Celera Corporation (Celera) has reported net revenues of $93.1 million for the full year of 2008, compared with the net revenues of $56.5 million in the previous year-end. It has also reported a net loss of $13.1 million, or $0.16 loss per share, for the full year of 2008, compared with the net income of $1 million, or $0.01 per share, in the previous year-end.

Celera reported net revenues of $47.3 million for the fourth quarter of calendar 2008 that ended December 27, 2008, compared to $40.3 million in the prior year quarter. For the fourth quarter of calendar 2008, Celera reported a net loss of $6.1 million, or $0.08 per share, compared to net income of $0.3 million, or $0.00 per share, for the prior year quarter. Results for both periods included items that affected the comparability of results. A breakdown of these items is listed in the reconciliation table below. These items increased the net loss for the fourth quarter of calendar 2008 by $8.2 million. Net income on a non-GAAP basis, excluding the items listed in the reconciliation table below, was $2.1 million, or $0.03 per share, for the fourth quarter of calendar 2008 compared to $1.7 million, or $0.02 per share, for the prior year quarter.

In July, 2008, and as previously announced, Celera changed its fiscal year to align with the calendar year. When the company reported its fiscal 2008 earnings for the year ended June 30, 2008, it provided a business outlook for the six months ended December 27, 2008, which is referred to here as the transition period. For the transition period, Celera reported net revenues of $93.1 million compared to $56.5 million for the prior year. Results for the prior year six-month period included revenues from Berkeley HeartLab, Inc., (BHL) and Atria Genetics, Inc., from the dates of their acquisition at the beginning of the fourth quarter of calendar 2007.

Results for both periods included items that affected the comparability of results. A breakdown of these items is listed in the reconciliation table below. These items increased the net loss for the transition period by $15.7 million. Net income on a non-GAAP basis, excluding the items listed in the reconciliation table below, was $2.6 million, or $0.03 per share, for the transition period, compared to $2.4 million, or $0.03 per share, for the prior year period.

“The strong performance in the fourth quarter allowed us to exceed the goals that we laid out for the six-month transition period following our separation from Applera Corporation,” said Kathy Ordonez, chief executive officer of Celera. “Berkeley HeartLab is now initiating the marketing of StatinCheck, a cheek swab testing service for KIF6, in a pilot study.”

Financial Highlights

Celera operates through three reporting segments: a clinical laboratory testing service business conducted through BHL (Lab Services); a molecular diagnostic products business (Products); and a segment that includes other activities under corporate management (Corporate). Most of the company’s molecular diagnostic products are commercialized through a distribution agreement with Abbott. The Corporate segment includes revenues from royalties, licenses, funded collaborations and milestones related to the licensing of certain intellectual property and from the sale of Celera’s former small molecule and partnered proteomic programs.

Revenue by segment for the fourth quarter of calendar 2008 was as follows:

Lab Services revenue was $29.2 million compared to $21.2 million in the prior year quarter, primarily due to increased test volumes processed by the laboratory and a contribution from KIF6 sales following the launch of the blood-based test service by BHL in July 2008;

Products revenue was $11.2 million compared to $9.5 million in the prior year quarter. The growth in revenues for the fourth quarter of calendar 2008 was primarily from sales of certain Celera-manufactured products, and royalties from sales of RealTime™ viral load assays used on the m2000™ system from Abbott; and

Corporate revenue was $6.9 million compared to $9.6 million in the prior year quarter. The reduction in revenue in the fourth quarter of calendar 2008 was due primarily to lower royalty and service revenues.

SG&A expenses for the fourth quarter of calendar 2008 were $27.0 million compared to $20.1 million in the prior year quarter; $3.7 million of this increase was due to an increased allowance for bad debt at BHL. Additional contributions to this increase in SG&A were from Corporate infrastructure build-out and transition activities related to Celera’s separation from Applera Corporation (now Life Technologies, Inc.), and costs associated with the expansion of sales efforts at BHL.

R&D expenses for the fourth quarter of calendar 2008 were $7.6 million, compared to $10.6 million in the prior year quarter, as a result of the completion of certain discovery research and development projects and associated lower employee-related costs in the Corporate and Products segments, and the restructuring of the strategic alliance with Abbott.

As previously disclosed, Celera’s revised agreements with Abbott provide that Abbott repay Celera’s working capital investment in the former alliance. The repayment is to be made according to a specified schedule between 2013 and 2015. As a result of the fixed repayment terms, Celera recorded non-cash interest expense of $6.0 million to reduce the receivable to its present value of $24.8 million. This discount will be amortized as non-cash interest income over the scheduled repayment period.

The tax benefit of $1.2 million in the fourth quarter of calendar 2008 relates primarily to a reduction in state deferred tax liabilities and R&D tax credits.

At December 27, 2008, Celera’s cash and short-term investments were approximately $316 million, compared to approximately $317 million at September 27, 2008. At December 27, 2008, Celera’s net accounts receivable were approximately $47.7 million, compared to approximately $44.6 million at September 27, 2008.

Outlook for 2009

Total revenues are anticipated to be $192 – $202 million and gross margin, as a percentage of revenue, is anticipated to be 66 – 70 percent. The number of samples tested at BHL in 2009 is expected to grow by more than 20 percent over 2008 levels.

SG&A expenses are anticipated to be $102 – $112 million and R&D expenses are anticipated to be $30 – $36 million.

Celera expects to take pre-tax restructuring charges of approximately $1.8 million over the first three quarters of fiscal 2009 associated with the closure of its Rockville, MD facility. Approximately $1.4 million of these charges are expected to be cash outlays.

Celera anticipates mid-single digit EPS on a non-GAAP basis for 2009, and expects to be slightly below breakeven on a non-GAAP basis in the first quarter. Due to declining interest rates, interest income is expected to be lower than the prior year.

Amortization of intangibles relating to acquisitions, which are excluded in the determination of non-GAAP earnings per share, are expected to be approximately $10 million. The company expects non-cash interest income of $0.9 million, which is excluded in the determination of non-GAAP earnings per share, associated with the accounting for the repayment of Celera’s investment in the Abbott alliance.

The total pre-tax impact of expense associated with equity awards under FAS 123R is expected to be approximately $5.3 million, which represents approximately $0.06 per share included in the determination of Celera’s non-GAAP EPS.