EX-99.1 2 f24653exv99w1.htm EXHIBIT 99.1 exv99w1
 

EXHIBIT 99.1
     
COMPANY CONTACT:
  INVESTOR CONTACTS:
 
    
Mark Fischer-Colbrie
  Jody Cain (jcain@lhai.com)
 
    
Chief Financial Officer
  Bruce Voss (bvoss@lhai.com)
 
    
Adeza Biomedical Corporation
  Lippert/Heilshorn & Associates, Inc.
 
    
(408) 745-0975 ext 520
  (310) 691-7100
 
ir@adeza.com
    
For Immediate Release
ADEZA ANNOUNCES 2006 THIRD QUARTER FINANCIAL RESULTS
Achieves 17th Consecutive Quarter of Profitability on Record Product Sales
Conference Call to Begin at 4:30 p.m. Eastern Time Today
SUNNYVALE, Calif. (November 1, 2006) – Adeza (NASDAQ: ADZA) today announced financial results for the quarter ended September 30, 2006 and updated 2006 financial guidance.
Adeza reported record product sales of $13.5 million for the third quarter of 2006, an increase of 18% from product sales of $11.4 million for the third quarter of 2005. This increase was due primarily to higher sales volume of FullTerm™, The Fetal Fibronectin Test.
Net income for the third quarter of 2006 was $751,000, or diluted earnings per share of $0.04, which included charges of $825,000 for stock-based compensation expense related to SFAS 123R and a tax rate of 59.5%. Net income for the third quarter of 2005 was $2.2 million, or diluted earnings per share of $0.12, which included no stock-based compensation expense related to SFAS 123R and a 5.9% tax rate.
Gross profit for the third quarter of 2006 was $11.5 million, or 85.4%, which included stock-based compensation expense related to SFAS 123R of $39,000. This compares with gross profit of $9.7 million, or 85.1%, for the third quarter of 2005.
Sales and marketing expenses for the third quarter of 2006 were $6.6 million, including stock-based compensation expense related to SFAS 123R of $418,000, compared with $4.6 million for the same quarter in 2005. This increase reflects expansion of the company’s direct sales force and marketing programs. General and administrative expenses for the third quarter of 2006 were $1.8 million, including stock-based compensation expense related to SFAS 123R of $309,000, compared with $2.0 million in the comparable quarter of the prior year. Research and development expenses were $2.5 million for the third quarter of 2006, including stock-based compensation expense related to SFAS 123R of $59,000, compared with $1.6 million in the same quarter of the prior year. This increase was mainly due to product development efforts, including costs related to Gestiva™, Adeza’s drug candidate for the prevention of preterm birth in women with a history of preterm delivery.
Product sales for the first nine months of 2006 totaled $37.3 million, an increase of 18% from $31.7 million for the first nine months of 2005. For the nine months ended September 30, 2006, Adeza reported net income of $1.3 million, or diluted earnings per share of $0.07, which included $2.7 million for stock-based compensation expense due to the adoption of SFAS 123R and a tax rate of 56.0%. This compares with net income of $5.4 million, or diluted earnings per share of $0.31, for the nine months ended September 30, 2005, which included no employee stock-based compensation expense related to SFAS 123R and a 5.5% tax rate.

 

 

As of September 30, 2006, Adeza had cash and cash equivalents of $94.2 million, an increase of $4.5 million since December 31, 2005. Stockholders’ equity was $102.0 million and working capital was $101.3 million as of September 30, 2006.
“We see significant market opportunity for FullTerm, the Fetal Fibronectin Test and have initiatives underway to drive growth in both the ‘high risk’ and ‘signs-and-symptoms’ market,” said Emory V. Anderson, president and chief executive officer. “With respect to Gestiva, following the receipt of our approvable letter, we have requested a meeting with the U.S. Food and Drug Administration (FDA) to review the requirements outlined in the letter.”
2006 Financial Guidance
Adeza today updated its guidance for 2006. The company expects revenue to be in the range of $51 million to $53 million. Previous 2006 revenue guidance was in the range of $54 million to $57 million. Adeza is reaffirming its financial guidance that gross margin for 2006 is expected to exceed 80%. The tax rate through September 30, 2006 of 56.0% is expected to remain above the previously announced 48% to 52% guidance range, primarily as a result of accounting for stock-based compensation expense under SFAS 123R.
Conference Call
Adeza’s management will host an investment-community conference call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results and to answer questions.
Individuals interested in participating in the conference call may do so by dialing (888) 463-4383 for domestic callers, or (706) 634-5615 for international callers. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (800) 642-1687 for domestic callers, or (706) 645-9291 for international callers, and entering reservation code 9490938.
The live call also will be available via the Internet on the Investor Relations section of the company’s Web site at www.adeza.com. A webcast replay of the call will be available following the conclusion of the call.
About Adeza
Adeza designs, manufactures and markets innovative products for women’s health. Adeza’s initial focus is on reproductive healthcare using its proprietary technologies to predict preterm birth and assess infertility. Adeza’s principal product is a patented diagnostic test, FullTerm, The Fetal Fibronectin Test, which utilizes a single-use, disposable cassette and is analyzed on Adeza’s patented TLiIQ® System. This product is approved by the FDA for use in assessing the risk of preterm birth. Adeza also markets and sells the E-tegrity® Test, an infertility-related test to assess receptivity of the uterus to embryo implantation in women with unexplained infertility. In May 2006, Adeza announced the submission of its New Drug Application (NDA) to the FDA for Gestiva, a long-acting form of a naturally occurring progesterone to prevent preterm birth in women with a history of preterm delivery. On October 23, 2006 Adeza announced that it received an approvable letter from the FDA, subject to the completion of certain animal studies and other conditions. More information is available at www.adeza.com.
Adeza cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements, including for example, statements about forecasts of future revenue and the bases for revenue growth, and the uses of Adeza’s products and potential regulatory approvals. The inclusion of forward-looking statements should not be regarded as a representation by Adeza that any of its plans will be achieved. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in Adeza’s business including, without limitation, risks related to fluctuations in our business and market acceptance of our products, and risks related to obtaining and maintaining government approvals of our products. Further information about these and other risks is included Adeza’s Annual Report on Form 10-K and other periodic and current reports filed by Adeza with the Securities Exchange Commission, which are available from the SEC’s Web site (www.sec.gov), and also available on the Investor Relations section of Adeza’s Web site. All forward-looking statements are qualified in their entirety by this cautionary statement and Adeza undertakes no obligation to revise or update this news release to reflect events or circumstances after the date hereof.
[Tables to follow]

 

 

ADEZA BIOMEDICAL CORPORATION
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
                                 
    Three Months     Nine Months  
    Ended     Ended  
    September 30,     September 30,  
    2006     2005     2006     2005  
Product sales
   $ 13,471     $ 11,419     $ 37,293     $ 31,663  
Cost of product sales
     1,961       1,703       5,623       4,559  
 
                        
 
                                
Gross profit
     11,510       9,716       31,670       27,104  
 
                                
Operating costs and expenses:
                                
Sales and marketing
     6,581       4,566       20,042       14,078  
General and administrative
     1,840       1,959       6,302       5,363  
Research and development
     2,490       1,634       5,763       3,711  
 
                        
 
                                
Total operating costs and expenses
     10,911       8,159       32,107       23,152  
 
                        
 
                                
Income (loss) from operations
     599       1,557       (437 )     3,952  
Interest income
     1,256       729       3,378       1,802  
 
                        
 
                                
Income before provision for income taxes
     1,855       2,286       2,941       5,754  
Provision for income taxes
     1,104       136       1,647       319  
 
                        
 
                                
Net income
   $ 751     $ 2,150     $ 1,294     $ 5,435  
 
                        
 
                                
Net income per share:
                                
Basic
   $ 0.04     $ 0.13     $ 0.07     $ 0.32  
 
                        
Diluted
   $ 0.04     $ 0.12     $ 0.07     $ 0.31  
 
                        
 
                                
Shares used to compute net income per share:
                                
Basic
     17,494       16,991       17,459       16,803  
 
                        
Diluted
     18,156       17,931       18,174       17,798  
 
                        

 

 

ADEZA BIOMEDICAL CORPORATION
CONDENSED BALANCE SHEETS
(In thousands, except par value)
                 
    September 30,     December 31,  
    2006     2005  
    (unaudited)     (1)  
Assets
                
 
                
Current assets:
                
Cash and cash equivalents
   $ 94,199     $ 89,722  
Accounts receivable, net
     9,470       9,182  
Inventories
     1,030       849  
Prepaid expenses and other current assets
     410       292  
Current deferred tax asset
     4,929       4,929  
 
            
Total current assets
     110,038       104,974  
 
                
Property and equipment, net
     419       348  
Noncurrent deferred tax asset
     193       193  
Intangible assets, net
     92       128  
 
            
 
                
Total assets
   $ 110,742     $ 105,643  
 
            
 
                
Liabilities and Stockholders’ Equity
                
 
                
Current liabilities:
                
Accounts payable
     1,971     $ 1,994  
Accrued compensation
     2,061       2,216  
Accrued royalties
     807       1,427  
Other accrued liabilities
     1,827       1,246  
Taxes payable
     2,008       1,322  
Deferred revenue
     82       33  
 
            
Total current liabilities
     8,756       8,238  
 
                
Stockholders’ equity:
                
Common stock, $0.001 par value; 100,000 shares authorized; 17,504 and 17,376 shares issued and outstanding at September 30, 2006 and December 31, 2005, respectively
     17       17  
Additional paid-in-capital
     133,114       132,432  
Deferred compensation
     —       (2,604 )
Accumulated other comprehensive income
     1       —  
Accumulated deficit
     (31,146 )     (32,440 )
 
            
Total stockholders’ equity
     101,986       97,405  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 110,742     $ 105,643  
 
            
 
(1) – Derived from the December 31, 2005 audited financial statements included in the Annual Report on Form 10-K of Adeza Biomedical Corporation for fiscal year 2005.
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