Caliper Life Sciences third quarter GAAP revenue decreases 8% to $29.7 million

Caliper Life Sciences, Inc. (Nasdaq: CALP), today reported results for its third quarter ended September 30, 2010.  Third quarter GAAP revenue decreased 8% to $29.7 million from $32.2 million in the same period in 2009 as a result of divestitures in 2010 and 2009.  Revenue from on-going business increased 10% on a reported basis and 11% on an organic basis.  The Company reported a third quarter GAAP-basis net loss of $1.3 million, or $0.03 per share, compared to a net loss of $3.4 million, or $0.07 per share, in the same quarter of 2009.  The Company achieved positive $0.01 earnings per diluted share on a Non-GAAP basis in the third quarter of 2010, compared to a non-GAAP net loss per diluted share of $0.02 in the same period in 2009.  The Company generated positive operating cash flows of $1.7 million in the third quarter which resulted in positive operating cash flows on a year-to-date basis.   

Third Quarter Commentary:

• The Company's Imaging and LabChip product families comprised 75% of total revenues in the quarter and together achieved 16% reported growth and 17% organic growth compared to the same period in 2009.  Revenues of the Company's CDAS services unit increased 57% during the third quarter as a result of services performed on Phase II task orders under the Environmental Protection Agency (EPA) ToxCast program.  Automation product family revenue decreased 19% on a Non-GAAP basis and 18% organically.  This decline resulted from the completed streamlining and ongoing repositioning of the Company's automation platforms to address fast-growing genomic and biotherapeutic market needs.  
• Total gross margin increased approximately 8 percentage points in the third quarter to 53% from 45% in the same period in 2009, and combined product/services gross margin increased approximately 9 percentage points in the third quarter to 50% from 41% in the same period in 2009.  Increased services revenues generated by CDAS as well as an increase in the proportion of revenue derived from higher margin instruments, services and consumables were the key factors behind gross margin improvements during the third quarter compared to the same period in 2009.  
• Operating expenses (research and development, and selling, general and administrative costs) increased 3% to $15.5 million, from $15.0 million during the third quarter as a result of higher legal spending, compared to the same period in 2009.  
• The Company entered into a two-year sublease arrangement covering approximately 50% of the idled portion of its Mountain View, California chip manufacturing facility, and recorded a restructuring charge of $0.7 million based upon its revised estimate of total expected sublease income potential over the remaining duration of the Mountain View lease.
• Cash, cash equivalents and marketable securities less outstanding debt totaled $38.7 million as of September 30, 2010, compared to a net cash position of $23.1 million as of December 31, 2009.  As of September 30, 2010, the Company had no outstanding debt and approximately $20.0 million of borrowing availability under its $25 million bank credit facility.

"We continue to see strong demand for our LabChip and Imaging platforms driven by growing market investment in molecular imaging, genomics and targeted therapeutic research applications," commented Kevin Hrusovsky, Caliper's president and CEO.  "We were very pleased to see robust growth in our CDAS unit as a result of revenues from the EPA ToxCast project in the third quarter, and remain on target with repositioning our automation tools to support the rapidly growing biotherapeutic research and next-generation sequencing sample-prep markets," added Hrusovsky.

Recent Business Highlights:

• The Company announced it has entered into a co-marketing agreement with Illumina, Inc. (Nasdaq: ILMN), the terms of which enable the parties to participate in the marketing and promotion of the other party's products.  This announcement followed the recent third quarter commercial launch of the LabChip XT, an automated nucleic acid fractionation instrument which eliminates a key bottleneck in the current workflow for next generation sequencing.  LabChip platforms are expected to provide Illumina Genome Analyzer® and HiSeq2000® users with more accurate and higher throughput solutions for sample analysis and sizing, significantly reducing manual manipulation while improving data quality and sample-to-sample consistency.   The Company began shipping LabChip XT instruments in the third quarter of 2010.
• The Company announced a new seven-year supply agreement as exclusive supplier of planar microfluidic chips to Agilent Technologies for use with its Bioanalyzer® instrument platform.  The terms of the agreement provide for increases in chip pricing over the term, which is expected to result in higher profit margins from OEM chip sales to Agilent.  Since 1999, Agilent has placed over 7,000 Bioanalyzer instruments, for which Caliper has supplied in excess of 5 million chips.
• Kevin Hrusovsky, president and CEO, presented a keynote address at the Miptec conference in Basel, Switzerland on September 21, 2010.  The conference attracted over 5,000 attendees.  The address, entitled "Next Generation Tools Revolutionizing Medicine" was well received and, we believe, underscored the importance of Caliper's technologies toward enabling "personalized medicine" in healthcare.  
• The Company hosted over 175 registrants at its 2010 European COG (Caliper Owner's Group) meeting.  Registrants representing AstraZeneca, GSK, Merck, Novartis, Pfizer, Roche, Sanger Centre, sanofi-aventis, Vertex and over 30 academic institutions spanning Europe and the United States participated in three session tracks which covered Imaging, Small Molecule Discovery and Genomics/Proteomics.
• The Company launched its General Side Effects Profile (GENSEP™), a service offering through its Caliper Discovery Alliances and Services (CDAS) unit, to assess the potential for safety liabilities of drugs under Good Laboratory Practices (GLP).  The ability to operate under GLP facilitates CDAS's growing expansion in clinical biomarker studies, and bridges CDAS's preclinical safety and toxicity studies into the clinical setting.
• During September, the Company's CDAS unit received an initial shipment of compounds for Phase II of the ToxCast program under its contract with the EPA, allowing screening work to begin under this next phase.  Issued task orders from the EPA to the Company under Phase II of the ToxCast program total approximately $4.7 million.
• The National Cancer Institute purchased the Company's Quantum FX, a standalone microCT instrument for preclinical imaging, to study spontaneous tumor models in lung cancer and other solid tumors.  The Quantum FX, launched in the second quarter, uses low dose radiation to enable longitudinal studies which provide more accurate, informative, and clinically relevant data from preclinical research animal models.

2010 Guidance

The Company increased its 2010 revenue outlook and currently anticipates full year GAAP revenues of $119 to $121 million, up from its previous range estimate of $117 to $120 million.  The Company will provide further detail on its business outlook during the conference call today.  

SOURCE Caliper Life Sciences, Inc.