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Caliper's Q4 Revenues Decline 9 Percent; Takes $45.3M Charge to Earnings

This article has been updated with comments from Caliper's conference call.

NEW YORK (GenomeWeb News) – Caliper Life Sciences today reported a decline of 9 percent in its fourth-quarter revenues — in line with its guidance — while taking a $45.3 million charge for goodwill impairment and other restructuring charges.

The Hopkinton, Mass.-based firm brought in revenues of $36.7 million for the three-month period ended Dec. 31, down from revenues of $40.3 million for the fourth quarter of 2007. Caliper said that the organic decline in revenues was 2 percent when excluding the effects of product-line divestitures and foreign currency translation.

During the quarter, Caliper divested its PDQ and AutoTrace product lines, fetching $17.8 million in cash proceeds. However, those divestitures also cut its revenues around 4 percent for the quarter.

"We are going to continue looking at opportunities to shed businesses if it makes strategic sense," Caliper President and CEO Kevin Hrusovsky said during the firm's conference call this morning. "We have a couple that could fit in that category, but for the moment we're holding off because we don't want to deleverage our overall fixed cost base. We also have some interest in potential acquisitions in the area of molecular imaging. However, at this moment we're making sure we're nailing our numbers."

The firm's product revenues decreased to $25.5 million from $28.2 million year over year, while service revenues were $8.9 million versus $9.5 million in the comparable period of 2007, and license and contract revenues were $2.3 million versus $2.6 million.

Caliper posted a net loss of $46.3 million, or $.95 per share, compared to a net loss of $5.7 million, or $.12 per share, for the fourth quarter of 2008. Excluding the goodwill impairment and restructuring charges, Caliper's net loss would have been $.02 per share, which beat analysts' consensus estimate of a loss of $.06 per share.

The firm's R&D spending decreased 23 percent to $4.4 million from $5.7 million, while its SG&A spending also decreased 23 percent to $12 million from $15.6 million.

For full-year 2008, Caliper had revenues of $134.1 million, down from $140.7 million for 2007.

The firm's net loss for the year was $68.3 million, or $1.42 per share, compared to a net loss of $24.1 million, or $.51 per share, for full-year 2007.

Its R&D spending for the year declined to $19.9 million from $24.8 million, while its SG&A spending dropped to $49 million from $55 million.

Caliper finished the year with $26.7 million in cash, cash equivalents, and marketable securities.

"We have strong momentum to start 2009, with our new genomic products, LabChip GX and Zephyr Genomics Workstation, and the new IVIS Kinetic imaging system, all launched in the past two quarters," Hrusovsky said in a statement. "In addition, through streamlining and cost reductions, we reduced our annual ongoing spending needs by approximately $10 million. The impact of all of these actions strengthened our balance sheet, improved top and bottom line growth potential and sharpened focus on fast growing molecular applications with our proprietary microfluidics and imaging product lines."

He noted during the call that the firm has sold 40 of its new GX systems, 26 of them in Q4, since its launch in July 2008.

Caliper said that it expects first-quarter 2009 revenues to between $25 million and $28 million, before unfavorable currency effects of 3 percent. It expects full-year 2009 revenue growth of between 4 percent and 7 percent, before anticipated unfavorable currency effects of 2 percent.

Asked during the call about the current market conditions and dynamics, Hrusovsky said, "We expected small biotechs to have trouble particularly in the first half of 2009 because of their capital structures. I think that's probably going to play out. We do see some buying from them, but it's not as aggressive as we've seen in the past."

However, he noted only about 5 percent to 10 percent of Caliper's revenue comes from that segment of the market.

Hrusovsky said that in academia "there does appear to be a lot of endowment impairment, and that's creating some negative headwinds." But, he said that is offset by the recent economic stimulus package, and noted that academics who Caliper deals with are trying to get some of the NIH funding. Overall, "We think academic is more of a neutral play," he said.

He also noted that the recent wave of industry consolidation among big pharma and big biotech will not harm the firm's revenue potential.

In early afternoon trade on the Nasdaq, shares of Caliper were up 11 percent at $1.04.

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