GenMark Diagnostics Reports First Quarter 2018 Results
CARLSBAD, Calif., May 01, 2018 (GLOBE NEWSWIRE) -- GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the first quarter ended March 31, 2018.
Highlights
- Revenues of $20.6 million, an increase of 65% over the prior year period
- ePlex net new placements of 32 analyzers, expanding the global installed base to 228 placements
- Five abstracts and posters on the benefits of ePlex BCID panels presented at ECCMID, the largest microbiology meeting in Europe
“We’re off to a solid start in 2018, with revenue growth in the first quarter driven by high respiratory testing volumes in an exceptionally strong flu season, as well as a growing number of customers utilizing ePlex for routine clinical testing. As a result, ePlex contributed meaningfully to first quarter sales and for the first time, surpassed revenues from our XT-8 products,” said Hany Massarany, President and Chief Executive Officer. “We’re encouraged by the steady positive customer feedback we receive on the performance, ease of use and processing capacity of ePlex, and we’re very pleased with its strong market acceptance across all segments. We’re also excited about the potential for our uniquely differentiated BCID panels and look forward to accelerating future placements and revenue as we launch them in the U.S. market.”
First Quarter Financial Results
Revenue was $20.6 million in the first quarter of 2018, an increase of 65% versus $12.5 million in the first quarter of 2017. Gross profit was $4.2 million, or 20% of revenue, compared with $6.2 million, or 49% of revenue in the same period of 2017, reflecting the increased proportion of ePlex revenues in the quarter, driven by extraordinary flu season demand.
Operating expenses for the first quarter of 2018 were $15.0 million compared to $19.7 million in the same period for 2017. The decrease was largely due to reduced ePlex development expenses, partially offset by an increase in Sales and Marketing expenses.
Loss per share was $0.21 per share for the first quarter of 2018, compared to a $0.30 loss per share in the first quarter of 2017.
The Company ended the quarter with $65.5 million in cash and investments, reflecting the impact of reductions in operating expenses and the focus on minimizing working capital needs.
Guidance for Full Year 2018
GenMark is reconfirming prior 2018 revenue guidance of $68 to $72 million. Gross margin is expected to be in the 30% range. The Company continues to expect ePlex placements of 140-170 net new analyzers, and an annuity per ePlex placement in the $100,000 to $120,000 range.
Webcast and Conference Call Information
The Company will be hosting a conference call to discuss first quarter results in further detail on Tuesday, May 1, 2018 starting at 4:30 p.m. ET. The conference call will be concurrently webcast. The link to the webcast will be available on the GenMark Diagnostics, Inc. website at www.genmarkdx.com under the investor relations section and will be archived for future reference. To listen to the conference call, please dial (877) 312-5847 (US/Canada) or (253) 237-1154 (International) and use the conference ID number 9384229 approximately five minutes prior to the start time.
About GenMark Diagnostics
GenMark Diagnostics (NASDAQ:GNMK) is a leading provider of multiplex molecular diagnostic solutions designed to enhance patient care, improve key quality metrics, and reduce the total cost-of-care. Utilizing GenMark's proprietary eSensor® detection technology, GenMark's eSensor XT-8® and ePlex® systems are designed to support a broad range of molecular diagnostic tests with compact, easy-to-use workstations and self-contained, disposable test cartridges. GenMark’s ePlex: The True Sample-to-Answer Solution™ is designed to optimize laboratory efficiency and address a broad range of infectious disease testing needs, including respiratory, bloodstream, and gastrointestinal infections. For more information, visit www.genmarkdx.com.
Safe Harbor Statement
This press release includes forward-looking statements regarding events, trends and business prospects, which may affect our future operating results and financial position. Such statements, including, but not limited to, those regarding our future financial performance, regulatory submissions and approvals, and the timely and effective commercialization and clinical impact of our ePlex system, are all subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, our ability to successfully commercialize our ePlex system and its related test menu in a timely manner, constraints or inefficiencies caused by unanticipated acceleration and deceleration of customer demand, our ability to successfully expand sales of our product offerings outside the United States, and third-party payor reimbursement to our customers, as well as other risks and uncertainties described under the “Risk Factors” in our public filings with the Securities and Exchange Commission. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.
Investor Relations Contact
Lynn Pieper Lewis or Leigh Salvo
(415) 937-5404
ir@genmarkdx.com
GENMARK DIAGNOSTICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
| March 31, 2018 |
December 31, 2017 |
||||||
| ASSETS: | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $ | 30,278 | $ | 26,754 | |||
| Short-term marketable securities | 35,185 | 45,236 | |||||
| Accounts receivable, net of allowances of $52 and $2,754, respectively | 8,081 | 10,676 | |||||
| Inventories | 10,452 | 10,949 | |||||
| Prepaid expenses and other current assets | 1,490 | 2,216 | |||||
| Total current assets | 85,486 | 95,831 | |||||
| Property and equipment, net | 21,881 | 22,581 | |||||
| Intangible assets, net | 2,475 | 2,624 | |||||
| Restricted cash | 758 | 758 | |||||
| Other long-term assets | 507 | 505 | |||||
| Total assets | $ | 111,107 | $ | 122,299 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 9,688 | $ | 11,171 | |||
| Accrued compensation | 4,577 | 5,419 | |||||
| Current portion of long-term debt | 13,428 | 7,927 | |||||
| Other current liabilities | 2,912 | 3,226 | |||||
| Total current liabilities | 30,605 | 27,743 | |||||
| Deferred rent | 2,893 | 3,059 | |||||
| Long-term debt | 14,868 | 20,099 | |||||
| Other noncurrent liabilities | 187 | 241 | |||||
| Total liabilities | 48,553 | 51,142 | |||||
| Stockholders' equity: | |||||||
| Preferred stock, $0.0001 par value; 5,000 authorized, none issued | — | — | |||||
| Common stock, $0.0001 par value; 100,000 authorized; 55,412 and 55,066 shares issued and outstanding, respectively | 6 | 6 | |||||
| Additional paid-in capital | 490,306 | 487,525 | |||||
| Accumulated deficit | (427,808 | ) | (416,383 | ) | |||
| Accumulated other comprehensive income | 50 | 9 | |||||
| Total stockholders’ equity | 62,554 | 71,157 | |||||
| Total liabilities and stockholders’ equity | $ | 111,107 | $ | 122,299 | |||
GENMARK DIAGNOSTICS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per share data)
| Three months ended | |||||||
| March 31, | |||||||
| 2018 | 2017 | ||||||
| Revenue | |||||||
| Product revenue | $ | 20,576 | $ | 12,470 | |||
| License and other revenue | 69 |
65 | |||||
| Total revenue | 20,645 |
12,535 | |||||
| Cost of revenue | 16,480 |
6,352 | |||||
| Gross profit | 4,165 |
6,183 | |||||
| Operating expenses: | |||||||
| Sales and marketing | 5,402 |
4,693 | |||||
| General and administrative | 4,133 |
4,011 | |||||
| Research and development | 5,420 |
11,035 | |||||
| Total operating expenses | 14,955 |
19,739 | |||||
| Loss from operations | (10,790) | (13,556) | |||||
| Other income (expense): | |||||||
| Interest income | 187 |
52 | |||||
| Interest expense | (788) | (507) | |||||
| Other income (expense) | (12) | 95 | |||||
| Total other income (expense) | (613) | (360) | |||||
| Loss before provision for income taxes | (11,403) | (13,916) | |||||
| Income tax expense | 20 | 1 | |||||
| Net loss | $ | (11,423) | $ | (13,917) | |||
| Net loss per share, basic and diluted | $ | (0.21) | $ | (0.30) | |||
| Weighted average number of shares outstanding basic and diluted | 55,205 |
46,846 | |||||
| Other comprehensive loss: | |||||||
| Net loss | $ | (11,423) | $ | (13,917) | |||
| Other comprehensive income/(loss): | |||||||
| Foreign currency translation adjustments, net of tax | (34) | 91 | |||||
| Net unrealized losses on marketable securities, net of tax | 8 | (16) | |||||
| Total other comprehensive income/(loss) | (26) | 75 | |||||
| Total comprehensive loss | $ | (11,449) | $ | (13,842) | |||
GENMARK DIAGNOSTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Three months ended March 31, | |||||||
| 2018 | 2017 | ||||||
| Operating activities: | |||||||
| Net loss | $ | (11,423 | ) | $ | (13,917 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Depreciation and amortization | 1,740 | 1,217 | |||||
| Net amortization/(accretion) of premiums/discounts on investments | (42 | ) | 19 | ||||
| Amortization of deferred debt issuance costs | 290 | 151 | |||||
| Stock-based compensation | 2,724 | 2,808 | |||||
| Provision for bad debt | — | 9 | |||||
| Non-cash inventory adjustments | 449 | 317 | |||||
| Other non-cash adjustments | 84 | (85 | ) | ||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 2,566 | 1,558 | |||||
| Inventories | (526 | ) | (3,118 | ) | |||
| Prepaid expenses and other assets | 760 | (216 | ) | ||||
| Accounts payable | (1,361 | ) | (2,821 | ) | |||
| Accrued compensation | (992 | ) | (1,144 | ) | |||
| Other current and non-current liabilities | (321 | ) | (343 | ) | |||
| Net cash used in operating activities | (6,052 | ) | (15,565 | ) | |||
| Investing activities: | |||||||
| Purchases of property and equipment | (465 | ) | (1,888 | ) | |||
| Purchases of marketable securities | (7,900 | ) | — | ||||
| Proceeds from sales of marketable securities | — | 13,896 | |||||
| Maturities of marketable securities | 18,000 | 700 | |||||
| Net cash provided by investing activities | 9,635 | 12,708 | |||||
| Financing activities: | |||||||
| Principal repayment of borrowings | (22 | ) | (6 | ) | |||
| Payments associated with debt issuance | (20 | ) | (20 | ) | |||
| Proceeds from stock option exercises | 17 | 88 | |||||
| Net cash provided by (used in) financing activities | (25 | ) | 62 | ||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (34 | ) | 14 | ||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 3,524 | (2,781 | ) | ||||
| Cash, cash equivalents, and restricted cash at beginning of year | 27,512 | 16,717 | |||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 31,036 | $ | 13,936 | |||
| Non-cash investing and financing activities: | |||||||
| Transfer of systems to property and equipment from inventory | $ | 569 | $ | 415 | |||
| Property and equipment costs incurred but not paid included in accounts payable | $ | 147 | $ | 183 | |||
| Supplemental cash flow information: | |||||||
| Cash paid for income taxes, net | $ | 33 | $ | 5 | |||
| Cash paid for interest | $ | 508 | $ | 347 | |||
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