(Source: PRNewswire)
ALISO VIEJO, Calif., Aug. 4 /PRNewswire-FirstCall/ -- Clarient, Inc. (Nasdaq: CLRT), a premier anatomic pathology and molecular testing services resource for pathologists, oncologists and the pharmaceutical industry, today reported financial results for the second quarter and six months ended June 30, 2009. Financial results included a 40 percent increase in revenue for the second quarter of 2009 versus the second quarter of 2008, and a 43 percent increase in revenue for this year's first six months versus the first six months of 2008.
Second quarter revenue was $23.7 million, compared to $16.9 million for the same period in 2008. Clarient has now posted 20 consecutive quarters of sequential revenue growth. Revenue for this year's six-month period was $46.9 million, up from $32.8 million in the year-earlier period.
Case volume in the second quarter increased to 33,853 cases, a 29.2 percent increase from the same period in 2008. For the second quarter of 2009, testing volume totaled 236,196, up 21.7 percent from the same period in 2008. The Company's customer base of oncology and pathology practices in the U.S. increased to more than 1,000 active clients at June 30, 2009, from 950 active clients at March 31, 2009.
"Our success in adding new customers, same store sales to current clients, and new product launches continued to drive strong growth in the second quarter, our 20th in a row with sequential growth. These initiatives combined with our new sales force expansion are the foundation for our future success, and should continue to provide a solid growth trajectory throughout the year," said Ron Andrews, Clarient Vice Chairman and Chief Executive Officer. "What has changed is the strength of our balance sheet and reaching critical mass in terms of revenues - finally putting us in a position to realize the operating leverage and profits that are possible under this business model. In the second quarter, profits were constrained by investments in much needed infrastructure initiatives, so it is very gratifying for our entire team that we were able to balance these investments and still post our first net income from continuing operations."
The Company's operating income for the second quarter of 2009 was $771 thousand compared with an operating loss of $1.7 million for the same period of 2008. For the six months ended June 30, 2009, operating income was $2.3 million versus an operating loss of $1.9 million for the six months ended June 30, 2008.
Clarient's net income for the quarter was $29 thousand. However, the net amount applicable to common shareholders was a loss of $4.3 million, or $0.06 per share. This was due to a $4.3 million non- cash deemed dividend arising from a "beneficial conversion feature" in the second tranche of the Oak Purchase Agreement. This "in-the- money non-detachable" conversion feature of the issued 1.4 million Preferred Shares gave Oak Investment Partners the opportunity to convert their Preferred Shares into 5.6 million common shares at a $1.90 per share. This was $0.75 below the market price of $2.65 at May 14, 2009, the date of the second Oak closing. In the second quarter of 2008, the Company reported a loss of $4.3 million and a $0.06 loss per share.
For the first six months of 2009, the net loss was $127 thousand, or $0.02 loss per share, compared with a net loss of $5.2 million, or $0.07 loss per share. Net loss applicable to common stockholders for this year's six-month period, including the non-cash deemed dividend mentioned above and a $1.5 million gain on discontinued operations from the satisfaction of post-closing conditions related to the divestiture of its instrument systems business in March of 2007, was a $0.06 loss per share.
Adjusted EBITDA (defined below) for the 2009 second quarter was $2.3 million, compared to adjusted EBITDA of $179 thousand in the second quarter of 2008. For the 2009 six-month period, adjusted EBITDA was $5.2 million, versus adjusted EBITDA of $1.2 million in the prior year period.
Operating expenses were $13.0 million for the second quarter of 2009, up 29 percent from $10.1 million in the same quarter of 2008. For the first six months of 2009, operating expenses totaled $25.8 million, versus $18.8 million in the year-earlier period. The increase in operating expenses was largely related to additional sales and marketing personnel costs, increased bad debt expense, higher stock compensation expense, and legal and accounting expenses related to certain business development activities.
At June 30, 2009, the Company's cash and cash equivalents totaled $7.9 million compared with $1.8 million at December 31, 2008.
Ray Land, Senior Vice President and Chief Financial Officer, said, "As expected, we were able to complete the second tranche of our private placement of convertible preferred stock with Oak Investment Partners on May 14, 2009 which considerably strengthened our balance sheet. In addition, we collected $19.9 million in cash in the second quarter which is a 34% increase over our first quarter. This is a strong indication that our billing and collection process is improving."
Land cited continued progress in marketing programs and customer retention, combined with the early success of new product introductions, in increasing guidance for annual revenue to the range of $96 million to $101 million, as well as positive adjusted EBITDA and operating income for the year.
Andrews concluded, "Clarient's business model built on a balanced revenue stream across multiple cancer types and technologies is well positioned in the new environment of health reform and cost containment.
