CombiMatrix Corporation Reports Results for 2012 Fourth Quarter

CombiMatrix Corporation Reports Results for 2012 Fourth Quarter

Core Prenatal Testing Revenues Grew 161% Year-Over-Year in Fourth Quarter

IRVINE, Calif., Feb. 27, 2013 (GLOBE NEWSWIRE) -- CombiMatrix Corporation
(Nasdaq:CBMX), a molecular diagnostics company performing DNA-based testing
services for cancer and developmental disorders, reported today that total
revenues for the fourth quarter and full-year 2012, increased to $1.5 million
and $5.4 million, respectively, up 18% and 15% from the fourth quarter and
full-year 2011. Revenues from the Company's core prenatal testing markets in
the fourth quarter grew by 161% over the corresponding period in 2011 and grew
by more than 101% for full-year 2012 over the comparable prior year. On a
sequential basis, prenatal testing revenues in the 2012 fourth quarter grew by
76% over the 2012 third quarter.

As previously reported, the revenue growth in prenatal testing was driven by a
172% and 171% increase in billable test volumes quarter-over-quarter and
year-over-year, respectively. The Company performed a total of 1,595 billable
diagnostic tests for 108 customers in the fourth quarter of 2012, compared to
1,318 tests for 103 customers in the fourth quarter of 2011. On an annual
basis, billable test volumes for the full year grew 25% in 2012 to 5,787 from
a total of 4,634 in 2011.

In 2012, the Company announced that it would direct resources to build on its
advantageous position and success in the prenatal markets, while in oncology,
it would focus almost exclusively on laboratory partnerships and de-emphasize
direct oncology efforts. Prenatal testing revenues in the fourth quarter and
full-year 2012 were $791,000 and $2.0 million, respectively, as compared to
$303,000 and $1.0 million in the comparable 2011 periods.

CombiMatrix President and Chief Executive Officer Judd Jessup said, "The
growth in our core prenatal business continued to accelerate and exceeded our
expectations in the fourth quarter. That business was driven principally by
miscarriage management testing, where we see a great deal of opportunity. In
addition, prenatal microarray testing volumes are also increasing as the
seminal studies favorably comparing that technology to the current standard
are becoming more widely accepted."

Total operating expenses in the 2012 fourth quarter were $2.8 million, a
reduction of 15% from the prior year fourth quarter total operating expenses
of $3.2 million. The reduction was primarily due to the Company's cost-cutting
activities and organizational shift to focus resources more fully on its core
prenatal markets.

The Company also announced on February 22, 2013 that Mark McDonough, currently
the Company's Chief Commercial Officer, will become Chief Executive Officer
following the retirement of Judd Jessup, who has announced his retirement,
effective March 15, 2013.

"The momentum we had at year-end is also continuing in the new year," said
McDonough, "We are continuing to refine our selling organization and approach
to take advantage of the prenatal market opportunity, and we anticipate that
the de-emphasized oncology business will stabilize soon – allowing for strong
year-over-year top line growth in the entire Company for 2013."

Net loss from continuing operations during the fourth quarter of 2012,
including substantial non-cash charges, was $(3.8 million), or $(3.31) per
basic and diluted share from continuing operations, compared to $(2.0
million), or $(1.87) per basic and diluted share from continuing operations in
the fourth quarter of 2011. Net loss from continuing operations for 2012 was
$(9.5 million), or $(8.75) per basic and diluted share from continuing
operations, compared to $(7.6 million), or $(8.01) per basic and diluted share
from continuing operations for 2011.The increases for all periods presented
were primarily driven by non-cash warrant derivative charges of $2.4 million
that were recognized during the fourth quarter of 2012, as a result of issuing
warrants to certain investors in the Company's Series A Preferred Stock
financing, which closed in two tranches on October 1, 2012 and December 6,
2012.Under generally accepted accounting principles, the warrants are
classified as derivative liabilities at fair value, with changes to fair value
recognized as non-operating credits or charges in the consolidated statements
of operations.Partially offsetting the increases in net loss for all periods
presented were lower operating expenses resulting from the cost reduction
efforts executed during the second quarter of 2012.

Cash and cash equivalents totaled $2.4 million as of December 31, 2012 vs.
$6.4 million as of December 31, 2011.Cash used in operating activities were
$(1.4 million) and $(5.9 million) for the three and 12 months ended December
31 2012, respectively, compared to $(1.4 million) and $(6.5 million) for
comparable periods in 2011.

Conference Call

CombiMatrix will host a conference call at 8:00 a.m. Pacific Time (11:00 a.m.
Eastern) today to discuss thefourth quarter 2012 financial results.To attend
the presentation by phone, dial 1-888-395-3227 for domestic callers and
1-719-325-2215 for direct-dial or international callers. To listen to the call
via CombiMatrix's website, go to www.combimatrix.com in the Investor/Events
section (http://investor.combimatrix.com/events.cfm). A replay of the
presentation will be available following the presentation, either via the
CombiMatrix website Investor/Events section
(http://investor.combimatrix.com/events.cfm) or by dialing 1-877-870-5176 for
domestic callers or 1-858-384-5517 for direct-dial international callers. When
prompted, enter playback pin number 3824098.

About CombiMatrix Corporation

CombiMatrix Corporation, through its wholly owned subsidiary, CombiMatrix
Molecular Diagnostics, Inc. (CMDX), is a molecular diagnostics laboratory
which offers DNA-based testing services to the prenatal, pediatric and
oncology markets.The Company performs genetic testing utilizing Microarray,
FISH, PCR and G-Band Chromosome Analysis.CMDX offers prenatal and pediatric
testing services for the detection of abnormalities of genes at the DNA level
beyond what can be identified through traditional technologies.CMDX was also
the first commercial clinical laboratory in the United States to make
comprehensive DNA-based genomic analysis of solid tumors, including breast,
colon, lung, prostate and brain tumors, available to oncology patients and
medical professionals.Additional information about CMDX is available at
www.cmdiagnostics.com or by calling 1-800-710-0624.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995

This press release contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995.These statements are based upon our current expectations, speak only
as of the date hereof and are subject to change.All statements, other than
statements of historical fact included in this press release, are
forward-looking statements.Forward-looking statements can often be identified
by words such as "anticipates," "expects," "intends," "plans," "goal,"
"predicts," "believes," "seeks," "estimates," "may," "will," "should,"
"would," "could," "potential," "continue," "ongoing," similar expressions, and
variations or negatives of these words and include, but are not limited to,
statements regarding projected results of operations and management's future
business, operational and strategic plans, test menu expansion, services and
reports development and attracting greater prenatal genetic screening
business.These forward-looking statements are not guarantees of future
results and are subject to risks, uncertainties and assumptions that could
cause our actual results to differ materially and adversely from those
expressed in any forward-looking statement.The risks and uncertainties
referred to above include, but are not limited to:our ability to successfully
expand the base of our customers and strategic partners, add to the menu of
our diagnostic tests in both of our primary markets, develop and introduce new
tests and related reports, optimize the reimbursements received for our
testing services, and increase operating margins by improving overall
productivity and expanding sales volumes; our ability to successfully
accelerate sales, allow access to samples earlier in the testing continuum,
steadily increase the size of our customer rosters in both developmental
medicine and oncology; our ability to attract and retain a qualified sales
force; rapid technological change in our markets; changes in demand for our
future products; legislative, regulatory and competitive developments; general
economic conditions; and various other factors.Further information on
potential factors that could affect our financial results is included in our
Annual Report on Form 10-K, Quarterly Reports of Form 10-Q, and in other
filings with the Securities and Exchange Commission.We undertake no
obligation to revise or update publicly any forward-looking statements for any
reason, except as required by law.


COMBIMATRIX CORPORATION
CONSOLIDATED SUMMARY FINANCIAL INFORMATION
(In thousands, except share and per share information)
(Unaudited)
                                                                
CONSOLIDATED STATEMENTS OF OPERATIONS:
                                                                
                                 For the Three Months  For the Years Ended
                                  Ended December 31,    December 31,
                                 2012       2011       2012        2011
Revenues:                                                        
Diagnostic services               $1,426   $1,224   $4,975    $4,558
Clinical trial support services   --        --        195        --
Royalties                         54        25        180        100
Total revenues                    1,480     1,249     5,350      4,658
Operating expenses:                                              
Cost of services                  719       677       2,702      2,642
Research and development          297       361       1,400      1,366
Sales and marketing               574       754       2,596      2,715
General and administrative        1,104     1,391     5,378      5,567
Patent amortization and royalties 57        64        266        266
Total operating expenses          2,751     3,247     12,342     12,556
Operating loss                    (1,271)   (1,998)   (6,992)    (7,898)
Other income (expenses):                                         
Interest income                   --        --        1          3
Interest expense                  (160)     (6)       (179)      (20)
Warrant derivative charges        (2,357)   --       (2,357)    --
Total other (expense) income      (2,517)   (6)       (2,535)    (17)
Net loss from continuing          (3,788)   (2,004)   (9,527)    (7,915)
operations
(Loss) income from discontinued   --       (2)       --        316
operations
Net loss                          $(3,788) $(2,006) $(9,527)  $(7,599)
Deemed dividends from issuing
Series A convertible preferred    (617)     --       (617)      --
stock
Series A convertible preferred    (123)     --       (123)      --
stock dividends
Net loss attributable to common   $(4,528) $(2,006) $(10,267) $(7,599)
stockholders
                                                                
Basic and diluted net loss per    $(3.31)  $(1.87)  $(8.75)   $(8.01)
share from continuing operations
Basic and diluted net loss per
share from discontinued           --       --       --        0.32
operations
Deemed dividend associated with
beneficial conversion of Series A (0.54)    --       (0.57)     --
preferred stock
Series A convertible preferred    (0.11)    --       (0.11)     --
stock dividends
Basic and diluted net loss per    $(3.96)  $(1.87)  $(9.43)   $(7.69)
share
                                                                
Basic and diluted weighted        1,143,778 1,070,412 1,088,833  988,461
average common shares outstanding
                                                                
                                                                

CONSOLIDATED BALANCE SHEET INFORMATION:
                                           
                               December 31, December 31,
                               2012         2011
                                           
Total cash and cash equivalents $2,372       $6,385
Total assets                    $5,180       $9,448
Total liabilities               $5,905       $1,298
Total shareholders' equity      $(1,119)     $8,150

CONTACT: R. Judd Jessup
         President & CEO, CombiMatrix Corporation
         Tel (949) 753-0624
        
         Media Contact:
         Len Hall
         VP, Media Relations
         Allen & Caron
         Tel (949) 474-4300
         len@allencaron.com
        
         Investor Relations Contact:
         John Baldissera
         BPC Financial Marketing
         Tel (800) 368-1217

CombiMatrix Corporation
 
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