Nov. 3, 2009 (PR Newswire) --

ALISO VIEJO, Calif., Nov. 3 /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 third quarter and nine months ended September 30, 2009. Results included a 13 percent increase in net revenues for the third quarter of 2009 as compared to the third quarter of 2008. Third quarter net revenue was $21.4 million, compared to $19.0 million for the same period in 2008. Net revenue for this year's first nine months was $68.3 million, a 32 percent increase over the prior year period.

Third quarter net revenue was reduced by a change in estimate of expected third-party payor reimbursements based upon their cash collection behavior over the past fifteen months. In addition, this new information was used to set the current period's third-party payor reimbursement rates, which also reduced third quarter 2009 revenue. The analysis of patient payor behavior patterns over the past fifteen months was used to determine the adequacy of the allowance for bad debts, which was increased in the 2009 third quarter.

Ron Andrews, Clarient Vice Chairman and Chief Executive Officer said, "Our business in terms of customer growth, case volumes, tests per case, menu expansion and market penetration continues to grow and indicates the potential for even stronger quarters ahead for Clarient.

"At the beginning of 2009, management identified the reduction of our bad debt and improvement of our billing and collections processes as a top priority. The third quarter's financials include new information gathered after the close of the quarter which allowed us to have a better understanding of payor behavior patterns and will assist us in improving the future collectability of our receivables. Having better information about our payors will allow us to initiate action to engage them. For example, one of our goals will be to get non-paying, non-contracted insurers under contract as rapidly as possible," Andrews said. "That strategy should improve our non-contracted payor collections and position us to make positive rate adjustments in future periods. Going forward, we believe that the net annual revenue impact of the pricing adjustments for these payors will be less than five percent, and the subsequent reduction of bad debt expense over time should still allow us to achieve our earnings per share goals in 2010."

Case volume in the third quarter increased to approximately 35,000 cases, a 22 percent increase from the same period in 2008. For the third quarter of 2009, testing volume totaled approximately 240,000, up 15.5 percent from the same period in 2008. Clarient's customer base of oncology and pathology practices in the U.S. increased by 35 new customers in the third quarter, taking the Company's active customer base to well over 1,100.

"While the new information received in the third quarter resulted in a recalibration of our revenue run rates, the addition of new customers, greater volumes of testing from current clients, and recent product launches will drive case and test volume growth in future quarters. With the market adoption of our new proprietary and non-proprietary tests still in its early phases, and with our new sales team members just now hitting their stride, we believe we have a solid foundation for continued growth for years to come," said Andrews.

The Company's loss from continuing operations before income taxes for the third quarter of 2009 was $3.2 million compared with an operating loss of $2.2 million for the same period of 2008. For the nine months ended September 30, 2009, loss from continuing operations before income taxes was $4.9 million compared to a loss from continuing operations before income taxes of $7.4 million for the nine months ended September 30, 2008.

Clarient's net loss for the third quarter 2009 was $3.2 million, or ($0.04) per share applicable to common stockholders. In the third quarter of 2008, the Company reported a net loss of $2.2 million, or ($0.03) per share applicable to common stockholders.

For the nine months ended September 30, 2009 and 2008, the net loss was $3.4 million and $7.4 million, respectively. Net loss per share applicable to common stockholders for the nine months ended September 30, 2009 and 2008 was ($0.10) and ($0.10), respectively.

Adjusted EBITDA (defined below) for the 2009 third quarter was a negative $1.6 million, compared to adjusted EBITDA of $1.4 million in the third quarter of 2008. For the 2009 nine-month period, adjusted EBITDA was $3.1 million, compared to adjusted EBITDA of $2.6 million in the prior year period, an increase of 19 percent.

Operating expenses were $14.7 million for the third quarter of 2009, compared to $10.2 million in the same quarter of 2008. For the first nine months of 2009, operating expenses totaled $40.5 million, compared to $29.0 million in the year-earlier period. The increase in operating expenses in the third quarter of 2009 versus the comparable period in 2008 was largely related to additional sales and marketing personnel costs and investment in our information technology infrastructure.

At September 30, 2009, Clarient's cash and cash equivalents totaled $8.1 million compared with $1.8 million at December 31, 2008.

Ray Land, Senior Vice President and Chief Financial Officer, said, "In the long term we will greatly benefit from the changes we made this quarter. The new information will allow us to better estimate our expected reimbursement rates, give us a clearer picture of receivables, and help to improve future collections. And finally it will allow us to better forecast our future revenues, bad debts, profits and cash flows."

Land continued, "Taking into account these new estimates, we are now revising our revenue guidance for 2009 to $90 million to $94 million from the previous range of $96 million to $101 million.