NEW YORK, July 31- Genomic Solutions announced on Tuesday a drop in sales and a plateau in revenues during the second quarter.
Second quarter revenues were $4.5 million, essentially the same as the comparable quarter last year. Although revenues for this latest quarter are much lower than what was projected at the end of the first quarter, the company began warning shareholders almost one month ago that decreased sales would likely flatten revenues during the second quarter.
According to Kathleen Murphy, vice president of corporate communications at Genomic Solutions, the company has maintained revenues despite the sales drop by reducing operating expenses. “I think most of us have accepted that there is some level of tightening of the belt of our customers,” said Murphy. “We are only taking steps to reduce our expenses, and will continue to do that.”
The company has already decreased operating costs by $130,000 relative to the first quarter.
In a statement, Genomic Solutions CEO Jeffrey Williams said he believes this current plateau in revenues is temporary, and expects revenue growth to increase through the rest of the year, with the company reaching profitability in the second quarter of 2002.
During the second quarter, Genomic Solutions, based in Ann Arbor, Mich., introduced a number of new products, including its ProPrep Protein Digestion and Mass Spec Preparation Station, GeneTAC UC-4 Microarray Analyzer, GeneTAC RA-1 Microarraying Sytstem, and pre-printed GeneMap arrays for human, mouse, and rat cytokines.
Genomic Solutions also reported a net loss of $2.9 million, or 12 cents per share, relative to the same net loss during the year ago period. Research and development expenses were essentially the same relative to last year, up slightly from $1.5 million to $1.6 million.
The company also posted a decrease in cash and cash equivalents to $24 million, down from the $40.2 million listed at the end of 2000.
According to Murphy, the marked decrease in cash and cash equivalents is largely due to the use of $5.5 million in cash to repurchase Genomic Solutions stocks from PerkinElmer, as well as the costs associated with the investment, manufacture, and marketing of the new products.
In addition, Murphy says Genomic Solutions has spent some extra money over the past six months to target better-established companies, not just new and entrepreneurial organizations. More mature companies tend to take more time to sign on as a customer, she said, and are as concerned about who they buy technology from as the technology itself, requiring additional marketing expenses, according to Murphy.