Recent Corporate Highlights:
Achieved positive operating cash flow of $0.9 million for the second quarter of 2009
Increased Diagnostic & Biopharmaceutical Products revenue by 23% and BioServices revenue by 2% in comparison to the quarter ended December 31, 2008
Prepared for the anticipated June 2009 launch of new diagnostic control products for sexually transmitted disease testing with the presentation of supporting data at the Clinical Virology Symposium
“In the second quarter of fiscal 2009, SeraCare made significant progress towards its goal of profitability by achieving positive operating cash flow,” said Susan Vogt, president and chief executive officer. “We believe this is an important indicator of our potential to reach profitability. While the economic downturn has impacted our revenues, as it has others in the sector, we are encouraged by the improvement in sequential quarter over quarter revenues. Further, we believe that SeraCare will benefit from the federal stimulus dollars directed at scientific research that may be awarded to a number of our current customers, including major government agencies and research facilities.
We will continue to focus on growing SeraCare’s core business and anticipate expanding our product portfolio later this year with the introduction of diagnostic controls for one of the largest and fastest growing segments of the molecular diagnostics market today–testing for sexually transmitted diseases,” concluded Vogt.
Diagnostic & Biopharmaceutical Products revenue for the second quarter of 2009 increased by $1.5 million to $8.3 million compared with the first quarter of 2009 and BioServices revenue increased by $0.1 to $2.6 million across the same period.
On a quarterly basis, second quarter revenue for fiscal year 2009 decreased by $1.6 million compared with the Q2 fiscal 2008. Diagnostic & Biopharmaceutical Products decreased by $0.5 million for the second quarter of fiscal year 2009 compared with the Q2 fiscal 2008as a result of lower spending by the company’s larger customers as they reduced inventory levels. BioServices revenue decreased by $1.1 million for the second quarter of fiscal year 2009 compared with the second quarter of fiscal year 2008. During the same period in fiscal year 2008, the company billed $0.2 million pursuant to a government contract related to the settlement of indirect billing rates used in previous periods. The company had no such billings during the second quarter of fiscal 2009. The remaining decrease in the BioServices segment is due to a slowdown in research spending by customers over the quarter, which the company believes is related to the current economic downturn.
Gross margin decreased to 34.5% in the second quarter of fiscal 2009 from 37.6% in the second quarter of fiscal 2008, primarily due to manufacturing costs being spread over a lower revenue base.
Selling, general and administrative expenses decreased to $3.4 million, or 31.6% of revenue, in the second quarter of fiscal 2009 from $4.1 million, or 32.8% of revenue, in the second quarter of fiscal 2008 as a result of proactive efforts to decrease discretionary spending and reduce compensation expense.
“Attaining sustainable profitability remains a priority for the company and we have achieved fundamental progress in this effort despite the challenging economic environment,” said Gregory Gould, Chief Financial Officer. “We took additional cost cutting measures during the quarter which will benefit the second half of the fiscal year and we will continue to evaluate our cost-structure and adjust as necessary, while simultaneously preparing the company for growth when the market recovers.”
The company recorded a $0.6 million non-cash impairment charge related to a loss in value of the company’s West Bridgewater, MA facility due to the downturn in the real estate market. Excluding this non-cash impairment charge, the company was break-even from an operating standpoint for the quarter ended March 31, 2009.
As of March 31, 2009, the company had $5.2 million in cash and $5.1 million in debt.
SeraCare Life Sciences serves the global life sciences industry by providing products and services to facilitate the discovery, development and production of human and animal diagnostics and therapeutics.
