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GenMark Diagnostics Reports Fourth Quarter and Full Year 2018 Results
Globe Newswire 21-Feb-2019 4:05 PM
CARLSBAD, Calif., Feb. 21, 2019 (GLOBE NEWSWIRE) -- GenMark Diagnostics, Inc. (NASDAQ:GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the fourth quarter and year ended December 31, 2018.
Financial Highlights
Revenues for the full year 2018 were $70.8 million, an increase of 35% over 2017
ePlex® revenue for the full year 2018 of $37.9 million, an increase of more than 270% over 2017
Revenues for the fourth quarter of 2018 were $19.4 million, an increase of 21% over the prior year period
ePlex revenue for the fourth quarter of 2018 of $12.1 million, an increase of approximately 110% over the prior year
Operational Highlights
Placed 42 net new ePlex analyzers in the fourth quarter of 2018, exiting the year with a global installed base of 354 ePlex analyzers
Received FDA 510(k) market clearance for the company's ePlex Blood Culture Identification Gram-Positive Panel (BCID-GP) and Fungal Pathogen Panel (BCID-FP)
Announced Executive Leadership Changes
Former CFO Scott Mendel to assume newly created position as Chief Operating Officer
Former Vice President of Finance and Corporate Controller Johnny Ek promoted to Chief Financial Officer
Expanded and restructured term loan agreement adding $11 million to the balance sheet on February 1, 2019 with potential to increase by an additional $15 million upon meeting certain revenue milestones
"I'm proud of our many accomplishments in 2018, including driving global commercial ePlex adoption, expanding our ePlex test menu, and improving manufacturing cost and yield efficiencies," said Hany Massarany, President and Chief Executive Officer. "With a highly experienced commercial team and expanded ePlex menu, this year we will remain focused on growing our market share and installed base of ePlex systems. We will also continue to implement additional manufacturing improvements which further drive cost efficiencies and help achieve our ePlex gross margin target of 60%-plus over the next two to three years."
Fourth Quarter Financial Results Revenue was $19.4 million in the fourth quarter of 2018, an increase of 21% versus $16.0 million in the fourth quarter of 2017. Gross profit was $5.3 million, or 27% of revenue, compared with $4.7 million, or 30% of revenue in the same period of 2017.
Operating expenses for the fourth quarter of 2018 were $15.9 million compared to $18.7 million in the same period of 2017. The decrease was largely due to reduced ePlex development expenses.
Loss per share was $0.21 for the fourth quarter of 2018, compared to a $0.26 loss per share in the fourth quarter of 2017.
Full Year 2018 Financial Results Revenue was $70.8 million in 2018, an increase of 35% versus $52.5 million in 2017. Gross profit was $19.5 million, or 28% of revenue, compared with $20.0 million, or 38% of revenue in the prior year.
Operating expenses for 2018 were $67.3 million compared to $79.5 million in 2017. The decrease was largely due to reduced ePlex development expenses.
Loss per share was $0.91 for 2018, compared to a $1.21 loss per share in 2017.
Cash and investments were $45.2 million as of December 31, 2018.
Guidance for Full Year 2019 GenMark expects total revenue for the full year 2019 to be in the range of $85 million to $90 million.
Global ePlex placements are expected to range from 170 to 190 net new analyzers with an annuity per analyzer of $135,000 to $145,000. The ePlex platform is expected to reach 75% of total 2019 revenue, representing 70% year-over-year growth in ePlex revenues.
Gross margin is expected to be in the 28% to 30% range and operating expenses are expected to be approximately $65 million to $70 million.
Cash usage is projected to decline year-over-year to $25 million to $30 million.
Webcast and Conference Call Information GenMark will be hosting a conference call to discuss fourth quarter results in further detail on Thursday, February 21, 2019 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 8163576 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, plans and objectives of management, 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)
As of December 31,
2018
2017
ASSETS:
Current Assets:
Cash and cash equivalents
$
36,286
$
26,754
Short-term marketable securities
8,882
45,236
Accounts receivable, net of allowances of $75 and $2,754, respectively
11,534
10,676
Inventories
10,244
10,949
Prepaid expenses and other current assets
1,483
2,216
Total current assets
68,429
95,831
Property and equipment, net
21,070
22,581
Intangible assets, net
2,023
2,624
Restricted cash
758
758
Other long-term assets
701
505
Total assets
$
92,981
$
122,299
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable
$
9,886
$
11,171
Accrued compensation
7,358
5,419
Current portion of long-term debt
—
7,927
Other current liabilities
3,043
3,226
Total current liabilities
20,287
27,743
Deferred rent
2,996
3,059
Long-term debt
36,042
20,099
Other noncurrent liabilities
109
241
Total liabilities
59,434
51,142
Commitments and contingencies - See Note 7
Stockholders' equity
Preferred stock, $0.0001 par value; 5,000 authorized, none issued
—
—
Common stock, $0.0001 par value; 100,000 authorized; 56,240 and 55,066 shares issued and outstanding, respectively
6
6
Additional paid-in capital
500,344
487,525
Accumulated deficit
(466,883
)
(416,383
)
Accumulated other comprehensive income
80
9
Total stockholders' equity
33,547
71,157
Total liabilities and stockholders' equity
$
92,981
$
122,299
GENMARK DIAGNOSTICS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands, except per share data)
Three months ended December 31,
Twelve Months Ended December 31,
2018
2017
2018
2017
Revenue
Product revenue
$
19,325
$
15,947
$
70,481
$
52,260
License and other revenue
53
75
278
259
Total revenue
19,378
16,022
70,759
52,519
Cost of revenue
14,106
11,287
51,278
32,514
Gross profit
5,272
4,735
19,481
20,005
Operating expenses:
Sales and marketing
5,813
5,584
21,777
20,557
General and administrative
4,147
4,651
17,545
16,205
Research and development
5,924
8,463
27,931
42,760
Total operating expenses
15,884
18,698
67,253
79,522
Loss from operations
(10,612
)
(13,963
)
(47,772
)
(59,517
)
Other income (expense):
Interest income
134
208
711
561
Interest expense
(862
)
(771
)
(3,108
)
(3,042
)
Other income (expense)
(143
)
22
(192
)
249
Total other income (expense)
(871
)
(541
)
(2,589
)
(2,232
)
Loss before provision for income taxes
(11,483
)
(14,504
)
(50,361
)
(61,749
)
Income tax expense
80
32
139
101
Net loss
$
(11,563
)
$
(14,536
)
$
(50,500
)
$
(61,850
)
Net loss per share, basic and diluted
$
(0.21
)
$
(0.26
)
$
(0.91
)
$
(1.21
)
Weighted average number of shares outstanding basic and diluted
56,065
54,910
55,669
51,169
Other comprehensive loss
Net loss
$
(11,563
)
$
(14,536
)
$
(50,500
)
$
(61,850
)
Other comprehensive income/(loss):
Foreign currency translation adjustments, net of tax
15
(229
)
44
(84
)
Net unrealized gains (losses) on marketable securities, net of tax
1
22
27
(2
)
Total other comprehensive income/(loss)
16
(207
)
71
(86
)
Total comprehensive loss
$
(11,547
)
$
(14,743
)
$
(50,429
)
$
(61,936
)
GENMARK DIAGNOSTICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Years ended December 31,
2018
2017
2016
Operating activities:
Net loss
$
(50,500
)
$
(61,850
)
$
(50,601
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
7,088
5,317
3,916
Net amortization/(accretion) of premiums/discounts on investments
(142
)
(39
)
89
Gain on sale of investment in preferred stock
—
—
(9
)
Amortization of deferred debt issuance costs
938
1,132
388
Stock-based compensation
11,697
12,170
9,236
Provision for bad debt
23
14
13
Non-cash inventory adjustments
1,426
1,323
134
Other non-cash adjustments
15
(224
)
145
Changes in operating assets and liabilities:
Accounts receivable
(878
)
(1,555
)
(2,250
)
Inventories
(2,414
)
(10,512
)
(3,450
)
Prepaid expenses and other assets
854
(599
)
(613
)
Accounts payable
(1,389
)
2,557
4,105
Accrued compensation
1,059
(263
)
2,172
Other current and non-current liabilities
(289
)
(893
)
1,088
Net cash used in operating activities
(32,512
)
(53,422
)
(35,637
)
Investing activities:
Payments for intellectual property licenses
—
(500
)
(1,500
)
Purchases of property and equipment
(2,575
)
(4,815
)
(7,000
)
Purchases of marketable securities
(29,778
)
(70,989
)
(33,688
)
Proceeds from sales of marketable securities
—
13,896
8,015
Maturities of marketable securities
66,300
37,500
10,050
Net cash provided by (used in) investing activities
33,947
(24,908
)
(24,123
)
Financing activities:
Proceeds from issuance of common stock
1,061
87,267
30,920
Costs incurred in conjunction with public offering
—
(5,469
)
(1,143
)
Principal repayment of borrowings
(92
)
(7,848
)
(40
)
Proceeds from borrowings
7,098
15,000
10,000
Costs associated with debt issuance
(20
)
(187
)
(90
)
Proceeds from stock option exercises
22
287
712
Net cash provided by financing activities
8,069
89,050
40,359
Effect of exchange rate changes on cash
28
75
(25
)
Net increase (decrease) in cash and cash equivalents
9,532
10,795
(19,426
)
Cash and cash equivalents at beginning of year
27,512
16,717
36,143
Cash and cash equivalents at end of year
$
37,044
$
27,512
$
16,717
Non-cash investing and financing activities:
Transfer of systems from property and equipment into inventory
$
1,689
$
4,885
$
263
Property and equipment costs incurred but not paid included in accounts payable
