Cepheid Reports 2010 Second Quarter Results


Cepheid (Nasdaq:  CPHD) today reported revenue for the second quarter of 2010 of $49.6 million.  Net loss was $1.8 million, or $(0.03) per share, which compares to revenue of $41.0 million and a net loss of $6.8 million, or $(0.12) per share, in the second quarter of 2009.

Excluding amortization of purchased intangible assets and stock compensation expense, non-GAAP net income for the second quarter was $2.9 million, or $0.05 per share.  This compares to a non-GAAP net loss of $2.2 million, or $(0.04) per share, in the second quarter of 2009.

"Second quarter highlights included record revenue and gross margin performance driven by the continued rapid adoption of our industry-leading GeneXpert® System in the clinical market," said John Bishop, Cepheid’s Chief Executive Officer.  "With our heavy royalty burden starting to ease in the third quarter, combined with our continued market growth, we have our eye firmly set on achieving sustainable profitability without compromising the research and development investment we are making to protect and grow our leadership position in molecular diagnostics."

Operational Overview

    * Total product sales of $48.6 million in the second quarter of 2010, compared to $39.6 million in the second quarter of 2009. 

    * During the quarter, Cepheid installed a total of 106 GeneXpert systems and 478 modules.  As of June 30, 2010, a cumulative total of 1,605 GeneXpert systems and 8,618 modules have been placed worldwide.

    * GAAP gross margin on product sales was 48% and non-GAAP gross margin on product sales was 50%, which compares to 41% and 44%, respectively, in the second quarter of 2009.

    * Cash, cash equivalents and investments, net of associated debt, were $47 million as of June 30, 2010.

    * DSO was 51 days.

Business Outlook

For the fiscal year ending December 31, 2010, the company expects:

    * Total revenue to be in the range of $200 to $205 million;
    * Net loss in the range of $(0.25) to $(0.21) per share; 
    * Non-GAAP net income in the range of $0.05 to $0.09 per share. 

Expected non-GAAP net income excludes approximately $16.5 million related to stock compensation expense and approximately $2 million related to the amortization of acquired intangibles.

Accessing Cepheid’s Q210 Results Conference Call

The company will host a management presentation at 2:00 p.m. Pacific Time on Thursday, July 22, 2010 to discuss the results.  To access the live webcast, please visit Cepheid’s website at www.cepheid.com/investors at least 15 minutes before the scheduled start time to download any necessary audio or plug-in software.  A replay of the webcast will be available shortly following the call and will remain available for at least 90 days.

Interested participants may also listen to the live teleconference call by dialing (866) 761-0748 (domestic) or (617) 614-2706 (international), and entering participant code 64453418.  A replay will be available for seven days beginning at 4 p.m. Pacific Time.  Access numbers for this replay are (888) 286-8010 (domestic) and (617) 801-6888 (international), with participant code 17778236.