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Cepheid Reports First Quarter 2016 Results

SUNNYVALE, Calif., April 28, 2016 /PRNewswire/ -- Cepheid CPHD, -19.86% today reported revenue for the first quarter of 2016 of $144.8 million, representing growth of 9%, or 13% on a constant currency basis, from $132.6 million for the first quarter of 2015. Net loss was $(6.6) million, or $(0.09) per share, which compares to net income of $0.9 million, or $0.01 per share, in the first quarter of 2015.

Excluding stock-based compensation expense, amortization of debt discount and transaction costs, and amortization of purchased intangible assets, non-GAAP net income for the first quarter of 2016 was $6.3 million, or $0.08 per share. This compares to non-GAAP net income of $12.4 million, or $0.17 per share, in the first quarter of 2015, which excluded stock-based compensation expense, amortization of debt discount and transaction costs, and amortization of purchased intangible assets.

"This was a solid start to the year across many parts of our business, with stronger than expected revenue contributions associated with the late surge in what was still a moderate flu season, in addition to strong system placements, particularly in our emerging markets business," said John Bishop, Cepheid's Chairman and Chief Executive Officer. "Furthermore, we continued to broaden our Xpert menu with the US release of Xpert Carba-R and the international release of our next generation Xpert MRSA test."

Continued Bishop, "Cepheid also delivered the milestone 10,000 [th] GeneXpert System during the quarter, and substantially extended our reach in the US market with new agreements with three of the most significant, non-acute distributors. Based on feedback from our early point of care engagements, we have decided to broaden our entry into the US point of care market using the existing GeneXpert System and the planned menu of faster Xpress tests to address the most compelling opportunities for near-patient testing, including Flu, Flu/RSV, Group A Strep, and CT/NG."

Operational Overview

Total revenue was, in millions:


Three Months Ended March 31,


2016


2015


Change







Systems and Other

$ 24.3


$ 18.7


30%

Reagents and Disposables

120.5


113.9


6%

Total Revenue

$ 144.8


$ 132.6


9%

By geography, total revenue was, in millions:


Three Months Ended March 31,


2016


2015


Change







North America

$ 82.4


$ 82.3


0%

International

62.4


50.3


24%

Total Revenue

$ 144.8


$ 132.6


9%

  • GAAP gross margin was 50% and non-GAAP gross margin was 51% for the first quarter of 2016, which compares to 54% and 55%, respectively, in the first quarter of 2015.
  • Cash, cash equivalents and investments were $355.7 million as of March 31, 2016.
  • DSO was 46 days.

Business Outlook

For the fiscal year ending December 31, 2016, the Company continues to expect:

  • Total revenue to be in the range of $618 to $635 million;
  • Net loss in the range of $(0.57) to $(0.51) per share; and
  • Non-GAAP net income in the range of $0.22 to $0.28 per share.

Expected non-GAAP net income excludes approximately $43 million related to stock-based compensation expense, approximately $11 million related to the amortization of debt discount and transaction costs, and approximately $5 million related to the amortization of purchased intangible assets. The fully diluted share count for the year is expected to be approximately 73 million in the case of a net loss, and approximately 77 million shares in the case of net income.

The following table reconciles net loss per share to the non-GAAP net income per share range:



Guidance Range for Year



Ending December 31, 2016



Low


High

Net Loss Per Share


$ (0.57)


$ (0.51)

Stock-Based Compensation Expense


0.57


0.57

Amortization of Debt Discount and Transaction Costs

0.07


0.07

Amortization of Purchased Intangible Assets


0.15


0.15

Non-GAAP Measure of Net Income Per Share


$ 0.22


$ 0.28

Accessing Cepheid's 2016 First Quarter Results Conference Call

The Company will host a management presentation at 2 p.m. Pacific Time on Thursday, April 28, 2016 to discuss the results. To access the live webcast, please visit Cepheid's website at http://ir.cepheid.com. A replay of the webcast will be available shortly following the call and will remain available for at least 90 days.

Summary of Management Presentation

In conjunction with today's press release, the Company is making a summary of the management presentation immediately available at http://ir.cepheid.com.

About Cepheid

Based in Sunnyvale, California, Cepheid CPHD, -19.86% is a leading molecular diagnostics company that is dedicated to improving healthcare by developing, manufacturing, and marketing accurate yet easy-to-use molecular systems and tests. By automating highly complex and time-consuming manual procedures, the Company's solutions deliver a better way for institutions of any size to perform sophisticated genetic testing for organisms and genetic-based diseases. Through its strong molecular biology capabilities, the Company is focusing on those applications where accurate, rapid, and actionable test results are needed most, such as managing infectious diseases and cancer. For more information, visit http://www.cepheid.com.

Use of Non-GAAP Measures

The Company has supplemented its reported GAAP financial information, including (1) non-GAAP net income and non-GAAP gross margin that do not include stock-based compensation expense, amortization of debt discount and transaction costs and amortization of purchased intangible assets and (2) revenue metrics presented on a constant currency basis. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. The Company's management uses the non-GAAP information internally to evaluate its ongoing business, continuing operational performance and cash requirements, and believes these non-GAAP measures are useful to investors as they provide a basis for evaluating the Company's cash requirements and additional insight into the underlying operating results and the Company's ongoing performance in the ordinary course of its operations.

These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company...


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