Company Profile

Pacific Biometrics Reports Third Quarter and Nine-Month Operating Results

Nine-Month Net Income of $1,168,742 Compares with Prior-Year Net Loss of $684,509

Seattle, Washington--May 18, 2009 - Pacific Biometrics, Inc. (OTCBB:  PBME), a leading provider of specialized central laboratory and contract research services, today announced its operating results for the third quarter and first nine months of FY2009.  The Company will host an investor conference call at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) today, May 18, 2009, to discuss its operating results and other topics of interest (details provided below). 

For the nine months ended March 31, 2009, revenue increased 31% to $7,889,177, compared with $6,025,507 in the first nine months of FY2008.  Operating income improved to $547,824, versus an operating loss of $548,156 in the nine months ended March 31, 2008.  The Company reported net income of $1,168,742, or $0.06 per diluted share, for the nine months ended March 31, 2009, compared with a net loss of $684,509, or $0.04 per share, in the corresponding period of the previous fiscal year.

Revenue for the three months ended March 31, 2009 increased 24% to $2,853,222, compared with $2,296,310 in the third quarter of FY2008.  Operating income totaled $206,691 in the most recent quarter, versus $236,480 in the prior-year quarter.  The Company recorded net income of $197,808, or $0.01 per diluted share, in the third quarter of FY2009, compared with net income of $282,275, or $0.01 per diluted share, in the third quarter of FY2008.

“We continued to benefit from strong demand for specialty laboratory testing in the diabetes and rheumatoid arthritis areas in the most recent quarter and are pleased to report that third quarter revenues increased 24% from the prior-year period,” commented Ron Helm, Chief Executive Officer of Pacific Biometrics.  “On a year-to-date basis, total revenues rose 31% and continued to reflect the Company’s significant investments in business development initiatives during the past two fiscal years.

For the nine months ended March 31, 2009, the Company’s profitability improved by more than $1.8 million when compared with the corresponding period of the previous year.  Net income totaled $1,168,742, reflecting a dramatic earnings turnaround when compared with a net loss of $684,509 in the first nine months of Fiscal 2008.  The Company also generated over $1.3 million in cash from its operating activities during the first nine months of Fiscal 2009, compared to a burn of over $800,000 in cash in the prior-year period.  This improvement in operating cash flows has allowed us to invest in new strategic opportunities and to be more aggressive in our efforts to penetrate the rapidly growing biomarker services market.  

Third quarter earnings were impacted by accelerated spending on instrument platforms and laboratory staffing in order to expand the assay development capabilities of our Pacific Biomarkers subsidiary and to continue building our business development initiatives.  We are optimistic that such investments will allow the Company to pursue additional market and revenue opportunities in Fiscal 2010 and future years that will complement the organic growth of our legacy business model.  Cost increases in petrochemical-based reagents and the payment of performance bonuses also influenced our bottom-line performance in the most recent quarter.

We expect to look back upon Fiscal 2009 as a year during which we (1) substantially strengthened our balance sheet by paying off all long- and short-term debt; (2) recorded an impressive earnings turnaround; (3) bolstered our competitive position in our core areas of cardiovascular disease, diabetes, metabolic syndrome, osteoporosis and arthritis; and (4) positioned the Company for growth opportunities in the multi-billion-dollar biomarker services industry.  These are exciting times for Pacific Biometrics, and while our quarterly results can fluctuate due to the timing of order receipts and contract performance, we are very optimistic regarding prospects for the Company in the years ahead,” concluded Helm. 

Investor Conference Call

Pacific Biometrics, Inc. has scheduled an investor conference call to discuss its operating results for the third quarter and first nine months of FY2009, along with other relevant subjects.  The call is scheduled for 11:00 a.m. EDT (8:00 a.m. PDT) today, May 18, 2009.

Shareholders and other interested parties may listen to the conference call by dialing 800-860-2442 (international/local participants dial 412-858-4600) and requesting the "Pacific Biometrics, Inc. Conference Call" a few minutes before 11:00 a.m. EDT on May 18, 2009.  A replay of the conference call will be available one hour after the call through May 27, 2009 at 5:00 p.m. EDT by dialing 877-344-7529 (international/local participants dial 412-317-0088) and entering the Conference ID 430456.

About Pacific Biometrics, Inc. (PBI)

Established in 1989, PBI provides specialized central laboratory and contract research services to support pharmaceutical and diagnostic manufacturers conducting human clinical trial research, including expert services in the areas of cardiovascular disease, diabetes, osteoporosis, arthritis, 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.

Pacific Biomarkers, a wholly-owned subsidiary of PBI, focuses specifically on the emerging field of biomarker assay development and testing.  Services include validating and performing ligand-binding assays for novel clinical biomarkers, immunogenicity testing, and multiplex testing.

PBI is headquartered in Seattle, Washington, and its common stock trades on the OTC Bulletin Board under the symbol “PBME”.  For more information about PBI, visit the company's web site at www.pacbio.com.

Contact:

Pacific Biometrics, Inc.
Ron Helm, Chairman and CEO
(206) 298-0068

or

R. Jerry Falkner CFA
RJ Falkner & Company, Inc.
Investor Relations Counsel
(800) 377-9893
email at info@rjfalkner.com

 

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PACIFIC BIOMETRICS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS	31 March 09	30 Jun 08
	(unaudited)	(audited)
Current assets:
Cash and cash equivalents	$1,601,858	$1,196,310
Accounts receivable, net	1,783,016	2,146,080
Other receivable, net	6,500	451,291
Inventory	163,038	197,456
Prepaid expenses and other assets	136,003	100,869
Deferred financing cost on secured convertible note - current portion	-	18,447
Total current assets	3,690,415	4,110,453
Property and equipment, net	876,738	884,521
Total assets	$4,567,153	$4,994,974
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$596,869	$818,224
Accrued liabilities	389,728	450,788
Advances from customers	570,911	643,291
Capital lease obligation - current portion	66,219	32,530
Secured convertible note, net of unaccreted fair value assigned to conversion feature and warrants of $0 and $214,771, respectively	-	678,535
Embedded derivative liability	-	642,470
Freestanding derivative liability	-	411,545
Other notes payable - current portion	-	102,467
Total current liabilities	1,623,727	3,779,850
Capital lease obligations - long - term portion	167,187	91,109
Total liabilities	1,790,914	3,870,959
Commitments and contingencies	-	-
Stockholders' equity:
Preferred stock, Series A convertible $0.01 par value, 5,000,000 shares authorized, 0 shares issued and outstanding for 2009 and 2008	-	-
Common stock, $0.01 par value, 30,000,000 shares authorized, 19,099,539 and 18,720,147 shares issued and outstanding, respectively	190,995	187,201
Additional paid-in capital	29,120,966	28,641,278
Accumulated deficit	(26,535,722)	(27,704,464)
Total stockholders' equity	2,776,239	1,124,015
Total liabilities and stockholders' equity	$4,567,153	$4,994,974
The accompanying condensed notes are an integral part of these consolidated financial statements.

 

PACIFIC BIOMETRICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
	Three Months Ended March 31
	2009	2008
Revenues	$2,853,222	$2,296,310
Laboratory expenses and cost of sales	1,638,950	1,200,107
Gross profit	1,214,272	1,096,203
Operating expenses:
Selling, general and administrative	1,007,581	859,723
Operating income (loss)	206,691	236,480
Other income (expense):
Interest expense	(10,503)	(210,241)
Gain on adjustment of embedded and freestanding derivatives to fair value	-	274,066
Amortization of deferred financing costs - secured convertible debt	-	(26,793)
Other income	1,620	8,763
Total other income (expense)	(8,883)	45,795
Net income (loss) before tax expense	197,808	282,275
Tax expense	-	-
Net income (loss)	$197,808	$282,275
Net income (loss) per share:
Basic income (loss) per share	$0.01	$0.02
Diluted income (loss) per share	$0.01	$0.01
Weighted average common shares outstanding:
Basic	19,099,539	18,720,147
Diluted	19,700,811	19,221,689
The accompanying condensed notes are an integral part of these consolidated financial statements.

 

PACIFIC BIOMETRICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
	Nine Months Ended March 31
	2009	2008
Cash flows from operating activities:
Net income (loss)	$ 1,168,742	$(684,509)
Reconciliation of net loss to net cash provided by operating activities:
Depreciation and amortization	192,000	182,845
Accretion of fair value assigned to conversion feature and warrants	88,134	547,135
Amortization of deferred financing costs on secured convertible note	18,447	80,378
Gain from embedded and freestanding derivative liabilities relating to secured convertible note	(675,691)	(606,926)
Warrant expense for equipment lease and financing	3,940	8,866
Compensation expense from restricted shares and options	101,218	164,603
Changes in assets and liabilities:
Accounts receivable	363,064	(100,438)
Other receivable	444,791	-
Inventory	34,418	(33,331)
Prepaid expenses and other assets	(35,134)	(126,550)
Advances from customers	(72,380)	(240,673)
Accounts payable	(221,355)	18,469
Accrued liabilities	(61,060)	(34,643)
Net cash provided by (used in) operating activities	1,349,134	(824,774)
Cash flows from investing activities:
Purchases of capital equipment	(42,159)	(20,609)
Net cash used in investing activities	(42,159)	(20,609)
Cash flows from financing activities:
Payments on notes payable	(869,136)	(1,283,116)
Payments on capital lease obligations	(32,291)	(55,305)
Net cash used in financing activities	(901,427)	(1,338,421)
Net increase (decrease) in cash and cash equivalents	405,548	(2,183,804)
Cash and cash equivalents, beginning of period	1,196,310	4,219,926
Cash and cash equivalents, end of period	$1,601,858	$2,036,122
Supplemental Information:
Cash paid during the period for interest	$61,993	$185,520
Non-cash investing and financing activities:
Capital expenditures funded by capital lease borrowings	$142,058	$65,667
The accompanying condensed notes are an integral part of these consolidated financial statements.