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Cepheid Reports Preliminary Results For 2015 Third Quarter

The following excerpt is from the company's SEC filing.

SUNNYVALE, California, October 13, 2015 Cepheid (Nasdaq: CPHD) today announced preliminary results for the quarter ending September 30, 2015.

Based on Cepheids preliminary financial results, total revenue for the third quarter of 2015 is expected to be approximately $126.5 million, and net loss per share is expected to be approximately $(0.32) for the third quarter. Based on Cepheids preliminary financial results, non-GAAP net loss per share for the third quarter of 2015 is expected to be approximately $(0.13), excluding stock-based compensation expense of approximately $10.0 million, amortization of d ebt discount and transaction costs of $2.6 million, and amortization of purchased intangible assets of approximately $1.2 million. The larger than expected loss per share was primarily driven by lower gross margin, which is expected to be approximately 46%, or 48% excluding the same items.

While the third quarters overall business continued to perform broadly in line with our expectations, we were disappointed with gross margin that fell short of our targets, said John Bishop, Cepheids Chairman and Chief Executive Officer. The primary driver was mix, with a higher proportion of lower-margin HBDC business and less commercial business than we projected. In addition, we incurred higher than expected manufacturing costs associated with the ramp-up to volume of our newest virology tests.

Continued Bishop, With our initial virology manufacturing ramp now behind us, we believe that this issue has been addressed, although we are putting in place some additional controls intended to enhance visibility into ramp-up costs associated with new product introductions in the future. We continue to expect a sequential step-up in gross margin in the fourth quarter, and remain committed to our 2017 business model gross margin target of 60% on a non-GAAP basis.

Reflecting ongoing customer adoption of the GeneXpert System and based on Cepheids preliminary financial results, Cepheid currently expects to report total year-to-date revenue growth of 16%, including commercial clinical growth of 22%. On a constant currency basis, Cepheid expects to report total year-to-date revenue growth of 18%, including commercial clinical growth of 24%. The Company expects to report 376 GeneXpert Systems placements, including 35 in North America Commercial Clinical, 169 in International Commercial Clinical, and 172 in HBDC.

Business Outlook

For the fiscal year ending December 31, 2015, the Company now expects total revenue to be in the range of $537 to $541 million, which suggests total revenue for the fourth quarter of 2015 in the range of $146 to $150

million. Updated GAAP net loss per share and non-GAAP net income per share guidance will be provided on the Third Quarter Conference Call on October 20, 2015.

Preliminary Results Conference Call Details

The Company will host a brief conference call to discuss preliminary third quarter results at 2 p.m. Pacific Time on Tuesday, October 13, 2015. Interested parties may listen to the call by dialing 888-371-8897 or 970-315-0479, or access the live webcast via Cepheids 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.

Accessing Cepheids 2015 Third Quarter Results Conference Call

The Company will host a management presentation at...


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