Orchid Cellmark reports fourth quarter and full year 2007 financial results

Princeton, NJ - March 6, 2008 Orchid Cellmark Inc. (NASDAQ: ORCH), a leading worldwide provider of identity DNA testing services, today reported its financial results for the fourth quarter and full year of 2007.

Total revenues were essentially flat at $15.0 million for the fourth quarter of 2007 compared to $14.9 million for the fourth quarter of 2006. For the full year of 2007, revenues were $60.3 million compared to $56.9 million for the full year of 2006. Revenues for the fourth quarter of 2007 as compared to the fourth quarter of 2006 increased slightly due to increased revenue associated with the acquisition of ReliaGene in October 2007, offset by lower volume of U.K. agricultural testing services and U.S. forensic casework. Revenues for the full year of 2007 increased by $3.4 million as compared to 2006 due to increases in U.S. and U.K. forensic revenues and the impact of the ReliaGene acquisition partially offset by decreases in U.K. agricultural and government and private paternity revenues in the U.S.

Gross margin for the fourth quarter of 2007 was 30% compared to a gross margin of 36% for the fourth quarter of 2006. Gross margin for the fourth quarter of 2007 as compared to the fourth quarter of 2006 was negatively impacted by decreased testing volumes in U.K. agricultural testing services and U.S. forensic casework and costs associated with expanding our U.K. capabilities and capacity in anticipation of new tender awards. Gross margin for the full year of 2007 was 33% compared to a gross margin for the full year of 2006 of 30%. The increase in gross margin for the full year of 2007 compared to 2006 primarily reflects improved pricing in U.S. forensic casework and CODIS testing services and operating cost efficiencies, partially offset by reduced gross margin contribution associated with the reduced U.K. agricultural testing services.

Total operating expenses, excluding cost of service revenue, for the fourth quarter of 2007 were $5.8 million compared to $6.3 million for the fourth quarter of 2006. Operating expenses, excluding cost of service revenue, decreased from $29.2 million in 2006 to $24.2 million in 2007. These declines were primarily due to a decline in U.S. general and administrative, marketing and sales, and restructuring expenses resulting from our continued focus on reducing expenses.

The company’s operating loss for the fourth quarter of 2007 was $1.3 million, compared to an operating loss of $956 thousand for the fourth quarter of 2006. The operating loss for the full year of 2007 was $4.1 million compared to $12.0 million in 2006. The increase in operating loss for the fourth quarter of 2007 compared to the fourth quarter of 2006 was principally due to the reduction in gross margin for the quarter compared to the same period in 2006 partially offset by a reduction in operating expenses, primarily reduced general and administrative expenses. The $7.9 million decrease in the operating loss for the full year of 2007 compared to 2006 primarily reflects stronger gross margins for the full year of 2007 coupled with lower operating expenses.

Orchid Cellmark reported net income of $168 thousand, or $0.01 per share, for the fourth quarter of 2007, compared to a net income of $885 thousand, or $0.03 per share, for the fourth quarter of 2006. The net loss for the full year of 2007 was $3.0 million, or $(0.10) per share, compared to a net loss of $11.3 million in 2006, or $(0.45) per share. The fourth quarters of 2007 and 2006 include proceeds from the sale of state net operating losses of $1.1 million and $749 thousand, respectively, which are reflected as reductions of income tax expense in the respective quarters and which positively impacted our net results.

At December 31, 2007, cash and cash equivalents were $20.9 million and restricted cash was $958

About Orchid Cellmark
Orchid Cellmark is a leading provider of identity DNA testing services for the human identity and agriculture markets. In the human identity area, the company provides DNA testing services for forensic, family relationship and security applications. In the agriculture field, Orchid Cellmark provides DNA testing services for selective trait breeding. Orchid Cellmark’s strong market positions in these areas reflect the company’s accredited laboratories in the U.S. and U.K., its innovative genetic analysis technologies and expertise, and the world-renowned Cellmark brand that has been associated with exceptional quality, reliability and customer service for nearly two decades. More information on Orchid Cellmark can be found at www.orchid.com.

Contact:
Orchid Cellmark, Inc.
(609) 750-2200

Investors:
Mary Bashore
(609) 750-2324

Media:
Barbara Lindheim
Gendel Lindheim BioCom Partners
(212) 918-4650

All statements in this press release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: expectations regarding Orchid Cellmark’s business operations and outlook, our belief that the amount of work under the regional tender has a potential value of approximately $10,000,000 annually, and the anticipation that the remaining police forces in the U.K. will tender their forensics work starting later this year or early next year. Such statements are subject to the risks and uncertainties that could cause actual results to differ materially from those projected, including, but not limited to, the risk that we are not able to regain or replace services that we previously provided to several police forces in the U.K. under an arrangement with LGC, the risk that the amount of revenue resulting from the North West/South West and Wales regional tender in the U.K. is not significant, Orchid Cellmark’s ability to timely and successfully integrate ReliaGene’s business, uncertainties relating to technologies, product development, manufacturing, market acceptance, cost and pricing of Orchid Cellmark’s products and services, dependence on government funding and collaborations, regulatory approvals, competition, intellectual property of others, patent protection, litigation, the timing of release of federal funds, the timing and amount of contracts put up for bid, and Orchid Cellmark’s ability to successfully offer its services directly to U.K. police forces. These risks and other additional factors affecting these forward-looking statements and Orchid Cellmark’s business are discussed under the headings "Risks Related to Our Business" and "Risks Associated with Our Common Stock" in Orchid Cellmark’s Annual Report on Form 10-K for the year ended December 31, 2007, as filed with the Securities and Exchange Commission, and in other filings made by Orchid Cellmark with the Securities and Exchange Commission from time to time. Orchid Cellmark expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Orchid Cellmark’s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based, except as may be required by law.

Information contained in our press releases should be considered accurate only as of the date of the release. Information in any press release may be superseded by more recent information we have disclosed in later press releases, filings with the Securities and Exchange Commission or otherwise. Press releases may contain forward-looking statements based on the expectations of our management as of the date of the release. Actual results may materially differ based on several factors, including those described in the press release.