The last few year haven’t been great for SeraCare Life Sciences Inc., let alone the last six months, but despite the economy’s impact on R&D spending, the Milford-based company is clawing its way back from a 2006 Chapter 11 bankruptcy and a series of lawsuits.
Sales slipped 23.3 percent during the second quarter for SeraCare, which provides biological products and research and development services to diagnostics makers, to $10.9 million compared with $12.5 million during the same period last year.
Quarterly net losses widened 178 percent to more than $605,000, compared with $331,000 during same period last year, largely due to a $600,000 charge on depreciation of its former West Bridgewater headquarters, which is languishing due to the slumping real estate market. SeraCare moved its operations to Milford last year and put the West Bridgewater facility up for sale; it’s now listed for less than the appraised value because the company is eager to get it off its books.
The company blamed a slowdown in spending by its research and development customers for the sales decline.
Net losses for the six months ended March 31 plummeted an eye-popping 1,655 percent to $17.5 million, compared with nearly $998,000 during the first half of 2008. The bulk of the decline was due to a $15.1 million goodwill impairment charge, based on lowered future sales expectations for SeraCare’s diagnostics and biopharmaceutical products segment.
SeraCare did manage to cut costs, reducing its Q2 selling, general and administrative expenses to $3.4 million, compared with $4.1 million during the same period last year, a 1.2 percent decline.
And it slashed its accounts receivable by nearly 11 percent during the first two quarters of 2009; SeraCare’s customers owed it just more than $64,000 as of March 31 (less than 1 percent of revenues), compared with $1.4 million as of March 21, 2008 (more than 11 percent of revenues).
The company had $5.2 million in cash on hand and $5.1 million in total debt as of March 31, having drawn a nearly $3.1 million payment from its revolving credit facility.
President and CEO Susan Vogt said SeraCare is making “significant” progress, citing positive operating cash flow, revenue growth compared with the first quarter and the expectation that the American Recovery and Reinvestment Act will stimulate R&D spending.
It’s been a long road back from bankruptcy and a series of shareholder and federal lawsuits for SeraCare, which saw its stock price tumble to $0.36 per share April 14, a far cry from its former $11-per-share glory days last June. The company’s stock closed May 12 at $0.97 per share.
In 2005, shareholders sued the company, alleging that it cooked the books to artificially inflate its share price.
A year later, former CEO Michael Crowley and former director and interim CFO Jerry Burdick settled a lawsuit filed by the federal Securities and Exchange Commission for their roles in the accounting fraud.
SeraCare fired Crowley and three other top executives in 2006, filed for Chapter 11 bankruptcy and moved kit-and-kaboodle across the country to Milford.