NEW YORK (GenomeWeb News) – Orchid Cellmark said today that its first-quarter revenues rose 3.6 percent with US sales up 21 percent but offset by lower revenues in the UK. The firm’s net loss climbed 35.3 percent, which the firm said was primarily due to legal costs.
The Princeton, NJ-based DNA testing services firm brought in revenues of $14.5 million for the three-month period ended March 31, compared to revenues of $14 million in the first quarter of 2007.
Orchid said that it recorded increases in US revenues from generating profiles for the federal Combined DNA Index System, state DNA databases, and its paternity testing business. These revenue gains were offset by a decrease in US forensics casework and a decrease in UK revenues related to lower volumes of immigration identity testing, animal DNA testing for scrapie susceptibility, and reduced forensics revenue.
"We believe our first-quarter results reflect a truth about our business — DNA identity testing has a degree of workflow 'lumpiness' that can result in short-term fluctuations that primarily reflect timing rather than changes in the underlying demand for our services,” Thomas Bologna, Orchid’s president and CEO, said in a statement. “We believe this was apparent in the first quarter, when important areas of strength were obscured by a few areas of weakness related to the timing of work, especially in our forensic casework businesses in the US and UK.”
The firm’s net loss rose to $2.3 million, or $.08 per share, from $1.7 million, or $.06 per share, in the first quarter of 2007.
“One-time legal costs related to a very sizeable paternity bid that we won that was protested by a competitor also adversely impacted our first-quarter results,” said Bologna. He added that the firm’s net loss per share would have been $.06 rather than $.08 if not for the legal costs.
Orchid’s R&D spending dropped 21.1 percent to $220,000 from $279,000, and its SG&A expenses increased 16.6 percent to $6.3 million from $5.4 million.
Orchid finished the quarter with $19.1 million in cash and cash equivalents.