Accelerate Diagnostics Reports 2018 Fourth Quarter and Full-Year Financial Results
TUCSON, Ariz., Feb. 19, 2019 /PRNewswire/ -- Accelerate Diagnostics, Inc. (NASDAQ: AXDX) today announced financial results for the fourth quarter and fiscal year ended December 31, 2018.
"I am pleased to report an improvement in our commercial progress during the fourth quarter after a challenging start to 2018," said Lawrence Mehren, President and CEO of Accelerate Diagnostics, Inc. "We worked diligently over the first three quarters of the year to implement significant changes to our commercial strategy in order to improve our access to the hospital market. These efforts began to bear meaningful fruit during the fourth quarter as we added 133 new commercial contracts, including 117 in the U.S., which more than doubles our number of U.S. commercially contracted instruments. We enter 2019 with renewed confidence and belief that careful and consistent execution will enable us to capitalize on the tremendous opportunity in front of us and bring our life-saving technology to an ever-expanding number of patients around the globe."
Fourth Quarter 2018 Highlights
-- Added 133 commercially contracted instruments, compared to 22 in the
fourth quarter of 2017.
-- Net sales of $1.8 million, compared to $2.1 million in the fourth
quarter of 2017, a decrease attributable to lower capital sales mix as
customers began adopting using reagent rental agreements, an option not
available in the prior year period.
-- Gross margin was 29%, which included an unfavorable 24 percentage point
reduction due to increased costs arising from investments in service and
manufacturing capacity ahead of production demand. Gross margin was 69%
in the fourth quarter of 2017, which included a benefit of 16 percentage
points due to the sale of pre-FDA manufactured instruments which had
previously been written off to research and development.
-- Selling, general, and administrative expenses were $13.4 million,
compared to $11.5 million for the fourth quarter of 2017, driven by the
expansion of our U.S. sales team and costs related to increased global
sales and marketing activity.
-- Research and development (R&D) expense was $6.9 million, compared to
$6.1 million in the fourth quarter of 2017, due to continued investment
in clinical outcomes studies and costs incurred in preparation for
respiratory FDA registration and outcomes studies.
-- Net loss was $22.2 million, or $0.41 per share, which included $2.2
million in non-cash stock-based compensation expense.
-- Net cash used was $14.1 million.
Full Year 2018 Highlights
-- Ended the year with 202 global commercially contracted instruments,
compared to 78 at the end of 2017.
-- Net sales of $5.7 million, compared to $4.2 million in 2017, driven by
increased Accelerate Pheno instrument placements and the resulting sales
of Accelerate PhenoTest(TM) BC test kits.
-- Gross margin was 44%, which included an unfavorable 9 percentage point
reduction due to costs arising from investments in service and
manufacturing capacity ahead of production demand. Gross margin was 76%
in 2017, which included a benefit of 21 percentage due to the sale of
pre-FDA manufactured instruments which had previously been written off
to R&D.
-- Selling, general, and administrative expenses were $55.2 million,
compared to $45.1 million in 2017, driven by expansion of the U.S. sales
team and costs related to increased global sales and marketing activity.
-- Research and development expenses for the year were $27.6 million,
compared to $22.3 million in 2017, due to continued investment in
clinical outcomes studies and costs incurred in preparation for
respiratory FDA registration and outcomes studies.
-- Net loss was $88.3 million, or $1.62 per share. Net loss included $14.7
million in non-cash stock-based compensation expense.
-- Net cash used was $64.1 million. The Company ended the year with total
cash, investments, and cash-equivalents from all activities of $166.5
million.
Full financial results for the fourth quarter and full-year 2018 will be filed on Form 10-K through the Securities and Exchange Commission's (SEC) website at http://www.sec.gov. Investors are cautioned not to place undue reliance on these preliminary and unaudited estimates in the event of material changes.
Audio Webcast and Conference Call
The Company will host a conference call at 4:30 p.m. ET today to review its fourth quarter and full-year 2018 results. To participate in this conference call, dial +1.877.883.0383 and enter the conference ID: 3234922. International participants may dial +1.412.902.6506. Please dial in 10-15 minutes before the start of the conference. A replay of the call will be available by telephone at +1.877.344.7529 (U.S.) or +1.412.317.0088 (international) using the replay code 10128408 until May 21, 2019.
This conference call will also be webcast and can be accessed from the "Investors" section of the Company's website at ir.axdx.com. A replay of the audio webcast will be available until May 21, 2019.
About Accelerate Diagnostics, Inc.
Accelerate Diagnostics, Inc. is an in vitro diagnostics company dedicated to providing solutions for the global challenges of antibiotic resistance and sepsis. The Accelerate Pheno(TM) system and Accelerate PhenoTest(TM) BC kit combine several technologies aimed at reducing the time clinicians must wait to determine the most optimal antibiotic therapy for serious infections. The FDA-cleared system and kit fully automate sample preparation steps, enabling phenotypic antibiotic susceptibility results in about 7 hours directly from positive blood cultures. Recent external studies indicate the solution offers results 1 to 2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage specific to the individual patient's infection, days earlier.
The "ACCELERATE DIAGNOSTICS" and "ACCELERATE PHENO" and "ACCELERATE PHENOTEST"
and diamond shaped logos and marks are trademarks or registered trademarks of Accelerate Diagnostics, Inc.
For more information about the Company, its products and technology, or recent publications, visit axdx.com.
Forward-Looking Statements
Certain of the statements made in this press release and the related conference call and webcast are forward-looking, such as those, among others, about our projections as to when certain key business milestones may be achieved, the potential of our products or technology, the growth of the market, our estimates as to the size of our market opportunity and potential pricing, our competitive position and estimates of time reduction to results, and our future development plans and growth strategy. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Information about the risks and uncertainties faced by Accelerate Diagnostics, Inc. is contained in the section captioned "Risk Factors" in the company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 1, 2018, and in any other subsequent reports that we file with the Securities and Exchange Commission from time to time. The company's forward-looking statements could be affected by general industry and market conditions. Except as required by federal securities laws, the company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingencies.
ACCELERATE DIAGNOSTICS, INC.
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
(in thousands, except share data)
December 31,
2018 2017
---
ASSETS
Current assets:
Cash and
cash
equivalents $
66,260 $
28,513
Investments 100,218 80,648
Trade
accounts
receivable 1,860 1,946
Inventory 7,746 8,063
Prepaid
expenses 980 850
Other
current
assets 576 468
Total
current
assets 177,640 120,488
Property
and
equipment,
net 7,303 4,890
Intellectual
property,
net 114 134
Other
non-
current
assets 208
Total
assets $
185,265 $
125,512
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts
payable $
1,322 $
2,080
Accrued
liabilities 4,962 3,636
Accrued
Interest 1,262
Deferred
revenue
and
income 217 1,071
Total
current
liabilities 7,763 6,787
Other
long
term
liabilities 53 21
Convertible
notes 120,074
Total
liabilities 127,890 6,808
Commitments and
contingencies
Stockholders' equity:
Preferred shares, $0.001
par value;
5,000,000
preferred and
shares 2017
authorized
and
none
outstanding
as of
December
31,
2018 -
Common stock, $0.001 par
value;
75,000,000
common December and
shares 31, outstanding
authorized 2018 on
with and December
54,231,876 75,000,000 31,
shares authorized 2017
issued with
and 55,673,810
outstanding shares
on 54 56
Contributed
capital 432,885 360,620
Treasury
stock (45,067)
Accumulated
deficit (330,348) (241,972)
Accumulated
other
comprehensive
income
(loss) (149)
Total
stockholders'
equity 57,375 118,704
Total
liabilities
and
stockholders'
equity $
185,265 $
125,512
See accompanying notes to
consolidated financial statements.
ACCELERATE DIAGNOSTICS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(in thousands, except per share data)
Years Ended December 31,
2018 2017 2016
---
Net sales $
5,670 $
4,177 $
246
Cost of sales 3,187 1,002
Gross profit 2,483 3,175 246
Costs and expenses:
Research and development 27,638 22,301 29,564
Sales, general and
administrative 55,214 45,058 37,183
Total costs and expenses 82,852 67,359 66,747
Loss from operations (80,369) (64,184) (66,501)
Other income (expense):
Interest expense (10,113)
Foreign currency exchange
loss (450) (75) (77)
Interest and dividend
income 2,845 908 494
Other expense, net (28) (184) (23)
Total other income
(expense), net (7,746) 649 394
Net loss before income
taxes (88,115) (63,535) (66,107)
Provision for income
taxes (211) (493) (267)
Net loss $
(88,326) $
(64,028) $
(66,374)
Basic and diluted net
loss per share $
(1.62) $
(1.18) $
(1.29)
Weighted average shares
outstanding 54,494 54,073 51,276
Other comprehensive loss:
Net loss $
(88,326) $
(64,028) $
(66,374)
Net unrealized gain
(loss) on available-
for-sale investments 23 (117) (64)
Foreign currency
translation adjustment (172) 321 (128)
Comprehensive loss $
(88,475) $
(63,824) $
(66,566)
See accompanying notes to
consolidated financial statements.
ACCELERATE DIAGNOSTICS, INC.
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands)
Shares Common Contributed Accumulated Treasury Accumulated Total
Stock Capital Deficit stock Other Stockholders'
Amount Comprehensive Equity
Income (Loss)
---
Balances, January 1,
2016 51,191 $
51 $
243,894 $
(110,915)
$ $
(12) $
133,018
Net loss - (66,374) (66,374)
Exercise of options
and warrants 314 1 1,496 1,497
Issuance of common
stock under
employee purchase
plan 11 226 226
Short swing profits
(net of costs) - 866 866
Unrealized loss on
available-for-
sale securities - (64) (64)
Foreign currency
translation
adjustment - (128) (128)
Equity-based
compensation - 8,775 8,775
Balances, December
31, 2016 51,516 52 255,257 (177,289) (204) 77,816
Net loss - (64,028) (64,028)
Issuance of common
stock 3,085 3 83,221 83,224
Exercise of options
and warrants 1,045 1 6,605 6,606
Issuance of common
stock under
employee purchase
plan 28 597 597
Unrealized loss on
available-for-
sale securities - (117) (117)
Foreign currency
translation
adjustment - 321 321
Cumulative impact of
accounting change - (655) (655)
Equity-based
compensation - 14,940 14,940
Balances, December
31, 2017 55,674 56 360,620 (241,972) 118,704
Net loss - (88,326) (88,326)
Exercise of options
and restricted
stock awards issued 382 3,749 3,749
Issuance of common
stock under
employee purchase
plan 35 583 583
Unrealized loss on
available-for-
sale securities - 23 23
Foreign currency
translation
adjustment - (172) (172)
Repurchase of common
stock under Prepaid
Forward contract (1,859) (2) (45,067) (45,069)
Issuance of
convertible note - 53,283 53,283
Cumulative impact of
accounting change - (50) (50)
Equity-based
compensation - 14,650 14,650
Balances, December
31, 2018 54,232 $
54 $
432,885 $
(330,348) $
(45,067) $
(149) $
57,375
See accompanying notes to
consolidated financial statements.
ACCELERATE DIAGNOSTICS, INC.
CONSOLIDATED
STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
Years Ended December 31,
2018 2017 2016
---
Cash flows from operating activities:
Net loss $
(88,326) $
(64,028) $
(66,374)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and
amortization 2,561 2,196 2,351
Amortization of investment
discount (621) 326 374
Equity-based compensation 14,650 13,933 8,775
Amortization of debt
discount and issuance costs 6,849
Realized gain on available-
for-sale securities - (6)
Loss on disposal of property
and equipment 678 240 23
(Increase) decrease in assets:
Accounts receivable 86 (1,912) 43
Inventory (4,451) (7,759)
Prepaid expense and other
assets (250) (459) 1,121
Increase (decrease) in liabilities:
Accounts payable (748) 1,064 (1,242)
Accrued liabilities 1,426 596 1,619
Accrued interest 1,262
Deferred revenue and income (904) 36 (92)
Deferred compensation 32 21
Net cash used in operating
activities (67,756) (55,746) (53,408)
Cash flows from investing activities:
Purchases of equipment (998) (2,966) (2,409)
Purchase of marketable
securities (120,556) (82,333) (74,075)
Proceeds from sales of
marketable securities 3,000 11,522 9,716
Maturities of marketable
securities 98,416 48,049 17,200
Net cash used in investing
activities (20,138) (25,728) (49,568)
Cash flows from financing activities:
Proceeds from exercise of
warrants and options 3,749 6,606 1,497
Common stock issuance cost - (814)
Proceeds from issuance of
common stocks and warrants 583 83,821 226
Recovery of related party
short-swing profits - 866
Payments on capital lease
obligations - (13)
Proceeds from issuance of
convertible note 171,500
Prepayment of forward stock
repurchase transaction (45,069)
Payment of debt issuance
costs (4,992)
Net cash provided by
financing activities 125,771 90,427 1,762
Effect of exchange rate on
cash (130) 316 (127)
Increase (decrease) in cash
and cash equivalents 37,747 9,269 (101,341)
Cash and cash equivalents,
beginning of period 28,513 19,244 120,585
Cash and cash equivalents,
end of period $
66,260 $
28,513 $
19,244
See accompanying notes to
consolidated financial statements.
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SOURCE Accelerate Diagnostics, Inc.
