OMAHA, Neb.--(BUSINESS WIRE)--

Transgenomic, Inc. (TBIO) today reported financial results for the three and nine months ended, September 30, 2012, and provided a business update.

Third Quarter Financial Results

Net sales for the third quarter of 2012 were $7.9 million compared with $8.3 million for the same period in 2011. Despite the decline in consolidated sales, the Company realized double digit growth in its Clinical Laboratories segment, its largest business, driven by sales of its C-GAAP test, which identifies whether or not a heart disease patient will benefit from Plavix (clopidogrel) treatment, and also due to a shift in sales mix to higher priced tests. This increase was offset by a decline in the Pharmacogenomics Services segment, due to a lower volume of projects performed for our pharmaceutical clients. We also had a decline in our Diagnostic Tools segment, which had a higher percentage of its sales go to our European distribution partner at distributor prices.

Gross profit was $3.8 million or 48 percent of net sales, compared with gross profit of $4.4 million or 54 percent of net sales for the same period in 2011. The margin decline was largely due to the significantly lower margins in the Pharmacogenomics Services segment, since its costs are relatively fixed. The Clinical Laboratories segment also had a more modest decline in its gross margin, as it is making investments to improve efficiency in anticipation of the upcoming volume growth from the C-GAAP test and the recently acquired ScoliScore test.

Operating expenses were $6.2 million during the third quarter of 2012, compared with $4.9 million in the prior year. The increase was the result of a higher bad debt provision, higher non-cash stock compensation expense, higher costs related to expansion of our field sales force to support the launch of C-GAAP and ScoliScore, and higher research and development expenses.

In summary, the net loss for the third quarter of 2012 was $2.8 million or $0.04 per share compared with a net loss of $1.3 million or $0.03 per share for the third quarter of 2011.

Modified EBITDA, which is a non-GAAP measure that Transgenomic views as an appropriate and sound measure of the Company's results was a loss of $1.8 million for the third quarter of 2012 compared to income of $43,000 for the same period for 2011. A reconciliation of Net Loss to Modified EBITDA is presented below.

Cash, cash equivalents and short term investments were $8.7 million as of September 30, 2012, compared with $4.9 million as of December 31, 2011.

Nine Month Financial Results

Link:
Transgenomic Reports Third Quarter 2012 Financial Results