SUNNYVALE, Calif., May 1 /PRNewswire-FirstCall/ -- Cepheid (Nasdaq: CPHD) today reported record revenue of $44.8 million for the first quarter of fiscal 2008, an increase of 76 percent over the first quarter of fiscal 2007. First quarter net loss was $1.9 million, or $(0.03) per share, on a GAAP basis; first quarter net income was $1.7 million, or $0.03 per diluted share, on a non-GAAP basis. Net loss in the first quarter of the prior year was $6.2 million, or $(0.11) per share on a GAAP basis, and $3.9 million, or $(0.07) per share, on a non-GAAP basis. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
"Continued success in growing our clinical market sales along with significant improvement in the gross margin realized on product sales are driving Cepheid toward profitability on a non-GAAP basis for the full year 2008," said John Bishop, Cepheid's Chief Executive Officer. "As a result of the continued expansion of the Healthcare Associated Infection (HAI) market and the success of our Xpert(TM) MRSA test and GeneXpert(R) System, clinical sales in the first quarter grew by nearly 250 percent compared to the same period last year. The market is clearly recognizing the need for and benefit of our rapid, on-demand molecular testing solution. We are committed to delivering the most robust platform and comprehensive menu of tests in the industry to meet the expanding HAI market need for surveillance, diagnostic, and pre-surgical testing products."
Cepheid's performance in the first quarter was driven by robust growth in clinical product sales resulting from test utilization in the emerging HAI test market for Xpert MRSA, continued adoption of the GeneXpert System and reagent pull-through sales of additional products from Cepheid's menu of GeneXpert tests. Clinical product sales grew 246 percent to $25.8 million, and now represent 61 percent of total product revenue. Xpert MRSA test revenue grew 78 percent sequentially from the fourth quarter of fiscal 2007 to over $8 million. Clinical GeneXpert System revenues grew approximately 400 percent as compared to the first quarter of fiscal 2007.
Momentum in the placement of GeneXpert Systems continued in the first quarter. Cepheid installed a total of 126 GeneXpert Systems and 565 modules, primarily in North America and Europe. As of March 31, 2008, a cumulative total of 609 GeneXpert Systems and 3,134 modules have been placed worldwide.
"Our US placement of 50 systems and 395 modules was in line with our expectations for the first quarter," added John Bishop. "We are also starting to see accounts purchase additional modules to accommodate potentially increasing test demand."
Cepheid's product development programs continue to be on track. As expected, the Company filed a 510(k) with the FDA for the Xpert MRSA/SA -- SSTI (Skin and Soft Tissue Infection) product in March and expects to submit a 510(k) for the Xpert MRSA/SA -- BC (Blood Culture) product during the current quarter. The development of the GeneXpert Infinity-48 is on track with shipment expected to begin in December of this year. A functional prototype of the GeneXpert Infinity-48 is expected to be unveiled at the American Association of Clinical Chemistry (AACC) meeting in July.
For fiscal year 2008, the Company is raising its previously provided revenue guidance:
Safe Harbor Statement
This press release contains forward-looking statements that are not purely historical regarding Cepheid's or its management's intentions, beliefs, expectations and strategies for the future, including those relating to potential growth in clinical products sales, future product releases, future regulatory clearance of products, other future development and operational milestones, future revenues and demand for certain products, future net income and other future operating results. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the company's current expectations. Factors that could cause actual results to differ materially include risks and uncertainties such as those relating to: our success in increasing direct sales and the effectiveness of new sales personnel; the performance and market acceptance of new products; sufficient customer demand; our ability to develop and complete clinical trials successfully in a timely manner for new products; uncertainties related to the FDA regulatory and European regulatory processes; the level of testing at existing clinical customer sites; changes in the protocols or level of testing for MRSA and other HAIs; the mix of products sold, which can affect gross margins; the rate of environmental biothreat testing conducted by the USPS, which will affect the amount of consumable products sold to the USPS; unforeseen development and manufacturing problems; the potential need for additional licenses for new tests and other products and the terms of such licenses; lengthy sales cycles in certain markets; the company's ability to continue to realize manufacturing efficiencies, which are an important factor in improving gross margins; the company's reliance on distributors in some regions to market, sell and support its products; the occurrence of unforeseen expenditures, acquisitions or other transactions; the impact of acquisitions; the impact of competitive products and pricing; our ability to manage geographically-dispersed operations; and underlying market conditions worldwide. Readers should also refer to the section entitled "Risk Factors" in Cepheid's Annual Report on Form 10-K and its other reports filed with the Securities and Exchange Commission.
All forward-looking statements and reasons why results might differ included in this release are made as of the date of this press release, based on information currently available to Cepheid, and Cepheid assumes no obligation to update any such forward-looking statement or reasons why results might differ.
Conference Call Information and Webcast
Cepheid will host its first quarter conference call today at 4:30 p.m. ET. Interested participants and investors may access the teleconference call by dialing 888-679-8018 (U.S./Canada) or 617-213-4845 (international), participant code 93009314. A telephonic replay will be available for seven days beginning at 6:30 p.m. ET. Access numbers for this replay are 888-286-8010 (U.S./Canada) and 617-801-6888 (international); participant code 25802805.
The live conference call can also be accessed on the Investor section of Cepheid's Web site at http://www.cepheid.com under Investors: Events: Webcasts and Presentations. Web participants are encouraged to go to the Web site 15 minutes prior to the start of the call to register, download, and install any necessary software. After the live webcast, a replay will remain available in the Investors section of Cepheid's Web site for 90 days.
Based in Sunnyvale, Calif., Cepheid (Nasdaq: CPHD) is an on-demand molecular diagnostics company that develops, manufactures, and markets fully-integrated systems for genetic analysis in the clinical, industrial and biothreat markets. The company's systems enable rapid, sophisticated genetic testing for organisms and genetic-based diseases by automating otherwise complex manual laboratory procedures. The company's easy-to-use systems integrate a number of complicated and time-intensive steps, including sample preparation, DNA amplification and detection, which enable the analysis of complex biological samples in its proprietary test cartridges. Through its strong molecular biology capabilities, the company is focusing on those applications where rapid molecular testing is particularly important, such as identifying infectious disease and cancer in the clinical market; food, agricultural, and environmental testing in the industrial market; and identifying bio-terrorism agents in the biothreat market. See http://www.cepheid.com for more information.