rose in early Thursday as the Princeton, N.J.-based biotech company reported a sharp reduction in losses from continuing operations for the fourth quarter.
The company's stock gained 4.2%, or 9 cents, to $2.25, one day before the company is scheduled to hold a special shareholders' meeting to vote on a proposed reverse stock split of between 1 for 3 and 1 for 7 shares. The company also is converting its Series A convertible preferred stock whose redemption date was Feb. 6.
For the fourth quarter ended Dec. 31, the company lost $2 million, or 4 cents a share, from continuing operations, compared with a loss of $27.8 million, or 50 cents a share, for the same period in 2002. Orchid's net loss was 9 cents a share vs. 63 cents a share for the same period in 2002. Revenue rose to $13.7 million from $13 million.
Orchid, which is engaged in DNA testing, got a big boost in its share price in late December after the federal government said it would be require stricter testing of the nation's meat supplies following the discovery of the nation's first case of mad cow disease.
Orchid issued a press release one day after the government's announcement, noting that it has tested 500,000 sheep in the United Kingdom for scrapie, a simlar brain-wasting disease. Orchid said it would apply its knowledge of scrapie to developing tests for detecting disease in meat. The company, which still lacks formal Wall Street coverage for its stock, saw its shares jump 30.1% on the day of its news release.
In releasing earnings today, Orchid -- which also provides DNA testing for crime investigation and paternity determination -- predicted it would achieve positive operating income in 2004, positive cash flow from operations during the first half of 2004 and about 20% more revenue this year than the $50.6 million last year.
Results from continuing operations for 2003 and 2002 exclude the revenue and operating expenses of a discontinued diagnostic unit that Orchid sold in January 2004. Fourth-quarter results were also affected by the fact that the company had 78.6 million shares outstanding for the three months ended Dec. 31, 2003 vs. 55.7 million shares for the final quarter of 2002.