Gross profit for the first quarter 2011 increased to $20.3 million, or 59.8% of revenues, compared to $20.1 million, or 63.1% of revenues, in the first quarter 2010. The decline in gross profit is related to the addition of the lower margin Biotel business as well as lower average reimbursement.
On a GAAP basis, operating expenses for the first quarter 2011 were $21.9 million, a decrease of 14.0% compared to $25.5 million in the first quarter 2010. Operating expenses on an adjusted basis declined by 9.5% compared to the prior year quarter, excluding $1.1 million in the first quarter 2011 and $2.4 million in the first quarter 2010 related to restructuring and other nonrecurring charges. The decrease in operating expenses was driven by a reduction in bad debt expense as well as the Company’s cost reduction initiatives that were implemented in early 2010. These reductions were partially offset by the addition of Biotel’s operating expenditures in the quarter.
On a GAAP basis, net loss for the first quarter 2011 was $1.6 million, or a loss of $0.06 per diluted share, compared to net loss of $5.4 million, or a loss of $0.23 per diluted share, for the first quarter 2010. Excluding expenses related to restructuring and other charges, adjusted net loss for the first quarter 2011 was $0.5 million, or a loss of $0.02 per diluted share. This compares to an adjusted net loss of $3.0 million, or a loss of $0.13 per diluted share, for the first quarter 2010, which also excludes the impact of restructuring and other nonrecurring charges.
LiquidityAs of March 31, 2011, the Company had total cash and investments of $43.0 million, compared to $45.5 million as of December 31, 2010, a decrease of $2.5 million primarily due to annual management incentive payments as well as the prepayment of certain expenses that typically occurs in the first quarter. The Company has no short or long-term debt and does not anticipate needing to secure financing from external sources for cash to operate the business. The existing cash and investment balances enable the Company to continue to invest strategically in order to drive market penetration and diversify the business.