Accelerate Diagnostics Reports Second Quarter 2019 Financial Results
TUCSON, Ariz., Aug. 8, 2019 /PRNewswire/ -- Accelerate Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results for the second quarter ended June 30, 2019.
"We achieved mixed results in the second quarter, as revenue and placements were both lighter than anticipated due to lower-than-expected capital sales in our EMEA region," commented Lawrence Mehren, President and CEO of Accelerate Diagnostics, Inc. "However, we were encouraged by our commercial progress during the quarter, highlighted by 30% sequential growth in consumable sales and by our signing of the Mayo Clinic as a key reference customer. We expect our increasingly strong customer pipeline to drive higher placements in the second half of the year, particularly in Q4, and are confident that consumable revenues will continue to ramp higher as an ever-increasing number of new customers go clinically live."
Second Quarter 2019 Highlights
-- Added 55 net new commercially contracted instruments, compared to 29 in
the second quarter of 2018.
-- Net sales of $1.8 million, compared to $1.7 million in the second
quarter of 2018. Instrument revenue decreased year-over-year while
consumable revenue grew meaningfully over the same time period,
reflecting the company's change to a reagent rental business model
starting Q3 of 2018. Consumable revenue grew by over 125% as compared
the second quarter of 2018 and by approximately 30% over the prior
quarter.
-- Gross margin was 50% for the quarter, compared to 58% in the second
quarter of 2018. This decrease was the result of one-time inventory
timing benefits in the prior year which did not repeat in the current
year.
-- Selling, general, and administrative expenses for the quarter were $12.8
million, compared to $15.3 million in the second quarter of 2018. This
decrease was driven by lower stock-based compensation expense in the
current year.
-- Research and development (R&D) costs for the quarter were $6.1 million,
compared to $6.1 million in the second quarter of 2018. R&D expense were
materially unchanged due to a stable product development program.
-- Net loss was $20.8 million in the second quarter, or $0.38 per share,
which included $2.9 million in non-cash stock-based compensation
expense.
-- Net cash used in the quarter was $13.0 million, and the company ended
the quarter with total cash, investments, and cash equivalents of $137.8
million.
Year to Date 2019 Highlights
-- Added 130 net new commercially contracted instruments year to date,
compared to 40 for the same period from 2018.
-- Net sales of $3.6 million year to date, compared to $2.5 million for the
same period from 2018. Instrument revenue decreased while consumable
revenue grew steadily reflecting the company's change to a reagent
rental business model starting Q3 of 2018. Consumable revenue grew by
over 125% year to date compared to the same period in the prior year.
-- Gross margin was 49% year to date, compared to 51% for the same period
from 2018. This decrease was in part due to one-time inventory timing
benefits in the prior year that did repeat in the current year. After
excluding the impacts of pre-FDA inventory previously written off to
R&D, gross margin improved by 300 basis points year to date to due to
higher test kit production levels.
-- Selling, general, and administrative expenses were $25.6 million year to
date, compared to $29.7 million for the same period from 2018. This
decrease was driven by lower stock-based compensation expense in the
current year.
-- Research and development (R&D) costs were $13.1 million year to date,
compared to $12.8 million for the same period from 2018. R&D expense
remain unchanged due to a stable product development program.
-- Net loss was $42.5 million year to date, or $0.78 per share, which
included $6.3 million in non-cash stock-based compensation expense.
-- Net cash used year to date was $28.6 million, and the company ended the
quarter with total cash, investments, and cash equivalents of $137.8
million.
Full financial results for the quarter ending June 30, 2019 will be filed on Form 10-Q through the Securities and Exchange Commission's (SEC) website at http://www.sec.gov.
Audio Webcast and Conference Call
The company will host a conference call at 4:30PM ET today to review its second quarter results. To participate in the conference call, dial +1.877.883.0383 and enter the conference ID: 8768870. International participants may dial +1.412.902.6506. Please dial in 10 to 15 minutes prior to the start of the conference call. A replay of the call will be available by telephone at +1.877.344.7529 (U.S.) or +1.412.317.0088 (international) using replay code 10132228 until August 29, 2019.
This conference call will also be webcast and can be accessed from the "Investors" section of the company's website at axdx.com/investors. A replay of the audio webcast will be available until August 29, 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 deadly infections. The FDA cleared system and kit fully automate the sample preparation steps to report phenotypic antibiotic susceptibility results in approximately 7 hours direct from positive blood cultures. Recent external studies indicate the solution offers results 1-2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage specific to the individual patient 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 are forward looking, such as those, among others, about the company's projections as to when certain key business milestones may be achieved, the potential of the company's products or technology, the growth of the market, the company's estimates as to the size of its market opportunity and potential pricing, the company's competitive position and estimates of time reduction to results, and its 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 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, 2019, and in any other reports that the company files with the Securities and Exchange Commission. 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.
CONDENSED CONSOLIDATED
BALANCE SHEET
(in thousands, except share data)
June 30, December 31,
2019 2018
---
Unaudited
ASSETS
Current assets:
Cash and cash
equivalents $
87,469 $
66,260
Investments 50,349 100,218
Trade accounts
receivable 1,911 1,860
Inventory 8,298 7,746
Prepaid expenses 1,342 980
Other current assets 805 576
Total current assets 150,174 177,640
Property and
equipment, net 7,624 7,303
Right of use assets 375
Other non-current
assets 471 322
Total assets $
158,644 $
185,265
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
1,819 $
1,322
Accrued liabilities 3,976 4,962
Accrued interest 1,262 1,262
Deferred revenue and
income 255 217
Current operating
lease liability 200
Total current
liabilities 7,512 7,763
Non-current operating
lease liability 175
Other non-current
liabilities 35 53
Convertible notes 124,917 120,074
Total liabilities $
132,639 $
127,890
Commitments and contingencies
Stockholders' equity:
Preferred shares, $0.001 par value;
5,000,000 preferred
shares authorized and
none outstanding as
of June 30, 2019 and
December 31, 2018 -
Common stock, $0.001 par value;
85,000,000 common
shares authorized December 31, 2018
with 54,512,492
shares issued and
outstanding on June
30, 2019 and
75,000,000 common
shares authorized
with 54,231,876
shares issued and
outstanding on 55 54
Contributed capital 443,857 432,885
Treasury stock (45,067) (45,067)
Accumulated deficit (372,884) (330,348)
Accumulated other
comprehensive income
(loss) 44 (149)
Total stockholders'
equity 26,005 57,375
Total liabilities and
stockholders' equity $
158,644 $
185,265
See accompanying notes to condensed
consolidated financial statements.
ACCELERATE DIAGNOSTICS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Unaudited
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2019 2018 2019 2018
---
Net sales $
1,806 $
1,692 $
3,557 $
2,493
Cost of sales 907 717 1,823 1,210
Gross profit 899 975 1,734 1,283
Costs and expenses:
Research and development 6,149 6,060 13,083 12,842
Sales, general and
administrative 12,837 15,330 25,559 29,682
Total costs and expenses 18,986 21,390 38,642 42,524
Loss from operations (18,087) (20,415) (36,908) (41,241)
Other income (expense):
Interest expense (3,528) (3,205) (6,987) (3,363)
Foreign currency exchange
(loss) gain 6 (253) (53) (198)
Interest income 812 774 1,653 1,075
Other expense, net (1) (25) (3) (25)
Total other expense, net (2,711) (2,709) (5,390) (2,511)
Net loss before income
taxes (20,798) (23,124) (42,298) (43,752)
Provision for income
taxes (17) (101) (238) (285)
Net loss $
(20,815) $
(23,225) $
(42,536) $
(44,037)
Basic and diluted net
loss per share $
(0.38) $
(0.43) $
(0.78) $
(0.80)
Weighted average shares
outstanding 54,476 54,003 54,407 54,821
Other comprehensive loss:
Net loss $
(20,815) $
(23,225) $
(42,536) $
(44,037)
Net unrealized gain
(loss) on available-
for-sale investments 98 (2) 219 (55)
Foreign currency
translation adjustment 50 (191) (26) (79)
Comprehensive loss $
(20,667) $
(23,418) $
(42,343) $
(44,171)
See accompanying notes to condensed
consolidated financial statements.
ACCELERATE DIAGNOSTICS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Unaudited
(in thousands)
Six Months Ended
June 30, June 30,
2019 2018
---
Cash flows from operating activities:
Net loss $
(42,536) $
(44,037)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and
amortization 1,236 1,082
Amortization of investment
discount (320) (146)
Equity-based compensation 6,278 9,011
Amortization of debt
discount and issuance costs 4,843 2,273
Loss on disposal of property
and equipment 407 266
(Increase) decrease in assets:
Accounts receivable (51) 123
Inventory (2,217) (4,334)
Prepaid expense and other (588) (697)
Increase (decrease) in liabilities:
Accounts payable 476 206
Accrued liabilities, and
other (1,110) 661
Accrued interest - 1,105
Deferred revenue and income 38 (935)
Deferred compensation (18) 5
Net cash used in operating
activities (33,562) (35,417)
Cash flows from investing activities:
Purchases of equipment (76) (702)
Purchase of marketable
securities (17,601) (91,272)
Proceeds from sales of
marketable securities 13,400 3,000
Maturities of marketable
securities 54,447 38,272
Net cash provided by (used
in) investing activities 50,170 (50,702)
Cash flows from financing activities:
Proceeds from issuance of
common stock 251 276
Proceeds from exercise of
options 4,369 2,757
Proceeds from issuance of
convertible note - 171,499
Prepayment of forward stock
repurchase transaction - (45,069)
Payment of debt issuance
costs - (4,991)
Net cash provided by
financing activities 4,620 124,472
Effect of exchange rate on
cash (19) (56)
Increase in cash and cash
equivalents 21,209 38,297
Cash and cash equivalents,
beginning of period 66,260 28,513
Cash and cash equivalents,
end of period $
87,469 $
66,810
See accompanying notes to condensed
consolidated financial statements.
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SOURCE Accelerate Diagnostics, Inc.
