Transgenomic, Inc. Reports Third Quarter 2009 Results

OMAHA, Neb., Nov. 5 /PRNewswire-FirstCall/ -- Transgenomic, Inc. (OTC Bulletin
Board: TBIO) today announced financial results for the quarter ended September
30, 2009. The Company's financial results are presented in the tables that
follow.

Third Quarter 2009
The Company reported a net loss of $366,000 or $0.01 per share for the third
quarter of 2009 as compared to a net loss of $499,000 or $0.01 per share for
the third quarter of 2008.

Net sales were $5.0 million during the third quarter of 2009, compared to $5.4
million during the comparable period of 2008. Gross profit from continuing
operations was $2.8 million or 55 percent during the third quarter of 2009
compared to $2.9 million or 54 percent during the comparable period of 2008.
Included in cost of sales was $0.3 million of inventory obsolescence.
Operating expenses were $3.2 million during the third quarter of 2009 compared
to $3.4 million during the same period of 2008. Excluding the impact of
foreign currency revaluation gains/losses, operating expenses were down by
$163,000 in the third quarter of 2009 compared to the same period of 2008.
Included in operating expenses was $0.2 million related to the license for
Cold-PCR from the Dana-Farber Cancer Institute.

Cash and cash equivalents totaled $4.7 million at September 30, 2009 compared
to $4.8 million at December 31, 2008.

Nine Months Ended September 30, 2009
The Company reported a net loss of $2.0 million or $0.04 per share for the
nine months ended September 30, 2009, compared to a net loss of $276,000 or
$0.01 per share during the comparable period of 2008.

Net sales were $15.5 million for the nine months ended September 30, 2009,
compared to $17.9 million during the comparable period of 2008. Gross profit
was $8.2 million or 53 percent for the nine months ended September 30, 2009,
compared to $10.3 million or 58 percent in 2008. Operating expenses were
$10.4 million for the nine months ended September 30, 2009 compared to $10.6
million during the same period of 2008. Excluding the impact of foreign
currency revaluation gains/losses, operating expenses were down by $976,000
for the nine months ended September 30, 2009 compared to the same period in
2008.

Comment and Outlook
Craig Tuttle, the Company's President and Chief Executive Officer, noted, "Net
sales for the third quarter declined slightly from the second quarter of 2009.
This decrease is primarily attributable to lower instrument sales in the U.S.
as well as an expected quarterly decline in our reference laboratory net sales
related to summer vacations in the U.S. We also had two OEM instrument sales
that ended up closing in October that were expected in the third quarter.
This gives us confidence that fourth quarter net sales will show marked
improvement."

Tuttle continued, "We remain heavily engaged in development and validation of
our mitochondrial DNA damage assay applications, our licensed NuroPro assays
for Alzheimer's and Parkinson's disease and our recently announced license for
Cold-PCR from the Dana-Farber Cancer Institute. We have already seen strong
interest from potential customers for Cold-PCR and hope to have one or more
pharma studies initiated during the fourth quarter. Our beta site trials for
our K-Ras mutation detection kit have been completed and this kit, the first
of several expected, will be launched shortly."

Earnings Call
Company management will discuss third quarter 2009 financial results via
teleconference on Thursday, November 5th, at 5:00 p.m. Eastern Time. To
access the call via telephone, dial 800-862-9098 or 785-424-1051. The Company
will also host a live broadcast of the call over the Internet. To listen to
the webcast, investors should log on to the Company's Investor Relations web
page at http://www.transgenomic.com/events.asp?id=6 and follow the
instructions provided. An archived recording of the conference call will be
available and can be accessed via the web using the same link listed above for
14 days after the call. Investors can also listen to a replay via telephone
until 11:59 p.m. Eastern Time on Thursday, November 19, 2009. Simply dial
800-839-3613 or 402-220-2973 from any telephone.

About Transgenomic, Inc.
Transgenomic, Inc. (OTC BB: TBIO.OB, www.transgenomic.com ) is a global
biotechnology company specializing in high sensitivity genetic variation and
mutation analysis, providing products and services in DNA mutation detection
and discovery for clinical research, clinical molecular diagnostics and
pharmacogenomics analyses. Its product offerings include the WAVE® Systems and
associated consumables specifically designed for use in genetic variation
detection and single- and double-strand DNA/RNA analysis and purification.
With broad applicability to genetic research, over 1,450 systems have been
shipped to customers in more than 30 countries. The SURVEYOR® Mutation
Detection Kits and SURVEYOR Check-It Kit provide reagents and protocols for
high sensitivity detection of mutations in DNA. In addition, HANABI automated
chromosome harvesting systems improve laboratory productivity with consistent
quality compared to manual methods for cytogenetic analyses. Service offerings
include the Transgenomic Molecular Laboratory, which provides reference
laboratory services specializing in molecular diagnostics including
Mitochondrial Disorders, Oncology and Hematology, Molecular Pathology and
Inherited Diseases. Transgenomic Pharmacogenomic Services is a CRO for
pharmacogenomic, translational research and clinical trials.

Transgenomic Cautionary Statements
Certain statements in this press release constitute "forward-looking
statements" of Transgenomic within the meaning of the Private Securities
Litigation Reform Act of 1995, which involve known and unknown risks,
uncertainties and other factors that may cause our actual results to be
materially different from any future results, performance or achievements
expressed or implied by such statements. Forward-looking statements include,
but are not limited to, those with respect to management's current views and
estimates of future economic circumstances, industry conditions, company
performance and financial results, including the ability of the Company to
grow its involvement in the diagnostic products and services markets. The
known risks, uncertainties and other factors affecting these forward-looking
statements are described from time to time in Transgenomic'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. All information in this
press release is as of the date of the release and Transgenomic does not
undertake any duty to update this information, including any forward-looking
statements, unless required by law.

Transgenomic, Inc.
Summary Financial Results
Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
NET SALES $5,046 $5,367 $15,508 $17,869
COST OF GOODS SOLD 2,293 2,448 7,291 7,570
----- ----- ----- -----
Gross profit 2,753 2,919 8,217 10,299
OPERATING EXPENSES:
Selling, general and
administrative 2,215 2,757 7,922 8,824
Research and development 938 684 2,468 1,816
Restructuring costs - - - 8
--- --- --- ---
3,153 3,441 10,390 10,648
----- ----- ------ ------
LOSS FROM OPERATIONS (400) (522) (2,173) (349)
OTHER INCOME (EXPENSE):
Interest income 1 22 14 80
Other, net (1) 14 (4) 13
--- -- --- --
- 36 10 93
--- --- --- ---
LOSS BEFORE INCOME TAXES (400) (486) (2,163) (256)
INCOME TAX EXPENSE (BENEFIT) (34) 13 (114) 20
---- -- ----- --
NET LOSS (366) (499) (2,049) (276)
===== ===== ======= =====

BASIC AND DILUTED LOSS
PER SHARE: $(0.01) $(0.01) $(0.04) $(0.01)
====== ====== ====== ======

BASIC AND DILUTED
WEIGHTED AVERAGE
SHARES OUTSTANDING 49,189,672 49,189,672 49,189,672 49,189,672

Transgenomic, Inc.
Summary Financial Results
Unaudited Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)

Nine Months Ended
September 30,
-------------
2009 2008
---- ----
NET CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES $237 $(472)

NET CASH FLOWS USED IN INVESTING ACTIVITIES (347) (254)

EFFECT OF FOREIGN CURRENCY EXCHANGE RATE
CHANGES ON CASH - (210)
--- ----

NET CHANGE IN CASH AND CASH EQUIVALENTS (110) (936)

CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 4,771 5,723
----- -----

CASH AND CASH EQUIVALENTS AT END OF PERIOD $4,661 $4,787
====== ======

Transgenomic, Inc.
Summary Financial Results
Condensed Consolidated Balance Sheets
(Dollars in thousands)

(Unaudited)
September 30, December 31,
2009 2008
---- -----

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $4,661 $4,771
Accounts receivable (net of
allowances for bad debts of
$345 and $388, respectively) 4,145 5,385
Inventories (net of allowances
for obsolescence of $353 and
$14, respectively 4,134 4,775
Prepaid expenses and other current
assets 655 654
--- ---
Total current assets 13,595 15,585
PROPERTY AND EQUIPMENT, NET 1,059 1,198
OTHER ASSETS:
Other assets, (net of accumulated
amortization of $478 and $425,
respectively) 701 773
--- ---
$15,355 $17,556
======= =======
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable $795 $905
Other accrued expenses 2,330 2,810
Accrued compensation 538 520
--- ---
Total current liabilities 3,663 4,235
OTHER LONG TERM LIABILITIES 202 116
--- ---
Total liabilities 3,865 4,351
STOCKHOLDERS' EQUITY 11,490 13,205
------ ------
$15,355 $17,556
======= =======

SOURCE Transgenomic, Inc.

Debra Schneider, Chief Financial Officer of Transgenomic, Inc.,
+1-402-452-5400, Fax, +1-402-452-5461, investorrelations@transgenomic.com