Alpha Innotech Reports Second Quarter 2009 Results

Second quarter revenues of $4.2 million were flat from the $4.2 million of revenues reported in the same period in 2008.

The Company posted a net loss of $15,785 in the second quarter ending June 30, 2009 as compared to a $23,199 net profit in the comparable period of 2008.

Excluding interest, depreciation and share-based compensation, on a non-GAAP basis, the Company had net income of $429,056 for the three months ended June 30, 2009 compared to $456,448 for the three months ended June 30, 2008. The non-GAAP net income is reconciled to comparable GAAP net income in the table below entitled "Non-GAAP Calculation of Net Income."

For the six months ended June 30, 2009, revenues remained at $7.9 million compared to the $7.9 million for the six months ended June 30, 2008. The Company reported net loss for the six months ended June 30, 2009 of $234,748, or $0.02 per share, compared to net income of $21,142, or less than $0.01 per share, for the six months ended June 30, 2008.

Excluding interest, depreciation and share-based compensation, on a non-GAAP basis, the Company had net income of $671,010 for the six months ended June 30, 2009 compared to a net income of $794,758 for the six months ended June 30, 2008. The non-GAAP net income is reconciled to comparable GAAP net income in the table entitled "Non-GAAP Calculation of Net Income."

On July 14, 2009, we received a letter from General Electric Healthcare (GEHC) terminating our supply agreement with them effective May 2010. During the remainder of the term of the agreement we will continue shipping systems to GEHC as customer demand requires. While we may continue to supply GEHC with systems as well as support for their installed base, we assume future revenues will be minimal from GEHC beginning in our third quarter of 2009. During the six months ended June 30, 2009, revenue from GEHC was $705,000 compared to $1.4 million for the six months ended June 30, 2008.

"Excluding the GEHC business, our second quarter 2009 revenues grew 17% compared to the second quarter of 2008. The growth, during the second quarter of 2009, in our non-GEHC revenues was greater than the nearly $600,000 decline in GEHC revenues for the three months ended June 30, 2009 compared to the three months ended June 30, 2008," stated Ron Bissinger, Chief Executive Officer of Alpha Innotech Corp. "As a percentage of our total revenues, we have been reducing our dependency on GEHC business since 2007. We expect continuing growth from our own global channel expansions and introduction of new products," he continued.

Recent Product Highlights

-- We launched FluorChem(R) Xplor, a complete solution for the imaging and analysis of 2D gels, chemiluminescent Westerns, and 1D protein and nucleotide gels.

-- We launched our latest software product, AlphaView 3.0 software, which offers automation, improved lab workflow, and increased throughput for imaging customers.

More information on Alpha Innotech can be found at the Company's website www.alphainnotech.com.

About Alpha Innotech Corp.

With over 10,000 systems sold worldwide, Alpha Innotech is a leading developer, manufacturer and marketer of digital imaging and analysis systems for the life science research and drug discovery markets. Our goal is to combine instruments, reagents and bioinformatics software in order to offer integrated modular technology platforms for functional genomics, proteomics, and cell analysis markets. Our customers include pharmaceutical and biotechnology companies, as well as universities, medical centers, government research institutes, and agencies worldwide.

Use of Non-GAAP Financial Measures

To supplement the Company's financial statements presented in accordance with GAAP, the Company is also providing non-GAAP financial information. The presentation of non-GAAP financial information should be considered in addition to the Company's GAAP results and is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with GAAP. The Company believes that both management and investors benefit from referring to non-GAAP financial information, since GAAP excludes certain expenses in their assessment of the Company's performance. The Company also believes that investors benefit from an increased transparency of the supplemental information which management uses in its financial and operational decision making.

Cautionary Note Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements related to the continued expansion of our international sales channel, our continued development, manufacture and supply of new products, our relationship with GEHC, and is subject to the safe harbor created by those sections. Words such as "will," "expect," "believe," "suggest," "potential" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon the Company's current expectations. These forward-looking statements involve a number of risks and uncertainties that include, but are not limited to, the loss of revenues from the cancellation of the Company's agreement with GEHC, worldwide economic conditions and our ability to grow our non-GEHC revenue, any of which could cause actual results to differ materially from those anticipated or planned by these forward-looking statements. Please also refer to the risk factors described under "Risk Factors" and elsewhere in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the Securities and Exchange Commission. We expressly disclaim any obligation or undertaking to update the forward-looking statements contained in this news release except as required by law.

Alpha Innotech Corp.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)
                                                     Three Months Ended          Six Months Ended
                                                     June 30,                    June 30,
                                                     2009          2008          2009          2008
Revenue                                              $  4,248      $  4,243      $  7,939      $  7,911
Cost of Goods Sold                                      1,889         1,857         3,577         3,414
Gross profit                                            2,359         2,386         4,362         4,497
Operating expenses:
Sales and Marketing                                     1,232         1,313         2,417         2,498
Research and Development                                353           273           666           648
General and Administrative                              603           590           1,149         1,157
Total operating expenses                                2,188         2,176         4,232         4,303
Income from operations                                  171           210           130           194
Other income (expense):
Interest expense                                        (186   )      (188   )      (356   )      (271   )
Other income (expense), net                             (1     )      1             (9     )      (2     )
Sale of patents                                         --            --            --            100
Net income (loss) applicable to common stockholders  $  (16    )   $  23         $  (235   )   $  21
Net income (loss) per share:
Basic                                                $  (0.00  )   $  0.00       $  (0.02  )   $  0.00
Diluted                                              $  (0.00  )   $  0.00       $  (0.02  )   $  0.00
Weighted average shares outstanding:
Basic                                                   10,940        10,874        10,932        10,694
Diluted                                                 10,940        11,281        10,932        10,893

Alpha Innotech Corp.
Condensed Consolidated Balance Sheets
As of June 30, 2009 and December 31, 2008
(in thousands)
                                             June 30,     December 31,
                                             2009         2008
Assets
Current assets:
Cash and cash equivalents                    $     266    $     649
Restricted cash                                    50           50
Accounts receivable, net                           2,569        3,033
Inventory, net                                     2,275        1,464
Prepaid expenses and other current assets          93           155
Total current assets                               5,253        5,351
Property and equipment, net                        715          790
Loan costs, net                                    48           120
Other assets                                       110          90
Total assets                                 $     6,126  $     6,351
Liabilities and shareholders'
deficit
Current liabilities:
Accounts payable                             $     1,635  $     880
Accrued liabilities                                850          1,110
Current portion of debt                            2,234        2,936
Deferred revenue                                   1,114        1,217
Other liabilities                                  121          152
Total current liabilities                          5,954        6,295
Debt, net of current portion                       157          152
Total shareholders' equity (deficit)               15           (96   )
Total liabilities and shareholders' deficit  $     6,126  $     6,351

Alpha Innotech Corp.
Non-GAAP Calculation of Net Income
(Unaudited)
(in thousands)
                          Three Months Ended    Six Months Ended
                          June 30,              June 30,
                          2009         2008     2009        2008
GAAP net income (loss)    $   (16 )    $   23   $  (235 )   $  21
Interest                      186          188     356         271
Depreciation                  133          108     276         245
Share-based compensation      126          137     274         257
Non-GAAP basis income     $   429      $   456  $  671      $  794

SOURCE: Alpha Innotech Corp.

Alpha Innotech Corp. 
Michael P. Henighan, CFO, 510-483-5610