HACKENSACK, N.J., March 15, 2018 /PRNewswire/ -- Champions
Oncology, Inc. (Nasdaq: CSBR), engaged in the development of
advanced technology solutions and services to personalize the
development and use of oncology drugs, today announced its
financial results for the third fiscal quarter and nine months
ended January 31, 2018.
Third Quarter and Recent Business Highlights:
- Revenue of $5.1 million, an
increase of 42.6% year-over-year
- Recorded Translational Oncology Services ("TOS") revenue of
$4.8 million, an increase of 49.9%
year-over-year
- Reiterated expectations for fiscal year 2018 revenue growth of
at least 20%
- Reported operating income, excluding non-cash stock based
compensation and depreciation, of $183,000
- Collaborated in global research study for patients with ROS1
Cancer
Ronnie Morris, CEO of Champions,
commented, "For the third consecutive quarter we delivered revenue
in excess of $5 million, maintained
disciplined management of expenses and continued on a trajectory
towards year-over-year revenue growth of at least 20% in fiscal
2018. With revenue growth of more than 40% in the third fiscal
quarter and an extremely modest rise in costs and operating
expenses of just under 4%, we continue to demonstrate the leverage
in our business model that is propelling us towards long-term
profitability as we continue to scale and increase the services we
provide to new and existing customers."
"The level of active engagement with customers for new studies
and applications for our tumor bank remains encouraging and signals
opportunities for meaningful growth in the coming quarters," added
Morris. "Looking ahead, we have the infrastructure to service our
pipeline of new projects and execute our vision to achieve
long-term profitability."
Third Fiscal Quarter Financial Results
For the third quarter of fiscal 2018, revenue increased 42.6% to
$5.1 million compared to $3.6 million for the third quarter of fiscal
2017. Total operating expenses for the third quarter of fiscal 2018
were $5.1 million compared to
$5.0 million for the third quarter of
fiscal 2017, an increase of $183,000
or 3.7%.
For the third quarter of fiscal 2018, Champions reported a loss
from operations of $67,000, which
includes $257,000 in stock-based
compensation and depreciation expense, an improvement of
$1.3 million or 95.2% compared to the
loss from operations of $1.4 million,
inclusive of $277,000 in stock-based
compensation and depreciation expense, in the third quarter of
fiscal 2017. Excluding stock based compensation and depreciation,
Champions recognized income from operations of $183,000 for the third quarter of fiscal 2018
compared to a loss from operations, excluding stock-based
compensation and depreciation, of $1.1
million in the third quarter of fiscal 2017.
Net cash generated was $402,000
for the three months ended January 31,
2018. Net cash used for the same period last year was
$839,000. The improvement in cash
flow is the result of revenue growth and expense management.
The Company ended the quarter with $1.1
million of cash and cash equivalents and reiterated its
position that it does not need to raise capital to fund
operations.
TOS revenue was $4.8 million for
the three months ended January 31,
2018, compared to $3.2 million
for the three months ended January 31,
2017, an increase of $1.6
million or 49.9%.
TOS cost of sales was $2.3 million
for the three months ended January 31,
2018, an increase of $200,000,
or 8%, compared to $2.1 million for
the three months ended January 31,
2017. The increase in TOS cost of sales was due to an
increase in the number and size of TOS studies. For the three
months ended January 31, 2018 and
2017, gross margin for TOS was 53.3% compared to 35.2% for the
three months ended January 31, 2017.
While the gross margin often fluctuates quarter to quarter,
resulting from timing differences between revenue and expense
recognition, the improvement in gross margin is mostly attributable
to the increase in revenue, leveraged against the fixed cost
portion of cost of sales.
Personalized Oncology Services ("POS") revenue was $259,000 for the three months ended January 31, 2018 compared to $347,000 for the three months ended January 31, 2017, a decrease of $88,000 or (25.4%). The decrease is due mainly to
a decrease in implant and drug study revenue.
POS cost of sales was $220,000 for
the three months ended January 31,
2018, a decrease of $ 100,000,
or (31.3%), compared to $320,000 for
the three months ended January 31,
2017. For the three months ended January 31, 2018, gross margin for POS was 15.1%
compared to 7.8% for the three months ended January 31, 2017. The improvement is attributed
to the increase in higher margin sequencing revenue.
Research and development expense was $1.0
million for both the three months ended January 31, 2018 and 2017. Sales and marketing
expense for the three months ended January
31, 2018 was $627,000, a
decrease of $99,000, or (13.6%),
compared to $726,000 for the three
months ended January 31, 2017. The
decrease is mainly due to a reduction of marketing resources for
the POS division. General and administrative expense was
$1.0 million for the three months
ended January 31, 2018 compared to
$836,000 for the three months ended
January 31, 2017, an increase of
$164,000 or 20.1%.
Year-to-Date Financial Results
For the first nine months of fiscal 2018, revenue increased 31%
to $15.3 million, as compared to
$11.7 million for the first nine
months of fiscal 2017. Total operating expenses for the first nine
months of both fiscal 2018 and 2017 were $16.1 million.
For the first nine months of fiscal 2018, Champions reported a
loss from operations of $755,000,
which includes $863,000 in
stock-based compensation and $253,000
in depreciation, an improvement of $3.6
million, or 83%, compared to the loss from operations of
$4.4 million, inclusive of
$1.9 million in stock-based
compensation and $127,000 in
depreciation, in the first nine months of fiscal 2017. Excluding
stock-based compensation and depreciation, Champions recognized
income from operations of $339,000
for the nine months ended January 31,
2018 compared to a loss from operations, excluding
stock-based compensation and depreciation, of $2.4 million for the nine months ended
January 31, 2017.
TOS revenue was $14.2 million for
the nine months ended January 31,
2018 compared to $10.3 million
for the nine months ended January 31,
2017, an increase of $3.9
million or 37.8%.
TOS cost of sales was $6.9 million
for the nine months ended January 31,
2018, an increase of $900,000,
or 15.1%, compared to $6.0 million
for the nine months ended January 31,
2017. Gross margin for TOS was 51.8% for the first nine
months of fiscal 2018 compared to 42.3% for the first nine months
of fiscal 2017.
POS revenue was $1.0 million for
the nine months ended January 31,
2018 compared to $1.4 million
for the nine months ended January 31,
2017, a decrease of $400,000
or (20.5%).
POS cost of sales was $900,000 for
the nine months ended January 31,
2018, a decrease of $300,000,
or 25.4%, compared to $1.2 million
for the nine months ended January 31,
2017. Gross margin for POS for the nine months ended
January 31, 2018 was 19.1% compared
to 13.8% for the nine months ended January
31, 2017.
Research and development expense was $3.3
million for the nine months ended January 31, 2018, an increase of $100,000 or 2.8% compared to $3.2 million for the nine months ended
January 31, 2017. Sales and
marketing expense for the nine months ended January 31, 2018 was $1.9
million, a decrease of $500,000, or (21.4%), compared to $2.4 million for the nine months ended
January 31, 2017. General and
administrative expense was $3.2
million for the nine months ended January 31, 2018, a decrease of $200,000 or (6.7%), compared to $3.4 million for the nine months ended
January 31, 2017.
Net cash used in operations was $1.2
million for the nine months ended January 31, 2018 compared to $3.2 million for the nine months ended
January 31, 2017, a decrease of
$2 million or (62.5%).
Cash and cash equivalents were $1.1
million as of January 31, 2018
compared to $3.3 million as of
April 30, 2017.
Conference Call Information:
The Company will host a conference call today at 4:30 p.m. EST (1:30:00
p.m. PST) to discuss its third quarter financial results. To
participate in the call, please call 877-407-8035 (domestic) or
201-689-8035 (international) 10 minutes ahead of the call and give
the verbal reference "Champions Oncology."
Full details of the Company's financial results will be
available Monday, March 19, 2018 in
the Company's Form 10-Q at www.championsoncology.com.
* Non-GAAP Financial Information
See the attached Reconciliation of GAAP net loss to non-GAAP net
loss for an explanation of the amounts excluded to arrive at
non-GAAP net loss and related non-GAAP net loss per share amounts
for the three and nine months ended January
31, 2018 and 2017. Non-GAAP financial measures provide
investors and management with supplemental measures of operating
performance and trends that facilitate comparisons between periods
before and after certain items that would not otherwise be apparent
on a GAAP basis. Certain unusual or non-recurring items that
management does not believe affect the Company's basic operations
do not meet the GAAP definition of unusual or non-recurring items.
Non-GAAP net loss and non-GAAP loss per share are not, and should
not be viewed as a substitute for similar GAAP items. Champions'
defines non-GAAP dilutive loss per share amounts as non-GAAP net
loss divided by the weighted average number of diluted shares
outstanding. Champions' definition of non-GAAP net loss and
non-GAAP diluted loss per share may differ from similarly named
measures used by others.
About Champions Oncology, Inc.
Champions Oncology, Inc. is engaged in the development of
advanced technology solutions and services to personalize the
development and use of oncology drugs. The Company's
TumorGraft technology platform is a novel approach to personalizing
cancer care based upon the implantation of primary human tumors in
immune deficient mice followed by propagation of the resulting
engraftments, or TumorGrafts, in a manner that preserves the
biological characteristics of the original human tumor in order to
determine the efficacy of a treatment regimen. The Company
uses this technology in conjunction with related services to offer
solutions for two customer groups: Personalized Oncology
Solutions, in which results help guide the development of
personalized treatment plans, and Translational Oncology Solutions,
in which pharmaceutical and biotechnology companies seeking
personalized approaches to drug development can lower the cost and
increase the speed of developing new drugs. TumorGrafts are
procured through agreements with a number of institutions in the
U.S. and overseas as well as through Champions' Personalized
Oncology Solutions business. For more information, please visit
www.championsoncology.com.
This press release may contain "forward-looking statements"
(within the meaning of the Private Securities Litigation Act of
1995) that inherently involve risk and uncertainties.
Champions Oncology generally uses words such as "believe," "may,"
"could," "will," "intend," "expect," "anticipate," "plan," and
similar expressions to identify forward-looking statements.
One should not place undue reliance on these forward-looking
statements. The Company's actual results could differ
materially from those anticipated in the forward-looking statements
for many unforeseen factors. See Champions Oncology's Form
10-K for the fiscal year ended April 30,
2017 for a discussion of such risks, uncertainties and other
factors. Although the Company believes the expectations
reflected in the forward-looking statements are reasonable, they
relate only to events as of the date on which the statements are
made, and Champions Oncology's future results, levels of activity,
performance or achievements may not meet these expectations.
The Company does not intend to update any of the forward-looking
statements after the date of this press release to conform these
statements to actual results or to changes in Champions Oncology's
expectations, except as required by law.
Champions
Oncology, Inc.
|
(Dollars in
thousands except per share amounts)
|
|
Reconciliation of
GAAP to Non-GAAP Net Gain (Loss) (Unaudited)
|
|
|
Three Months
Ended
January
31,
|
|
Nine Months
Ended
January 31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net (loss) -
GAAP
|
$
|
(76)
|
|
|
$
|
(1,409)
|
|
|
$
|
(844)
|
|
|
$
|
(4,460)
|
|
Less:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
152
|
|
|
237
|
|
|
863
|
|
|
1,901
|
|
Net gain (loss) -
non-GAAP
|
$
|
76
|
|
|
$
|
(1,172)
|
|
|
$
|
19
|
|
|
$
|
(2,559)
|
|
Reconciliation of
GAAP EPS to Non-GAAP EPS (Unaudited)
|
|
|
Three Months
Ended
January 31,
|
|
Nine Months
Ended
January 31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
EPS – GAAP
|
$
|
(0.01)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.32)
|
|
Less:
|
|
|
|
|
|
|
|
Effect of stock-based
compensation on EPS
|
0.01
|
|
|
0.02
|
|
|
0.06
|
|
|
0.17
|
|
EPS -
non-GAAP
|
$
|
—
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.15)
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
Three Months
Ended
January 31,
|
|
Nine Months
Ended
January 31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
TOS operating
revenue
|
4,823
|
|
|
3,218
|
|
|
14,242
|
|
|
10,337
|
|
POS operating
revenue
|
$
|
259
|
|
|
$
|
347
|
|
|
$
|
1,077
|
|
|
$
|
1,354
|
|
Total operating
revenue
|
$
|
5,082
|
|
|
$
|
3,565
|
|
|
$
|
15,319
|
|
|
$
|
11,691
|
|
Cost of
TOS
|
2,253
|
|
|
2,086
|
|
|
6,866
|
|
|
5,965
|
|
Cost of
POS
|
220
|
|
|
320
|
|
|
871
|
|
|
1,167
|
|
Research and
development
|
1,045
|
|
|
998
|
|
|
3,308
|
|
|
3,217
|
|
Sales and
marketing
|
627
|
|
|
726
|
|
|
1,862
|
|
|
2,369
|
|
General and
administrative
|
1,004
|
|
|
836
|
|
|
3,167
|
|
|
3,393
|
|
Loss from
Operations
|
$
|
(67)
|
|
|
$
|
(1,401)
|
|
|
$
|
(755)
|
|
|
$
|
(4,420)
|
|
Other
(Expense)
|
(7)
|
|
|
(8)
|
|
|
(71)
|
|
|
(33)
|
|
Net Loss before
provision for income taxes
|
$
|
(74)
|
|
|
$
|
(1,409)
|
|
|
$
|
(826)
|
|
|
$
|
(4,453)
|
|
Income
taxes
|
(2)
|
|
|
—
|
|
|
(18)
|
|
|
7
|
|
Net
Loss
|
$
|
(76)
|
|
|
$
|
(1,409)
|
|
|
$
|
(844)
|
|
|
$
|
(4,460)
|
|
Condensed
Consolidated Balance Sheets as of (Unaudited)
|
|
|
January 31,
2018
|
|
April
30,
2017
|
Cash and cash
equivalents
|
$
|
1,062
|
|
|
$
|
3,295
|
|
Accounts
receivable
|
2,942
|
|
|
2,274
|
|
Other current
assets
|
185
|
|
|
300
|
|
Total current
assets
|
4,189
|
|
|
5,869
|
|
|
|
|
|
Restricted
cash
|
150
|
|
|
150
|
|
Property and
equipment, net
|
1,980
|
|
|
1,216
|
|
Other long term
assets
|
107
|
|
|
107
|
|
Goodwill
|
669
|
|
|
669
|
|
Total
assets
|
$
|
7,095
|
|
|
$
|
8,011
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
2,326
|
|
|
$
|
2,537
|
|
Deferred
revenue
|
3,851
|
|
|
4,910
|
|
Total current
liabilities
|
6,177
|
|
|
7,447
|
|
|
|
|
|
Other Non-current
Liability
|
446
|
|
|
164
|
|
Stockholders'
equity
|
472
|
|
|
400
|
|
Total liabilities
and stockholders' equity
|
$
|
7,095
|
|
|
$
|
8,011
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
Nine Months
Ended
January 31,
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
Net Loss
|
$
|
(844)
|
|
|
$
|
(4,460)
|
|
Adjustments to
reconcile net cash used in operations:
|
|
|
|
Stock-based
compensation expense
|
848
|
|
|
1,901
|
|
Issuance of common
stock for services
|
15
|
|
|
20
|
|
Depreciation and
amortization expense
|
253
|
|
|
127
|
|
Changes in operating
assets and liabilities
|
(1,507)
|
|
|
(826)
|
|
Net cash used in
operating activities
|
(1,235)
|
|
|
(3,238)
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(1,017)
|
|
|
(181)
|
|
Net cash used in
investing activities:
|
(1,017)
|
|
|
(181)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Public Offering June
2016, net of financing costs of $742,000
|
—
|
|
|
4,340
|
|
Proceeds from the
exercise of stock options
|
38
|
|
|
—
|
|
Capital lease
payments
|
(19)
|
|
|
(18)
|
|
Net cash provided
by financing activities:
|
19
|
|
|
4,322
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
(2,233)
|
|
|
903
|
|
Cash and cash
equivalents, beginning of period
|
3,295
|
|
|
2,585
|
|
Cash and cash
equivalents, end of period
|
$
|
1,062
|
|
|
$
|
3,488
|
|
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content:http://www.prnewswire.com/news-releases/champions-oncology-reports-quarterly-revenue-of-51-million-300614855.html
SOURCE Champions Oncology, Inc.