Chembio Diagnostics, Inc. (Nasdaq:CEMI), a leader in point-of-care
("POC") diagnostic tests for infectious diseases, today reported
financial results for the second quarter ended June 30, 2017.
Sharon Klugewicz, Chembio's acting CEO, stated,
"During the second quarter of 2017, the Company continued to
execute upon the transition strategy, with a focus in three key
areas: 1) strengthening our core sexually transmitted disease
business, 2) building a broad tropical and fever disease portfolio,
and 3) building a global commercial team.
"To strengthen our core sexually transmitted
disease business, the Company continues to prioritize the U.S.
development and international commercialization of
the DPP® HIV-Syphilis Assay. This assay, which is
currently available in Europe, Latin America and the Caribbean
(except for Puerto Rico), addresses a significant need as
co-infection rates and mother-to-child transmission of both HIV and
Syphilis continue to present significant health risks in the U.S.
and around the world. The U.S. clinical trial for the DPP® HIV
Syphilis Assay is expected to be completed during the fourth
quarter of 2017. During the second quarter of 2017, Chembio
secured a $5.8 million order to supply test components and
intermediate product for the production of DPP® HIV 1/2 Assays
in Brazil and subsequent supply to Brazil's Ministry of
Health. We shipped $0.9 million of this order during the
second quarter of 2017 and we anticipate shipping the remaining
$4.9 million during the third and fourth quarters of 2017.
"To build a broad tropical and fever disease
portfolio, Chembio committed to commercializing multiple tropical
and fever disease products during 2017. We have
already initiated sales of our DPP® Dengue Assay,
our DPP® Zika Assay, and we initiated a pilot program
with the CDC for our DPP® Dengue/Zika/Chikungunya Assay
in India, Peru, Haiti and Guatemala. During the second quarter
of 2017, the Company added to our accomplishments through a joint
collaboration with FIND (www.finddx.org), to develop a POC test
that can identify multiple life-threatening acute febrile illnesses
common in the Asia Pacific region. Subsequent to the end of
the second quarter, Chembio received approval for its
DPP® Micro Reader from ANVISA, the Brazilian
health regulatory agency, through a joint collaboration with
Bio-Manguinhos/Fiocruz. With this approval, Chembio's
DPP® Zika System, which includes the DPP® Zika Assay and
DPP® Micro Reader, is now approved for commercial use in
Brazil. The Company continues to pursue additional
regulatory approvals for the DPP® Zika Assay, including U.S.
FDA Emergency Use Authorization and World Health Organization
Emergency Use Assessment and Listing. We remain optimistic,
given the performance of our DPP® Zika Assay.
"To build a global commercial team, the Company
continues its transition from a product supply organization, where
we marketed and sold our products exclusively through others, to an
integrated commercial organization. As previously announced, the
Company strengthened its commercial leadership by appointing
seasoned executives to lead the Americas region and EMEA and Asia
Pacific regions. In addition, we added experienced diagnostics
sales executives in Latin America, Africa and Asia Pacific. We
believe these key hires position the Company for commercial
success, globally."
Addressing the Company's financial results, Ms.
Klugewicz commented, "During the second quarter of 2017, we
achieved total revenue of $4.1 million, which represented a 26%
increase over the prior year period. Product sales during the
second quarter of 2017 were $2.9 million, which represented a 42.2%
increase over the prior year period. During the first six months of
2017, we achieved total revenue of $10.4 million, which represented
a 5.8% increase over the prior year period. Product sales during
the first six months of 2017 were $8.3 million, which represented a
4.6% increase over the prior year period.
"During the second quarter of 2017, we achieved
significant product sales growth within all of our target regions
compared to the prior year period, including a 187.1% increase in
Europe, 41.2% increase in Asia Pacific, 40.4% increase in Latin
America, 22.1% increase in Africa, and 8.1% increase in the United
States."
Summary Financial Information comparing
the 2017 three-month second quarter to the 2016 second
quarter:
- Total revenues of $4.11 million, compared with $3.27 million
(an increase of 26.0%).
- Product sales of $2.89 million, compared with $2.03 million (an
increase of 42.2%).
- Operating loss of $2.18 million, compared with operating loss
of $2.39 million.
- Net loss of $2.17 million, or $0.18 per diluted share, compared
with net loss of $8.35 million, or $0.86 per diluted share.
The net loss in the 2016 period includes a tax provision for the
recording of a valuation allowance on the Company's deferred tax
asset of $5.96 million.
Summary Financial Information comparing
the first six months of 2017 to the first six months of
2016:
- Total revenues of $10.44 million, compared with $9.87 million
(an increase of 5.8%).
- Product sales of $8.32 million, compared with $7.95 million (an
increase of 4.6%).
- Operating loss of $3.81 million, compared with operating loss
of $2.85 million.
- Net loss of $3.79 million, or $0.31 per diluted share, compared
with net loss of $8.65, or $0.90 per diluted share. The net
loss in the 2016 period includes a tax provision for the recording
of a valuation allowance on the Company's deferred tax asset of
$5.80 million.
Additional Financial
Information
Second Quarter:
Total revenues in the 2017 second quarter of
$4.11 million increased 26.0% compared with $3.27 million in the
prior-year period. Product sales in the 2017 second quarter of
$2.89 million increased 42.2% compared with $2.03 million in the
prior-year period. R&D milestone, grant and royalty
revenues in the 2017 second quarter of $1.22 million decreased 0.8%
compared with $1.23 million in the prior-year period.
Gross margin dollars in the 2017 second quarter
of $1.91 million increased 20.1% compared with $1.58 million in the
prior-year period, due primarily to increased product sales.
Product gross margin dollars in the 2017 second quarter of $0.69
million increased 98.0% compared with $0.35 million in the
prior-year period, which also was primarily due to the increased
product revenues.
R&D expenses in the 2017 second quarter of
$1.98 million decreased 16.3%, compared with $2.37 million in the
prior-year period. Selling, general and administrative
expenses in the 2017 second quarter of $2.11 million increased
31.9% compared with $1.60 million in the prior-year period, largely
due to investments made in our global sales and marketing
organization, and professional fees.
Operating loss in the 2017 second quarter was
$2.18 million, compared with an operating loss of $2.39 million in
the prior-year period.
Net loss in the 2017 second quarter was $2.17
million, or $0.18 per diluted share, compared with net loss of
$8.35 million, or $0.86 per diluted share, in the prior-year
period. The net loss in the 2016 period includes a tax
provision for the recording of a valuation allowance on the
Company's deferred tax asset of $5.96 million.
First Six Months:
Total revenues in the 2017 first six months of
$10.44 million increased 5.8% compared with $9.87 million in the
prior-year period. Product sales in the 2017 first six months of
$8.32 million increased 4.6% compared with $7.95 million in the
prior-year period. R&D milestone, grant and royalty
revenues in the 2017 first six months of $2.12 million increased
10.6% compared with $1.92 million in the prior-year period.
Gross margin dollars in the 2017 first six
months of $5.02 million increased 5.7% compared with $4.75 million
in the prior-year period, due primarily to the increase in product
sales. The amount of product gross margin in the 2017 first six
months of $2.90 million increased 2.4% compared with $2.83 million
in the prior-year period, which also was primarily due to the
increased product revenues.
R&D expenses in the 2017 first six months of
$4.23 million decreased 5.7%, compared with $4.00 million in the
prior-year period. Selling, general and administrative expenses in
the 2017 first six months of $4.60 million increased 27.8%,
compared with $3.60 million in the prior-year period, largely due
to investments made in our global sales and marketing organization,
and professional fees.
Operating loss in the 2017 first six months was
$3.81 million, compared with an operating loss of $2.85 million in
the prior-year period.
Net loss in the 2017 first six months was $3.79
million, or $0.31 per diluted share, compared with net loss of
$8.65 million, or $0.90 per diluted share, in the prior-year
period. The net loss in the 2017 period includes a tax
provision for the recording of a valuation allowance on the
Company's deferred tax asset of $5.80 million.
Balance Sheet Highlights:
The Company had cash and cash equivalents of
$3.69 million as of June 30, 2017, compared with $10.55 million as
of December 31, 2016. The decrease was primarily due to net cash
used in operating activities of $5.46 million. Our working capital
decreased by $4.44 million from $14.71 million as of December 31,
2016 to $10.27 million, largely due to cash used in operating
activities and in investing activities, including the acquisition
of RVR, for the six months of 2017.
Conference Call
To participate on the conference call, please
dial (866) 682-6100 from the U.S. or (862) 255-5401 from outside
the U.S. To listen live via the Internet, please visit the
Investor Relations section of Chembio's website at
www.chembio.com.
To listen to a replay of the call, which will be
accessible until August 16, 2017 at 11:59 p.m. ET, please dial
(877) 481-4010 from the U.S. or (919) 882-2331 from outside the
U.S., and enter conference ID #:19390. An archive of the
webcast will be available for 90 days on the Company's website at
www.chembio.com.
About Chembio Diagnostics
Chembio Diagnostics, Inc. develops,
manufactures, licenses and markets proprietary rapid diagnostic
tests in the growing $8.0 billion point-of-care testing
market. Chembio markets each of its DPP® HIV 1/2 Assay,
HIV 1/2 STAT-PAK® Assay, and SURE CHECK® HIV 1/2 Assay,
with these Chembio brand names, in the U.S. and internationally,
both directly and through third-party distributors.
Chembio has developed a patented point-of-care
test platform technology, the Dual Path Platform (DPP®) technology,
which has significant advantages over lateral-flow technologies.
This technology is providing Chembio with a significant pipeline of
business opportunities for the development and manufacture of new
products.
Headquartered in Medford, NY, Chembio is
licensed by the U.S. Food and Drug Administration (FDA) as well as
the U.S. Department of Agriculture (USDA), and is certified for the
global market under the International Standards Organization (ISO)
directive 13485. Each of Chembio Diagnostic Systems, Inc. and RVR
Diagnostics Sdn Bhd is a wholly-owned subsidiary of Chembio
Diagnostics, Inc. For more information, please
visit: www.chembio.com.
Forward-Looking Statements
Statements contained herein that are not
historical facts may be forward-looking statements within the
meaning of the Securities Act of 1933, as amended. Forward-looking
statements include statements regarding the intent, belief or
current expectations of the Company and its management. Such
statements, which are estimates only, reflect management's current
views, are based on certain assumptions, and involve risks and
uncertainties. Actual results, events, or performance may differ
materially from the above forward-looking statements due to a
number of important factors, and will be dependent upon a variety
of factors, including, but not limited to Chembio's ability to
obtain additional financing and to obtain regulatory approvals in a
timely manner, as well as the demand for Chembio's products.
Chembio undertakes no obligation to publicly update these
forward-looking statements to reflect events or circumstances that
occur after the date hereof or to reflect any change in Chembio's
expectations with regard to these forward-looking statements or the
occurrence of unanticipated events. Factors that may impact
Chembio's success are more fully disclosed in Chembio's most recent
public filings with the U.S. Securities and Exchange
Commission.
(Tables to follow)
|
|
|
|
|
|
|
|
|
|
|
|
|
Chembio Diagnostics, Inc. &
Subsidiaries |
|
|
Summary of Consolidated Results of
Operations |
|
|
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended |
|
|
For the six months
ended |
|
|
|
|
June 30, 2017 |
|
June 30, 2016 |
|
|
June 30, 2017 |
|
June 30, 2016 |
|
|
Net product
sales |
|
$ |
2,892,942 |
|
|
$ |
2,034,072 |
|
|
|
$ |
8,320,314 |
|
|
$ |
7,951,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License and royalty
revenue |
|
|
227,635 |
|
|
|
33,895 |
|
|
|
|
327,689 |
|
|
|
56,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R&D, milestone and grant
revenue |
|
|
994,237 |
|
|
|
1,198,438 |
|
|
|
|
1,791,977 |
|
|
|
1,860,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
REVENUES |
|
$ |
4,114,814 |
|
|
$ |
3,266,405 |
|
|
|
$ |
10,439,980 |
|
|
$ |
9,867,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
MARGIN |
|
$ |
1,910,971 |
|
|
$ |
1,580,305 |
|
|
|
$ |
5,016,923 |
|
|
$ |
4,745,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
expenses |
|
$ |
1,982,426 |
|
|
$ |
2,367,466 |
|
|
|
$ |
4,228,998 |
|
|
$ |
4,001,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
expenses |
|
$ |
2,109,360 |
|
|
$ |
1,598,813 |
|
|
|
$ |
4,597,696 |
|
|
$ |
3,598,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS |
|
$ |
(2,180,815 |
) |
|
$ |
(2,385,974 |
) |
|
|
$ |
(3,809,771 |
) |
|
$ |
(2,854,128 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME: |
|
$ |
7,722 |
|
|
$ |
1,310 |
|
|
|
$ |
21,104 |
|
|
$ |
3,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision |
|
$ |
- |
|
|
$ |
5,962,818 |
|
|
|
$ |
- |
|
|
$ |
5,800,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS |
|
$ |
(2,173,093 |
) |
|
$ |
(8,347,482 |
) |
|
|
$ |
(3,788,667 |
) |
|
$ |
(8,651,072 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share |
|
$ |
(0.18 |
) |
|
$ |
(0.86 |
) |
|
|
$ |
(0.31 |
) |
|
$ |
(0.90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share |
|
$ |
(0.18 |
) |
|
$ |
(0.86 |
) |
|
|
$ |
(0.31 |
) |
|
$ |
(0.90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding, basic |
|
|
12,299,122 |
|
|
|
9,667,543 |
|
|
|
|
12,284,979 |
|
|
|
9,649,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding, diluted
|
|
|
12,299,122 |
|
|
|
9,667,543 |
|
|
|
|
12,284,979 |
|
|
|
9,649,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chembio Diagnostics, Inc. &
Subsidiaries |
|
|
Summary of Consolidated Balance
Sheets |
|
|
(UNAUDITED) |
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
3,691,783 |
|
|
$ |
10,554,464 |
|
|
|
|
Accounts receivable,
net of allowance for doubtful accounts of $52,000 at June 30, 2017
and December 31, 2016, respectively |
|
|
4,671,627 |
|
|
|
3,383,729 |
|
|
|
|
Inventories, net |
|
|
4,993,951 |
|
|
|
3,335,188 |
|
|
|
|
Prepaid expenses and
other current assets |
|
|
777,688 |
|
|
|
840,145 |
|
|
|
|
TOTAL CURRENT
ASSETS |
|
|
14,135,049 |
|
|
|
18,113,526 |
|
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS, net of accumulated
depreciation |
|
|
2,093,494 |
|
|
|
1,709,321 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS |
|
|
3,367,733 |
|
|
|
752,389 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
19,596,276 |
|
|
$ |
20,575,236 |
|
|
|
|
|
|
|
|
|
|
|
|
- LIABILITIES
AND STOCKHOLDERS’ EQUITY - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT
LIABILITIES |
|
$ |
3,862,792 |
|
|
$ |
3,405,650 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
|
4,198,782 |
|
|
|
3,405,650 |
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
|
|
Common stock - $.01 par
value; 100,000,000 shares authorized; 12,299,122 and 12,026,847
shares issued and outstanding at June 30, 2017 and December 31,
2016, respectively |
|
|
122,991 |
|
|
|
120,268 |
|
|
|
|
Additional paid-in
capital |
|
|
62,611,394 |
|
|
|
60,721,783 |
|
|
|
|
Accumulated other
comprehensive income |
|
|
124,241 |
|
|
|
- |
|
|
|
|
Accumulated
deficit |
|
|
(47,461,132 |
) |
|
|
(43,672,465 |
) |
|
|
|
TOTAL
STOCKHOLDERS’ EQUITY |
|
|
15,397,494 |
|
|
|
17,169,586 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
19,596,276 |
|
|
$ |
20,575,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chembio Diagnostics, Inc. &
Subsidiaries |
|
|
Summary of Consolidated Cash
Flows |
|
|
For the six months
ended |
|
|
(UNAUDITED) |
|
|
|
|
|
|
|
June 30, 2017 |
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
Net cash used
in operating activities |
|
$ |
(5,456,787 |
) |
|
$ |
(3,856,555 |
) |
|
|
Net cash used
in investing activities |
|
|
(1,405,894 |
) |
|
|
(85,877 |
) |
|
|
Net cash
provided by financing activities |
|
|
- |
|
|
|
5,370 |
|
|
|
DECREASE IN
CASH AND CASH EQUIVALENTS |
|
$ |
(6,862,681 |
) |
|
$ |
(3,937,062 |
) |
|
|
|
|
|
|
|
|
Contacts:
Company:
Susan Norcott
(631) 924-1135 Ext. 125
snorcott@chembio.com
Vida Strategic Partners (investor relations)
Stephanie C. Diaz
(415) 675-7401
sdiaz@vidasp.com
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