GNMK GenMark Diagnostics Inc

Fourth Quarter Revenue $9.8 million, Up 52% Versus Prior Year

Gross Margin Increases to 61% in the Fourth Quarter

ePlex™ European Launch on Track for Mid-Year

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, 2014.

Revenue for the fourth quarter of 2014 was $9.8 million, an increase of 52% over the prior year period. Full year 2014 revenue grew to $30.6 million, an increase of 59% versus 2013 base business revenue, which excludes revenues from former customer NMTC. During the quarter, 38 additional XT-8 analyzers were placed in end-user laboratories, resulting in a total installed base of 540 analyzers within the U.S. market at year end.

Gross profit for the fourth quarter was $6.0 million, or 61% of revenue, compared with $3.0 million, or 47% of revenue in same period of 2013. Full year 2014 gross profit was $17.5 million, or 57% of revenue.

“We are very pleased with our results in 2014, both in terms of revenue growth and gross margin improvement,” said Hany Massarany, President and Chief Executive Officer of GenMark. “In 2015, we will continue to grow and support our XT-8 business in the US market, while remaining very focused on launching ePlex in Europe in the middle of the year,” added Massarany.

Operating expenses for the fourth quarter of 2014 were $14.7 million compared to $13.3 million in the same period for 2013. The increase was mainly driven by Research and Development expenses as the Company completed the development phase of the ePlex system. For the full year, 2014 operating expenses were $56.5 million, an increase of $9.8 million over 2013 primarily driven by Research and Development investment in ePlex.

Loss per share was $0.21 per share for the fourth quarter of 2014 compared to a loss of $0.26 per share in the same period of 2013. For the full year 2014, loss per share was $0.93.

The Company ended the year with $70.5 million in cash and cash equivalents and intends to continue utilizing its cash balances to invest in the global commercialization of the ePlex platform. As previously announced, the Company also established a debt facility for up to $40 million to provide additional capital to launch ePlex internationally as well as domestically.

Business Outlook

For full year 2015, the Company expects revenue in the range of $38 to $40 million and Gross Margin in the range of 53-55%. The Company expects to place approximately 50 XT-8 analyzers in the first half of 2015.

The Company will be hosting a conference call to discuss fourth quarter results in further detail and release 2015 guidance on Tuesday, February 24, 2015 starting at 4:30 p.m. Eastern Time. 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 61540488 approximately five minutes prior to the start time.

ABOUT GENMARK DIAGNOSTICS

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. The eSensor® detection technology is also incorporated into GenMark’s sample-to-answer system, ePlex™. 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, the timely commercialization of our ePlex system, and the availability of future financing, 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.

GENMARK DIAGNOSTICS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except par value)     As of December 31,   2014       2013   Current assets (Unaudited) Cash and cash equivalents $ 36,855 $ 35,723 Marketable securities 33,651 69,866 Accounts receivable - net of allowances of $2,702 and $2,736, respectively 4,889 2,859 Inventories 2,137 2,102 Prepaid expenses and other current assets   575     552   Total current assets 78,107 111,102 Property and equipment, net 11,052 8,591 Intangible assets, net 1,870 1,197 Restricted cash 758 758 Other long-term assets   183     106   Total assets $ 91,970   $ 121,754   Current liabilities Accounts payable $ 3,468 $ 3,863 Accrued compensation 5,172 3,375 Loan payable — 37 Other current liabilities   3,653     2,962   Total current liabilities 12,293 10,237 Long-term liabilities Deferred rent 1,445 1,601 Other noncurrent liabilities   208     748   Total liabilities   13,946     12,586   Stockholders’ equity Preferred stock, $0.0001 par value; 5,000 authorized, none issued — — Common stock, $0.0001 par value; 100,000 authorized; 41,859 and 41,520 shares issued and outstanding as of December 31, 2014 and December 31, 2013, respectively 4 4 Additional paid-in capital 340,502 333,363 Accumulated deficit (262,472 ) (224,209 ) Accumulated other comprehensive income (loss)   (10 )   10   Total stockholders’ equity   78,024     109,168   Total liabilities and stockholders’ equity $ 91,970   $ 121,754     GENMARK DIAGNOSTICS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands, except per share data)     Three Months Ended   Twelve Month Ended December 31 December 31,   2014       2013     2014       2013   Revenue (Unaudited) (Unaudited) (Unaudited) Product revenue $ 9,735 $ 6,577 $ 30,328 $ 27,204 License and other revenue   91     (125 )   266     200   Total revenue 9,826 6,452 30,594 27,404 Cost of revenues   3,827     3,420     13,127     15,570   Gross profit 5,999 3,032 17,467 11,834 Operating expenses Sales and marketing 3,112 2,988 12,629 12,818 General and administrative 3,018 4,041 12,069 11,836 Research and development   8,526     6,274     31,823     22,060   Total operating expenses   14,656     13,303     56,521     46,714   Loss from operations   (8,657 )   (10,271 )   (39,054 )   (34,880 ) Other income (expense) Interest income 37 124 244 403 Interest expense (1 ) (2 ) (20 ) (19 ) Other income (expense)   27     (469 )   (6 )   897   Total other income (expense)   63     (347 )   218     1,281   Loss before income taxes (8,594 ) (10,618 ) (38,836 ) (33,599 ) Income tax expense (benefit)   18     14     (573 )   44   Net loss $ (8,612 ) $ (10,632 ) $ (38,263 ) $ (33,643 ) Net loss per share, basic and diluted $ (0.21 ) $ (0.26 ) $ (0.93 ) $ (0.95 ) Weighted average number of shares outstanding, basic and diluted   41,569     40,957     41,346     35,253   Other comprehensive loss Net loss $ (8,612 ) $ (10,632 ) $ (38,263 ) $ (33,643 ) Net unrealized losses on marketable securities, net of tax   (14 )   (16 )   (20 )   (4 ) Comprehensive loss $ (8,626 ) $ (10,648 ) $ (38,283 ) $ (33,647 )   GENMARK DIAGNOSTICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)     Year ended December 31,   2014       2013       2012   Operating activities: (Unaudited) Net loss $ (38,263 ) $ (33,643 ) $ (22,103 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,656 2,530 1,198 Amortization of premiums on marketable securities 702 314 — Stock-based compensation 5,796 3,893 2,352 Provision for bad debt — 2,721 (24 ) Non-cash inventory adjustments 450 1,779 (482 ) Gain on sales of investment in preferred stock — (1,392 ) — Elimination of cumulative foreign currency translation adjustments upon liquidation of foreign subsidiary — 450 — Impairment of intangible asset — 1,624 — Other non-cash adjustments 185 — — Changes in operating assets and liabilities: Accounts receivable (2,030 ) (2,390 ) (2,068 ) Inventories (229 ) (1,313 ) 880 Prepaid expenses and other assets (184 ) (119 ) 68 Accounts payable 85 1,343 728 Accrued compensation 1,797 951 1,811 Other liabilities   (537 )   (544 )   1,397   Net cash used in operating activities   (29,572 )   (23,796 )   (16,243 ) Investing activities Change in restricted cash — 585 (1,343 ) Purchase of marketable securities (28,054 ) (76,190 ) (1,000 ) Payments for intellectual property licenses (350 ) (882 ) (1,327 ) Purchases of property and equipment (5,726 ) (4,270 ) (3,476 ) Proceeds from sales of marketable securities 7,497 6,643 — Maturities of marketable securities   56,050     1,550     5,000   Net cash provided by (used in) investing activities   29,417     (72,564 )   (2,146 ) Financing activities Proceeds from issuance of common stock 812 86,547 48,300 Cost incurred in conjunction with public offering — (5,510 ) (3,211 ) Proceeds from borrowings — 166 991 Principal repayment of borrowings (56 ) (766 ) (1,984 ) Proceeds from stock option exercises   531     396     223   Net cash provided by financing activities   1,287     80,833     44,319   Net (decrease) increase in cash and cash equivalents 1,132 (15,527 ) 25,930 Cash and cash equivalents at beginning of period   35,723     51,250     25,320   Cash and cash equivalents at end of period $ 36,855   $ 35,723   $ 51,250   Non-cash investing and financing activities: Property and equipment purchased with capital lease $ — $ — $ 109 Transfer of systems from property and equipment into inventory $ 256 $ 575 $ 223 Property and equipment costs incurred but not paid included in accounts payable $ 124 $ 603 $ 592 Leasehold improvements related to lease incentives $ — $ — $ 1,359 Intellectual property acquisition included in other noncurrent liabilities $ 550 $ 450 $ — Offering costs incurred but not paid included in other liabilities — 65 — Supplemental cash flow disclosures: Cash paid for interest $ 20 $ 19 $ 90 Cash received for interest $ 244 $ 403 $ 42 Cash paid for income taxes, net $ 24 $ 21 $ 91

GenMark Diagnostics, Inc.Hany MassaranyPresident/Chief Executive Officer760-448-4358