Exhibit 99
Transgenomic Inc. Reports Third Quarter and Year-to-Date 2004 Results
Sale of Oligonucleotide Manufacturing Facility Completed
OMAHA, Neb., Nov. 15 /PRNewswire-FirstCall/ -- Transgenomic Inc.
(Nasdaq: TBIO) today announced financial results for the three- and nine-month
periods ended September 30, 2004. The Company also announced that it
completed the sale of all the assets of its Boulder, Colo. facility. In
addition, the Company announced an expense reduction plan which the Company
expects will result in further cost savings of $6.0 - $8.0 million per year.
Sale of Oligonucleotide Manufacturing Facility
Eyetech Pharmaceuticals, Inc. (Nasdaq: EYET) purchased substantially all
of the assets at the Company's synthetic oligonucleotide manufacturing
facility in Boulder, Colo. Consideration for this transaction was
$3.0 million cash and assumption of equipment and other operating leases
associated with the facility. Eyetech Pharmaceuticals will also retain
essentially all personnel employed at the facility. Transgenomic's Boulder
facility had been engaged in contract manufacturing and related services
supporting the development of therapeutic and diagnostic products based on
synthetic oligonucleotides. Transgenomic's manufacturing facility in Glasgow,
Scotland, is unaffected by this transaction.
Expense Reduction Plan
In addition to cost savings resulting from the sale of the Boulder
facility, the Company has also initiated a cost reduction plan to reduce its
remaining workforce by approximately 60 employees worldwide. The plan also
includes the closure of two domestic research and development facilities
associated with the Company's Synthetic Nucleic Acids business unit, and two
European field offices. The majority of the plan will be completed by the end
of November, and will be fully implemented by the end of the first quarter of
2005. The Company anticipates that it will incur aggregate charges associated
with the plan of approximately $1.5 - $2.0 million, consisting primarily of
severance and benefits payments to terminated employees and various office
closure costs. Substantially all of these charges will be recognized during
the fourth quarter of 2004.
Third Quarter and Nine Months Ended September 30, 2004
Third quarter revenues increased 9% to $8.2 million from $7.5 million in
the third quarter of 2003. On a sequential basis, third quarter revenues
declined 9% from the second quarter of 2004. The Company incurred a noncash
loss of $2.9 million on debt extinguishment in the quarter. Net loss for the
quarter was $8.4 million, representing a loss of $0.29 per share, compared to
a net loss of $6.1 million, or $0.25 per share, in the third quarter of 2003.
For the nine months ended September 30, 2004, revenues were $25.8 million
compared to $25.5 million in 2003. Net loss for the nine month period was
$27.4 million ($0.95 per share), including non-cash charges of $14.8 million
for debt extinguishment and asset impairment, as compared to a net loss of
$14.4 million ($0.61 per share), which included restructuring charges of
approximately $738,000, in 2003.
Comment and Outlook
CEO Collin D'Silva commented, "Our expense reduction plan coupled with the
sale of our Boulder manufacturing facility reduces expenses going forward."
According to D'Silva, the two initiatives are expected to result in
$10.0 - $12.0 million in annual savings. D'Silva concluded, "Moreover, these
expense reductions are expected to improve Transgenomic's margins and lower
operating expenses, leaving the company in an improved position to pursue its
goal of attaining positive cash flow from operations and profitability."
Earnings Call
The Company will host a live broadcast of its third quarter 2004 financial
results via conference call over the Internet on Monday, November 15, at
5 p.m. Eastern time. To listen to the Webcast, investors should log on to
http://phx.corporate-ir.net/playerlink.zhtml?c=120897&s=wm&e=968073 and follow
the instructions listed. A link to this site will also be located on the
Company's Investor Relations' Shareholder Information Web page at
http://www.transgenomic.com/default.asp?pgid=31&cyid=1. An archived recording
of the conference call will be available and can be accessed via the web using
the same links listed above for 14 days after the call. Investors can also
listen to a replay via telephone from 8 p.m. ET on November 15 through
November 29, 2004, midnight ET. Simply dial 800-388-6197 or 402-220-1115 from
any telephone.
About Transgenomic
Transgenomic provides versatile and innovative research tools and related
consumable products. Transgenomic's BioSystems segment offers its WAVE
Systems and associated consumables. These systems are specifically designed
for use in genetic variation detection and single- and double-strand DNA/RNA
analysis and purification. These systems have broad applicability to genetic
research and molecular diagnostics. To date there have been approximately one
thousand systems installed in over 30 countries around the world. In
addition, the BioSystems segment offers WAVE-based biomarker discovery and
validation services in support of translational research, pre-clinical and
clinical studies. Through its nucleic acids business segment, Transgenomic
provides specialty chemicals, including advanced nucleic acid building blocks
and associated reagents used in the manufacture of synthetic oligonucleotides.
For more information about the innovative genomics research tools developed
and marketed by Transgenomic, please visit the company's Web site at
www.transgenomic.com.
Forward-Looking Statement
Certain statements in this press release constitute "forward-looking
statements" of Transgenomic within the meaning of the Private Securities
Litigation Reform Act of 1995, which involve known and unknown risks,
uncertainties and other factors that may cause our actual results to be
materially different from any future results, performance or achievements
expressed or implied by such statements. Forward-looking statements include,
but are not limited to, those with respect to management's current views and
estimates of future economic circumstances, industry conditions, company
performance, financial results, the reduction of operating expenses,
improvement in gross margins, and the successful pursuit of focus on the
Company's core business. The known risks, uncertainties and other factors
affecting these forward-looking statements are described from time to time in
Transgenomic's reports to the Securities and Exchange Commission. Any change
in such factors, risks and uncertainties may cause the actual results, events
and performance to differ materially from those referred to in such
statements. Accordingly, the company claims the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995 with respect to all statements contained in this press
release. All information in this press release is as of the date of the
release and Transgenomic does not undertake any duty to update this
information, including any forward-looking statements, unless required by law.
TRANSGENOMIC INC.
SUMMARY FINANCIAL RESULTS
(In thousands, except per share amounts)
STATEMENTS OF OPERATIONS
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
Net Sales $8,194 $7,537 $25,834 $25,521
Cost of Sales 6,857 6,762 18,484 18,500
Gross Margin 1,337 775 7,350 7,021
Operating Expenses:
Selling, General and
Administrative 4,353 4,331 12,866 13,239
Research and Development 1,743 2,411 5,344 7,098
Restructuring Charges -- -- -- 738
Impairment charges -- -- 11,964 --
6,096 6,742 30,174 21,075
Loss from operations (4,759) (5,967) (22,824) (14,054)
Other Income/(Expense) (3,682) (105) (4,704) (261)
Loss Before Income Taxes (8,441) (6,072) (27,528) (14,315)
Income Tax Expense (Benefit) 1 25 (94) 49
Net Loss $(8,442) $(6,097) $(27,434) $(14,364)
Shares Used in Computing
Net Loss Per Share
Basic and Diluted 29,078 24,177 28,951 23,741
Basic and Diluted Net
Loss Per Share $(0.29) $(0.25) $(0.95) $(0.61)
TRANSGENOMIC INC.
SUMMARY FINANCIAL POSITION
(In thousands)
BALANCE SHEETS
Sept. 30, Dec. 31,
2004 2003
Cash and Cash Equivalents $1,125 $1,241
Other Current Assets 19,199 23,137
Current Assets 20,324 24,378
Net Property and Equipment 14,904 18,704
Other Assets 6,449 14,224
Total Assets $41,677 $57,306
Current Liabilities $18,182 $12,248
Long-term Debt 2,306 --
Stockholders' Equity 21,189 45,058
Total Liabilities and Stockholders Equity $41,677 $57,306
SOURCE Transgenomic Inc.
-0- 11/15/2004
/CONTACT: Mitchell L. Murphy, +1-402-452-5418, mmurphy@transgenomic.com,
or Robert J. Pogulis, Ph.D., +1-845-782-9617, rpogulis@transgenomic.com, both
of Transgenomic Inc./
/Web site: http://www.transgenomic.com/
(TBIO EYET)
CO: Transgenomic Inc.; Eyetech Pharmaceuticals, Inc.
ST: Nebraska
IN: HEA MTC BIO
SU: ERN ERP CCA