PRINCETON, N.J., Oct. 29, 2009 (GLOBE NEWSWIRE) -- Orchid Cellmark Inc. (Nasdaq:ORCH), a leading international provider of identity DNA testing services, today reported its financial results for the third quarter of 2009.

Total revenues were $14.7 million for the third quarter of 2009, as compared to $14.9 million for the third quarter of 2008. On a constant dollar basis, total revenues for the third quarter of 2009 increased to $15.9 million, or 7%, compared to the third quarter of 2008. The exchange rate movement of the British pound as compared to the U.S. dollar negatively impacted total revenue by approximately $1.2 million. U.S. forensic casework revenues increased 19% over the third quarter of 2008. U.K. forensic casework revenues increased by 30% and, on a constant dollar basis, by 50% compared to the third quarter of 2008.

Total U.K. revenues for the third quarter of 2009 rose 11% compared to the third quarter of 2008, primarily as a result of the increase in U.K. forensic revenues which was partially offset by the expected lower volumes of animal DNA testing for scrapie susceptibility. In British pounds, total U.K. revenues for the third quarter of 2009 rose 28% compared to the third quarter of 2008. U.S. based revenues for the third quarter of 2009 decreased approximately 13% compared to the third quarter of 2008, primarily due to the decline in CODIS business that was partially offset by the substantial increase in forensic casework business.

The company's gross margin increased four percentage points over the third quarter of 2008. Operating loss for the third quarter of 2009 was $465 thousand, a decrease of approximately 70%, compared to a $1.5 million loss for the third quarter of 2008. On a constant dollar basis, the operating loss for the third quarter of 2009 was $272 thousand. The sharp reduction in the operating loss was principally due to significantly increased U.S. and U.K. forensic casework revenue, improved gross margins and reduced operating expenses.

Orchid Cellmark reported a net loss of $625 thousand, or $(0.02) per share, for the third quarter of 2009, compared to a net loss of $1.5 million, or $(0.05) per share, for the third quarter of 2008. Net losses for the third quarters of 2009 and 2008 include charges of $1.0 million and $1.1 million, respectively, for depreciation and amortization.

Operating expenses, excluding cost of service revenue, for the third quarter of 2009 declined to $5.3 million from $5.8 million for the third 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.

At September 30, 2009, cash and cash equivalents were $17.0 million, up from the $16.6 million reported at the end of the second quarter, June 30, 2009.

Thomas Bologna, president and chief executive officer of Orchid Cellmark, commented, "Our third quarter results reflect strong growth in our core forensics business both in the U.K. and in the U.S. In the U.K., we are seeing expanded sample volume from both existing and new contracts. Our growth in the U.S. forensics casework business is being fueled by the outsourcing of sexual assault kits." Mr. Bologna continued, "We believe we are beginning to see positive trends in our CODIS business as there was a notable increase in both revenue and sample volume in the third quarter of 2009 as compared to the second quarter of this year."

Mr. Bologna added, "Our gross margins improved significantly in the third quarter of 2009 reflecting the success of our continued focus on operational efficiencies and productivity enhancements, and increased forensic casework business. On a constant dollar basis, our operating loss dropped to less than $300 thousand, or by more than 80% from a year ago, and we believe the goal of achieving sustainable profitability is within sight."

Conference Call Information

A conference call with Orchid Cellmark management will be held on Thursday, October 29, 2009 at 10:00 a.m. EDT. To listen to the conference call, please dial 1-888-893-7720 (US/Canada) or 1-706-758-5085 (Int'l/Local) and ask for the Orchid Cellmark conference call, conference ID 37620896. To listen to the live or archived webcast via the Internet, please visit the Investor Relations section of the company's web site at www.orchidcellmark.com.

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"). These measurements are not a substitute for GAAP measurements, although company management uses these measurements as aids in monitoring the company's ongoing financial performance from quarter-to-quarter and year-to-year on a regular basis.