Nov. 5, 2009 (PR Newswire) --

CARLSBAD, Calif., Nov. 5 /PRNewswire-FirstCall/ -- Genoptix, Inc. (Nasdaq: GXDX), a specialized laboratory services provider, today reported revenues of $50.8 million for the third quarter of 2009, which includes a $4.4 million benefit from changes in accounting estimates resulting primarily from strong cash collections related to prior period revenue. Third quarter revenue increased 58% over revenue of $32.1 million for the comparable period in 2008, which included a $2.5 million benefit from changes in accounting estimates.

"Our performance in the third quarter was the product of exceptional execution, reflected by the increase in sales and new customer acquisitions, even during what is typically the slower summer vacation season," said Tina S. Nova, Ph.D., President and CEO of Genoptix. "By the end of September we were servicing approximately 1,300 community physicians across the country and managing more than 14,700 patient cases, an increase of approximately 45% from the number of cases managed during the same period in 2008."

Gross profit for the third quarter of 2009 was $32.4 million, or 64% of revenues, up from $19.8 million, or 62% of revenues, for the third quarter of 2008. Operating income for the third quarter of 2009 was $16.4 million, or 32% of revenues, compared to operating income of $8.6 million, or 27% of revenues, for the same period in 2008.

Net income was $9.5 million for the third quarter of 2009, or $0.53 diluted earnings per share (EPS), based on 18.0 million weighted average common shares outstanding and a tax rate of 43%. This compares to net income of $15.4 million for the third quarter of 2008, or EPS of $0.87, based on 17.8 million weighted average common shares outstanding, which would have been reduced by $0.57 if taxed at the comparable rate of 43%.

As of September 30, 2009, the Company's total cash, cash equivalents and investment securities were $141.9 million. Cash generated from operations was $14.0 million for the third quarter of 2009, with days sales outstanding of 51 days, as compared to 56 days at the end of the third quarter of 2008.

2009 Year-To-Date Performance

Revenues for the first nine months of 2009 totaled $135.3 million, including a $6.4 million benefit from changes in accounting estimates resulting primarily from strong cash collections related to revenue from prior years. This is an increase of 65% over revenues of $82.2 million for the comparable period in 2008, which included a $2.2 million benefit from changes in accounting estimates.

Gross profit for the first nine months of 2009 was $84.7 million, or 63% of revenues, up from $49.5 million, or 60% of revenues, for the first nine months of 2008. Operating income for the first nine months of 2009 was $39.9 million, or 30% of revenues, compared to operating income of $17.9 million, or 22% of revenues, for the same period in 2008.

Net income was $23.3 million for the first nine months of 2009, or EPS of $1.30, based on 17.9 million weighted average common shares outstanding and a tax rate of 44%. This compares to net income of $26.0 million for the first nine months of 2008, or EPS of $1.48, which would have been reduced by $0.84 if taxed at the comparable rate of 44%.

For the first nine months of 2009, cash generated from operations was $33.6 million, while purchases of capital equipment for the same period totaled $3.2 million. Bad debt expense for the first nine months of 2009 was 2% of revenue, as compared to 3% for the same period in 2008.

"It was another quarter of solid performance as we continued to fine-tune our operations and drive new business while maintaining our signature high-quality service offering," said Sam Riccitelli, Genoptix EVP and COO. "We made great progress on our hiring initiatives, ending the third quarter with 34 hematopathologists on staff with our Cartesian Medical Group, and 67 sales representatives in the field. The outstanding productivity of these groups has allowed us to revise our hiring plan through the close of 2009, which we now expect to end with the 34 physicians currently on staff, adding more at the start of 2010. Our sales team is expected to expand to approximately 85 field representatives by the end of the year, with additional sales staff to come as the new year begins."

Performance Outlook

Recognizing the strength of our collection efforts and financial results in the third quarter, Genoptix expects revenues for the full-year 2009 of approximately $180 million with full-year gross margins of approximately 60%.

Operating margins for 2009 are expected to be in the mid- to high-twentieth percentile, with net income of approximately $29 million, up from prior estimates of approximately $25 million. Diluted EPS for the full-year 2009 is now expected to be approximately $1.60, increasing from a prior range of $1.40 to $1.45, on about 18.0 million shares. This assumes a tax rate of approximately 44%, down from initial estimations of 45%.

Based on continued infrastructure expansion and implementation of its strategic plan, the Company projects capital expenditures of $8.5 million for the full-year 2009, which includes approximately $4.5 million in maintenance capital. A planned laboratory expansion beginning this quarter is now expected to cost approximately $9.5 million, with approximately $4 million to be spent in 2009 and the remainder in the first half of 2010.

For 2010, revenues are expected to grow to approximately $235 million. The Company intends to provide more detailed guidance in February when reporting results for the fourth quarter and full-year 2009.

Conference Call Information

A conference call will take place on Thursday, November 5, 2009, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time), hosted by President and CEO, Tina S. Nova, Ph.D., and other members of senior management.