First Quarter Revenue Increased 9% Versus
Prior Year to $11.1 millionePlex CE Mark Expected in Second
Quarter
GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading
provider of automated, multiplex molecular diagnostic testing
systems, today announced financial results for the first quarter
ended March 31, 2016.
Revenue for the first quarter of 2016 was $11.1 million, an
increase of 9% over the prior year period.
Gross profit for the first quarter was $6.7 million, or 60% of
revenue, compared with $6.1 million, or 61% of revenue in the same
period of 2015.
"Our commercial team drove another quarter of strong XT-8
results in spite of a light flu season,” said Hany Massarany,
President and Chief Executive Officer of GenMark. “Furthermore, as
a result of our focused efforts over the past couple of months, we
were able to identify the main root cause of ePlex manufacturing
variability and we believe we’ve now put in place appropriate
measures to rectify this problem. We have resumed production level
manufacturing and rigorous testing of the ePlex Respiratory
Pathogen panel, and we are on track to achieve CE Mark by the end
of this quarter,” added Massarany.
Operating expenses for the first quarter of 2016 were $19.4
million compared to $16.1 million in the same period for 2015. The
increase was mainly driven by Research and Development expenses as
efforts continued towards the launch of ePlex.
Loss per share was $0.30 per share for the first quarter of 2016
compared to a loss of $0.24 per share in the same period of
2015.
The Company ended the quarter with $38.0 million in cash and
cash equivalents and intends to continue utilizing its cash
balances to invest in the global commercialization of the ePlex
system. The Company's existing debt facility can provide up to an
additional $30 million to support the launch of ePlex
internationally as well as domestically.
The Company will be hosting a conference call to discuss first
quarter results in further detail on Tuesday, May 3, 2016 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 90864115
approximately five minutes prior to the start time.
ABOUT GENMARK DIAGNOSTICS
GenMark Diagnostics (NASDAQ: GNMK) 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. UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except
par value) March 31, 2016 December
31, 2015 Current assets Cash and cash equivalents
$ 27,913 $ 35,385 Marketable securities 10,075 10,080 Accounts
receivable, net of allowances of $2,756 and $2,727, respectively
5,433 6,847 Inventories 2,441 3,054 Prepaid expenses and other
current assets 623 591
Total current assets
46,485 55,957 Property and equipment, net 11,705 11,396 Intangible
assets, net 2,282 2,376 Restricted cash 758 758 Other long-term
assets 178 180
Total assets $ 61,408 $
70,667
Current liabilities Accounts payable $ 5,130 $
4,376 Accrued compensation 4,489 3,861 Other current liabilities
1,907 2,352
Total current liabilities 11,526
10,589
Long-term liabilities Deferred rent 1,281 1,257
Long-term debt 9,562 9,890 Other non-current liabilities 319
334
Total liabilities 22,688 22,070
Stockholders’ equity Preferred stock, $0.0001 par value;
5,000 authorized, none issued — — Common stock, $0.0001 par value;
100,000 authorized; 42,788 and 42,551 shares issued and outstanding
as of March 31, 2016 and December 31, 2015, respectively 4 4
Additional paid-in capital 356,344 353,233 Accumulated deficit
(317,627 ) (304,669 ) Accumulated other comprehensive income (loss)
(1 ) 29
Total stockholders’ equity 38,720
48,597
Total liabilities and stockholders’ equity $
61,408 $ 70,667
GENMARK DIAGNOSTICS,
INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS (In thousands, except per share data)
Three Months Ended March 31, 2016
2015 Revenue Product revenue $
10,959 $ 10,012 License and other revenue 105 95
Total revenue 11,064 10,107 Cost of revenue 4,375
3,991
Gross profit 6,689 6,116
Operating
expenses Sales and marketing 3,709 3,693 General and
administrative 3,419 3,671 Research and development 12,269
8,779
Total operating expenses 19,397 16,143
Loss from operations
(12,708
)
(10,027
)
Other income (expense) Interest income 29 36 Interest
expense (277 ) (73 ) Other income 33 217
Total
other income (expense)
(215
)
180
Loss before provision for income taxes
(12,923
)
(9,847
)
Income tax expense 35 22
Net loss $ (12,958 )
$ (9,869 ) Net loss per share, basic and diluted $ (0.30 ) $ (0.24
) Weighted average number of shares outstanding, basic and diluted
42,672 41,774
Other comprehensive loss Net
loss $ (12,958 ) $ (9,869 ) Foreign currency translation
adjustments 47 9 Net unrealized losses on marketable securities,
net of tax (17 ) (17 )
Comprehensive loss $ (12,928 ) $
(9,877 )
GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) Three Months Ended March 31,
2016 2015 Operating activities Net loss
$ (12,958 ) $ (9,869 ) Adjustments to reconcile net loss to net
cash used in operating activities: Depreciation and amortization
900 797 Amortization of premiums on investments 16 73 Amortization
of deferred debt issuance costs 92 49 Gain on sale of investment in
preferred stock — (223 ) Stock-based compensation 2,402 2,339
Provision for bad debt 29 — Non-cash inventory adjustments 75 402
Other non-cash adjustments (49 ) 20 Changes in operating assets and
liabilities: Accounts receivable 1,385 445 Inventories 501 (366 )
Prepaid expenses and other assets — (216 ) Accounts payable 617
(775 ) Accrued compensation 989 (919 ) Other liabilities (42 ) (22
)
Net cash used in operating activities (6,043 ) (8,265 )
Investing activities Payments for intellectual property
licenses (800 ) (550 ) Purchases of property and equipment (966 )
(411 ) Purchases of marketable securities — (14,797 ) Proceeds from
sales of marketable securities — 223 Maturities of marketable
securities — 14,350
Net cash used in investing
activities (1,766 ) (1,185 )
Financing activities
Principal repayment of borrowings (5 ) (5 ) Proceeds from
borrowings — 10,000 Costs associated with debt issuance (10 ) (700
) Proceeds from stock option exercises 345 222
Net
cash provided by financing activities 330 9,517
Effect of exchange rate changes on cash 7 (9 )
Net
increase (decrease) in cash and cash equivalents (7,472 ) 58
Cash and cash equivalents at beginning of period 35,385
36,855 Cash and cash equivalents at end of period $ 27,913
$ 36,913
Non-cash investing and financing
activities Transfer of instruments from property and equipment
to inventory $ 38 $ 48 Property and equipment costs included in
accounts payable $ 285 $ 818
Supplemental cash flow
disclosures Cash paid for income taxes, net $ 13 $ 17 Cash
received for interest $ 21 $ 109 Cash paid for interest $ 184 $ 73
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version on businesswire.com: http://www.businesswire.com/news/home/20160503006849/en/
GenMark Diagnostics, Inc.Hany MassaranyPresident/Chief Executive
Officer760-448-4325
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