Cepheid Reports First Quarter 2001 Results

Apr 23, 2001, 01:00 ET from Cepheid

    SUNNYVALE, Calif., April 23 /PRNewswire Interactive News Release/ --
 Cepheid (Nasdaq:   CPHD), developers of accelerated, integrated DNA testing
 systems, today announced financial results for the quarter ended
 March 31, 2001.  Cepheid reported a net loss of $3.2 million, or $0.12 per
 share for the first quarter of 2001, compared to a net loss of $22.4 million,
 or $1.22 per share on a pro forma basis for the first quarter of 2000.  Pro
 forma net loss per share amounts assume conversion of preferred stock to
 common at the time of their original issuance.
     In connection with Cepheid's initial public offering in June 2000, the
 first quarter 2000 financial results include a deemed dividend of
 $19.1 million upon the issuance of Series C convertible preferred stock.
 Excluding the effect of this deemed dividend, the pro forma net loss per share
 for the first quarter of 2000 would have been $0.18 per share, compared to the
 loss per share for the first quarter of 2001 of $0.12.
     Revenue for the current quarter increased to $3.3 million from
 $0.9 million for the same quarter of 2000.  The increase in revenues is
 primarily due to the initial sales of Cepheid's Smart Cycler(R) system in the
 United States launched through the Fisher Scientific Life Sciences Research
 sales force in May 2000, and the initial sales from the launch in Japan, South
 Korea and Taiwan through Takara Shuzo Co., Ltd (Takara) in the fourth quarter
 of 2000. Additionally, the Smart Cycler system was commercially launched in
 Europe and Canada in January 2001 through Eurogentec SA and Fisher Scientific
 Canada, respectively.
     Product sales for the quarter ended March 31, 2001 increased to
 $2.4 million from $1.8 million for the quarter ended December 31, 2000.  More
 than 100 Smart Cyclers and approximately 300,000 tubes were sold in the first
 quarter of 2001.  The vast majority of these sales were through distributors,
 including approximately 50% in North America, 25% in the Far East and 25% in
 Europe.
     Total contract revenue from both grant and government sponsored research
 and commercial research and development increased to $987,000 for the first
 quarter of 2001 from $765,000 for the first quarter of 2000.  Cepheid
 recognizes revenue under these contracts as services are performed, therefore
 the contract revenue for the quarter relates to the level of activity on the
 contracts during each quarter.  As a result, there can be quarter-to-quarter
 fluctuations for both government and commercial contract revenue due to the
 level of activity relating to government, commercial and company-sponsored
 research and development projects in any given quarter.  As anticipated, the
 company expects that contract revenue will decrease in the second half of this
 year due to the fact its three-year DARPA contract is scheduled to end in
 mid-2001.
     The cost of product sales increased to $1.9 million for the first quarter
 of 2001 compared to $131,000 for the same prior year period.  Cepheid's gross
 margin increased to 18% for the first quarter of 2001 compared to 12% for the
 fourth quarter of 2000.  The company expects its margins to continue to
 improve in 2001 as the number of units being manufactured increases.
      Research and development expenses increased to $3.7 million for the first
 quarter of 2001 from $3.5 million for the first quarter of 2000.  This
 increase was primarily due to increased salaries, recruiting and temporary
 employee expenses as well as facility and infrastructure costs.  Research and
 development resources also making a substantial shift from Smart Cycler
 development in 2000 to GeneXpert development in 2001.
     Selling, general and administrative expenses increased to $1.4 million for
 the first quarter of 2001 from $730,000 for the first quarter of 2000.  This
 increase was due to increased salaries and related personnel costs for
 technical and administrative staff in the customer support function related to
 the Smart Cycler launch, and ongoing increased expenses associated with being
 a public company.  Excluding non-cash amortization of stock-based compensation
 from both quarters, R&D expenses for the first quarter of 2001 increased 15%
 and SG&A expenses increased 11% over the expense level incurred in the fourth
 quarter of 2000.
     Thomas Gutshall, Chairman and CEO, said, "With the recent launches of the
 Smart Cycler by Takara and Eurogentec, we are delighted with the acceptance of
 our system in the Japanese and European markets and the variety of roles it
 fills in the research laboratory.  The initial performance of both Takara and
 Eurogentec have certainly fulfilled our expectations.  Over the remainder of
 the year we will be adding to Cepheid's domestic sales capabilities which will
 allow for greater penetration of the industrial and food markets."
     Commenting on the financial results, Cathy Smith, Vice President and CFO,
 said, "With distributors in place in all the major markets, we are starting to
 see some solid sales momentum in both Smart Cycler systems and our proprietary
 single-use disposable reaction tubes.  In 2000, we sold just over 200 Smart
 Cyclers and over 340,000 reaction tubes.  In the three months ended
 March 31, 2001, we sold over 100 Smart Cyclers and almost 300,000 reaction
 tubes."
     At March 31, 2001, cash, cash equivalents and marketable securities
 totaled $37 million.  The company's operations used $2.4 million in cash
 during the first quarter. We forecast the company's monthly cash burn will
 continue to be between $1.0 million and $1.5 million per month for the
 remainder of 2001. As previously stated, the amount and the timing of payments
 for the company's diagnostic thermal cycling license from Applied Biosystems
 is not known at this time, and may affect the rate at which cash is consumed.
     Cepheid will host a conference call to discuss the results for the first
 quarter at 4:30 p.m. EDT on April 23, 2001.  The call will be available via
 web cast live through the Street Events web site at www.streetevents.com or
 through Cepheid's website at www.cepheid.com.  Interested investors and media
 can also call 800-946-0712, passcode 689994 to listen to the conference call.
     Cepheid is applying proprietary microfluidic and microelectronic
 technologies to the development of fast, versatile, miniaturized systems that
 can perform all the steps required to analyze complex biological samples
 -- including sample preparation, amplification, and detection -- with a single
 platform. Cepheid is initially focused on the detection of DNA and RNA in such
 application areas as life sciences research, clinical diagnostics, industrial
 testing and pharmacogenomics.  For additional information about Cepheid, visit
 the company's web site at www.cepheid.com.
     Statements in this release other than statements of historical fact are
 forward looking statements.  Forward looking statements include those that may
 relate to revenue growth, trends in financial or operational performance and
 cash flows, new product plans, business prospects and margins. Actual results
 might differ materially from these statements due to risks and uncertainties,
 including the impact of competitive products and pricing, market acceptance of
 new products, market conditions, reliance on efforts of distributors and
 enforcement of intellectual property rights. A more detailed description of
 these risks and other risks applicable to Cepheid appears in Cepheid's reports
 filed with the Securities and Exchange Commission and available upon request
 from Cepheid. Cepheid disclaims any intent or obligation to update these
 forward-looking statements.  Cepheid and Smart Cycler(R) are registered
 trademarks of Cepheid.
 
                                    Cepheid
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
 
 
                                                       Three months ended
                                                              March 31,
                                                         2001           2000
                                                            (unaudited)
     Product sales                                     $2,361           $151
     Grant and government sponsored
      research revenue                                    980            655
     Research and development
      contract revenue                                      7            110
 
     Total revenues                                     3,348            916
 
     Operating costs and expenses:
 
     Cost of product sales                              1,940            131
     Research and development                           3,701          3,467
     Selling, general and administrative                1,405            730
     Total costs and operating expenses                 7,046          4,328
 
     Loss from operations                             (3,698)        (3,412)
 
     Interest income, net                                 513            159
 
     Net loss                                        $(3,185)       $(3,253)
 
 
     Deemed dividend upon issuance of
      convertible preferred stock                          --       (19,114)
 
     Net loss attributable to
      common shareholders                            $(3,185)      $(22,367)
 
     Basic and diluted net
      loss per common share                           $(0.12)        $(4.42)
 
     Weighted average shares used in
     computing net loss per common share               25,680          5,064
 
     Pro forma basic and diluted net loss
     per common share                                 $(0.12)        $(1.22)
 
     Weighted average shares used in
     computing pro forma net loss
     per share (A)                                     25,680         18,391
 
 
     (A) Assumes conversion of preferred stock into common stock at date of
         issuance.The preferred stock automatically converted to common stock
         upon the initial public offering of the Company's common stock.
 
 
                                    Cepheid
                    SUMMARY CONSOLIDATED BALANCE SHEET DATA
                                 (in thousands)
 
                                      March 31,              December 31,
                                         2001                   2000
                                      (unaudited)               (B)
 
     Cash and cash equivalents         $37,038                $39,698
     Other current assets                5,463                  4,709
     Property and equipment, net         2,995                  2,892
     Other assets                           54                     54
     Total assets                       45,550                 47,353
 
     Current liabilities                 3,729                  3,148
     Long-term portion of debt and
       capital lease obligations          1,562                 1,504
     Other liabilities                       47                    54
 
     Common stock                        64,931                64,944
     Other shareholders' equity           5,790                 5,027
     Accumulated deficit               (30,509)              (27,324)
     Total shareholders' equity          40,212                42,647
     Total liabilities and
       shareholders' equity             $45,550               $47,353
 
      (B) Derived from the audited financial statements for the year ended
          December 31, 2000.
 
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SOURCE Cepheid
    SUNNYVALE, Calif., April 23 /PRNewswire Interactive News Release/ --
 Cepheid (Nasdaq:   CPHD), developers of accelerated, integrated DNA testing
 systems, today announced financial results for the quarter ended
 March 31, 2001.  Cepheid reported a net loss of $3.2 million, or $0.12 per
 share for the first quarter of 2001, compared to a net loss of $22.4 million,
 or $1.22 per share on a pro forma basis for the first quarter of 2000.  Pro
 forma net loss per share amounts assume conversion of preferred stock to
 common at the time of their original issuance.
     In connection with Cepheid's initial public offering in June 2000, the
 first quarter 2000 financial results include a deemed dividend of
 $19.1 million upon the issuance of Series C convertible preferred stock.
 Excluding the effect of this deemed dividend, the pro forma net loss per share
 for the first quarter of 2000 would have been $0.18 per share, compared to the
 loss per share for the first quarter of 2001 of $0.12.
     Revenue for the current quarter increased to $3.3 million from
 $0.9 million for the same quarter of 2000.  The increase in revenues is
 primarily due to the initial sales of Cepheid's Smart Cycler(R) system in the
 United States launched through the Fisher Scientific Life Sciences Research
 sales force in May 2000, and the initial sales from the launch in Japan, South
 Korea and Taiwan through Takara Shuzo Co., Ltd (Takara) in the fourth quarter
 of 2000. Additionally, the Smart Cycler system was commercially launched in
 Europe and Canada in January 2001 through Eurogentec SA and Fisher Scientific
 Canada, respectively.
     Product sales for the quarter ended March 31, 2001 increased to
 $2.4 million from $1.8 million for the quarter ended December 31, 2000.  More
 than 100 Smart Cyclers and approximately 300,000 tubes were sold in the first
 quarter of 2001.  The vast majority of these sales were through distributors,
 including approximately 50% in North America, 25% in the Far East and 25% in
 Europe.
     Total contract revenue from both grant and government sponsored research
 and commercial research and development increased to $987,000 for the first
 quarter of 2001 from $765,000 for the first quarter of 2000.  Cepheid
 recognizes revenue under these contracts as services are performed, therefore
 the contract revenue for the quarter relates to the level of activity on the
 contracts during each quarter.  As a result, there can be quarter-to-quarter
 fluctuations for both government and commercial contract revenue due to the
 level of activity relating to government, commercial and company-sponsored
 research and development projects in any given quarter.  As anticipated, the
 company expects that contract revenue will decrease in the second half of this
 year due to the fact its three-year DARPA contract is scheduled to end in
 mid-2001.
     The cost of product sales increased to $1.9 million for the first quarter
 of 2001 compared to $131,000 for the same prior year period.  Cepheid's gross
 margin increased to 18% for the first quarter of 2001 compared to 12% for the
 fourth quarter of 2000.  The company expects its margins to continue to
 improve in 2001 as the number of units being manufactured increases.
      Research and development expenses increased to $3.7 million for the first
 quarter of 2001 from $3.5 million for the first quarter of 2000.  This
 increase was primarily due to increased salaries, recruiting and temporary
 employee expenses as well as facility and infrastructure costs.  Research and
 development resources also making a substantial shift from Smart Cycler
 development in 2000 to GeneXpert development in 2001.
     Selling, general and administrative expenses increased to $1.4 million for
 the first quarter of 2001 from $730,000 for the first quarter of 2000.  This
 increase was due to increased salaries and related personnel costs for
 technical and administrative staff in the customer support function related to
 the Smart Cycler launch, and ongoing increased expenses associated with being
 a public company.  Excluding non-cash amortization of stock-based compensation
 from both quarters, R&D expenses for the first quarter of 2001 increased 15%
 and SG&A expenses increased 11% over the expense level incurred in the fourth
 quarter of 2000.
     Thomas Gutshall, Chairman and CEO, said, "With the recent launches of the
 Smart Cycler by Takara and Eurogentec, we are delighted with the acceptance of
 our system in the Japanese and European markets and the variety of roles it
 fills in the research laboratory.  The initial performance of both Takara and
 Eurogentec have certainly fulfilled our expectations.  Over the remainder of
 the year we will be adding to Cepheid's domestic sales capabilities which will
 allow for greater penetration of the industrial and food markets."
     Commenting on the financial results, Cathy Smith, Vice President and CFO,
 said, "With distributors in place in all the major markets, we are starting to
 see some solid sales momentum in both Smart Cycler systems and our proprietary
 single-use disposable reaction tubes.  In 2000, we sold just over 200 Smart
 Cyclers and over 340,000 reaction tubes.  In the three months ended
 March 31, 2001, we sold over 100 Smart Cyclers and almost 300,000 reaction
 tubes."
     At March 31, 2001, cash, cash equivalents and marketable securities
 totaled $37 million.  The company's operations used $2.4 million in cash
 during the first quarter. We forecast the company's monthly cash burn will
 continue to be between $1.0 million and $1.5 million per month for the
 remainder of 2001. As previously stated, the amount and the timing of payments
 for the company's diagnostic thermal cycling license from Applied Biosystems
 is not known at this time, and may affect the rate at which cash is consumed.
     Cepheid will host a conference call to discuss the results for the first
 quarter at 4:30 p.m. EDT on April 23, 2001.  The call will be available via
 web cast live through the Street Events web site at www.streetevents.com or
 through Cepheid's website at www.cepheid.com.  Interested investors and media
 can also call 800-946-0712, passcode 689994 to listen to the conference call.
     Cepheid is applying proprietary microfluidic and microelectronic
 technologies to the development of fast, versatile, miniaturized systems that
 can perform all the steps required to analyze complex biological samples
 -- including sample preparation, amplification, and detection -- with a single
 platform. Cepheid is initially focused on the detection of DNA and RNA in such
 application areas as life sciences research, clinical diagnostics, industrial
 testing and pharmacogenomics.  For additional information about Cepheid, visit
 the company's web site at www.cepheid.com.
     Statements in this release other than statements of historical fact are
 forward looking statements.  Forward looking statements include those that may
 relate to revenue growth, trends in financial or operational performance and
 cash flows, new product plans, business prospects and margins. Actual results
 might differ materially from these statements due to risks and uncertainties,
 including the impact of competitive products and pricing, market acceptance of
 new products, market conditions, reliance on efforts of distributors and
 enforcement of intellectual property rights. A more detailed description of
 these risks and other risks applicable to Cepheid appears in Cepheid's reports
 filed with the Securities and Exchange Commission and available upon request
 from Cepheid. Cepheid disclaims any intent or obligation to update these
 forward-looking statements.  Cepheid and Smart Cycler(R) are registered
 trademarks of Cepheid.
 
                                    Cepheid
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)
 
 
                                                       Three months ended
                                                              March 31,
                                                         2001           2000
                                                            (unaudited)
     Product sales                                     $2,361           $151
     Grant and government sponsored
      research revenue                                    980            655
     Research and development
      contract revenue                                      7            110
 
     Total revenues                                     3,348            916
 
     Operating costs and expenses:
 
     Cost of product sales                              1,940            131
     Research and development                           3,701          3,467
     Selling, general and administrative                1,405            730
     Total costs and operating expenses                 7,046          4,328
 
     Loss from operations                             (3,698)        (3,412)
 
     Interest income, net                                 513            159
 
     Net loss                                        $(3,185)       $(3,253)
 
 
     Deemed dividend upon issuance of
      convertible preferred stock                          --       (19,114)
 
     Net loss attributable to
      common shareholders                            $(3,185)      $(22,367)
 
     Basic and diluted net
      loss per common share                           $(0.12)        $(4.42)
 
     Weighted average shares used in
     computing net loss per common share               25,680          5,064
 
     Pro forma basic and diluted net loss
     per common share                                 $(0.12)        $(1.22)
 
     Weighted average shares used in
     computing pro forma net loss
     per share (A)                                     25,680         18,391
 
 
     (A) Assumes conversion of preferred stock into common stock at date of
         issuance.The preferred stock automatically converted to common stock
         upon the initial public offering of the Company's common stock.
 
 
                                    Cepheid
                    SUMMARY CONSOLIDATED BALANCE SHEET DATA
                                 (in thousands)
 
                                      March 31,              December 31,
                                         2001                   2000
                                      (unaudited)               (B)
 
     Cash and cash equivalents         $37,038                $39,698
     Other current assets                5,463                  4,709
     Property and equipment, net         2,995                  2,892
     Other assets                           54                     54
     Total assets                       45,550                 47,353
 
     Current liabilities                 3,729                  3,148
     Long-term portion of debt and
       capital lease obligations          1,562                 1,504
     Other liabilities                       47                    54
 
     Common stock                        64,931                64,944
     Other shareholders' equity           5,790                 5,027
     Accumulated deficit               (30,509)              (27,324)
     Total shareholders' equity          40,212                42,647
     Total liabilities and
       shareholders' equity             $45,550               $47,353
 
      (B) Derived from the audited financial statements for the year ended
          December 31, 2000.
 
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                http://tbutton.prnewswire.com/prn/11690X48614406
 
 SOURCE  Cepheid