GenMark Diagnostics Reports First Quarter 2013 Results

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GenMark Diagnostics Reports First Quarter 2013 Results

  • Quarterly Reagent Revenue Grows Over 463%
  • Installed Base Grows to 339 Analyzers
  • Quarterly Gross Margin Reaches 55%
  • Annuity Per Analyzer Increases to $146,000

CARLSBAD, Calif.--(BUSINESS WIRE)-- GenMark Diagnostics, Inc. (Nasdaq: GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today reported financial results for the first quarter ended March 31, 2013.

Revenues for the quarter ending March 31, 2013 were $11.1 million compared with $2.2 million during the first quarter of 2012. The 414% year-over-year increase in total revenue reflects an increase in the number of systems placed at customer sites, growth in test menus and a significant increase in the number of tests sold. Reagent revenues for the first quarter grew 463% year-over-year to $10.8 million from $1.9 million. Instrument and other revenues increased by 22.8% year-over-year to $295,000 from $240,000 due mainly to capital sales of instruments.


The Company placed a net 42 analyzers during the quarter, bringing the total installed base to 339, all in end-user laboratories within the U.S. market.

Gross profit for the quarter ending March 31, 2013 was $6.1 million, or 55% of revenue, compared with a gross profit of $472,000, or 21.8% of revenue for the same period in 2012. The continued improvement in gross profit is the result of significant volume increases and manufacturing efficiencies.

Operating expenses increased $4.3 million to $10.3 million during the first quarter of 2013 compared with the first quarter of 2012. Selling, General and Administrative expenses increased $912,000 year-over-year due to the increase in revenue, headcount growth and other corporate expenses. Research and Development expenses increased $3.4 million due to an expansion of the R&D team, menu development for the XT-8 and continued development work on the NexGen platform.

Net loss for the first three months of 2013 was $4.2 million, or $0.13 loss per share, compared to net loss of $5.6 million, or $0.28 loss per share, for the prior year period.

"We significantly grew our reagents business in the first quarter by adding new customers, increasing the number of net new analyzers, as well as expanding menu utilization and revenue with existing customers," stated GenMark's President & CEO Hany Massarany. "Furthermore, we've made excellent progress toward the development of our NexGen system and now plan to complete it in Q2, 2014."

The Company ended the first quarter of 2013 with $45 million in cash, cash equivalents, investments and restricted cash. The Company intends to continue utilizing its cash balances to invest in new product and menu development, including the development of its NexGen platform, and for infrastructure improvements and general corporate purposes.

INVESTOR CONFERENCE CALL

GenMark will hold a conference call to discuss first quarter 2013 results and the outlook for 2013 at 4:15PM EST today. The conference call and webcast can be accessed live through the Company's website 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 17509226 approximately five minutes prior to the start time.

ABOUT GENMARK

GenMark Diagnostics is a leading provider of automated, multiplex molecular diagnostic testing systems that detect and measure DNA and RNA targets to diagnose disease and optimize patient treatment. Utilizing GenMark's proprietary eSensor® detection technology, GenMark's eSensor® XT-8 system is designed to support a broad range of molecular diagnostic tests with a compact, easy-to-use workstation and self-contained, disposable test cartridges. GenMark currently markets four tests that are FDA cleared for IVD use: Cystic Fibrosis Genotyping Test, Respiratory Virus Panel, Thrombophilia Risk Test, and Warfarin Sensitivity Test. A number of other tests, including HCV Genotyping, 2C19 Genotyping, and 3A4/3A5 Genotyping are available for research use only. 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 growth strategy, 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 research and development plans and timelines, including with respect to the expected completion of our NexGen system, risks related to our history of operating losses, the need for further financing and our ability to access the necessary additional capital for our business, inherent risk and uncertainty in the protection intellectual property rights, and regulatory uncertainties regarding approval or clearance for our products, 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.

GenMark Diagnostics, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except par value)
(unaudited)
 As of  As of

March 31,
2013

December 31,
2012

Current assets
Cash and cash equivalents$32,017$51,250
Investments11,786-
Restricted Cash1,0941,343
Accounts receivable - net of allowance of $38 and $304,3633,190
Inventories3,1751,993
Other current assets 382  226 
 
Total current assets52,81758,002
Property and equipment, net7,3477,074
Intangible assets, net2,5661,832
Other long-term assets 1,108  1,108 
 
Total assets$63,838$68,016
 
Current liabilities
Accounts payable$2,315$2,445
Accrued compensation1,7913,076
Current portion of loan payable353638
Other current liabilities 3,515  3,015 
 
Total current liabilities7,9749,174
Long-term liabilities
Loan payable, net of current portion5963
Other noncurrent liabilities 2,300  2,329 
 
Total liabilities 10,333  11,566 
 
Stockholders' equity
Common stock, $0.0001 par value; 100,000 authorized; 32,750 and 32,753 shares issued33
and outstanding as of March 31, 2013 and December 31, 2012, respectively
Preferred stock, $0.0001 par value; 5,000 authorized, none issued--
Additional paid-in capital248,683247,449
Accumulated deficit(194,741)(190,566)
Accumulated other comprehensive loss (440) (436)
 
Total stockholders' equity 53,505  56,450 
 
Total liabilities and stockholders' equity$63,838 $68,016 
 

GenMark Diagnostics, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(In thousands, except per share amounts)
(Unaudited)
    
Three Months Ended
March 31, 
20132012
Revenue
Product revenue$10,968$2,120
License and other revenue 133  39 
 
Total revenue11,1012,159
Cost of sales 5,034  1,687 
 
Gross profit6,067472
Operating expenses
Sales and marketing2,3591,418
General and administrative2,5582,587
Research and development 5,381  1,949 
 
Total operating expenses 10,298  5,954 
 
Loss from operations (4,231) (5,482)
 
Other income (expense)
Interest income (expense), net68(20)
Other expense (5)  (24)
 
Total other income (expense) 63  (44)
 
Loss before income taxes(4,168)(5,526)
Provision for income taxes (7) (32)
 
Net loss$(4,175)$(5,558)
 
Net loss per share, basic and diluted (0.13) (0.28)
Weighted average number of shares outstanding31,83520,094
 
Other Comprehensive Loss
Net loss$(4,175)$(5,558)
Net unrealized loss on investments (4)

-

 
Comprehensive loss$(4,179)$(5,558)
 

GenMark Diagnostics, Inc.
Condensed Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
  Three months ended
March 31,
2013  2012
Cash flows from operating activities:
Net loss$(4,175)$(5,558)
Adjustments to reconcile net loss to net cash used in operating activities:
 
Depreciation and amortization498264
Share-based compensation697506
Bad debt provision29(28)
Non-cash inventory adjustments403(636)
Changes in operating assets and liabilities:
Accounts receivable(1,202)72
Inventories(1,531)757
Other current assets(116)165
Accounts payable129(112)
Accrued compensation(856)(188)
Other liabilities 20  (738)
Net cash used in operating activities (6,104) (5,496)
Cash flows from investing activities
Restricted cash249-
Purchase of available-for-sale securities(13,848)-
Payments for intellectual property licenses(345)(739)
Purchases of property and equipment(1,003)(17)
Proceeds from sales of marketable securities2,000-
Maturity of short-term investment -  5,000 
Net cash (used in) provided by investing activities (12,947) 4,244 
Cash flows from financing activities
Principal repayment of borrowings(287)(267)
Proceeds from stock exercises 105  - 
Net cash used in financing activities (182) (267)
Net decrease in cash and cash equivalents(19,233)(1,519)
Cash and cash equivalents at beginning of period 51,250  25,320 
Cash and cash equivalents at end of period$32,017 $23,801 
Non-cash investing and financing activities:
Property and equipment purchased with capital lease$-$109
Transfer of systems from property and equipment into inventory$ Read Full Story

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