LION roars back to profitability
restructuring plans appear to be reaping rewards. The decision to
sell off its troublesome bioinformatics unit appears wise as the
company reached a near break-even result - a stark contrast to the
€ 2.6 million loss in Q1 2004.
The German informatics firm said that with an overall net loss, as of June 30, 2005, of €53,000, the sales process of its bioinformatics unit, in the long run, would be of benefit to the company after a troubled year.
"The company is focused on the sales process of its bioinformatics unit," said Peter Willinger, LION's CFO. "We expect to announce a successful sale within the next few weeks."
Despite the sale of the bioinformatics business, the confidence in the future of the SRS product line remains high with several companies extending their commitment to the product by renewing long-term contracts in Q1 including Sanofi-Pasteur and Astellas.
LION revealed that the biggest part of the cash burn, about € 1.1 million, of the total € 1.2 million to March 31, 2005, occurred in the bioinformatics unit.
The company also achieved total revenues of € 0.2 million for the twelve months ending March 31, 2005, compared with € 0.3 million for the prior fiscal year.
Net loss for the period was reduced to € 13.2 million compared to € 20.8 m in fiscal year 2003/2004.
The total revenues including discontinued operations totalled € 10.0 million for the twelve months ending March 31, 2005, compared with € 19.7 million for the prior fiscal year.
Compared to prior year, costs and expenses decreased by € 2.2 million (-31 per cent) to € 4.9 m. Cash and cash equivalents (including marketable securities) totalled € 25.6 million as of March 31, 2005.
LION have not been exempt from the current problematic financing situation affecting the biotech sector and the slow investments from the life science industry. However, there have been signs of recovery with noticeable increases in customer activity particularly in North America and Asia Pacific.
"For the first time in LION's history, we are close to a near-balanced result. We are controlling our costs well and there is only a small need to use our cash reserves," said Willinger.
"The restructuring activities have been quite hard, but the result shows they were necessary and reasonable," he added.
LION's 2005/2006 outlook confirmed the expectation to reach break-even for the continuing activities.
"Including the one-time gain of the sale of the bioinformatics unit, a positive result is probable," the company said
