Adeza Biomedical Corp (902482) SEC Filing 10-Q Quarterly report for the period ending Saturday, September 30, 2006

EXHIBIT 99.1

COMPANY CONTACT:		INVESTOR CONTACTS:
Mark Fischer-Colbrie		Jody Cain (jcain@lhai.com)
Chief Financial Officer		Bruce Voss (bvoss@lhai.com)
Adeza Biomedical Corporation		Lippert/Heilshorn & Associates, Inc.
(408) 745-0975 ext 520		(310) 691-7100
ir@adeza.com

For Immediate Release

ADEZA ANNOUNCES 2006 THIRD QUARTER FINANCIAL RESULTS

Achieves 17^th Consecutive Quarter of Profitability on Record Product Sales
Conference Call to Begin at 4:30 p.m. Eastern Time Today

SUNNYVALE, Calif. (November 1, 2006)

– Adeza (NASDAQ: ADZA) today announced financial results for the quarter ended September 30, 2006 and updated 2006 financial guidance.

Adeza reported record product sales of $13.5 million for the third quarter of 2006, an increase of 18% from product sales of $11.4 million for the third quarter of 2005. This increase was due primarily to higher sales volume of FullTerm™, The Fetal Fibronectin Test.

Net income for the third quarter of 2006 was $751,000, or diluted earnings per share of $0.04, which included charges of $825,000 for stock-based compensation expense related to SFAS 123R and a tax rate of 59.5%. Net income for the third quarter of 2005 was $2.2 million, or diluted earnings per share of $0.12, which included no stock-based compensation expense related to SFAS 123R and a 5.9% tax rate.

Gross profit for the third quarter of 2006 was $11.5 million, or 85.4%, which included stock-based compensation expense related to SFAS 123R of $39,000. This compares with gross profit of $9.7 million, or 85.1%, for the third quarter of 2005.

Sales and marketing expenses for the third quarter of 2006 were $6.6 million, including stock-based compensation expense related to SFAS 123R of $418,000, compared with $4.6 million for the same quarter in 2005. This increase reflects expansion of the company’s direct sales force and marketing programs. General and administrative expenses for the third quarter of 2006 were $1.8 million, including stock-based compensation expense related to SFAS 123R of $309,000, compared with $2.0 million in the comparable quarter of the prior year. Research and development expenses were $2.5 million for the third quarter of 2006, including stock-based compensation expense related to SFAS 123R of $59,000, compared with $1.6 million in the same quarter of the prior year. This increase was mainly due to product development efforts, including costs related to Gestiva™, Adeza’s drug candidate for the prevention of preterm birth in women with a history of preterm delivery.

Product sales for the first nine months of 2006 totaled $37.3 million, an increase of 18% from $31.7 million for the first nine months of 2005. For the nine months ended September 30, 2006, Adeza reported net income of $1.3 million, or diluted earnings per share of $0.07, which included $2.7 million for stock-based compensation expense due to the adoption of SFAS 123R and a tax rate of 56.0%. This compares with net income of $5.4 million, or diluted earnings per share of $0.31, for the nine months ended September 30, 2005, which included no employee stock-based compensation expense related to SFAS 123R and a 5.5% tax rate.