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| 8-K - SERACARE LIFE SCIENCES INC | v229717_8k.htm |
Exhibit 99.1
SeraCare Announces Change in Executive Team, Greg Gould Named Interim CEO, and Company Reports Third Quarter Fiscal Year 2011 Results
MILFORD, Mass., July 26, 2011 -- SeraCare Life Sciences, Inc. (NASDAQ: SRLS), a global life sciences company providing vital products and services to facilitate the discovery, development and production of human diagnostics and therapeutics, today announced a leadership change, and reported financial results for its fiscal 2011 third quarter ended June 30, 2011.
The SeraCare Board of Directors announced steps taken to improve the performance of the company:
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Susan Vogt, previously CEO of SeraCare, is no longer with the Company. She guided SeraCare during the past five years and led a reorganization, a return to profitability and improved operations.
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Greg Gould has been named interim CEO and continues in his role as CFO.
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The Board has started a search for a new CEO. Healthcare industry veteran and Chairman of the Board Joseph Nemmers will work closely with management during the transition period.
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The head of business development is no longer with the Company. The Board is continuing its review of the Company’s current business development processes and expects to make appropriate changes to improve performance.
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“We believe we have a great foundation in place and see a healthy environment for profitable growth in the foreseeable future,” said Joseph Nemmers, Chairman of the Board, SeraCare Life Sciences, Inc. “The Board of Directors is making these changes and raising its expectations for commercial and R&D execution as well as a more focused business development strategy. We’re confident these steps will lead to improvements in the overall performance of the Company.”
For the quarter ended June 30, 2011, SeraCare reported revenue of $11.0 million, a 15% decrease when compared to $13.0 million in revenue for the quarter ended June 30, 2010. Gross margins decreased to 37% compared to 39% for the same quarter in the prior year. Net income decreased to $0.5 million, or $0.03 per share on a basic and diluted basis, from net income of $1.3 million, or earnings per share on a basic and diluted basis of $0.07, for the quarter ended June 30, 2010.
“We are disappointed in the results for the quarter,” said Greg Gould, SeraCare Life Sciences’ Chief Financial Officer and interim Chief Executive Officer. “The decline in revenue was driven primarily by two previously disclosed events: the expiration of certain government-funded contracts and projects, which led to a decrease in BioServices revenues of $1.3 million, or 33%, compared to the prior year, and a reduction in purchases from a single large customer as we transition it to a new jointly developed product, which contributed to a decrease in Diagnostics & Biopharmaceutical Products revenue of $0.7 million, or a 7% reduction, compared to the prior year. The decrease in revenues had an impact on our gross margin and net income due primarily to the nature of our fixed costs, which could not be scaled with the decreased revenues.”
“Even though SeraCare is having a difficult year in fiscal 2011, we remain confident in our market opportunity and the potential for our products and services to win in our target markets. The restructuring underway in our commercial channel is designed to capitalize on this opportunity. In addition, we have a solid balance sheet with a strong cash position and virtually no debt. I look forward to working closely with the Board of Directors to return the Company to a profitable growth trajectory,” said Greg Gould.
Conference Call Information:
SeraCare will host a conference call today, July 26, 2011, at 8:30 a.m. EDT. The conference call will be webcast live over the Internet and can be accessed by logging on to the "Investor Center, Events" section of the SeraCare Life Sciences website at www.seracare.com. The call can also be accessed by dialing (866) 730-5763 (within the United States) or (857) 350-1587 (outside the United States). The passcode for participants is 52933117.
A replay of the call will be available approximately two hours after the live call concludes through August 2, 2011. To access the replay, dial (888) 286-8010 (within the United States) or (617) 801-6888 (outside the United States). The passcode is 31788085. The webcast will also be archived on the Company's website.
About SeraCare Life Sciences, Inc.:
SeraCare serves the global life sciences industry by providing vital products and services to facilitate the discovery, development and production of human diagnostics and therapeutics. The Company's innovative portfolio includes diagnostic controls, plasma-derived reagents and molecular biomarkers, biobanking and contract research services. SeraCare's quality systems, scientific expertise and state-of-the-art facilities support its customers in meeting the stringent requirements of the highly regulated life sciences industry.
Forward-Looking Statements:
This press release contains disclosures that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about SeraCare Life Sciences, Inc. ("SeraCare" or the "Company"). All statements regarding our expected future financial position, results of operations, cash flows, dividends, financing plans, business strategy, budget, projected costs or cost savings, capital expenditures, competitive positions, growth opportunities for existing products or products under development, plans and objectives of management for future operations and markets for stock are forward-looking statements. In addition, forward-looking statements include statements in which we use words such as "expect," "believe," "anticipate," "intend," or similar expressions. Although we believe the expectations reflected in such forward-looking statements are based on reasonable assumptions, we cannot assure you that these expectations will prove to have been correct, and actual results may differ materially from those reflected in the forward-looking statements. Factors that could cause our actual results to differ from the expectations reflected in the forward-looking statements in this press release include, but are not limited to, disruptions arising from our management transition, expenses associated with our management transition, distraction of management and employees arising from an unsolicited proposal to acquire the company, uncertainty among customers, suppliers, employees and others regarding our management transition and the unsolicited acquisition proposal, prolonged impairment of sales from changes in our sales organization, revenue shortfalls arising from customer transitions to new products, unpredictability in large customer orders, failure to maintain proper inventory levels, availability of financing, reductions or terminations of government or other contracts, interruption in our supply of products or raw materials, actions of SeraCare's competitors, changes in the regulatory environment, delays in new product introductions, lack of market acceptance of new products, decreased healthcare spending, reduced margins resulting from a shift in revenue towards services, absence or loss of acquisition opportunities to higher bidders, potential failure to complete any announced acquisition, and potential failure of any acquisition to produce expected revenues, profits or synergies. Many of these factors are beyond our ability to control or predict.
Contacts:
Gregory A. Gould
Interim Chief Executive Officer and Chief Financial Officer
SeraCare Life Sciences, Inc.
508-244-6400
Paul M. Newmann
Fleishman-Hillard Inc.
312-729-3647
SERACARE LIFE SCIENCES, INC.
STATEMENTS OF OPERATIONS — UNAUDITED
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
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2011
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2010
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2011
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2010
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Revenue
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$ | 11,028,622 | $ | 12,975,119 | $ | 32,494,003 | $ | 37,083,594 | ||||||||
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Cost of revenue
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6,935,287 | 7,867,551 | 20,033,360 | 21,500,674 | ||||||||||||
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Gross profit
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4,093,335 | 5,107,568 | 12,460,643 | 15,582,920 | ||||||||||||
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Research and development expense
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303,778 | 210,695 | 849,476 | 542,300 | ||||||||||||
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Selling, general and administrative expenses
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3,264,675 | 3,510,410 | 9,080,023 | 10,178,633 | ||||||||||||
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Reorganization items
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- | - | (846,094 | ) | - | |||||||||||
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Operating income
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524,882 | 1,386,463 | 3,377,238 | 4,861,987 | ||||||||||||
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Interest (expense) income, net
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(36,532 | ) | (2,184 | ) | (23,193 | ) | (232,834 | ) | ||||||||
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Other income, net
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50 | 40,000 | 15,502 | 70,083 | ||||||||||||
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Income before income taxes
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488,400 | 1,424,279 | 3,369,547 | 4,699,236 | ||||||||||||
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Income tax (benefit) expense
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(34,891 | ) | 112,500 | (128,117 | ) | 8,575 | ||||||||||
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Net income
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$ | 523,291 | $ | 1,311,779 | $ | 3,497,664 | $ | 4,690,661 | ||||||||
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Earnings per common share
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Basic
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$ | 0.03 | $ | 0.07 | $ | 0.19 | $ | 0.25 | ||||||||
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Diluted
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$ | 0.03 | $ | 0.07 | $ | 0.18 | $ | 0.24 | ||||||||
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Weighted average shares outstanding
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Basic
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18,928,878 | 18,848,478 | 18,898,218 | 18,805,324 | ||||||||||||
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Diluted
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19,280,640 | 19,293,283 | 19,274,423 | 19,172,586 | ||||||||||||
SERACARE LIFE SCIENCES, INC.
BALANCE SHEETS — UNAUDITED
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As of
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As of
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June 30,
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September 30,
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2011
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2010
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ASSETS
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Current assets
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Cash and cash equivalents
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$ | 17,160,722 | $ | 16,074,915 | ||||
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Accounts receivable, less allowance for doubtful accounts of $100,000 and
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$40,000 as of June 30, 2011 and September 30, 2010
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6,692,854 | 7,288,133 | ||||||
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Taxes receivable
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25,129 | 118,486 | ||||||
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Inventory
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10,116,812 | 9,028,809 | ||||||
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Prepaid expenses and other current assets
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263,691 | 333,191 | ||||||
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Total current assets
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34,259,208 | 32,843,534 | ||||||
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Property and equipment, net
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5,860,895 | 5,970,179 | ||||||
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Goodwill
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4,284,979 | 4,284,979 | ||||||
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Other assets
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428,910 | 526,810 | ||||||
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Total assets
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$ | 44,833,992 | $ | 43,625,502 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Accounts payable
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$ | 1,897,679 | $ | 2,787,855 | ||||
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Accrued expenses and other liabilities
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1,916,951 | 4,041,172 | ||||||
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Current portion of long-term debt
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36,295 | 55,994 | ||||||
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Total current liabilities
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3,850,925 | 6,885,021 | ||||||
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Long-term debt
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988 | 21,970 | ||||||
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Other liabilities
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2,086,365 | 2,216,916 | ||||||
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Total liabilities
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5,938,278 | 9,123,907 | ||||||
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Commitments and contingencies
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Stockholders' equity
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Preferred stock, $.001 par value, 5,000,000 shares authorized; no shares
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issued or outstanding
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Common stock, $.001 par value, 35,000,000 shares authorized; 18,958,902
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and 18,853,584 shares issued and outstanding as of June 30, 2011 and
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September 30, 2010, respectively
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18,959 | 18,853 | ||||||
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Additional paid-in-capital
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105,247,442 | 104,351,093 | ||||||
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Retained deficit
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(66,370,687 | ) | (69,868,351 | ) | ||||
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Total stockholders' equity
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38,895,714 | 34,501,595 | ||||||
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Total liabilities and stockholders' equity
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$ | 44,833,992 | $ | 43,625,502 | ||||