Orchid Cellmark reports third quarter 2007 financial results

Operating Loss Decreases by 27% Compared to the Third Quarter of 2006. Cash Increases by $650 Thousand During the Quarter.

Princeton, NJ - November 1, 2007 Orchid Cellmark Inc. (NASDAQ: ORCH), a leading worldwide provider of identity DNA testing services, today reported its financial results for the third quarter of 2007.

Total revenues were $15.6 million for the third quarter of 2007, compared to $15.7 million for the third quarter of 2006, a decrease of 1%. The decrease in revenues was primarily due to lower U.K. agriculture sample testing and to a lesser extent lower U.S. paternity revenues. The overall decrease was essentially offset by higher forensic testing service revenues in the U.S. and U.K.

Service revenues gross margin for the third quarter of 2007 was 35%, compared to gross margin of 36% for the corresponding quarter of 2006. The decrease in gross margin in the third quarter of 2007 as compared to the same period of 2006 resulted from decreased revenues of approximately 49% from our U.K. agriculture testing services. That decrease was partially offset by improved operating leverage resulting from increased volumes from our U.S. and U.K. forensic business coupled with increased laboratory efficiencies and cost reduction programs implemented over the last 15 months.

Total operating expenses, excluding cost of service revenues, for the third quarter of 2007 were $6.0 million, compared to $6.3 million for the third quarter of 2006. General and administrative and research and development expenses for the third quarter of 2007 decreased from the third quarter of 2006 by $276 thousand while marketing and sales expenses were essentially unchanged. The third quarter of 2007 also included a $75 thousand restructuring benefit, while the third quarter of 2006 included $41 thousand of restructuring costs.

Operating loss for the third quarter of 2007 was $466 thousand, compared to an operating loss of $638 thousand for the third quarter of 2006, a decrease of 27%.

Orchid Cellmark reported a 47% decrease in net loss for the third quarter of 2007 compared to the third quarter of 2006. The company incurred a net loss of $707 thousand, or $(0.02) per share, for the third quarter of 2007, compared to a net loss of $1.3 million, or $(0.05) per share, for the third quarter of 2006.

Total revenues for the nine months ended September 30, 2007 were $45.3 million compared to $41.9 million for the same period last year, an increase of 8%. Operating loss decreased by $8.3 million or 75% from $11.1 million for the nine months ended September 30, 2006 to $2.8 million for the nine months ended September 30, 2007. This significant reduction in operating loss is due to increased gross margins coupled with overall expense reductions. Net loss for the nine month period was $3.1 million, or $(0.11) per share, as compared to $12.2 million, or $(0.50) per share, for the same period in 2006.

At September 30, 2007, cash and cash equivalents were $24.5 million, an increase of $650 thousand for the quarter, and restricted cash was $958 thousand. In the third quarter of 2007, cash generated by operations was $744 thousand and cash used for capital expenditures was $297 thousand. The effect of foreign currency translation also favorably impacted the cash balance by $275 thousand in the quarter. The company had no short or long term debt as of September 30, 2007.

Orchid Cellmark’s President and Chief Executive Officer, Thomas Bologna, commented, “The third quarter results reflect our focus on forensics and paternity revenues, reducing expenses and generating positive cash flows. Largely for reasons beyond our control, our agriculture business, which is typically strong in the third quarter, did not materialize as anticipated primarily due to a decision made by the U.K. Department for Environmental Food and Rural Affairs (DEFRA) to limit scrapie testing to male sheep.

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 Orchid Cellmark's belief that Mr. Thomas has the legal experience and skill set that will complement its management team well. 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, 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, Orchid Cellmark’s ability to timely and successfully initiate operational efficiencies, lower overhead and other remedial measures and Orchid Cellmark’s continued relationship with DEFRA. These risks and other additional factors affecting these 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, 2006, 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.