SUNNYVALE, Calif., Cepheid (Nasdaq: CPHD) today reported revenue for the fourth quarter of 2011 of $80.1 million. Net loss was $1.6 million, or $(0.03) per share, which compares to revenue of $58.7 million and net income of $1.3 million, or $0.02 per diluted share, in the fourth quarter of 2010. As anticipated, the fourth quarter net loss reflected a one-time, non-cash charge to cost of sales of $5.4 million, or $0.08 per share, associated with the termination of a patent license.

Excluding stock compensation expenses, the non-cash charge of $5.4 million associated with the termination of a patent license, and amortization of acquired intangibles, non-GAAP net income for the fourth quarter of 2011 was $9.4 million, or $0.14 per share. This compares to a non-GAAP net income of $6.1 million, or $0.09 per share, in the fourth quarter of 2010.

Fiscal 2011 Overview

For the year ended December 31, 2011, Cepheid reported revenue of $277.6 million which compares to revenue of $212.5 million in 2010. Net income for the year was $2.6 million, or $0.04 per diluted share, which compares to a net loss of $5.9 million, or $(0.10) per share, in 2010. Excluding stock compensation expenses, the non-cash charge of $5.4 million associated with the termination of a patent license, and amortization of acquired intangibles, non-GAAP net income for the year was $29.6 million, or $0.44 per share. This compares to a non-GAAP net income of $12.5 million, or $0.20 per share, for the full year 2010.

“GeneXpert system placements continued at a very strong pace in the fourth quarter contributing to a record number of placements during 2011, in both our commercial and High Burden Developing Country programs,” said John Bishop, Cepheid’s Chief Executive Officer. “The demand for our GeneXpert systems has continued to grow in spite of continuing tight capital availability in the US and Europe. In 2012, we will continue to invest aggressively in Xpert® test menu expansion to enable the benefits of our system to be realized in broader segments of the market. We expect to further extend our technology leadership and strong growth momentum in the quarters and years ahead.”

Operational Overview

Fourth quarter of 2011 Clinical sales of $68.9 million grew 39% from $49.5 million in the fourth quarter of 2010, and total fourth quarter of 2011 product sales of $76.9 million grew 37% from the same quarter a year ago. For the year ended December 31, 2011, total Clinical sales of $236.0 million grew 36% from $173.8 million reported for the same period a year ago.

During the fourth quarter of 2011, Cepheid placed a total of 175 GeneXpert systems in its commercial Clinical business. Additionally, the Company placed a total of 181 GeneXpert systems as part of its High Burden Developing Country (HBDC) program. For the year ended December 31, 2011, Cepheid placed a total of 565 GeneXpert systems in its commercial Clinical business and an additional 418 GeneXpert systems as part of its HBDC program. As of December 31, 2011, a cumulative total of 2,843 GeneXpert systems have been placed worldwide.

Cash and cash equivalents were $115.0 million as of December 31, 2011.

DSO was 40 days.

Business Outlook

For the fiscal year ending December 31, 2012, the Company expects:

Total revenue to be in the range of $333 to $347 million;

Net income in the range of $0.17 to $0.24 per share;

Non-GAAP net income in the range of $0.55 to $0.60 per share.

Expected non-GAAP net income excludes approximately $26 million related to stock compensation expense, approximately $2 million related to the amortization of acquired intangibles, and up to a $1.9 million non-cash tax benefit relating to a potential change to our international tax and legal entity structure. The fully diluted share count for the year is expected to be between 70 and 71 million.

About Cepheid

Based in Sunnyvale, Calif., Cepheid is a leading molecular diagnostics company that is dedicated to improving healthcare by developing, manufacturing, and marketing accurate yet easy-to-use molecular systems and tests. By automating highly complex and time-consuming manual procedures, the Company’s solutions deliver a better way for institutions of any size to perform sophisticated genetic testing for organisms and genetic-based diseases. Through its strong molecular biology capabilities, the Company is focusing on those applications where accurate, rapid, and actionable test results are needed most, such as managing infectious diseases and cancer. For more information, visit http://www.cepheid.com.