November 1, 2001 – Please note that the command performance telephone number was listed incorrectly in our press release. The number to use for the conference call replay is 402-220-0665. We apologize for any inconvenience.
– Investor Relations

Wednesday October 31, 2001

COMPANY PRESS RELEASE

Transgenomic, Inc. Reports Record Third Quarter Revenues

Quarterly and Year-to-Date Life Sciences Revenues Up 64 Percent and 67 Percent, Respectively, From Comparable Periods in 2000

OMAHA, Neb., and SAN JOSE, Calif., Oct. 31 / -- Transgenomic, Inc. (Nasdaq: TBIO) today announced financial results for the quarter and nine months ended September 30, 2001. The company's historical financial results are presented in the tables attached.

Third Quarter 2001

Third quarter revenues increased 64 percent from $6.2 million in 2000 to $10.3 million in 2001. The net loss for the quarter was $1.9 million, or $0.08 per share. The net loss for the quarter, excluding goodwill associated with the Annovis acquisition, was $1.6 million, or $0.07 per share, compared to a net loss of $2.1 million, or $0.11 per share, in 2000. This was an improvement of 25 percent over the prior year period. On a sequential basis, the $10.3 million revenues in the third quarter of 2001 was a seven percent increase over the second quarter.

Nine Months Ended September 30, 2001

For the nine months ended September 30, 2001, life sciences revenues increased 67 percent from $16.6 million in 2000 to $27.7 million in 2001. The net loss year-to-date for 2001 was $4.7 million, or $0.21 per share. The net loss for the period, excluding goodwill and interest expense associated with the Annovis acquisition, was $4.0 million, or $0.18 per share, as compared to a life sciences net loss of $7.6 million, or $0.51 per share, for the same period in 2000. This was an improvement of 47 percent over the prior year period. The company's cash and investments position at the end of the period was $47.1 million.

Comment and Outlook

The company's life sciences revenues have sequentially grown for 15 quarters. According to Chief Executive Officer, Collin D'Silva, "This consistent growth in revenue is evidence that we have customer-validated technology with an effective business model. Our demonstrated understanding of our customers' evolving needs has been a key factor in the execution of our business model."

D'Silva points out that the company also understands the investment community's need for predictability and consistency. "We have met or exceeded analysts' expectations in each of the six quarters reported since going public in July of 2000, and have stayed on track in our march toward profitability. The strength of our balance sheet, with $47 million in cash and investments, with no debt, gives us the resources needed to execute our plan to achieve profitability by the end of 2002."

Consumables sales represent a significant component of the company's revenue growth and will continue to be important to its growth strategy. D'Silva commented, "Our focus remains in driving recurring revenue streams through the ongoing introduction of proprietary products in the areas of bio-consumables and synthetic nucleic acids. In addition, we will continue to drive top-line revenue growth by providing innovative solutions in our bio-instrument product line."

Earnings Call

The Company will host a live broadcast of its third quarter 2001 financial results via conference call over the Internet on Wednesday, October 31, at 5 p.m. Eastern time. To listen to the webcast, investors should log on to http://www.videonewswire.com/event.asp?id=1709 and follow the instructions listed. A link to this site will also be located on the Company's Investor Relations web page at www.transgenomic.com/pages/corporateinvestor.html. 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 October 31 through Thursday, November 15, 2001, midnight ET. Simply dial 402-530-9316 from any telephone.

November 1, 2001 – Please note that the command performance telephone number was listed incorrectly in our press release. The number to use for the conference call replay is 402-220-0665. We apologize for any inconvenience.
– Investor Relations

About Transgenomic

Transgenomic provides versatile and innovative research tools and related consumable products to the life sciences industry. Its WAVE® Nucleic Acid Fragment Analysis System can be used for variation detection, size-based double-strand DNA separation and analysis, single-strand DNA separation and analysis and DNA purification. When used for variation detection, these tools enable researchers to discover and understand variation in the human genetic code, or genome, in order to accelerate and improve drug development and diagnostics. Transgenomic believes the WAVE System will become a leading tool to analyze genetic variations as it allows researchers to analyze both known and unknown genetic variations faster, with more accuracy and at a lower cost than other commercially-available techniques. To date, WAVE Systems have been placed in over 25 countries around the world.

Transgenomic's specialty chemical products consist of a wide variety of nucleic acid-based products and services for the life sciences sector, including nucleic acid building blocks ("phosphoramidites"), fluorescent markers and dyes and associated reagents. In addition, the company is a principle provider of oligomimetics and specialty chemicals. Oligomimetics are chemically-modified DNA and RNA molecules exhibiting 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.

For more information about the innovative genomics research tools developed and marketed by Transgenomic, please visit the company's website at www.transgenomic.com.

Cautionary 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.
SUMMARY FINANCIAL RESULTS
(In thousands, except per share amounts)

LIFE SCIENCES STATEMENT OF OPERATIONS

 

Three Months
Ended September 30,

Nine Months
Ended September 30,

 

2001

2000

2001

2000

Net Sales

$10,254

$6,249

$27,729

$16,615

Cost of Sales

   4,591

   2,955

   12,395

   8,034

Gross Margin

5,663

3,294

15,334

8,581

 

 

 

 

 

Operating Expenses:

 

 

 

 

  Selling, General and Administrative

5,902

3,475

15,462

9,882

  Research and Development

2,172

1,898

6,437

5,231

  Stock-based Compensation

10

41

94

217

 

 

 

 

 

Operating Loss

(2,421)

(2,120)

(6,659)

(6,749)

 

 

 

 

 

Other Income/(Expenses)

       516

          43

     1,995

      (869)

Loss Before Income Taxes

(1,905)

(2,077)

(4,664)

(7,618)

Income Tax Expense

           5

           --

          21

            --

Net Loss

$(1,910)

$(2,077)

$(4,685)

$(7,618)

 

 

 

 

 

Acquisition Related Expenses:

 

 

 

 

  Goodwill Amortization

355

--

593

--

  Interest Expense

--

--

48

--

 

 

 

 

 

Operating Loss Excluding Acquisition
 Related Goodwill Amortization

$(2,066)

$(2,120)

$(6,018)

$(6,749)

Net Loss Excluding Acquisition Related
 Expenses

$(1,555)

$(2,077)

$(4,044)

$(7,618)

 

 

 

 

 

Shares Used in Computing Net Loss Per
 Share

 

 

 

 

  Basic and Diluted

23,184

19,031

22,310

15,022

Basic and Diluted Net Loss Per Share

$(0.08)

$(0.11)

$(0.21)

$(0.51)

Basic and Diluted Net Loss Per Share
 Excluding Acquisition Related Expenses

$(0.07)

$(0.11)

$(0.18)

$(0.51)

 

NOTE:  The Life Sciences Statement of Operations reflects the sale of our non-life sciences product line as if the sale had occurred on January 1, 2000.

 

            Earnings per share are computed independently for each of the quarters presented. Therefore, the sum of the quarterly per share losses may not equal the year-to-date loss per share.

 

 

TRANSGENOMIC, INC.
SUMMARY FINANCIAL RESULTS
(In thousands, except per share amounts)

HISTORICAL STATEMENTS OF OPERATIONS

 

Three Months
Ended September 30,

Nine Months
Ended September 30,

 

2001

2000

2001

2000

Net Sales

$10,254

$6,249

$27,729

$18,785

Cost of Sales

     4,591

     2,955

   12,395

     9,401

Gross Margin

5,663

3,294

15,334

9,384

 

 

 

 

 

Operating Expenses

 

 

 

 

  Selling, General and Administrative

5,902

3,475

15,462

10,363

  Research and Development

2,172

1,898

6,437

5,650

  Stock-based Compensation

10

41

94

791

 

 

 

 

 

Operating Loss

(2,421)

(2,120)

(6,659)

(7,420)

 

 

 

 

 

Other Income/(Expenses)

        516

          43

     1,995

      (869)

Loss Before Income Taxes

(1,905)

(2,077)

(4,664)

(8,289)

Income Tax Expense

            5

            --

          21

            --

Net Loss

$(1,910)

$(2,077)

$(4,685)

$(8,289)

 

 

 

 

 

Shares Used in Computing Net Loss Per
 Share

 

 

 

 

  Basic and Diluted

23,184

19,031

22,310

15,022

Basic and Diluted Net Loss Per Share

$(0.08)

$(0.11)

$(0.21)

$(0.55)

 

 

TRANSGENOMIC, INC.
SUMMARY FINANCIAL RESULTS
(In thousands)

BALANCE SHEET

 

September 30,

December 31,

 

2001

2000

Cash, Cash Equivalents and Short-term
 Investments

$47,148

$61,921

Other Current Assets

   16,916

     8,248

Current Assets

64,064

70,169

 

 

 

Net Property and Equipment

7,773

4,591

Other Assets

   17,582

     3,103

Total Assets

 $89,419

 $77,863

 

 

 

Current Liabilities

6,491

3,897

Stockholders Equity

   82,928

   73,966

 

 

 

Total Liabilities and Stockholders Equity

 $89,419

 $77,863

For confirmation of release or further information contact:

Mitchell L. Murphy
Transgenomic, Inc.
402-452-5418
mmurphy@transgenomic.com