EXHIBIT 99.1
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COMPANY CONTACT:
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INVESTOR CONTACTS: |
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Mark Fischer-Colbrie
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Jody Cain (jcain@lhai.com) |
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Chief Financial Officer
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Bruce Voss (bvoss@lhai.com) |
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Adeza Biomedical Corporation
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Lippert/Heilshorn & Associates, Inc. |
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(408) 745-0975 ext 520
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(310) 691-7100 |
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ir@adeza.com |
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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.
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