Full Press Release Details
Transgenomic Reports Second Quarter 2013
Conference Call to Be Held at 5:00 PM
Omaha, Neb. (August 6, 2013) - Transgenomic,
Inc. (OTC/BB: TBIO) today reported financial results for the three and six months ended,
June 30, 2013, and provided a business update.
Second Quarter Financial Results
Net sales for the second
quarter of 2013 were $7.3 million compared with $9.1
million for the same period in 2012. The decline was primarily attributable to unusually
high test volumes processed in the second quarter of 2012 as a result of reducing a test backlog that arose following the LIMS
software failure in the first quarter of 2012. Revenue in the Diagnostic Tools segment was slightly higher than last year's
Gross profit was $3.4
million or 47 percent of net sales, compared with gross profit of $4.6
million or 50 percent of net sales for the same period in 2012.
The decrease in gross profit was attributable to a lower margin in our Laboratory Services segment, related to the lower test volumes,
which was only partially offset by an increase in our Diagnostic Tools gross profit due to sales of higher margin instruments.
Operating expenses were $6.3
million during the second quarter of 2013, compared
with $5.9 million in the prior year. The increase in operating expenses was due to higher costs
related to the expansion of our field sales force and research and development activities related to converting a number of our
tests to a more efficient Next Generation Sequencing instrument platform.
The net loss for the second
quarter of 2013 was $2.9 million or $0.03
per share compared with a net loss of $0.6 million or $0.01
per share for the second quarter of 2012.
Modified EBITDA, which is a non-GAAP measure
that Transgenomic views as an appropriate and sound measure of the Company's results, was a loss of $2.2 million for the second
quarter of 2013 compared to a $0.6 million loss for the same period for 2012. A reconciliation of Net Loss to Modified EBITDA is
Cash and cash equivalents were $6.4
million as of June 30, 2013, compared with $4.5 million
as of December 31, 2012.
Six Month Financial Results
Net sales for the six
months ended June 30, 2013 were $14.7 million compared
with $16.3 million for the same period in 2012. The decrease
from last year was principally driven by a 14% decrease in the Laboratory Services segment, reflecting lower test volumes and lower
average sales prices per test.
Gross profit was $7.1
million or 48 percent of net sales, compared with gross profit of $7.7
million or 47 percent of net sales for the same period in 2012.
The decrease in gross profit was largely attributable to lower margins in our Laboratory Services segment related to lower test
volumes, as well as lower average sales prices. This decline was partially offset by a modest increase in our Diagnostic Tools
gross margin due to the sale of higher margin instruments. Last year, a higher percentage of our instrument sales were to our distributor
at lower distributor margins.
Operating expenses were $13.8
million for the six months ended June 30, 2013,
compared with $11.5 million in the prior year. The increase was due to higher costs related to
the expansion of our field sales force and a higher bad debt provision.
The net loss for the six
months ended June 30, 2013 was $6.5 million or $0.08
per share compared with a net loss of $3.3 million or $0.05
per share during the comparable period of 2012.
"In the second quarter we entered
into a major collaboration with Amgen, which will be an important value driver for Transgenomic going forward," said Craig
Tuttle, President and Chief Executive Officer. "This new collaboration allowed us to launch the CRC RAScan
test, the first dedicated test to more accurately screen patients with metastatic colorectal cancer (mCRC) for RAS mutations,
providing doctors with a cutting edge tool for treating patients with colorectal cancer. As we look ahead to the remainder of 2013
and beyond, it remains our goal to increase revenues in both our Laboratory Services and Diagnostic Tools segments with the commercialization
of CRC RAScan , as well as through a number of innovative new products in both businesses."
Second Quarter 2013 Highlights
management will host a conference call to discuss second quarter 2013
financial results and answer questions beginning at 5:00 p.m. Eastern Time today. To access the call via telephone, please
dial 866-952-7534 from the U.S. or Canada or 785-424-1835 for international participants and enter conference ID TRANS. The call
also will be broadcast live over the Internet. To listen to the webcast, please log onto the Company's Investor Relations web
follow the instructions. An archived webcast of the call will be available for 30 days. A telephone replay will be available from
8:00 p.m. Eastern Time on August 6, 2013 through 11:59 p.m. Eastern Time on August 20, 2013 by dialing 800-839-3020 (domestic)
or 402-220-7234 (international).
Transgenomic, Inc. (www.transgenomic.com)
is a global biotechnology company advancing personalized medicine in cancer and inherited diseases through its proprietary molecular
technologies and world-class clinical and research services. The Company has three complementary business divisions: Transgenomic
Pharmacogenomic Services is a contract research laboratory that specializes in supporting all phases of pre-clinical and clinical
trials for oncology drugs in development. Transgenomic Clinical Laboratories specializes in molecular diagnostics for cardiology,
neurology, mitochondrial disorders, and oncology. Transgenomic Diagnostic Tools produces equipment, reagents, and other consumables
that empower clinical and research applications in molecular testing and cytogenetics. Transgenomic believes there is significant
opportunity for continued growth across all three businesses by leveraging their synergistic capabilities, technologies, and expertise.
The Company actively develops and acquires new technology and other intellectual property that strengthen its leadership in personalized
Forward-Looking Statements
Certain statements in this press release
constitute "forward-looking statements" of Transgenomic within the meaning of the Private Securities Litigation Reform
Act of 1995, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially
different from any future results, performance or achievements expressed or implied by such statements. Forward-looking statements
include, but are not limited to, those with respect to management's current views and estimates of future economic circumstances,
industry conditions, company performance and financial results, including the ability of the Company to grow its involvement in
the diagnostic products and services markets. The known risks, uncertainties and other factors affecting these forward-looking
statements are described from time to time in Transgenomic's filings with the Securities and Exchange Commission. Any change in
such factors, risks and uncertainties may cause the actual results, events and performance to differ materially from those referred
to in such statements. Accordingly, the Company claims the protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995 with respect to all statements contained in this press release. All information
in this press release is as of the date of the release and Transgenomic does not undertake any duty to update this information,
including any forward-looking statements, unless required by law.
| Investor Contact | Company Contact |
| David Pitts | Investor Relations |
| Argot Partners | Transgenomic, Inc. |
| 212-600-1902 | 402-452-5416 |
| david@argotpartners.com | investorrelations@transgenomic.com |
TRANSGENOMIC, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
(Dollars in thousands except per share
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| NET SALES | $ | 7,306 | $ | 9,093 | $ | 14,680 | $ | 16,299 | ||||||||
| COST OF GOODS SOLD | 3,896 | 4,531 | 7,589 | 8,633 | ||||||||||||
| Gross profit | 3,410 | 4,562 | 7,091 | 7,666 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Selling, general and administrative | 5,419 | 5,278 | 12,157 | 10,273 | ||||||||||||
| Research and development | 913 | 654 | 1,677 | 1,202 | ||||||||||||
| 6,332 | 5,932 | 13,834 | 11,475 | |||||||||||||
| LOSS FROM OPERATIONS | (2,922 | ) | (1,370 | ) | (6,743 | ) | (3,809 | ) | ||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Interest expense, net | (151 | ) | (231 | ) | (304 | ) | (504 | ) | ||||||||
| Change in fair value of warrants | 200 | 1,000 | 600 | 1,000 | ||||||||||||
| Other, net | - | 8 | 53 | 28 | ||||||||||||
| 49 | 777 | 349 | 524 | |||||||||||||
| LOSS BEFORE INCOME TAXES | (2,873 | ) | (593 | ) | (6,394 | ) | (3,285 | ) | ||||||||
| INCOME TAX EXPENSE (BENEFIT) | (6 | ) | (30 | ) | 60 | (26 | ) | |||||||||
| NET INCOME (LOSS) | $ | (2,867 | ) | $ | (563 | ) | $ | (6,454 | ) | $ | (3,259 | ) | ||||
| PREFERRED STOCK DIVIDENDS | (181 | ) | (165 | ) | (362 | ) | (330 | ) | ||||||||
| NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ | (3,048 | ) | $ | (728 | ) | $ | (6,816 | ) | $ | (3,589 | ) | ||||
| BASIC AND DILUTED LOSS PER COMMON SHARE | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.08 | ) | $ | (0.05 | ) | ||||
| BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING | 88,245,725 | 71,645,725 | 86,136,333 | 67,164,626 |
See notes to unaudited condensed consolidated
financial statements.
Summary Financial Results
Proforma Modified EBITDA