13 May 2009: NorDiag had operating revenues of NOK 4.2 million and other revenues/grants of NOK 0.3 million in Q1-2009, compared with NOK 3.4 million and NOK 1.1 million in Q1-2008. "Although operating revenues were somewhat lower than in Q4 08, the business is developing according to plan," says CEO Mårten Wigstøl. The first quarter report confirms that the first "Arrow" instruments are sold. The Company reiterates its growth expectations for 2009 attributable to having both the Bullet and Arrow instruments in the market.

Lower operating revenues in Q1-2009, compared with Q4-2008 (NOK 5.1 million), were primarily due to a lower number of new "Bullet" instruments sold; 3 in Q1-2009 vs. 5 in Q4-2008. However, 6 "Bullet" instruments were placed with potential customers in the quarter. In total, 29 high throughput instruments are now placed in the market for validation or are already in commercial use. This constitutes a solid platform for future reagent sales, although it increases working capital short term.

The Company sold its first 4 "Arrow" instruments in Q1-2009. In addition, 11 "Arrow" instruments are as of today placed with potential customers. The new instrument which is a true "walk away" solution tailored for difficult clinical samples, is suitable for smaller laboratories due to its affordability and size, and it has unique high quality applications that are expected to drive revenues.

The "Arrow" instruments have a lower sales price than "Bullet" instruments, but also a much higher volume potential.  Revenues from kits and infectious diseases continued the subsequent quarter growth in  Q1-2009, while there was no operating revenues from cancer tests.

FOCUS ON COST CONTROL AND CASH FLOW
Total operating expenses in Q1-09 were NOK 12.8 million compared to NOK 12.5 million in Q1-08 and NOK 10.8 million in Q4-08. The lower operating expenses in Q4-08 were primarily due to a positive one-off effect of NOK 2,9 million in connection with settlement of the pension plan in 2008. Excluding this one-off effect, the operating expenses were NOK 0.9 million lower in Q1-09 compared with Q4-08.

"Cost-cutting measures decided will have an effect of up to NOK 7 million in 2009 compared with 2008 as we have previously stated, but the effect on operating expenses will be larger in H2 2009 than in H1 2009 since several of the employment and consultancy contracts expires in May 09", emphazises Wigstøl.

Net cash flow in Q1-09 was NOK 17.7 million, of which net proceeds from the rights issue completed in February 2009 were NOK 31.6 million, providing a cash balance at the end of Q1-09 of NOK 33.4 million. The operating cash flow in Q1-09 was NOK -12.8 million, compared with NOK -10.7 million in Q1-08 and NOK -6.1 million in Q4-08.

"The high operating cash burn in Q1-09 is attributable to an aggressive sales and marketing strategy of ramping up and placing of instruments, which provides a strong platform for future reagent sales.", the CEO explains, "and we expect to capitalize on this investment later in the year."

Cash flow from financing activities was net NOK 32.6 million, of which net proceeds from the rights issue accounted for NOK 31.6 million and the second milestone reached for the long term loan from Innovation Norway accounted for NOK 1.0 million.

OUTLOOK
NorDiag expects sales growth going forward. So far in 2009, focus has been on establishing the platform for future sales, by ramping-up and placing instruments with customers with the purpose of closing more deals. Going forward, the Company expects to benefit from this strategy, which has temporarily increased the working capital.

Kits sales are gradually growing, while the outlook for "Bullet" and "Arrow" instrument sales is promising. In addition, NorDiag expects to reap the fruits of an expanded distributor and partner network. The Company expects increased income from the German and the UK-market in the coming quarters.

The strong cost control continues and the effect of already implemented cost reduction programs is expected to be larger in the second half of 2009 than in the first half.

Complete Q1 report and presentation enclosed.

Contact:
CEO Mårten Wigstøl, phone +47 911 65775

About NorDiag:
NorDiag is a biotechnology company developing, manufacturing and marketing automated solutions, instruments and tests, for use in diagnostic of infectious diseases and cancer. The Company`s core competence is isolation of bacterial and human DNA from difficult clinical samples, and the Company has established a solid market share in the Scandinavian market for sexually transmitted infections. The company has similar applications for Tuberculosis, MRSA and DNA from stool. Applications for respiratory pathogens and viruses are under development. NorDiag was founded in 2003 and has its headquarters in Oslo - Norway. The Company has offices and laboratories in Stockholm - Sweden and West Chester (PA) - USA. The group has 36 employees. NorDiag is listed on Oslo Stock Exchange with the ticker NORD. For further information - www.nordiag.com.

Read the report and the presentation here

Read the notice in Norwegian here