New Molecular Tests and Increased Case Volume Continue to Drive
Revenue Growth ALISO VIEJO, Calif., May 6 /PRNewswire-FirstCall/ --
Clarient, Inc. (NASDAQ:CLRT), a premier anatomic pathology and
molecular testing services resource for pathologists, oncologists
and the pharmaceutical industry, today reported $22.4 million in
revenue for the three months ended March 31, 2009, a 41% increase
as compared with $15.9 million for the same period of 2008, and an
increase from $21.9 million for the fourth quarter of 2008. Case
volume in the first quarter increased to 31,765 cases, a 32%
increase from the same period in 2008. The Company's customer base
of oncology and pathology practices in the U.S. increased to more
than 950 active clients at March 31, 2009, from 900 active clients
at December 31, 2008. "With our nineteenth consecutive quarter of
revenue growth, and 56 new pathology clients within the quarter, we
continue to demonstrate the strength of our brand within the
pathology community," said Ron Andrews, Clarient Vice Chairman and
Chief Executive Officer. "Our record of solid revenue growth
combined with our third consecutive quarter of operating profit and
the new strength of our balance sheet, places Clarient at an
important inflection point. We are now extremely well positioned to
take advantage of opportunities that strengthen our menu in key
cancers and expand our geographic reach. The capital market crisis
has left many biotech companies with promising new tests and no way
to raise the necessary capital to bring their discoveries to
market. This has created an opportunity for Clarient to use its
powerful commercial engine to facilitate commercialization of these
new advanced tests. In executing this phase of our strategy, we
will maintain a focus on profitability by applying an investment
discipline with a bias for accretive growth." The Company's
operating income for the first quarter of 2009 was $0.8 million
compared with an operating loss of $0.1 million for the same period
of 2008. Clarient's net loss for the quarter was $0.8 million, or a
loss of $0.01 per share, versus a net loss of $0.9 million, or
$0.01 loss per share, in the first quarter of 2008. In the current
quarter, the Company benefited from a $1.5 million gain on
discontinued operations from the satisfaction of post-closing
conditions related to the divestiture of its instrument systems
business in March of 2007. Adjusted EBITDA (defined below) for the
2009 first quarter was $2.2 million, compared to adjusted EBITDA of
$1.0 million in the first quarter of 2008. Operating expenses were
$12.6 million for the first quarter of 2009, up 46% from $8.7
million in the same quarter of 2008. The increase in operating
expenses was largely driven by an increase in the hiring of 14
sales representatives, increased bad debt expense, higher stock
compensation expense, and legal and accounting expenses related to
certain business development activities. At March 31, 2009, the
Company's cash and cash equivalents totaled $4.7 million compared
to $1.8 million at December 31, 2008. "The Company's balance sheet
is markedly stronger, due to our private placement of up to $50
million in convertible preferred stock with Oak Investment
Partners," said Ray Land, Senior Vice President and Chief Financial
Officer. "We expect to complete the second tranche of $10.1 million
on or about May 14, 2009, which will allow us to extinguish most of
the Company's outstanding debt and provide working capital to fuel
Clarient's continued growth. The private placement also allows the
Company to avoid $12 million in interest expense, fees, and
amortization expense for the remainder of 2009." Land reiterated
the Company's expectations for annual revenue in the range of $93
million to $98 million, as well as positive adjusted EBITDA and
operating income for the year. "Today, Clarient offers community
pathologists more than 320 tests to identify and characterize more
types of cancer than ever before," Andrews concluded. "With our new
breast cancer test now on the market, a solid pipeline of new tests
on the horizon, and growing relationships with the pathology
community, pharma and academia, we believe Clarient is well
positioned to fulfill our vision of being the leading molecular
pathology company in the industry. Our mutual goal is to assist
clinicians in their efforts to treat patients more efficiently and
effectively, through earlier and more complete diagnoses, and by
providing pertinent molecular information to clinicians to take
advantage of the growing number of targeted therapies." Conference
Call Clarient will hold a conference call to discuss first quarter
2009 results. The call will include a period for questions and
answers. Date: Wednesday, May 6, 2009 Time: 5:00 p.m. Eastern
Call-in Number: 1-877-941-2332 (domestic) +480-629-9722
(international) Conference ID Number: 4062405 Webcast:
http://www.clarientinc.com/investor Web Replay: For those unable to
participate during the live broadcast, the webcast replay will be
archived at http://www.clarientinc.com/investor shortly after the
call and will be available for one year. About Clarient Clarient
combines innovative diagnostic technologies with world class
pathology expertise to assess and characterize cancer. Clarient's
mission is to become the leader in cancer diagnostics by dedicating
itself to collaborative relationships with the healthcare community
to translate cancer discovery and research into better patient
care. The Company's principal customers include pathologists,
oncologists, hospitals and biopharmaceutical companies. The rise of
individualized medicine as the new direction in oncology has
created the need for a centralized resource providing leading
diagnostic technologies, such as flow cytometry and molecular
testing. Clarient is that resource, having created a
state-of-the-art commercial cancer laboratory providing the most
advanced oncology testing and diagnostic services available both
onsite and over the web. The Company is also developing new,
proprietary "companion" diagnostic markers for therapeutics in
breast, prostate, lung and colon cancers, and leukemia/lymphoma.
Clarient is a Safeguard Scientifics, Inc. partner company.
http://www.clarientinc.com/ About Oak Investment Partners Oak
Investment Partners is a multi-stage venture capital firm with a
total of $8.4 billion in committed capital. The primary investment
focus is on high growth opportunities in Healthcare Information and
Services, Information Technology and Software Outsourced Services,
Consumer Internet/New Media, Financial Services Technology, Clean
Energy, Broadband Internet and Wireless Communications, and Retail.
Over a 30-year history, Oak has achieved a strong track record as a
stage-independent investor funding more than 481 companies at key
points in their lifecycles. Oak has been involved in the formation
of companies, funded spinouts of operating divisions and technology
assets, and provided growth equity to mid- and late-stage private
businesses and to public companies through PIPE investments.
Representative Oak healthcare investments include Genzyme
Corporation, Cephalon, ViroPharma, American Esoteric Laboratories,
athenahealth, Psychiatric Solutions, and United BioSource
Corporation. http://www.oakinv.com/ About Safeguard Scientifics
Founded in 1953 and based in Wayne, PA, Safeguard Scientifics, Inc.
(NYSE: SFE) provides growth capital for entrepreneurial and
innovative technology and life sciences companies. Safeguard
targets technology companies in Internet / New Media, Financial
Services IT and Healthcare IT, and life sciences companies in
Molecular and Point-of-Care Diagnostics, Medical Devices,
Regenerative Medicine and Specialty Pharmaceuticals with capital
requirements of up to $25 million. Safeguard participates in
expansion financings, corporate spin-outs, management buyouts,
recapitalizations, industry consolidations and early-stage
financings. http://www.safeguard.com/ Forward Looking Statements
The statements herein regarding Clarient, Inc. contain
forward-looking statements that involve risks and uncertainty.
Future events and the Company's actual results could differ
materially from the results reflected in these forward-looking
statements. Factors that might cause such a difference include, but
are not limited to: the Company's ability to continue to develop
and expand its diagnostic services business, the Company's ability
to expand and maintain a successful sales and marketing
organization, the Company's ability to maintain compliance with
financial and other covenants under the Company's credit
facilities, limitations on the Company's ability to borrow funds
under its credit facilities based on the Company's qualified
accounts receivable and other liquidity factors, the Company's
ability to obtain annual renewals of or replacements for its credit
facilities, the effects of a going concern audit opinion on the
Company's operations, the Company's ability to successfully
transition its billing function in-house from a third party vendor,
whether the conditions to payment of all or any portion of the
contingent consideration from the Company's prior sale of its
instrument systems business to Zeiss are satisfied, the Company's
ability to remediate the material weaknesses in the Company's
internal control over financial reporting, the continuation of
favorable third party payer reimbursement for laboratory tests, the
Company's ability to obtain additional financing on acceptable
terms or at all, unanticipated expenses or liabilities or other
adverse events affecting cash flow, uncertainty of success in
identifying and developing new diagnostic tests or novel markers,
the Company's ability to fund development of new diagnostic tests
and novel markers and the amount of resources the Company
determines to apply to novel marker development and
commercialization, failure to obtain FDA clearance or approval for
particular applications, the Company's ability to compete with
other technologies and with emerging competitors in novel cancer
diagnostics and dependence on third parties for collaboration in
developing new tests, and risks detailed from time to time in the
Company's SEC reports, including quarterly reports on Form 10-Q,
reports on Form 8-K and annual reports on Form 10-K. Recent
experience with respect to laboratory services, revenues and
results of operations may not be indicative of future results for
the reasons set forth above. The company does not assume any
obligation to update any forward-looking statements or other
information contained in this document. Adjusted EBITDA Definition
"Adjusted EBITDA" is defined by the Company as income or loss from
continuing operations before (i) interest expense, (ii) tax
expense, (iii) depreciation and amortization expense and (iv)
stock-based compensation expense. Adjusted EBITDA as defined by the
Company may differ from non-GAAP measures used by other companies
and is not a measurement under GAAP. Management believes that using
Adjusted EBITDA as a metric can enhance an overall understanding of
the Company's expected financial performance from ongoing
operations, and Adjusted EBITDA is used by management for that
purpose. We believe that Adjusted EBITDA is frequently used by
analysts, investors and other interested parties in evaluating
companies such as ours and that it provides a useful measure of our
financial performance since its use eliminates the effects of
period to period changes in costs associated with impairment of
assets related to capital investments, interest on our debt,
capital lease obligations and non-cash stock based compensation
charges. In addition, under our credit facilities with Gemino
Healthcare Finance LLC and Comerica Bank we are required to
maintain minimum levels of Adjusted EBITDA. There are limitations
inherent in non-GAAP financial measures such as Adjusted EBITDA in
that they exclude a variety of charges and credits that are
required to be included in a GAAP presentation, and do not
therefore present the full measure of the Company's recorded costs
against its revenue. Management compensates for these limitations
in non-GAAP measures by also evaluating our performance based on
traditional GAAP financial measures. Accordingly, in analyzing our
future financial performance, investors should consider these
non-GAAP results together with GAAP results, rather than as an
alternative to GAAP basis financial measures. Contact: Matt Clawson
949.474.4300 TABLES FOLLOW Clarient, Inc. Condensed Consolidated
Statements of Operations (in thousands, except share and per share
data) (Unaudited) Three Months Ended March 31, 2009 2008(*) Revenue
$22,447 $15,886 Cost of services 8,957 7,378 Gross profit 13,490
8,508 Sales and marketing 4,288 2,473 General and administrative
5,518 4,618 Bad debt expense 2,635 1,436 Research and development
200 124 12,641 8,651 Operating expenses Income (loss) from
operations 849 (143) Other expenses, net 3,170 791 Loss from
continuing operations (2,321) (934) Income from discontinued
operations, net of tax 1,500 - Net loss $(821) $(934) Basic and
diluted loss per common share: Continuing operations $(0.03)
$(0.01) Discontinued operations $0.02 $0.00 Net loss $(0.01)
$(0.01) Weighted average number of common shares outstanding
77,002,937 72,070,169 Reconciliation of Loss from Continuing
Operations to "Adjusted EBITDA" Loss from Continuing Operations
$(2,321) $(934) Interest Expense, net 3,170 791 Depreciation &
Amortization 811 869 Stock Compensation Expense 570 279 Taxes - -
Adjusted EBITDA $2,230 $1,005 (*) Adjusted for certain
reclassifications between cost of services and operating expenses
as a result of an income statement classification error discovered
during the fourth quarter of 2008. Clarient, Inc. Condensed
Consolidated Balance Sheets (in thousands) (Unaudited) March 31,
December 31, 2009 2008 Cash and cash equivalents $4,703 $1,838
Restricted cash 2,814 - Accounts receivable, net 25,403 20,315
Property and equipment, net 13,834 11,911 Other assets 3,227 1,445
Total assets $49,981 $35,509 Total liabilities $26,291 $40,249
Stockholders' equity (deficit) 23,690 (4,740) Total liabilities and
stockholders' equity $49,981 $35,509 DATASOURCE: Clarient, Inc.
CONTACT: Matt Clawson, +1-949-474-4300, , for Clarient, Inc. Web
Site: http://www.clarientinc.com/ http://www.oakinv.com/
http://www.safeguard.com/
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