(Source: PrimeNewswire)
IRVINE, Calif., Nov. 3, 2009 (GLOBE NEWSWIRE) -- SenoRx, Inc. (Nasdaq:SENO) today reported financial results for its third quarter ended September 30, 2009. Revenue for the quarter increased 21.8 percent to $13.7 million, compared with $11.3 million in the third quarter a year ago. Gross profit increased 32.9 percent to $9.7 million, or a record 70.9 percent of revenue, up from $7.3 million, or 65.0 percent of revenue, in the third quarter of 2008.
SenoRx reported a significantly reduced operating loss of $199,000 for the third quarter, an improvement of 88.7 percent compared with $1.8 million in the same period last year. The operating loss for the quarter included stock-based compensation expense of $604,000, compared with $641,000 in the third quarter of 2008. Also included in the results for the third quarter were attorney and related costs incurred as a result of ongoing patent litigation with Hologic of $1.5 million compared with $128,000 in the third quarter last year.
Interest expense for the third quarter increased to $44,000 compared to $22,000 a year ago. Interest income decreased to $7,000 compared to $99,000 from the third quarter of 2008, due to lower average cash balances and lower interest rates.
Net loss for the third quarter of 2009 declined 86 percent to $235,000 or 1 cent per share, compared with $1.7 million or 10 cents per share in the same period last year. Excluding patent litigation expenses and non-cash charges for stock-based compensation, SenoRx generated non-GAAP pre-tax income of $1.9 million for the quarter compared to a non-GAAP net loss of $908,000 for the same period last year.
Lloyd Malchow, SenoRx Chairman and Chief Executive Officer, said, "Our third quarter results continue to demonstrate meaningful progress toward achieving our goal of profitable growth. We continued to generate positive cash flow in the quarter after funding operations and litigation expense, while delivering continuing growth in revenues and gross margin. We experienced year-over-year growth in all four revenue categories, including biopsy disposable revenues which grew 18.2 percent to $6.0 million in the third quarter, and biopsy capital equipment revenues which grew 5.4 percent to $1.0 million. The installed base of EnCor systems grew to 913 from 696 in the third quarter a year ago and from 866 at the end of the second quarter of 2009. Revenues for therapeutic disposables in the third quarter decreased 8.1 percent sequentially compared with second quarter of 2009, reflecting lower overall seasonal procedure volume and some impact on average selling prices as a result of competitor discounting. However, compared with the third quarter a year ago, therapeutic disposables nearly doubled to $2.7 million compared with $1.4 million in the third quarter last year. We are encouraged by the solid overall operating performance in our third quarter, which is typically the most challenging quarter due to seasonality."
Malchow continued, "We continue to focus on achieving further economies of scale that create operating leverage, and other strategic initiatives and cost reduction programs, which have helped us continue to improve our gross margin."
For the first nine months of 2009, SenoRx posted revenue of $40.1 million, an increase of 21.0 percent compared with $33.1 million for the same period in 2008. Gross profit grew 36.1 percent to $28.3 million from $20.8 million in the first nine months of 2008. Net loss for the first nine months of 2009 was $1.9 million, or 11 cents per share, compared with $8.8 million, or 51 cents per share for the same period a year ago.
SenoRx's financial condition remains solid with minimal debt. Cash and cash equivalents increased $1.4 million to $17.2 million at the end of the third quarter, compared with $15.9 million at the end of the second quarter of this year. SenoRx continues to maintain a credit facility that allows it to borrow up to $10.0 million based on growth in eligible receivables and inventories, of which $6.8 million was available for advance as of September 30, 2009.
2009 Outlook
Based on performance through the first nine months of the year, SenoRx now expects revenues for 2009 to be in the range of $56 to $57 million, and that product gross margin is expected to be at least 70 percent for the full year, and may move higher depending on product mix.
In addition, SenoRx continues to estimate that deferred compensation and equity-based compensation expense will range between $2.4 million and $2.8 million for 2009. These ranges could be materially impacted based upon the number of options granted and fluctuation in the market price of the company's common stock.
With regard to the Hologic matter, summary judgment briefing and argument as to certain validity and infringement issues has been completed and the Court has not yet issued a ruling on the motions. The trial date was set to begin on October 13, 2009, but was postponed by action of the Court. The trial is now set to begin on December 1, 2009. A pre-trial hearing was held on November 2, 2009.
