding cost of service revenue, for the second quarter of 2009 declined to $5.6 million from $6.6 million for the second quarter of 2008 as a result of continued management focus on reducing G&A and marketing and sales expenses, as well as the foreign exchange rate impact on U.K. based expenses.
Operating loss for the second quarter of 2009 was $473 thousand compared to a $1.6 million loss for the second quarter of 2008. The sharp reduction in the operating loss was principally due to an increase in gross profit as a result of improved gross margins and reduced operating expenses. The company's gross margin percentage was 35% for the second quarter of 2009 as compared to 33% for the second quarter of 2008.
Orchid Cellmark reported a net loss of $603 thousand, or $(0.02) per share, for the second quarter of 2009, compared to a net loss of $1.2 million, or $(0.04) per share, for the second quarter of 2008. Net losses for the second quarters of 2009 and 2008 include charges of $1.0 million and $1.2 million, respectively, for depreciation and amortization.
At June 30, 2009, cash and cash equivalents were $16.6 million, up from the $14.4 million reported at the end of the first quarter, March 31, 2009.
Thomas Bologna, president and chief executive officer of Orchid Cellmark, commented, "Our second quarter 2009 results reflect continued growth in our core business segments, together with improvements in our primary business metrics, despite a challenging industry environment. Although reported revenue declined because of adverse exchange rates and what we believe is a temporary decline in U.S. CODIS revenue, the continued increases in worldwide forensic casework revenues demonstrate the strength of this core business."
Mr. Bologna added, "The second quarter of 2009 also showed further improvement in our overall operations with continued productivity enhancements and cost containment efforts favorably impacting results. Our Q2 2009 operating loss is the lowest quarterly loss we have had in the last several years."
Mr. Bologna concluded, "Another primary metric, and our number one priority in these challenging economic times, is to manage our cash prudently, which we believe we are doing. We ended the second quarter with an increase of $2.2 million in cash from the end of the first quarter of 2009. All in all, we are quite pleased with our results as we move ever closer to achieving sustainable profitability."
Conference Call Information
A conference call with Orchid Cellmark management will be held on Thursday, July 30, 2009 at 10:00 a.m. EDT. To listen to the conference call, please dial 1-888-893-7720 (U.S./Canada) or 1-706-758-5085 (Int'l/Local) and ask for the Orchid Cellmark conference call, conference ID 21542973. To listen to the live or archived webcast via the Internet, please visit the Investor Relations section of the company's web site.
Non-GAAP Information
Management has disclosed financial measurements in this press announcement that present financial information that is not in accordance with U.S. Generally Accepted Accounting Principles ("GAAP").
