Accelerate Diagnostics Reports Fourth Quarter 2019 Financial Results
TUCSON, Ariz., Feb. 27, 2020 /PRNewswire/ -- Accelerate Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results for the fourth quarter and full year ended December 31, 2019.
"Our contracted instrument trajectory continued over the course of 2019 as we doubled our global contracted instrument base by signing 304 instruments, including 137 units during the fourth quarter. Our full-year revenue was short of expectations as multi-site customers in the U.S. have taken longer than anticipated to go live and begin generating consumable revenue," said Jack Phillips, president and chief executive officer of Accelerate Diagnostics, Inc. "One of my initial areas of focus was to evaluate and re-engineer our go-live process, and I am confident the resulting improvements will help relieve our 255 U.S. instrument backlog and make the process quicker and more predictable. For clinically live accounts, I am encouraged that annual annuities are approximately $45k, proving to be predictable, and these customers are enthusiastic about the outcomes they are realizing."
Fourth Quarter 2019 Highlights
-- Added 137 net new commercially contracted instruments, compared to 133
in the fourth quarter of 2018.
-- Net sales of $3.5 million, compared to $1.8 million in the fourth
quarter of 2018, or 94% year-over-year growth.
-- Gross margin was 44% for the quarter, compared to 29% in the fourth
quarter of 2018. This increase was the result of lower consumable
production costs per unit as production volumes increase. Certain
perishable raw materials exceeded expiration and required disposal in
the quarter. Excluding the impact of this charge, gross margin for the
fourth quarter was 51%.
-- Research and development (R&D) costs for the quarter were $6.2 million,
compared to $6.9 million in the fourth quarter of 2018. We expected this
spend to remain relatively flat on a year-over-year basis, as our R&D
programs remain consistent.
-- Selling, general, and administrative expenses for the quarter were $13.6
million, compared to $13.4 million in the fourth quarter of 2018. These
expenses remained relatively unchanged on a year-over-year basis.
-- Net loss was $21.3 million in the fourth quarter, or $0.39 per share,
which included $3.2 million in non-cash stock-based compensation
expense.
-- Net cash used in the quarter was $13.5 million, and the company ended
the quarter with total cash, investments, and cash equivalents of $108.5
million.
Full Year 2019 Highlights
-- Added 304 net new commercially contracted instruments year to date,
compared to 202 in 2018.
-- Net sales of $9.3 million, compared to $5.7 million in 2018, or 63% year
over year growth.
-- Gross margin was 47%, compared to 44% in 2018. This increase was the
result of lower consumable production costs per unit as production
volumes increase. Certain perishable raw materials exceeded expiration
and required disposal in the fourth quarter. Excluding the impact of
this charge, gross margin for the year was 53%.
-- Selling, general, and administrative expenses were $51.9 million,
compared to $55.2 million in 2018. This decrease was driven by lower
stock-based compensation expense in the current year.
-- Research and development (R&D) costs were $25.3 million, compared to
$27.6 million in 2018. We expected this spend to remain relatively flat
on a year-over-year basis, as our R&D programs remain consistent.
-- Net loss was $84.3 million, or $1.55 per share, which included $12.6
million in non-cash stock-based compensation expense.
-- Net cash used was $58.0 million, and the company ended the year with
total cash, investments, and cash equivalents of $108.5 million.
Full financial results for the quarter and year ending December 31, 2019 will be filed on Form 10-K 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 first quarter results. To listen to the conference call, dial +1.877.883.0383 and enter the conference ID: 2860141. 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 10138283 until May 19, 2020.
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 May 19, 2020.
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® system and Accelerate PhenoTest® 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 placement trajectory, our belief that our re-engineered go-live process will make our implementation process quicker and more predictable, thereby relieving our backlog, our belief that annual annuities will average approximately $45,000, our expectation that customers will be enthusiastic about clinical results, and our expectation that R&D expenses will be relatively flat from 2019 to 2020. 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 February 27, 2020, 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.
CONSOLIDATED
BALANCE SHEETS
(in thousands, except share data)
December 31,
2019 2018
---
ASSETS
Current assets:
Cash and cash equivalents $
61,014 $
66,260
Investments 47,437 100,218
Trade accounts receivable 3,222 1,860
Inventory 8,059 7,746
Prepaid expenses 955 980
Other current assets 1,165 576
Total current assets 121,852 177,640
Property and equipment, net 7,905 7,303
Right of use assets 3,917
Other non-current assets 750 322
Total assets $
134,424 $
185,265
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
2,351 $
1,322
Accrued liabilities 3,828 4,962
Accrued interest 1,262 1,262
Deferred revenue 271 217
Current operating lease liability 450
Total current liabilities 8,162 7,763
Non-current operating lease
liability 3,579
Other non-current liabilities 19 53
Convertible notes 130,043 120,074
Total liabilities 141,803 127,890
Commitments and contingencies
Stockholders' equity (deficit):
Preferred shares, $0.001 par value;
5,000,000 preferred shares
authorized and none outstanding
as of December 31, 2019 and 2018 -
Common stock, $0.001 par value;
85,000,000 common shares
authorized with 54,708,792
shares issued and outstanding on
December 31, 2019 and 75,000,000
common shares authorized with
54,231,876 shares issued and
outstanding on December 31, 2018 55 54
Contributed capital 452,344 432,885
Treasury stock (45,067) (45,067)
Accumulated deficit (414,653) (330,348)
Accumulated other comprehensive
loss (58) (149)
Total stockholders' equity
(deficit) (7,379) 57,375
Total liabilities and
stockholders' equity (deficit) $
134,424 $
185,265
See accompanying notes to
consolidated financial statements.
ACCELERATE DIAGNOSTICS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share data)
Years Ended December 31,
2019 2018 2017
---
Net sales $
9,297 $
5,670 $
4,177
Cost of sales 4,897 3,187 1,002
Gross profit 4,400 2,483 3,175
Costs and expenses:
Research and development 25,345 27,638 22,301
Sales, general and
administrative 51,886 55,214 45,058
Total costs and expenses 77,231 82,852 67,359
Loss from operations (72,831) (80,369) (64,184)
Other income (expense):
Interest expense (14,256) (10,113)
Foreign currency exchange
loss (124) (450) (75)
Interest and dividend
income 2,809 2,845 908
Other expense, net (14) (28) (184)
Total other income
(expense), net (11,585) (7,746) 649
Net loss before income
taxes (84,416) (88,115) (63,535)
Benefit (provision) for
income taxes 111 (211) (493)
Net loss $
(84,305) $
(88,326) $
(64,028)
Basic and diluted net
loss per share $
(1.55) $
(1.62) $
(1.18)
Weighted average shares
outstanding 54,506 54,494 54,073
Other comprehensive loss:
Net loss $
(84,305) $
(88,326) $
(64,028)
Net unrealized gain
(loss) on available-
for-sale investments 193 23 (117)
Foreign currency
translation adjustment (102) (172) 321
Comprehensive loss $
(84,214) $
(88,475) $
(63,824)
See accompanying notes to
consolidated financial statements.
ACCELERATE DIAGNOSTICS, INC.
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands)
Shares Common Contributed Accumulated Treasury Accumulated Total
Stock Capital Deficit stock Other Stockholders'
Amount Comprehensive Equity (Deficit)
Income (Loss)
---
Balances, January 1,
2017 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 gain 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
Net loss - (84,305) (84,305)
Issuance of common
stock 56 1,000 1,000
Exercise of options
and restricted
stock awards issued 396 1 5,364 5,365
Issuance of common
stock under
employee purchase
plan 25 458 458
Unrealized gain on
available-for-
sale securities - 193 193
Foreign currency
translation
adjustment - (102) (102)
Equity-based
compensation - 12,637 12,637
Balances, December
31, 2019 54,709 $
55 $
452,344 $
(414,653) $
(45,067) $
(58) $
(7,379)
See accompanying notes to
consolidated financial statements.
ACCELERATE DIAGNOSTICS, INC.
CONSOLIDATED
STATEMENT OF CASH FLOWS
(in thousands)
Years Ended December 31,
2019 2018 2017
---
Cash flows from operating activities:
Net loss $
(84,305) $
(88,326) $
(64,028)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and
amortization 2,602 2,561 2,196
Amortization of
investment discount (427) (621) 326
Equity-based
compensation expense 12,618 14,422 13,933
Amortization of debt
discount and issuance
costs 9,969 6,849
Loss on disposal of
property and equipment 837 678 240
(Increase) decrease in assets:
Accounts receivable (1,362) 86 (1,912)
Inventory (3,655) (4,223) (7,759)
Prepaid expense and other
assets (752) (250) (459)
Increase (decrease) in liabilities:
Accounts payable 988 (748) 1,064
Accrued liabilities (1,327) 1,426 596
Accrued interest - 1,262
Deferred revenue and
income 54 (904) 36
Deferred compensation (34) 32 21
Net cash used in
operating activities (64,794) (67,756) (55,746)
Cash flows from investing activities:
Purchases of equipment (330) (998) (2,966)
Purchase of marketable
securities (50,226) (120,556) (82,333)
Proceeds from sales of
marketable securities 14,500 3,000 11,522
Maturities of marketable
securities 88,867 98,416 48,049
Net cash provided by
(used in) investing
activities 52,811 (20,138) (25,728)
Cash flows from financing activities:
Proceeds from issuance of
common stock 1,458 583 83,821
Proceeds from exercise of
options and warrants 5,365 3,749 6,606
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 6,823 125,771 90,427
Effect of exchange rate
on cash (86) (130) 316
Increase (decrease) in
cash and cash
equivalents (5,246) 37,747 9,269
Cash and cash
equivalents, beginning
of period 66,260 28,513 19,244
Cash and cash
equivalents, end of
period $
61,014 $
66,260 $
28,513
See accompanying notes to
consolidated financial statements.
ACCELERATE DIAGNOSTICS, INC.
CONSOLIDATED
STATEMENT OF CASH FLOWS (CONTINUED)
(in thousands)
Years Ended December 31,
2019 2018 2017
---
Non-cash investing activities:
Transfer of
instruments from
inventory to
property and
equipment $
3,361 $
4,767
$
Supplemental cash flow information:
Interest paid $
4,288 $
2,001
$
Income taxes paid,
net of refunds $
41 $
651
$
See accompanying notes to
consolidated financial statements.
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SOURCE Accelerate Diagnostics, Inc.
