Achieves record quarterly reproductive health
revenues and test volume, across-the-board increases in average
revenue per test, expanded gross margin, significantly narrowed
operating loss and record cash collections
CombiMatrix Corporation (NASDAQ:CBMX), a family health molecular
diagnostics company specializing in DNA-based reproductive health
and pediatric testing services, today reported financial results
for the three and 12 months ended December 31, 2016, and provided a
business update.
“I’m proud to report a strong finish to 2016
with substantial improvements in key financial and operating
metrics as we continue to make progress toward our stated goal of
sustained profitability,” said Mark McDonough, CombiMatrix
President and CEO. “Total revenues for the quarter increased
32% year-over-year to $3.5 million, driven by record reproductive
health test volume and revenues, and across-the-board increases in
average revenue per test. We also benefitted from further
improvement in gross margin, which expanded significantly from a
year ago to 58.4%. Our cash collections reached $3.3 million
in fourth quarter of 2016—another new record. These favorable
results along with our ability to manage expenses led to a nearly
$1 million improvement in quarterly operating loss from the
prior-year period.
“Our strategy is to aggressively capitalize on
the favorable market dynamics in reproductive health diagnostics,
to build upon our market-leading position and create value for our
shareholders,” Mr. McDonough added. “We have suspended our
process with our strategic advisory firm Torreya Partners, while we
continue to explore on our own strategic options including a range
of potential M&A and business development opportunities.
Our focus is on executing our business plan in 2017 and we expect
continued growth in revenues and test volume through increased
salesforce productivity, while maintaining a high level of cash
reimbursement and prudent management of expenses. Our
consistent business execution gives us confidence in reaching
positive cash flow from operations by the fourth quarter of
2017.”
2016 Fourth Quarter Financial and
Operating Highlights (all comparisons are with the fourth
quarter of 2015)
- Total revenues of $3.5 million, up 32%
- Total test volume of 2,770, up 8%
- Reproductive health revenues of $2.6 million, up 37%
- Reproductive health test volume of 1,512, up 10%
- Gross margin of 58.4%, up from 46.5%
- Number of billable customers of 261, up 10%
- Cash collections at 94% of total revenues to a record $3.3
million, up 41%
|
|
|
|
|
|
|
Volumes |
|
Revenues (in 000's) |
|
|
Q4 '16 |
|
Q4 '15 |
|
# Δ |
|
% Δ |
|
Q4 '16 |
|
Q4 '15 |
|
$ Δ |
|
% Δ |
Prenatal |
|
293 |
|
228 |
|
65 |
|
|
29 |
% |
|
$ |
438 |
|
$ |
293 |
|
$ |
145 |
|
49 |
% |
Miscarriage
analysis |
|
1,029 |
|
939 |
|
90 |
|
|
10 |
% |
|
|
1,863 |
|
|
1,363 |
|
|
500 |
|
37 |
% |
PGS |
|
190 |
|
202 |
|
(12 |
) |
|
(6 |
%) |
|
|
278 |
|
|
222 |
|
|
56 |
|
25 |
% |
Subtotal
- reproductive health |
|
1,512 |
|
1,369 |
|
143 |
|
|
10 |
% |
|
|
2,579 |
|
|
1,878 |
|
|
701 |
|
37 |
% |
Pediatric |
|
520 |
|
493 |
|
27 |
|
|
5 |
% |
|
|
646 |
|
|
535 |
|
|
111 |
|
21 |
% |
Subtotal |
|
2,032 |
|
1,862 |
|
170 |
|
|
9 |
% |
|
|
3,225 |
|
|
2,413 |
|
|
812 |
|
34 |
% |
FISH and
karyotyping |
|
738 |
|
701 |
|
37 |
|
|
5 |
% |
|
|
281 |
|
|
236 |
|
|
45 |
|
19 |
% |
Total -
all tests |
|
2,770 |
|
2,563 |
|
207 |
|
|
8 |
% |
|
|
3,506 |
|
|
2,649 |
|
|
857 |
|
32 |
% |
Royalties |
|
36 |
|
|
35 |
|
|
1 |
|
3 |
% |
Total revenues |
$ |
3,542 |
|
$ |
2,684 |
|
$ |
858 |
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes |
|
Revenues (in 000's) |
|
|
YTD '16 |
|
YTD '15 |
|
# Δ |
|
% Δ |
|
YTD '16 |
|
YTD '15 |
|
$ Δ |
|
% Δ |
Prenatal |
|
1,153 |
|
1,164 |
|
(11 |
) |
|
(1 |
%) |
|
$ |
1,640 |
|
$ |
1,508 |
|
$ |
132 |
|
9 |
% |
Miscarriage
analysis |
|
3,915 |
|
3,603 |
|
312 |
|
|
9 |
% |
|
|
6,564 |
|
|
4,830 |
|
|
1,734 |
|
36 |
% |
PGS |
|
756 |
|
359 |
|
397 |
|
|
111 |
% |
|
|
1,038 |
|
|
410 |
|
|
628 |
|
153 |
% |
Subtotal
- reproductive health |
|
5,824 |
|
5,126 |
|
698 |
|
|
14 |
% |
|
|
9,242 |
|
|
6,748 |
|
|
2,494 |
|
37 |
% |
Pediatric |
|
1,974 |
|
2,050 |
|
(76 |
) |
|
(4 |
%) |
|
|
2,292 |
|
|
2,222 |
|
|
70 |
|
3 |
% |
Subtotal |
|
7,798 |
|
7,176 |
|
622 |
|
|
9 |
% |
|
|
11,534 |
|
|
8,970 |
|
|
2,564 |
|
29 |
% |
FISH and
karyotyping |
|
3,235 |
|
2,826 |
|
409 |
|
|
14 |
% |
|
|
1,162 |
|
|
971 |
|
|
191 |
|
20 |
% |
Total -
all tests |
|
11,033 |
|
10,002 |
|
1,031 |
|
|
10 |
% |
|
|
12,696 |
|
|
9,941 |
|
|
2,755 |
|
28 |
% |
Royalties |
|
173 |
|
|
147 |
|
|
26 |
|
18 |
% |
Total revenues |
$ |
12,869 |
|
$ |
10,088 |
|
$ |
2,781 |
|
28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Financial Results
Three Months Ended December 31, 2016 and
2015
Total revenues for the fourth quarter of 2016
increased 32% to $3.5 million from $2.7 million for the fourth
quarter of 2015. Reproductive health diagnostic test
revenues, which include prenatal microarrays, miscarriage analysis
and preimplantation genetic screening (PGS), increased 37% to $2.6
million and test volume increased 10% to 1,512. Revenue
growth for the fourth quarter of 2016 was driven primarily by
higher test volume for reproductive health diagnostics, higher
average revenue per test, particularly for miscarriage analysis and
PGS tests, and an increase in the number of billable customers,
which reached 261 during the fourth quarter of 2016 from 243 in the
prior-year period.
Total operating expenses were $4.1 million for
the fourth quarter of 2016 compared with $4.2 million for the
prior-year period. The decrease was due primarily to lower sales
and marketing expenses, partially offset by higher general and
administrative expenses due to executive bonus and employee
retention accruals as well as higher cost of services as a result
of higher test volume. Gross margin for the fourth quarter of
2016 improved to 58.4% from 46.5% for fourth quarter of 2015.
The net loss attributable to common stockholders
for the fourth quarter of 2016 was $558,000, or $0.22 per share,
compared with a net loss attributable to common stockholders for
the fourth quarter of 2015 of $1.7 million, or $2.02 per share, an
improvement of $1.1 million.
12 Months Ended December 31, 2016 and 2015
Total revenues for 2016 increased 28% to $12.9
million from $10.1 million in 2015. Total revenues for 2016
included $12.7 million in diagnostic services revenues and $173,000
in royalty revenues.
Operating expenses for 2016 were $17.0 million
compared with $16.6 million for the prior year, with the increase
mainly due to higher general and administrative expenses and higher
cost of services resulting from increased testing volumes,
partially offset by lower sales and marketing expenses. Gross
margin improved to 54.4% in 2016 from 45.2% in 2015.
The net loss attributable to common stockholders
for 2016 was $5.8 million, or $3.27 per share, compared with $7.7
million, or $9.22 per share, in 2015. The net loss
attributable to common stockholders in 2016 reflected one-time,
non-cash charges of $1.9 million related to deemed dividends from
the issuance of Series F convertible preferred stock and warrants
in the $8.0 million public offering that closed on March 24,
2016. This increase was partially offset by the reversal of
the $890,000 Series E deemed dividend originally recognized in 2015
from the repurchase of those securities upon the closing of the
Series F public offering, partially reduced by the $656,000 deemed
dividend paid to the Series E investors in February of 2016.
The Company reported $3.7 million in cash, cash
equivalents and short-term investments as of December 31, 2016,
compared with $3.9 million as of December 31, 2015. The
Company used $539,000 and $3.9 million in cash to fund operating
activities during the fourth quarter and year ended December 31,
2016, respectively, compared with $1.5 million and $5.7 million
used to fund operating activities during the comparable 2015
periods, respectively. The significant decreases in net cash
used to fund operating activities for the 2016 periods resulted
primarily from improved cash reimbursement of $3.3 million and
$11.8 million for the three and 12 months ended December 31, 2016,
respectively, compared with $2.3 million and $9.3 million for the
three and 12 months ended December 31, 2015, respectively.
Conference Call and Webcast
CombiMatrix will hold an investment-community
conference call and audio webcast today beginning at 4:30 p.m.
Eastern time (1:30 p.m. Pacific time) to discuss these results and
answer questions. The conference call dial-in numbers are (866)
634-2258 for domestic callers and (330) 863-3454 for international
callers. A live webcast of the call will be available at
http://investor.combimatrix.com/events.cfm.
A recording of the call will be available for
seven days beginning approximately two hours after the completion
of the call by dialing (855) 859-2056 for domestic callers or (404)
537-3406 for international callers, and entering passcode 65848323.
The webcast of the call will be archived for 30 days on the
Company’s website at
http://investor.combimatrix.com/events.cfm.
About CombiMatrix
Corporation
CombiMatrix Corporation provides best-in-class
molecular diagnostic solutions and comprehensive clinical support
to foster the highest quality in patient care. CombiMatrix
specializes in pre-implantation genetic diagnostics and screening,
prenatal diagnosis, miscarriage analysis and pediatric
developmental disorders, offering DNA-based testing for the
detection of genetic abnormalities beyond what can be identified
through traditional methodologies. Our testing focuses on advanced
technologies, including single nucleotide polymorphism (“SNP”)
chromosomal microarray analysis (“CMA”), next generation sequencing
(“NGS”), fluorescent in situ hybridization (“FISH”) and high
resolution karyotyping. Additional information about CombiMatrix is
available at www.combimatrix.com or by calling (800) 710-0624.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
This press release contains forward-looking
statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These
statements are based upon our current expectations, speak only as
of the date hereof and are subject to change. All statements, other
than statements of historical fact included in this press release,
are forward-looking statements. Forward-looking statements can
often be identified by words such as "anticipates," "expects,"
"intends," "plans," "goal," "predicts," "believes," "seeks,"
"estimates," "may," "will," "should," "would," "could,"
"potential," "continue," "ongoing," “outlook,” “reach,” similar
expressions, and variations or negatives of these words and
include, but are not limited to, statements regarding projected
results of operations, including projected cash flow-positive
operating results, management's future business, operational and
strategic plans, recruiting efforts and test menu expansion. These
forward-looking statements are not guarantees of future results and
are subject to risks, uncertainties and assumptions that could
cause our actual results to differ materially and adversely from
those expressed in any forward-looking statement. The risks and
uncertainties referred to above include, but are not limited to:
our ability to grow revenue and improve gross margin; delays in
achieving cash flow-positive operating results; the risk that
operating expenses are not reduced or increase; the risk that test
volumes and reimbursements level off or decline; the risk that
payors decide to not cover our tests or to reduce the amounts they
are willing to pay for our tests; the risk that we will not be able
to grow our business as quickly as we need to; the inability to
raise capital; the loss of members of our sales force; our ability
to successfully expand the base of our customers, add to the menu
of our diagnostic tests, develop and introduce new tests and
related reports, expand and improve our current suite of services,
optimize the reimbursements received for our microarray testing
services, and increase operating margins by improving overall
productivity and expanding sales volumes; our ability to
successfully accelerate sales, steadily increase the size of our
customer rosters in all of our genetic testing markets; our
ability to attract and retain a qualified sales force in wider
geographies; our ability to ramp production from our sales; rapid
technological change in our markets; changes in demand for our
future services; legislative, regulatory and competitive
developments; general economic conditions; and various other
factors. Further information on potential factors that could affect
our financial results is included in our Annual Report on Form
10-K, Quarterly Reports of Form 10-Q, and in other filings with
the Securities and Exchange Commission. We undertake no
obligation to revise or update publicly any forward-looking
statements for any reason, except as required by law.
|
COMBIMATRIX CORPORATIONCONSOLIDATED
STATEMENTS OF OPERATIONS(In thousands, except share and per
share information)(Unaudited) |
|
|
|
|
|
For the Three Months Ended December
31, |
|
For the Years Ended December 31, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Diagnostic services |
|
$ |
3,506 |
|
|
$ |
2,649 |
|
|
$ |
12,696 |
|
|
$ |
9,941 |
|
Royalties |
|
|
36 |
|
|
|
35 |
|
|
|
173 |
|
|
|
147 |
|
Total revenues |
|
|
3,542 |
|
|
|
2,684 |
|
|
|
12,869 |
|
|
|
10,088 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Cost of services |
|
|
1,460 |
|
|
|
1,416 |
|
|
|
5,787 |
|
|
|
5,444 |
|
Research and development |
|
|
113 |
|
|
|
114 |
|
|
|
493 |
|
|
|
466 |
|
Sales and marketing |
|
|
1,037 |
|
|
|
1,321 |
|
|
|
4,569 |
|
|
|
4,979 |
|
General and administrative |
|
|
1,451 |
|
|
|
1,328 |
|
|
|
6,013 |
|
|
|
5,540 |
|
Patent amortization and royalties |
|
|
25 |
|
|
|
25 |
|
|
|
100 |
|
|
|
100 |
|
Impairment of cost-basis investment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
97 |
|
Total operating expenses |
|
|
4,086 |
|
|
|
4,204 |
|
|
|
16,962 |
|
|
|
16,626 |
|
Operating loss |
|
|
(544 |
) |
|
|
(1,520 |
) |
|
|
(4,093 |
) |
|
|
(6,538 |
) |
Other
income (expenses): |
|
|
|
|
|
|
|
|
Interest income |
|
|
3 |
|
|
|
3 |
|
|
|
22 |
|
|
|
16 |
|
Interest expense |
|
|
(17 |
) |
|
|
(20 |
) |
|
|
(69 |
) |
|
|
(79 |
) |
Total other income (expense) |
|
|
(14 |
) |
|
|
(17 |
) |
|
|
(47 |
) |
|
|
(63 |
) |
Net loss |
|
$ |
(558 |
) |
|
$ |
(1,537 |
) |
|
$ |
(4,140 |
) |
|
$ |
(6,601 |
) |
|
|
|
|
|
|
|
|
|
|
|
Deemed
dividend from issuing Series F |
|
|
|
|
|
|
|
|
convertible preferred stock and warrants |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(1,877 |
) |
|
$ |
- |
|
Deemed
dividend paid for right to repurchase |
|
|
|
|
|
|
|
|
Series E convertible preferred stock |
|
|
- |
|
|
|
- |
|
|
|
(656 |
) |
|
|
- |
|
Deemed
dividend from issuing and modifying Series E |
|
|
|
|
|
|
|
|
convertible preferred stock and warrants |
|
|
- |
|
|
|
(168 |
) |
|
|
890 |
|
|
|
(1,058 |
) |
Net loss attributable to common stockholders |
|
$ |
(558 |
) |
|
$ |
(1,705 |
) |
|
$ |
(5,783 |
) |
|
$ |
(7,659 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted net loss per share |
|
$ |
(0.22 |
) |
|
$ |
(1.82 |
) |
|
$ |
(2.34 |
) |
|
$ |
(7.95 |
) |
Deemed
dividend from issuing Series F |
|
|
|
|
|
|
|
|
convertible preferred stock and warrants |
|
|
- |
|
|
|
- |
|
|
|
(1.06 |
) |
|
|
- |
|
Deemed
dividend paid for right to repurchase |
|
|
|
|
|
|
|
|
Series E convertible preferred stock |
|
|
- |
|
|
|
- |
|
|
|
(0.37 |
) |
|
|
- |
|
Deemed
dividend from issuing and modifying Series E |
|
|
|
|
|
|
|
|
convertible preferred stock and warrants |
|
|
- |
|
|
|
(0.20 |
) |
|
|
0.50 |
|
|
|
(1.27 |
) |
Basic and
diluted net loss per share attributable |
|
|
|
|
|
|
|
|
to common stockholders |
|
$ |
(0.22 |
) |
|
$ |
(2.02 |
) |
|
$ |
(3.27 |
) |
|
$ |
(9.22 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted weighted average |
|
|
|
|
|
|
|
|
common shares outstanding |
|
|
2,558,552 |
|
|
|
845,395 |
|
|
|
1,768,090 |
|
|
|
830,835 |
|
CONSOLIDATED
BALANCE SHEET INFORMATION: |
|
|
|
December 31, |
|
|
December 31, |
|
|
2016 |
|
|
2015 |
Total cash, cash
equivalents and short-term investments |
$ |
3,727 |
|
$ |
3,901 |
Total assets |
|
8,478 |
|
|
7,922 |
Total liabilities |
|
1,984 |
|
|
2,066 |
Total stockholders’
equity |
|
6,494 |
|
|
5,856 |
Company Contact:
Mark McDonough
President & CEO, CombiMatrix Corporation
(949) 753-0624
Investor Contact:
LHA
Jody Cain
(310) 691-7100
jcain@lhai.com
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