NorDiag's business activity in Q3 was clearly hampered by the financial uncertainty. The revenue in the quarter came in at NOK 5.6 million compared to NOK 7.5 million in same quarter last year. Despite this the EBITDA was slightly better than previous quarter. The EBITDA margin improved with 11 % Year to Date (YTD) compared to the same period last year.  The cash situation for the next quarters is secured as the planned rights issue is underwritten for NOK 15 million and bridge financing is in place. - We expect the business activity to be normalized over the next quarters, and the work regarding industrial agreements with partners is in good progress, says CEO Mårten Wigstøl.
 
NorDiag had operating revenues of NOK 5.6 million in Q3-2011, compared with NOK 7.5 million in Q3-2010. Corresponding figures for YTD Q3-2011 were NOK 21.9 million compared to NOK 19.8 million in YTD Q3-2010; an increase of 11%.  - It was no surprise that the positive growth trend for our sales was broken in Q3 as much of the attention was on the financial situation. Among others our OEM partners did not order any new instruments. We believe the Company will return to growth as the situation gradually normalizes, comments Wigstøl. NorDiag had an EBITDA of NOK - 7.7 million in Q3-2011, compared with NOK - 8.7 million in Q3-2010.
 
NorDiag sold 15 Arrow instruments in Q3-2011, which gives an accumulated number of instruments sold/leased as of end quarter of 352 Arrow instruments. 1 new Bullet instrument was sold in Q3 2011. Accumulated Bullet instrument base by the end of third quarter of 2011 was 44 instruments.  The sale of Arrow kits of NOK 1.0 million was 21 % lower than previous quarter. Bullet kit sales decreased from 2.1 million in Q2-2011 to NOK 1.7 million in Q3-2011.
 
Restructuring and cost reduction are already under implementation. The operating expenses for Q3-2011 were NOK 10.6 million, compared to NOK 11.9 million in Q3-2010. The cost reduction program has three phases. Phase 1, which has already been implemented and will reduce the 2012 operating expenses with approximately NOK 7 million on a yearly basis. Full effect of these actions is expected from Q1-2012.  Phase 2 and 3 will be monitored towards sales performance and future strategic projects.
 
- We have taken actions to secure sales and delivery capacity in the restructuring process, says Wigstøl. A new automated production line for Arrow kits was installed in October and is under calibration. Routine production starts in January 2012 and increases the capacity from 50 kits a week to 50 kits a day, based on regular daytime work hours.  The average production cost including labour will be reduced with an average 42 % compared to the cost profile of manual production. - The Company also has sufficient inventory of Arrow instruments to cover the next quarters, which reduces the need for cash spending next quarters, says Wigstøl.
 
Net cash flow in Q3-2011 was NOK - 5.6 million compared with NOK - 5.4 million in Q3-2010, providing cash balances at the end of Q3-2011 of NOK 1.5 million. The operating cash flow in Q3-2011 was NOK - 3.1 million, compared with NOK - 4.4 million in Q3-2010. The Company has established an underwriting syndicate to guarantee subscriptions for NOK 15 million in a rights issue and bridge financing is in place until the rights issue is completed medio December 2011.
 
Wigstøl sums up: - The market for our technology is definitely there, and is growing. The combination of improved margins, reduced costs, improved sales volume and inventory reduction will reduce the Company's cash burn going forward. He states that the target now is to find a strategic industrial partner. - Our current financial and operational situation will give us time to develop such a solution, he concludes. DnB NOR Markets is engaged as adviser to assess strategic options securing long term capital need for the Company.
 
For further information, please contact:
CEO Mårten Wigstøl,    Phone. +47 911 65775
CFO Tone Kvåle,   Phone: +47 915 19576
 
About NorDiag:
NorDiag is a biotechnology company developing, manufacturing and marketing automated solutions (instruments and reagents) for sample preparation of DNA from difficult biological samples. DNA diagnostics give more rapid and precise answers, and are the fastest growing field within diagnostics. The Company's sample preparation solutions are today used in connection with STI, tuberculosis, MRSA, respiratory pathogens and viruses on instruments for large and small laboratories. NorDiag was founded in 2003 and has its headquarters in Oslo, Norway. The Company has offices and laboratories in Stockholm, Sweden and in Atlanta (GA), USA. The group has today 31.6 man-labour years. NorDiag is listed on the Oslo Stock Exchange with ticker NORD.
 
For further information - www.nordiag.com.
 

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Q3 Report
Q3 Presentation

Read the notice in Norwegian here.