Published:
Genoptix Reports Strong Financial Results for First Quarter 2008
CARLSBAD, Calif., May 8 /PRNewswire-FirstCall/ -- Genoptix, Inc.
(Nasdaq: GXDX), a specialized laboratory service provider, today reported
revenues of $22.3 million for the first quarter ended March 31, 2008, as
compared to revenues of $10.7 million for the comparable period in 2007. The
first quarter 2008 results include a $651 thousand benefit from changes in
accounting estimates relating to 2007.
"We started the year with another quarter of strong operational results,
increasing sales by 20% over the fourth quarter of 2007 and 109% from a year
ago," said Tina Nova Bennett, Ph.D., President and CEO of Genoptix. "A
growing customer base and improving case volumes continue to drive revenues as
customer adoption of our services grows in regions across the country."
The Company also reported GAAP net income of $5.0 million for the first
quarter ended March 31, 2008, compared to net income of $1.3 million for the
first quarter ended March 31, 2007. Diluted earnings per share, or EPS, for
the first quarter of 2008 was $0.29 based on 17.5 million weighted average
common shares outstanding, including $0.05 of negative impact from increased
costs associated with non-cash stock-based compensation expense, which
includes the launch of our employee stock purchase program at the start of
2008.
The Company completed its initial public offering, or IPO, on
November 2, 2007. On a pro forma basis, assuming conversion of all
outstanding preferred stock, diluted EPS for the three months ended March 31,
2007 would have been $0.10 (see "Pro Forma Net Income Per Share" table below).
Gross profit for the first quarter of 2008 improved to $13.1 million, or
59% of revenues, from $6.0 million, or 56% of revenues, for the first quarter
of 2007, a 118% improvement year-over-year resulting primarily from continued
increases in sales and operational leverage gained from additional case
volumes.
Operating expenses for the first quarter of 2008 increased to $9.0 million
from $4.6 million in the first quarter of 2007. These expenses consisted
primarily of additional investment in organizational growth efforts and
ultimately contributed to operating income of $4.2 million in the first
quarter of 2008, or 19% of revenues, as compared to $1.4 million, or 13% of
revenues, during the same period in 2007.
As of March 31, 2008, the Company's cash and cash equivalents and
investment securities available-for-sale totaled $84.7 million. For the first
quarter of 2008, cash generated from operations was $581 thousand, while
purchases of capital equipment for the same period totaled $1.3 million. The
quarter closed with bad debt expense of 2.8% of total revenues and average
days sales outstanding, or DSO, of 64 days, an increase over prior periods due
to the timing of receipt of certain payments, which were collected at the
beginning of April, 2008.
"We executed well on our major initiatives, hiring new sales
representatives to drive increases in the number of active customers we
service and adding hematopathologists to Cartesian's medical staff to
effectively manage the resulting increase in case volumes," said Sam
Riccitelli, Genoptix EVP and COO. "Our solid operational execution and
resulting cash flows will continue to support our reinvestment in future
growth as the year progresses."
Performance Outlook
Based on first quarter results, Genoptix is adjusting its performance
outlook for the full-year 2008, and now expects revenues of between $90 and
$95 million with net income near the high end of the previously provided range
of between $15 and $17 million (assuming an average annual tax rate of 5%).
This includes the impact of an estimated $6 million in non-cash stock-based
compensation, an increase resulting primarily from expenses associated with
the initiation of the Company's most recent equity incentive programs.
GAAP earnings per diluted share are now expected to be at the high end of
the previously provided range of $0.85 to $0.95 for the full year 2008.
Based on continued infrastructure expansion and implementation of its
strategic plan, the Company is projecting capital expenditures of
approximately $6 million for the full-year 2008.
Conference Call Information
A conference call will take place on Thursday, May 8, 2008, at 2:00 p.m.
Pacific Time (5:00 p.m. Eastern Time), hosted by President and CEO Tina Nova
Bennett, Ph.D., and other members of senior management. To access the live
conference call via phone, dial 866-277-1181 in the U.S. orCanada and
617-597-5358 for international callers. Please specify to the operator that
you would like to join the "Genoptix First Quarter 2008 Earnings Conference
Call." The participant code for the call is 26333972. If you are unable to
listen to the live webcast, a replay of the call will be available through
Thursday, May 15, 2008. Interested parties can access the rebroadcast by
dialing 1-888-286-8010 or 1-617-801-6888 internationally and entering the
reservation number 99500372.
The conference call will also be webcast live under the investor relations
section of the Genoptix website at http://www.genoptix.com. Please connect to
the Genoptix website several minutes prior to the start of the webcast to
ensure adequate time for any software download that may be necessary. If you
are unable to listen to the live webcast, a replay of the call will be
available through Monday, June 9, 2008, on the Genoptix website at
http://www.genoptix.com.
About Genoptix, Inc.
Genoptix is a specialized laboratory service provider focused on
delivering personalized and comprehensive diagnostic services to
community-based hematologists and oncologists. Genoptix is headquartered in
Carlsbad, California.
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with
generally accepted accounting principles (GAAP), this release contains
non-GAAP financial measures. The diluted EPS information for the three months
ended March 31, 2007 assumes the conversion of all outstanding preferred stock
at the beginning of the period. The Company believes that the non-GAAP
financial measures included in this release provide meaningful supplemental
information to both management and investors that is indicative of the
Company's core operating results. The Company believes these non-GAAP
financial measures facilitate comparison of operating results across reporting
periods, and uses these non-GAAP financial measures when evaluating its
financial results, as well as for internal planning and forecasting purposes.
These non-GAAP financial measures should not be considered a substitute for,
or superior to, financial measures calculated in accordance with GAAP that are
also included in this release.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995. Any statements
in this press release regarding the Company's business that are not historical
facts may be considered "forward-looking statements," including statements
regarding the value of the Company's services, the success of the Company's
business model, improving case volumes, increasing revenues, customer adoption
and growth, the Company's ability to continue to invest in future growth and
expand its business and consistently provide specialized, personalized and
comprehensive diagnostic services, the Company's growth prospects, DSOs, and
the Company's financial guidance for 2008. Forward-looking statements are
based on management's current preliminary expectations and are subject to
risks and uncertainties, which may cause the Company's results to differ
materially and adversely from the statements contained herein. Some of the
potential risks and uncertainties that could cause actual results to differ
from the results predicted include, without limitation, commercial and
governmental reimbursement decisions, compliance and regulatory risks, the
Company's ability to hire personnel and manage its growth and the competitive
landscape within our industry. These and other risks and uncertainties are
detailed in the Company's annual report on Form 10-K for the full-year period
ended December 31, 2007 that was filed with the United States Securities and
Exchange Commission on February 12, 2008 and in subsequent filings with the
SEC. Undue reliance should not be placed on forward-looking statements, which
speak only as of the date they are made. Genoptix undertakes no obligation to
update any forward-looking statements to reflect new information, events or
circumstances after the date they were made, or to reflect the occurrence of
unanticipated events.
[Financial tables follow]
GENOPTIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
March 31, December 31,
2008 2007
(unaudited)
Assets
Current assets:
Cash and cash equivalents $31,933 $50,624
Investment securities available-for-sale 52,729 34,836
Accounts receivable, net of allowance for
doubtful accounts 15,213 9,013
Other current assets 1,276 1,409
Total current assets 101,151 95,882
Property and equipment, net 3,096 1,950
Other long-term assets 78 -
Total assets $104,325 $97,832
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $5,691 $4,312
Accrued compensation 2,312 2,496
Deferred revenues 68 95
Total current liabilities 8,071 6,903
Deferred rent, net of current portion 332 324
Commitments and contingencies
Stockholders' equity:
Preferred stock - -
Common stock 16 16
Additional paid-in capital 132,853 132,532
Accumulated other comprehensive income 42 53
Accumulated deficit (36,989) (41,996)
Total stockholders' equity 95,922 90,605
Total liabilities and stockholders' equity $104,325 $97,832
GENOPTIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months Ended
March 31,
2008 2007
Revenues $22,298 $10,651
Cost of revenues 9,175 4,637
Gross profit 13,123 6,014
Operating expenses:
Sales and marketing expenses 4,261 2,321
General and administrative expenses 4,388 2,134
Research and development expenses 317 178
Total operating expenses 8,966 4,633
Income from operations 4,157 1,381
Interest income 931 48
Interest expense - (82)
Other income 28 29
Income before income taxes 5,116 1,376
Provision for income taxes (109) (51)
Net income $5,007 $1,325
Net income per share: (1)(2)
Basic $0.31 $ -
Diluted $0.29 $ -
Shares used to compute net income per share: (1)(2)
Basic 16,156 154
Diluted 17,493 154
(1) As a result of the conversion of the Company's preferred stock into
11,032 shares of common stock upon completion of the Company's initial
public offering in November 2007, there is a lack of comparability in
the basic and diluted net income per share amounts for the periods
presented above.
(2) For the three months ended March 31, 2007, the Company's net income of
$1,325 was allocated to preferred stockholders for purposes of
calculating net income per share pursuant to the terms of the
preferred stock, resulting in $0 of net income allocable to common
stockholders.
GENOPTIX, INC.
PRO FORMA NET INCOME PER SHARE (1)
(Unaudited)
Three Months Ended
March 31,
Pro forma
2008 2007
(in thousands, except per share data)
Numerator:
Net income allocable to common
stockholders $5,007 $1,325
Denominator:
Weighted average shares of common stock
outstanding 16,185 197
Weighted average unvested shares of common
stock subject to repurchase (29) (43)
Adjustments to reflect the weighted average
effect of the assumed conversion of
convertible preferred stock (1) - 11,032
Pro forma weighted average shares of
common stock outstanding - basic 16,156 11,186
Dilutive effect of common equivalent shares 1,337 1,532
Pro forma weighted average shares of
common stock outstanding - diluted 17,493 12,718
Pro forma net income per share (1):
Basic $0.31 $0.12
Diluted $0.29 $0.10
(1) As a result of the conversion of the Company's preferred stock into
11,032 shares of common stock upon completion of the Company's initial
public offering in November 2007, there is a lack of comparability in
the basic and diluted net income per share amounts for the periods
presented above.
SOURCE Genoptix, Inc.
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