NEW YORK, Nov. 1 – Struggling microarray and proteomics company Genomic Solutions said Thursday its third-quarter revenues slipped 28 percent to $3.6 million, compared with $5 million in the year ago period, as its net losses widened.
The revenue figures were in line with a previously reduced estimate. In September, Genomic Solutions slashed its revenue forecast to between $3.5 million to $3.7 million, from $7 million to $7.5 million. At the time, the company, which already appeared to be in rough shape, attributed the shortfall to a slowdown in business resulting from the September 11 attacks on the World Trade Center and the Pentagon.
During the third quarter, the Ann Arbor-based genomics and proteomics company, which recently announced a massive restructuring plan, posted a net loss of $7.9 million, or 32 cents a share, compared with a loss of $869,000, or three cents a share in the year ago period. The third-quarter 2001 loss included a $3.6 million charge related to the restructuring effort and other charges. The loss for the year ago period included a one-time gain of $484,000 related to the sale of certain assets.
"Our restructuring initiative to reduce operating expenses by 35 percent is proceeding as planned and is expected to be completed by the end of January 2002," Jeffrey Williams, Genomic Solutions CEO, said in a statement. "Our primary operating goal remains achieving and maintaining profitability in early 2002.”
Over the past couple of months Genomic Solutions has sold its proteomics contract services business and announced plans to trim its workforce of 170 by 25 percent as well as to close a research and development and manufacturing facility in Lansing, Mich.
Williams said that the moves would help stem operating costs and preserve cash reserves, which totaled $18.6 million at the end of the quarter, down from $40.2 million at the end of 2000.
“While significant amounts of cash were invested during 2001 in strategic initiatives, including payments to PerkinElmer to relinquish its call right on our stock and to Affymetrix for access to microarray patents, cash consumed by operations has declined slightly from the first quarter to the third quarter of 2001,” Williams said.
“Operations consumed slightly more than $900,000 per month during the third quarter, and cash used by operations continues to decline during the fourth quarter as a result of our restructuring,” he added.
In addition, the company said that its acquisition of Cartesian Technologies, a developer of automation tools, would also help it to boost its financial performance. As a result of the acquisition, which is scheduled to close in December, Genomic Solutions expects the combined company to have revenues of $33 million in 2002.