SOURCE: Pacific Biomarkers, Inc.

Pacific Biomarkers, Inc.

February 15, 2011 08:30 ET

Pacific Biomarkers, Inc. Reports Second Quarter Operating Results

SEATTLE, WA--(Marketwire - February 15, 2011) - Pacific Biomarkers, Inc. (OTCBB: PBMC), a leading provider of specialized biomarker and contract research services, today announced its operating results for the second quarter and first half of FY2011.

For the three months ended December 31, 2010 (the second quarter of FY2011), revenue increased 20% to $2,532,069, compared with $2,113,795 in the second quarter of FY2010. Operating loss was $202,728 in the second quarter of FY2011, versus an operating loss of $307,037 in the prior-year period. The Company reported net loss of $349,218, or $0.02 per share, for the three months ended December 31, 2010, compared with net loss of $457,629, or $0.03 per share, in the three months ended December 31, 2009.

Revenue for the six months ended December 31, 2010 increased 22% to $5,385,602, compared with $4,415,170 during the corresponding period of the previous fiscal year. Operating loss was $250,252 in the first half of FY2011, versus an operating loss of $520,745 in the same period last year. Net loss for the six months ended December 31, 2010 totaled $551,581, or $0.03 per share, compared with net income of $730,799, or $0.04 per share, for the comparable six-month period in FY2010.

"Our results for the three months ended December 31, 2010 are a reflection of the challenging drug development environment. While revenue increased from the prior year, gross profit was still short of plan. We remain confident that we are well positioned to execute our strategic plan for continued growth in the specialty laboratory and our biomarker services area," commented Ron Helm, Chief Executive Officer of Pacific Biomarkers. "We benefited from a large contract in the first two quarters, while other revenues reflected what we have seen in our clinical services market in line with what other Contract Research Organizations (CROs) have reported."

Mr. Helm continued, "The Company's result last year demonstrated that the drug development marketplace continues to challenge organizations supporting clinical trial work as well as biomarker development. We believe that our strategy of broadening our biomarker services offering continues to be a sound move even in view of somewhat mixed results so far for this fiscal year -- down 15% for the quarter, but up 4% for the six month period. The current market conditions may challenge us for a time and we have implemented measures to control costs including a reduction in force during the second quarter and other operating expense reductions. We believe we will be positioned appropriately as the market improves."

"We believe PBI's improved financial performance for the first half of Fiscal 2011 is encouraging. Nonetheless, we have made substantial adjustments to our current operating plan in view of soft margins and increased expense levels. We anticipate improvement in demand for our broad portfolio of specialty laboratory and biomarker services. We have identified the biomarker services area as the long-term growth driver in a market segment where demand is strong and there continue to be no dominant players in this area," concluded Helm.

For additional information, see Pacific Biomarkers' quarterly report filed with the SEC on Form 10-Q for the fiscal quarter ended December 31, 2010 and its annual report filed with the SEC on Form 10-K for the fiscal year ended June 30, 2010.

About Pacific Biomarkers, Inc.

Established in 1989, PBI provides biomarker laboratory services and contract research services to support pharmaceutical and diagnostic manufacturers conducting human clinical trial research. The Company provides expert services in the areas of cardiovascular and musculoskeletal diseases, diabetes, obesity, and nutrition. The PBI laboratory is accredited by the College of American Pathologists, New York State, and the Lipid Standardization Program. PBI's clients include many of the world's largest pharmaceutical, biotech, and diagnostic companies. PBI also provides clinical biomarker services focusing on the emerging field of biomarker assay development and testing. Services include validating and performing custom assays for novel clinical biomarkers, immunogenicity testing, mass spectrometry, and multiplex testing.

PBI is headquartered in Seattle, Washington, and its common stock trades on the OTC Bulletin Board under the symbol "PBMC."

For more information about PBI, visit the company's website at www.pacbio.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release includes forward-looking statements including, but not limited to, the following: growth in revenues; results of business development activities; financial results; future growth; and growth and demand for our services, particularly our biomarker services. These forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those described in the forward-looking statements. These risks include, but are not limited to, the following: the Company's ability to enter into contracts for its laboratory testing or biomarker services; client changes or early terminations of studies; the success of marketing and business development efforts, and competitive factors; the Company's ability to manage growth; and other risks and uncertainties set forth in periodic filings with the U.S. Securities and Exchange Commission (including Form 10-K for the year ended June 30, 2010).


                         PACIFIC BIOMARKERS, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                               December 31,    June 30,
                  ASSETS                          2010           2010
                                               (unaudited)
                                              -------------  -------------
Current assets:
  Cash and cash equivalents                   $   1,113,143  $   1,861,155
  Short-term bank deposits                          455,029        468,619
  Accounts receivable, net                        1,513,115      1,852,987
  Other receivable, net                               6,500          6,500
  Inventory                                         232,105        239,863
  Prepaid expenses and other assets                 302,359        229,802
                                              -------------  -------------
      Total current assets                        3,622,251      4,658,926

Property and equipment, net                       1,249,634      1,309,764

      Total assets                            $   4,871,885  $   5,968,690
                                              =============  =============

        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                            $     551,991  $     605,944
  Accrued liabilities                               399,620        632,429
  Advances from customers                           470,333        408,455
  Capital lease obligation - current portion        204,822        200,806
  Secured note - current portion, net of
   discount                                         860,068      1,015,603
                                              -------------  -------------
      Total current liabilities                   2,486,834      2,863,237

  Capital lease obligations - long-term
   portion                                          288,153        389,820
  Secured note - long-term portion, net
   of discount                                    2,491,353      2,676,969
                                              -------------  -------------
      Total liabilities                           5,266,340      5,930,026
                                              -------------  -------------

Commitments and contingencies                             -              -

Stockholders' equity:
  Common stock, $0.01 par value, 30,000,000
   shares authorized, 16,909,501 shares
   issued and outstanding at December 31,
   2010, 16,669,856  shares issued and
   outstanding at June 30, 2010                     166,981        166,699
  Additional paid-in-capital                     27,841,204     27,723,024
  Accumulated deficit                           (28,402,640)   (27,851,059)
                                              -------------  -------------
      Total stockholders' equity (deficit)         (394,455)        38,664

      Total liabilities and stockholders'
       equity                                 $   4,871,885  $   5,968,690
                                              =============  =============



                         PACIFIC BIOMARKERS, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (unaudited)

                         Three Months Ended           Six Months Ended
                            December 31,                December 31,
                      ------------------------    ------------------------
                          2010         2009           2010         2009
                      -----------  -----------    -----------  -----------


Revenues              $ 2,532,069  $ 2,113,795    $ 5,385,602  $ 4,415,170
                      -----------  -----------    -----------  -----------

Laboratory expenses
 and cost of sales      1,515,574    1,380,457      3,194,383    2,774,157
                      -----------  -----------    -----------  -----------
    Gross profit        1,016,495      733,338      2,191,219    1,641,013
                      -----------  -----------    -----------  -----------

Operating expenses:
  Selling, general
   and administrative   1,219,223    1,040,375      2,441,471    2,161,758
                      -----------  -----------    -----------  -----------

Operating loss           (202,728)    (307,037)      (250,252)    (520,745)
                      -----------  -----------    -----------  -----------

Other expense:
  Interest expense       (134,261)    (138,851)      (274,222)    (191,951)
  Amortization of
   discount on debt       (13,754)     (12,132)       (32,565)     (18,090)
  Other income              1,525          391          5,458            7
                      -----------  -----------    -----------  -----------
    Total other expense  (146,490)    (150,592)      (301,329)    (210,034)

Net loss before tax
 expense                 (349,218)    (457,629)      (551,581)    (730,779)
                      -----------  -----------    -----------  -----------

Tax expense                     -            -              -            -

  Net loss            $  (349,218) $  (457,629)   $  (551,581) $  (730,779)
                      ===========  ===========    ===========  ===========

  Net loss per share  $     (0.02) $     (0.03)   $     (0.03) $     (0.04)
                      ===========  ===========    ===========  ===========

Weighted average
 common shares
 outstanding, basic
 and diluted:          16,909,501   16,711,096     16,909,501   18,141,744
                      ===========  ===========    ===========  ===========



                         PACIFIC BIOMARKERS, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (unaudited)

                                                    Six Months Ended
                                                      December 31,
                                              ----------------------------
                                                  2010           2009
                                              -------------  -------------
Cash flows from operating activities:
  Net loss                                    $    (551,581) $    (730,779)

  Reconciliation of net loss to net cash
   provided by (used in) operating
   activities:
    Depreciation and amortization                   193,982        151,114
    Amortization of discount on debt                 32,565         18,090
    Income on deposits                               13,590          4,473
    Compensation expense from restricted
     shares and options                             118,462         49,590
    Changes in assets and liabilities:
      Accounts receivable                           339,872      1,063,480
      Other receivable                                    -          5,500
      Inventory                                       7,758         (1,019)
      Prepaid expenses and other assets             (72,557)        71,140
      Advances from customers                        61,878         47,537
      Accounts payable                              (53,953)      (128,601)
      Accrued liabilities                          (232,809)      (282,844)
                                              -------------  -------------
        Net cash  provided by (used in)
         operating activities                      (142,793)       267,681
                                              -------------  -------------

Cash flows from investing activities:
  Purchases of capital equipment                   (133,853)       (92,122)
  Purchases of investments                                -       (506,710)
                                              -------------  -------------
        Net cash used in investing activities      (133,853)      (598,832)
                                              -------------  -------------

Cash flows from financing activities:
  Payments on notes payable                        (373,715)             -
  Proceeds from loan                                      -      4,000,000
  Repurchases of common stock                             -     (1,674,334)
  Restricted stock transferred for employee
   withholding tax liability                              -        (65,614)
  Payments on capital lease obligations             (97,651)       (30,283)
                                              -------------  -------------
        Net cash provided by (used in)
         financing activities                      (471,366)     2,229,769
                                              -------------  -------------

Net increase (decrease) in cash and cash
 equivalents                                       (748,012)     1,898,618
Cash and cash equivalents, beginning of
 period                                           1,861,155      1,365,406
                                              -------------  -------------

Cash and cash equivalents, end of period      $   1,113,143  $   3,264,024
                                              =============  =============

Supplemental Information:
Cash paid during the period for interest      $     210,967  $     136,606
Cash paid during the period for income tax    $           -  $           -

Contact Information

  • PACIFIC BIOMARKERS, INC
    220 W. Harrison Street Seattle, WA 98119
    TEL. (206) 298-0068
    FAX (206) 298-9838

    For additional information, please contact:
    Ron Helm
    CEO
    (206) 298-0068