ORCHID CELLMRK 
By Worldwide Forensic Casework Revenues Grow Significantly
Total revenues were
In British pounds, U.K. revenues for the first quarter of 2009 rose 39% compared to the first quarter of 2008, primarily as a result of a 74% increase in U.K. forensic casework revenues. The revenue gains were partially offset by decreased revenues for PACE (Police and Criminal Evidence Act) and paternity testing, and the expected lower volumes of animal DNA testing for scrapie susceptibility. In dollars, total U.K.-based revenues for the first quarter of 2009 increased by approximately 1% over the first quarter of 2008.
In the U.S., the company revenues were driven by a 40% increase in forensic casework business and a 4% increase in revenues for paternity testing. These gains were offset by a 68% decrease in CODIS business, which the company believes to be a temporary decline as state backlogs continue to build. The company believes a contributing factor to these backlogs is the transition in the bidding process that has given the states a more decisive role in deciding to whom they can outsource their CODIS business. Total U.S. based revenues for the first quarter of 2009 decreased less than 8% compared to the first quarter of 2008. Excluding CODIS revenues, U.S. revenues were up 12% in the first quarter of 2009 as compared to the first quarter of 2008.
Operating expenses, excluding cost of service revenue, for the first quarter of 2009 declined to
Operating loss for the first quarter of 2009 was
Orchid Cellmark reported a net loss of
At
Mr. Bologna added, "Our results for the first quarter of 2009 continue to validate an important growth driver for the company - the successful transition of our company in the U.K. market from a sub-contractor to a direct provider of forensic services. Our U.K. forensic casework revenue grew by 26% in the first quarter over the first quarter of last year. In British pounds, U.K. forensic casework revenues for the first quarter of 2009 rose 74% compared to the first quarter of 2008. With the initial tender filed this quarter under the National Procurement Plan, we expect, on a local currency basis, to continue to grow our U.K. forensic casework business in 2009. Another key metric is the transformation of our U.S. casework business. That business increased 40% over the first quarter of last year and, while we experienced lower average casework prices, the gross margin for our U.S. casework business serviced from our
Mr. Bologna continued: "The first quarter of 2009 also showed a solid improvement in our overall gross margin, another primary metric. The increase in the company's gross margin percentage to 34% for the first quarter of 2009 as compared to 28% for the first quarter of 2008 demonstrates that our continuing productivity enhancements and cost containment efforts are favorably impacting results."
Mr. Bologna concluded: "We believe there is significant momentum in the forensics markets that can benefit our business. The U.K. forensics market is relatively mature with all forensics work expected to be tendered by the U.K. police forces over the next few years. We believe our success last year in the North West/South West and
Conference Call Information
A conference call with Orchid Cellmark management will be held on
Non-GAAP Information
Management has disclosed financial measurements in this press announcement that present financial information that is not in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). These measurements are not a substitute for GAAP measurements, although Company management uses these measurements as aids in monitoring the Company's on-going financial performance from quarter-to-quarter and year-to-year on a regular basis. Constant-dollar revenue changes, which exclude the impact of changes in foreign exchange rates, are not a GAAP performance measure. We provide constant-dollar revenue changes because we use the measure to understand the underlying growth rate of revenue excluding the impact on a quarter-to-quarter and year-to-year basis of changes in foreign exchange rates. To present this information, current U.K. revenues in British pounds are converted into U.S. dollars at the average exchange rates in effect during the comparative prior periods and compared to results based upon the actual exchange rates in effect during the current period. We believe that disclosing revenue changes on a constant-dollar basis, viewed in addition to and not in lieu of the company's reported GAAP results, provide additional useful information to investors because it enables them to better understand the level of growth of our business.
About Orchid Cellmark
Orchid Cellmark (Nasdaq: ORCH) is a leading international provider of DNA testing services primarily for forensic and family relationship applications. Orchid Cellmark is one of the largest providers of forensic DNA testing services and its DNA results are used by the criminal justice system to assist with the identification of perpetrators, the exclusion of suspects and the exoneration of wrongfully convicted individuals. The company provides DNA family relationship testing to numerous child services organizations and individuals seeking to verify parentage. Orchid Cellmark also serves immigration and security authorities for DNA testing of individuals. In the agriculture field, the company provides DNA testing services for selective trait breeding. Orchid Cellmark's strong market positions in these areas reflect the company's accredited laboratories in the U.S. and U.K., its innovative genetic analysis technologies and expertise, and the company's reputation for exceptional quality, reliability and customer service for nearly two decades. More information on Orchid Cellmark can be found at www.orchidcellmark.com.
All statements in this press release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: expectations regarding Orchid Cellmark's business operations and outlook; the belief that the decline in the federal CODIS and state DNA database businesses is temporary as state backlogs continue to build; the belief that a contributing factor to these backlogs is the transition in the bidding process that has given states a more decisive role in deciding to whom they can outsource their CODIS business; the expectation that, on a local currency basis, our U.K. forensic casework business will continue to grow in 2009; the belief that there is significant momentum in the forensics markets that can benefit our business; the expectation that that all forensics work will be tendered by the U.K. police forces over the next few years; the belief that our success last year in the North West/South West and
Information contained in our press releases should be considered accurate only as of the date of the release. Information in any press release may be superseded by more recent information we have disclosed in later press releases, filings with the Securities and Exchange Commission or otherwise. Press releases may contain forward-looking statements based on the expectations of our management as of the date of the release. Actual results may materially differ based on several factors, including those described in the press release.
(See attached Financial Tables)
Orchid Cellmark Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Three months ended March 31, 2009 and 2008
(In thousands, except per share data)
(Unaudited)
Three months ended
March 31,
2009 2008
Revenues:
Service revenues $13,844 $14,395
Other revenues 121 132
Total revenues 13,965 14,527
Operating expenses:
Cost of service revenues 9,180 10,436
Research and development 159 220
Marketing and sales 1,165 1,572
General and administrative 4,015 4,692
Amortization of intangible assets 462 477
Total operating expenses 14,981 17,397
Operating loss (1,016) (2,870)
Other income (expense), net (13) 350
Loss before income tax expense (1,029) (2,520)
Income tax expense (benefit) 143 (246)
Net loss $(1,172) $(2,274)
Basic and diluted net loss per share $(0.04) $(0.08)
Shares used in computing basic and diluted
net loss per share: 29,935 29,934
Orchid Cellmark Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, 2009 and December 31, 2008
(In thousands)
(Unaudited)
March 31, December 31,
2009 2008
Assets:
Current assets
Cash and cash equivalents $14,406 $14,998
Accounts receivable, net 10,051 9,826
Inventory 1,289 1,262
Prepaids and other current assets 1,083 1,392
Total current assets 26,829 27,478
Fixed assets, net 5,411 5,859
Goodwill 9,320 9,336
Other intangibles, net 7,099 7,570
Other assets 438 406
Total assets $49,097 $50,649
Liabilities and Stockholders' Equity:
Current liabilities
Accounts payable $1,725 $2,544
Accrued expenses and other current
liabilities 2,544 2,288
Short-term debt and current portion of
long-term debt 302 338
Deferred revenue 981 842
Total current liabilities 5,552 6,012
Other liabilities 254 269
Total liabilities 5,806 6,281
Total stockholders' equity 43,291 44,368
Total liabilities and stockholders'
equity $49,097 $50,649
SOURCE Orchid Cellmark Inc.
