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Wednesday July 31, 2002 COMPANY PRESS RELEASE Transgenomic, Inc. Reports Second Quarter 2002 Results Record Orders Received OMAHA, Neb., and SAN JOSE, Calif., July 31 /PRNewswire/ -- Transgenomic, Inc. (Nasdaq: TBIO) today announced financial results for the quarter and six months ended June 30, 2002. The Company's financial results are presented in tables below. Second Quarter 2002 Second quarter revenues decreased 1 percent to $9.4 million in 2002 from $9.5 million in 2001. The net loss for the quarter was $4.0 million, or $0.17 per share. This compares to a net loss of $1.6 million, or $0.07 per share in the second quarter of 2001. The Company's cash and investments at the end of the period totaled $25 million. Comment and Outlook During the quarter, the Company received approximately $15 million in new orders, the highest level of orders in Company history. Significant portions of those orders are related to its synthetic nucleic acids product line. The Company will carry forward to future quarters approximately $6.4 million in open orders and deferred revenue. The reduced revenue levels were the result of continued weakness in sales of the Company's WAVE® instrument in the U.S. commercial sector. Collin D'Silva, CEO, noted that the Company began expanding its synthetic nucleic acids production capacity late last year in anticipation of increasing demand. He indicated that the progression of a significant and increasing number of nucleic acid-based drug candidates, such as antisense molecules, into later stages of clinical development will fuel significant increases in demand for production-scale synthesis of nucleic acid products. "The significant orders we are receiving from leading companies involved in the development of antisense and other nucleic acid-based therapeutics validates our ability to deliver pharmaceutical-grade synthetic nucleic acid products as we meet our capacity scale-up milestones," said D'Silva. He added, "This ability, combined with our significant internal expertise with a variety of novel nucleic acid chemistries, should facilitate an increasing level of participation by Transgenomic in higher-value therapeutic markets." D'Silva indicated that while the economic environment posed challenges to the instrument business, several significant instrument-related milestones were achieved during the quarter. The Company began shipment of a new version of its WAVE instrument-the WAVE MD™, as well as new software for the WAVE platform. The WAVE-MD will appeal to additional market segments, and the software will provide added convenience and functionality for WAVE users. According to D'Silva, "Our WAVE System continues to be a valuable tool for researchers, as evidenced by a consistent average selling price. The additional model and new software will increase the appeal of our versatile WAVE technology to a growing number of market segments." Confident in growth prospects for both its instrument and consumables business, D'Silva said the Company remains positive about the future. This positive outlook, coupled with the view that its market valuation is out of line with its intrinsic value, led the company to announce in early July the establishment of a program to repurchase up to 1 million shares of its common stock, subject to the restrictions of Rule 10b-18 under the Securities Exchange Act of 1934. Said D'Silva, "Our current cash position is sufficient to address operating cash flow needs as well as execute this buyback program." Earnings Call The Company will host a live broadcast of its second quarter 2002 financial results via conference call over the Internet on Wednesday, July 31, at 5 p.m. Eastern time. To listen to the Webcast, investors should log on to http://www.firstcallevents.com/service/ajwz361393820gf12.html and follow the instructions listed. A link to this site will also be located on the Company's Investor Relations Web page at http://www.transgenomic.com/Pages/Press.asp?year=Recent. An archived recording of the conference call will be available and can be accessed via the web using the same links listed above for 90 days after the call. Investors can also listen to a replay via telephone from 8 p.m. ET on July 31 through Wednesday, August 14, 2002, midnight ET. Simply dial 402-220-0662 from any telephone. About Transgenomic Transgenomic provides versatile and innovative research tools and related consumable products to the life sciences industry for the synthesis, separation, analysis and purification of nucleic acids and a wide variety of nucleic acid-based specialty chemicals. Transgenomic's specialty chemicals consist of nucleic acid building blocks ("phosphoramidites"), fluorescent markers, dyes and associated reagents, as well as oligomimetics (chemically-modified DNA and RNA molecules) which exhibit proven enhancements in stability, bioavailability, specificity and efficacy, making them excellent candidates for use in clinical applications such as genetic diagnostics and therapeutics. Oligomimetics also exhibit higher affinity and specificity than regular DNA making them excellent candidates for DNA diagnostics and chip technology. Transgenomic's WAVE System is a versatile system that can be used for genetic variation detection, size-based single- and double-strand DNA separation and analyses, and DNA purification. Because of this versatility, the WAVE System can essentially replace the use of traditional gel electrophoresis in the molecular biology laboratory. This patented technology uses a process known as high-performance liquid chromatography to separate DNA material so that genetic variation may be identified and analyzed. Proprietary software controls the process and produces the results of the operation in an easy-to-read chart format. Once the DNA sample is loaded into the instrument and necessary data is entered into the software, the process requires virtually no additional input from the researcher. In four years, Transgenomic has installed WAVE Systems in 30 countries, evidence that it is a global leader in solutions for nucleic acid analysis. For more information about the innovative genomics research tools developed and marketed by Transgenomic, please visit the company's Web site at www.transgenomic.com. Forward-Looking Statement This press release may contain forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Such statements are subject to certain factors, risks and uncertainties described from time to time in Transgenomic, Inc.'s reports to the Securities and Exchange Commission. Any change in such factors, risks and uncertainties may cause the actual results, events and performance to differ materially from those referred to in such statements. Accordingly, the company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 with respect to all statements contained in this press release. TRANSGENOMIC, INC.
TRANSGENOMIC, INC.
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