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

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Caliper Life Sciences this week 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.

"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 week. "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 service revenues were $8.9 million versus $9.5 million in the comparable period of 2007.

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.

Caliper said that it expects first-quarter 2009 revenues to be 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 with whom Caliper deals 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.

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