Home > Press > Nanogen Reports 2006 Fourth Quarter and Year-End Financial Results
Abstract:
Nanogen, Inc. (Nasdaq: NGEN), developer of advanced diagnostic products, today reported its unaudited financial results for the quarter ended December 31, 2006.
Nanogen Reports 2006 Fourth Quarter and Year-End Financial Results
San Diego, CA | Posted on February 20th, 2007Total revenues for the fourth quarter of 2006 nearly tripled to $8.7 million from $3.1 million in
the same period in 2005, and increased by 16 percent from the $7.5 million recorded in the third
quarter of 2006. Product revenues for the fourth quarter of 2006 were approximately $5.1 million,
which represents a substantial increase from $1.2 million for the fourth quarter of 2005 and an
increase of approximately 9 percent as compared to $4.7 million for the third quarter of 2006.
Costs and expenses, including cost of sales, increased by $5.5 million from $14.1 million in the
fourth quarter of 2005, excluding the nonrecurring $59.0 million impairment of goodwill charge in
that period, to $19.6 million in the fourth quarter of 2006. Expenses, including cost of sales and
separation costs recorded in the fourth quarter, totaled $19.6 million in the fourth quarter of 2006
or relatively steady as compared to the $19.1 million in the previous quarter of 2006.
For the quarter ended December 31, 2006, Nanogen's net loss was $11.2 million or $0.17 per share,
compared to a net loss of $69.7 million including the $59.0 million impairment of goodwill charge or
$1.27 per share for the same quarter in 2005, and $11.8 million or $0.18 per share in the quarter
ended September 30, 2006.
"We have steadily grown our revenues during each quarter of 2006 as a result of both acquisitions
and organic growth," said Howard C. Birndorf, Nanogen's chairman of the board and CEO. "As expected,
EBITDA improvement accelerated during the second half of 2006, and we will continue to focus on
improving this performance measure."
Nanogen's consolidated cash, cash equivalents and short-term investments balance at the end of the
fourth quarter of 2006 was approximately $25.2 million. The company has since issued an additional
$7.5 million of stock to enhance its cash resources.
"Looking ahead, we expect to maintain solid double digit growth as we achieve milestones that
include the submission of assays to the FDA for the NanoChip® 400, the expansion of our real-time
business and the introduction of new easy to use rapid tests," said David Ludvigson, Nanogen's
president and COO.
Financial Guidance for 2007:
Nanogen expects annual revenue growth to exceed fifty percent during 2007 as compared to 2006 and to continue improving modified EBITDA.
Modified EBITDA declined as expected in the fourth quarter. Management remains committed to continuing to improve this measure of performance in future quarters.
Three months ended Three months ended
December 31, September 30,
2006 2006
------------------ ------------------
(Unaudited) (Unaudited)
Net loss $(11,238) $(11,782)
Net interest 556 (32)
Provision for income taxes 99 150
Add depreciation and
amortization 1,724 1,776
------------------ ------------------
EBITDA (8,859) (9,888)
Add stock-based compensation 1,248 1,212
Add Jurilab net loss 1,316 1,309
Add warrant valuation adjustment (2) 10
------------------ ------------------
Modified EBITDA $(6,297) $(7,357)
================== ==================
Management uses the non-GAAP modified EBITDA for financial guidance because management does not consider non-cash stock based compensation expense, minority-owned Jurilab's results of operations, or the non-cash warrant valuation adjustments in evaluating the performance of continuing operations of the company. Management focuses on cash management and the company's majority-owned rather than minority-owned subsidiaries as they are indicative of the success or failure of on-going business operations. Therefore, management calculates the modified EBITDA provided in this earnings release and the resulting financial guidance for 2007 to enable investors to analyze further and more consistently the period-to-period financial performance of our business operations. Management also uses non-GAAP measures in costs and expenses excluding non-recurring impairment of goodwill charge in order to provide investors with a fuller analysis of the period-to-period comparison of the company's financial performance. Management believes that by providing investors with these non-GAAP measures it gives the investor additional important information to enable them to assess, in a way management assesses, the company's current and future continuing operations. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies.
The financial results included in this press release are unaudited. The complete, audited financial statements of the company for the year ended December 31, 2006 will be included in Nanogen's Annual Report on Form 10-K to be filed with the SEC in March 2007.
Webcast of Conference Call
Nanogen management will host a conference call to discuss the fourth quarter 2006 results today at 4:30 p.m. Eastern (1:30 p.m. Pacific). Interested investors and others may participate in the conference call by dialing (877) 407-9205 for US/Canada participants and (201) 689-8054 for international participants.
Audio of management's presentation will be available via live webcast on the investor relations section of Nanogen's corporate website at www.nanogen.com, and will be archived for 90 days. A digital recording of the call will also be available for 48 hours, beginning two hours after the completion of the conference call on February 20, and can be accessed via telephone at (877) 660-6853 for US/Canada participants and (201) 612-7415 for international participants. The account number, 286, along with the conference ID, 231215, will be required to listen to the playback.
NANOGEN, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share data)
As of December 31,
---------------------
2006 2005
----------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $11,261 $6,194
Short-term investments 13,923 26,185
Receivables, net 11,568 2,141
Inventories, net 7,691 3,724
Other current assets 2,058 1,457
----------- ---------
Total current assets 46,501 39,701
Property and equipment, net 9,388 7,590
Acquired technology rights, net 17,894 9,604
Restricted cash 5,131 1,794
Other assets, net 1,312 2,214
Goodwill 39,027 37,178
----------- ---------
Total assets $119,253 $98,081
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $13,396 $7,728
Acquisition payable, secured by letter of
credit 2,570 -
Deferred revenue 3,376 535
Short-term assigned royalty interests
obligation 3,447 -
Common stock warrants 11 86
Current portion of debt obligations 3,590 701
----------- ---------
Total current liabilities 26,390 9,050
Debt obligations, less current portion 535 643
Debt obligation variable interest entity 7,406 7,245
Sponsored research payable 4,851 4,854
Long-term assigned royalty interests obligation 15,529 -
Other long-term liabilities 2,304 1,794
----------- ---------
Total long-term liabilities 30,625 14,536
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock, $0.001 par value,
5,000,000 shares authorized at December 31,
2006 and 2005; no shares issued and
outstanding at December 31, 2006 and 2005 -- --
Common stock, $0.001 par value, 135,000,000
shares authorized at December 31, 2006 and
2005, respectively; 67,883,670 and 54,794,648
shares issued and outstanding at December 31,
2006 and 2005, respectively 68 55
Additional paid-in capital 429,971 396,297
Accumulated other comprehensive loss (1,458) (189)
Deferred compensation -- (2,218)
Capital deficit in consolidated variable
interest entity, net (4,839) (6,856)
Accumulated deficit (360,733) (311,656)
Treasury stock, at cost, 416,027 and 505,830
shares at December 31, 2006 and 2005,
respectively (771) (938)
----------- ---------
Total stockholders' equity 62,238 74,495
----------- ---------
Total liabilities and stockholders' equity $119,253 $98,081
=========== ========= NANOGEN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenues:
Product sales $5,132 $1,196 $15,996 $4,544
License fees and royalty
income 2,413 1,459 7,908 6,530
Contracts and grants 1,139 407 2,948 1,470
--------- --------- --------- ---------
Total revenues 8,684 3,062 26,852 12,544
Costs and expenses:
Cost of product sales 3,542 1,445 13,290 4,518
Research and development 6,628 6,427 25,683 22,033
Selling, general and
administrative 8,652 5,875 33,385 23,578
Impairment charge on
goodwill -- 59,000 -- 59,000
Impairment of acquired
technology rights -- -- -- 167
Amortization of purchased
intangible assets 827 393 2,987 1,571
--------- --------- --------- ---------
Total costs and expenses 19,649 73,140 75,345 110,867
--------- --------- --------- ---------
Loss from operations (10,965) (70,078) (48,493) (98,323)
Other income (expense):
Interest income (expense),
net (556) 266 (246) 864
Other income (expense) (73) 40 (716) (78)
Warrant valuation adjustment 2 80 74 1,026
Gain on foreign currency
transactions 354 14 311 17
--------- --------- --------- ---------
Total other income (expense) (273) 400 (577) 1,829
--------- --------- --------- ---------
Net loss $(11,238) $(69,678) $(49,070) $(96,494)
========= ========= ========= =========
Net loss per share -- basic
and diluted $(0.17) $(1.27) $(0.78) $(1.95)
========= ========= ========= =========
Number of shares used in
computing net loss per share
-- basic and diluted 67,968 54,689 63,221 49,585
========= ========= ========= =========
*T
####
About Nanogen
Nanogen's advanced technologies provide researchers, clinicians and physicians
worldwide with improved methods and tools to predict, diagnose, and ultimately
help treat disease. The company's products include real-time PCR reagents, the
NanoChip(R)400 electronic microarray platform and a line of rapid,
point-of-care diagnostic tests. Nanogen's ten years of pioneering research
involving nanotechnology holds the promise of miniaturization and continues to
be supported for its potential for diagnostic and biodefense applications. For
additional information please visit Nanogen's website at http://www.nanogen.com .
Nanogen Forward-Looking Statement
This press release contains forward-looking statements that are subject to risks
and uncertainties that could cause actual results to differ materially from
those set forth in the forward-looking statements, including whether patents
owned or licensed by Nanogen will be developed into products, whether the
patents owned by Nanogen offer any protection against competitors with
competing technologies, whether products under development can be successfully
developed and commercialized, whether results reported by our customers or
partners can be identically replicated, and other risks and uncertainties
discussed under the caption "Factors That May Affect Results" and elsewhere in
Nanogen's Form 10-K or Form 10-Q most recently filed with the Securities and
Exchange Commission. These forward-looking statements speak only as of the date
hereof. Nanogen disclaims any intent or obligation to update these
forward-looking statements.
For more information, please click here
Contacts:
Suzanne Clancy, Ph.D.
Nanogen, Inc.
858-410-4688
Pam Lord
Porter Novelli Life Sciences
619-849-6003
Copyright © Nanogen
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