Fulgent Genetics, Inc. (NASDAQ: FLGT) (“Fulgent” or the “company”),
a technology company providing large-scale COVID-19 testing
services and comprehensive testing solutions through its scalable
technology platform, today announced financial results for its
fourth quarter and full year ended December 31, 2020.
Fourth quarter revenue was $295.0 million, an increase of 3,400%
from $8.4 million in the fourth quarter of 2019. GAAP income for
the fourth quarter of 2020 was $166.3 million, or $6.16 per share,
and non-GAAP income was $167.5 million, or $6.20 per share.
Full year 2020 revenue was $421.7 million, an increase of 1,200%
from $32.5 million in 2019. GAAP income for the full year 2020 was
$214.3 million, or $8.91 per share, and non-GAAP income was $218.9
million, or $9.10 per share.
Adjusted EBITDA was $230.1 million in the fourth quarter of
2020, compared to $1.1 million in the fourth quarter of 2019.
Adjusted EBITDA was $301.3 million in the full year 2020, compared
to $4.9 million in 2019.
Non-GAAP income (loss) and adjusted EBITDA are described below
under “Note Regarding Non-GAAP Financial Measures” and are
reconciled to the most directly comparable GAAP financial measure,
GAAP income (loss), in the accompanying tables.
For the first quarter of 2021, the company expects to generate
revenue of at least $325.0 million. For the full year 2021, the
company expects revenue of approximately $800.0 million, which
would represent growth of 90% year-over-year. The company
anticipates that of this $800.0 million, approximately $70.0
million will be realized from Next Generation Sequencing (“NGS”)
testing, and the remaining $730.0 million will be realized from
non-NGS testing. The company also expects to drive strong gross and
operating margins by leveraging the company’s proprietary
technology platform, which would generate GAAP income of
approximately $380.0 million, or more than $12.00 per share, and
non-GAAP income of approximately $12.50 per share for the year.
Ming Hsieh, Chairman and Chief Executive Officer, said, “Our
record fourth quarter results capped off a transformational year
for Fulgent Genetics. While we did not envision 2020 to unfold in
the way that it did, I am proud of our team for supporting the
pivot of our business to rapidly scale to become one of the top
providers of COVID-19 testing in the country. The results we
achieved were possible because of our differentiated technology
platform built over the ten years since our founding. While the
majority of our business this year was from COVID-19 testing, we
believe we have laid a very strong foundation for continued growth
in the years ahead. This year we made inroads with numerous new
customers, established new reimbursement agreements, expanded our
capacity and commercial capabilities, and have grown our
direct-to-consumer genetic testing platform, Picture Genetics. We
have also begun utilizing our NGS based COVID testing capabilities
to aid in identification and screening of potential new strains and
mutations of the virus. And finally, we have taken a novel approach
to licensing our lab management software solutions and are offering
a new COVID vaccine management software platform, which will
continue to aid in recovery from the pandemic. I believe we are
extremely well positioned in the years ahead as vaccine rollout
continues and our lives return to a state of normalcy.”
Paul Kim, Chief Financial Officer, said, “Despite the challenges
created by the pandemic this year, we were pleased with our ability
to execute and grow our core business while aggressively scaling
our COVID-19 testing capabilities. This resulted in overall revenue
growth of approximately 1,200% for the year, far exceeding our
expectations and guidance, while our non-COVID business grew 43%
year-over-year in the fourth quarter. Despite the second wave of
lockdowns that we experienced in the fourth quarter, our team was
able to process approximately 3.2 million tests in the quarter and
more than 4.4 million tests in the year, compared to 59,000 tests
in all of 2019. We continued to demonstrate improving leverage in
the quarter with record gross margin of 82% and operating margin of
77%, while generating non-GAAP income of $6.20 per share in the
quarter. We remain optimistic about our positioning for the
quarters ahead and expect to see revenue growth of at least 90% for
the full year 2021. We will provide a formal update during our
investment community conference call to shortly follow the issuance
of this press release.”
Conference Call Information
Fulgent Genetics will host a conference call for the investment
community today at 4:30 PM ET (1:30 PM PT) to discuss its fourth
quarter and full year 2020 results. Press and industry analysts are
invited to attend in listen-only mode.
The call can be accessed through a live audio webcast in the
Investors section of the company’s website,
http://ir.fulgentgenetics.com, and through a live conference call
by dialing (855) 321-9535 using the conference ID 7669989. An audio
replay will be available in the Investors section of the company’s
website or by calling (855) 859-2056 using passcode 7669989 through
March 11, 2021.
Note Regarding Non-GAAP Financial Measures
Certain of the information set forth in this press release,
including non-GAAP income (loss), non-GAAP income per share and
adjusted EBITDA, are non-GAAP financial measures. Fulgent Genetics
believes this information is useful to investors because it
provides a basis for measuring the performance of the company’s
business excluding certain income or expense items that management
believes are not directly attributable to the company’s core
operating results. Fulgent Genetics defines non-GAAP income (loss)
as income (loss) calculated in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”), plus or minus provisions (benefits) for income taxes,
plus equity-based compensation expenses, plus or minus the non-GAAP
tax effect, plus or minus equity (loss) earnings in investee, plus
impairment loss in equity-method investments, and plus or minus
other charges or gains, as identified, that management believes are
not representative of the company’s core operations. The non-GAAP
tax effect is calculated by applying statutory corporate tax rate
on GAAP income (loss) before equity-based compensation expenses,
provisions (benefits) for income taxes, equity earnings (loss) in
investee and impairment loss in equity-method investments. Fulgent
Genetics defines adjusted EBITDA as GAAP income (loss) plus or
minus interest expense (income), plus or minus provisions
(benefits) for income taxes, plus depreciation, plus equity-based
compensation expenses, plus or minus equity (loss) earnings in
investee, plus impairment loss in equity-method investments, and
plus or minus other charges or gains, as identified, that
management believes are not representative of the company’s core
operations.
Fulgent Genetics may continue to incur expenses similar to the
items added to or subtracted from GAAP income (loss) to calculate
non-GAAP income (loss) and adjusted EBITDA; accordingly, the
exclusion of these items in the presentation of these non-GAAP
financial measures should not be construed as an implication that
these items are unusual, infrequent or non-recurring. Management
uses these non-GAAP financial measures along with the most directly
comparable GAAP financial measure of income (loss) in evaluating
the company's operating performance. Non-GAAP financial measures
should not be considered in isolation from, or as a substitute for,
financial information presented in conformity with GAAP, and
non-GAAP financial measures as reported by Fulgent Genetics may not
be comparable to similarly titled metrics reported by other
companies.
About Fulgent Genetics
Fulgent Genetics’ proprietary technology platform has created a
broad, flexible test menu and the ability to continually expand and
improve its proprietary genetic reference library while maintaining
accessible pricing, high accuracy and competitive turnaround times.
Combining NGS with its technology platform, the Company performs
full-gene sequencing with deletion/duplication analysis in an array
of panels that can be tailored to meet specific customer needs. In
2019, the Company launched its first patient-initiated product,
Picture Genetics, a new line of at-home screening tests that
combines the Company’s advanced NGS solutions with actionable
results and genetic counseling options for individuals. Since March
2020, the Company has commercially launched several tests for the
detection of SARS-CoV-2, the virus that causes the novel
coronavirus (“COVID-19”), including NGS and reverse transcription
polymerase chain reaction (“RT-PCR”) - based tests. The Company has
received Emergency Use Authorization (“EUA”) from the U.S.
Food and Drug Administration (“FDA”) for the RT-PCR-based tests for
the detection of SARS-CoV-2 using upper respiratory specimens
(nasal, nasopharyngeal, and oropharyngeal swabs) and for the
at-home testing service through Picture Genetics. A cornerstone of
the Company’s business is its ability to provide expansive options
and flexibility for all clients’ unique testing needs through a
comprehensive technology offering including cloud computing,
pipeline services, record management, web portal services, clinical
workflow, sequencing as a service and automated laboratory
services.
About Picture Genetics
Through its Picture Genetics platform launched in 2019, Fulgent
Genetics offers consumers direct access to its advanced genetic
testing and analytics capabilities from the ease and comfort of
home, at an affordable price point. The Picture Genetics platform
provides a holistic approach to at-home genetic screening by
including oversight from independent physicians as well as genetic
counseling options to complement Fulgent Genetics’ comprehensive
genetic testing analysis. The Picture Genetics platform currently
offers multiple tests, providing medically actionable,
clinical-level results with professional medical follow-up in one
easy process. Visit www.picturegenetics.com for more
information.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Examples of forward-looking statements in this press release
include statements about, among other things: expected future
revenues, sources of revenue, growth, margins, GAAP income and
company performance, including the company’s and its technology
platform’s ability to scale; evaluations and judgments regarding
momentum, partnerships, relationships and the company’s testing
services and technology; the timing, commercial success and impact
on the company’s results of new product launches and other
initiatives; the company’s identification and evaluation of
opportunities and its ability to capitalize on opportunities,
capture market share; and the company’s ability to continue to grow
its business.
Forward-looking statements are statements other than historical
facts and relate to future events or circumstances or the company’s
future performance, and they are based on management’s current
assumptions, expectations and beliefs concerning future
developments and their potential effect on the company’s business.
These forward-looking statements are subject to a number of risks
and uncertainties, which may cause the forward-looking events and
circumstances described in this press release to not occur, and
actual results to differ materially and adversely from those
described in or implied by the forward-looking statements. These
risks and uncertainties include, among others: the ongoing impacts
of the COVID-19 pandemic, including the preventive public health
measures that may continue to impact demand for its tests and the
pandemic’s effects on the global supply chain; the market potential
for, and the rate and degree of market adoption of, the company’s
tests, including its newly-developed tests for COVID-19 and genetic
testing generally; the company’s ability to capture a sizable share
of the developing market for genetic and COVID-19 testing and to
compete successfully in these markets, including its ability to
continue to develop new tests that are attractive to its various
customer markets, its ability to maintain turnaround times and
otherwise keep pace with rapidly changing technology; the company’s
ability to maintain the low internal costs of its business model,
particularly as the company makes investments across its business;
the company’s ability to maintain an acceptable margin on sales of
its tests, particularly in light of increasing competitive
pressures and other factors that may continue to reduce the
company’s sale prices for and margins on its tests; risks related
to volatility in the company’s results, which can fluctuate
significantly from period to period; risks associated with the
composition of the company’s customer base, which can fluctuate
from period to period and can be comprised of a small number of
customers that account for a significant portion of the company’s
revenue; the company’s ability to grow and diversify its customer
base and increase demand from existing and new customers; the
company’s investments in its infrastructure, including its sales
organization and operational capabilities, and the extent to which
these investments impact the company’s business and performance and
enable it to manage any growth it may experience in future periods;
the company’s level of success in obtaining coverage and adequate
reimbursement and collectability levels from third-party payors for
its tests; the company’s level of success in establishing and
obtaining the intended benefits from partnerships, joint ventures
or other relationships; the company’s compliance with the various
evolving and complex laws and regulations applicable to its
business and its industry; risks associated with the company’s
international operations; the company’s ability to protect its
proprietary technology platform; and general industry, economic,
political and market conditions. As a result of these risks and
uncertainties, forward-looking statements should not be relied on
or viewed as predictions of future events.
The forward-looking statements made in this press release speak
only as of the date of this press release, and the company assumes
no obligation to update publicly any such forward-looking
statements to reflect actual results or to changes in expectations,
except as otherwise required by law.
The company’s reports filed with the U.S. Securities and
Exchange Commission (“SEC”), including its annual report on Form
10-K for the year ended December 31, 2019 filed with the SEC on
March 13, 2020 and the other reports it files from time to time,
including subsequently filed quarterly and current reports, are
made available on the company’s website upon their filing with the
SEC. These reports contain more information about the company, its
business and the risks affecting its business, as well as its
results of operations for the periods covered by the financial
results included in this press release. In particular, you are
encouraged to review the company’s annual report on Form 10-K for
the year ended December 31, 2020 for any revisions or updates to
the information in this release.
Investor Relations Contact:The Blueshirt GroupNicole Borsje,
415-217-2633, nicole@blueshirtgroup.com
FULGENT GENETICS, INC. |
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET DATA |
|
December 31, 2020
and 2019 |
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
December 31, |
|
ASSETS: |
2020 |
|
|
2019 |
|
Cash and cash equivalents |
$ |
87,426 |
|
|
$ |
11,965 |
|
Investments in marketable
securities |
|
344,443 |
|
|
|
58,251 |
|
Accounts receivable, net |
|
183,857 |
|
|
|
6,555 |
|
Property and equipment,
net |
|
40,199 |
|
|
|
5,974 |
|
Other assets |
|
44,536 |
|
|
|
6,011 |
|
Total assets |
$ |
700,461 |
|
|
$ |
88,756 |
|
|
|
|
|
|
|
|
|
LIABILITIES &
EQUITY: |
|
|
|
|
|
|
|
Accounts payable, accrued
liabilities and other liabilities |
$ |
131,074 |
|
|
$ |
5,979 |
|
Total stockholders’
equity |
|
569,387 |
|
|
|
82,777 |
|
Total liabilities &
equity |
$ |
700,461 |
|
|
$ |
88,756 |
|
|
|
|
|
|
|
|
|
FULGENT GENETICS, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS DATA |
|
|
|
|
|
|
|
|
|
Three and
Twelve Months Ended December 31, 2020 and 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
$ |
294,978 |
|
|
$ |
8,387 |
|
|
$ |
421,712 |
|
|
$ |
32,528 |
|
Cost of revenue (1) |
|
51,772 |
|
|
|
3,634 |
|
|
|
89,807 |
|
|
|
14,107 |
|
Gross profit |
|
243,206 |
|
|
|
4,753 |
|
|
|
331,905 |
|
|
|
18,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development (1) |
|
4,576 |
|
|
|
1,795 |
|
|
|
11,580 |
|
|
|
6,537 |
|
Selling and marketing (1) |
|
5,081 |
|
|
|
1,635 |
|
|
|
14,952 |
|
|
|
5,898 |
|
General and administrative (1) |
|
7,640 |
|
|
|
1,732 |
|
|
|
15,215 |
|
|
|
6,414 |
|
Total operating expenses |
|
17,297 |
|
|
|
5,162 |
|
|
|
41,747 |
|
|
|
18,849 |
|
Operating income (loss) |
|
225,909 |
|
|
|
(409 |
) |
|
|
290,158 |
|
|
|
(428 |
) |
Interest and other income,
net |
|
589 |
|
|
|
249 |
|
|
|
1,526 |
|
|
|
837 |
|
Income (loss) before income
taxes, equity earnings (loss) in investee and impairment loss |
|
226,498 |
|
|
|
(160 |
) |
|
|
291,684 |
|
|
|
409 |
|
Provisions (benefits) for income
taxes |
|
58,571 |
|
|
|
(38 |
) |
|
|
72,532 |
|
|
|
43 |
|
Income (loss) before equity
earnings (loss) in investee and impairment loss |
|
167,927 |
|
|
|
(122 |
) |
|
|
219,152 |
|
|
|
366 |
|
Equity earnings (loss) in
investee |
|
143 |
|
|
|
(174 |
) |
|
|
(488 |
) |
|
|
(777 |
) |
Impairment loss in equity-method
investments |
|
(1,763 |
) |
|
|
— |
|
|
|
(4,354 |
) |
|
|
— |
|
Net income (loss) |
$ |
166,307 |
|
|
$ |
(296 |
) |
|
$ |
214,310 |
|
|
$ |
(411 |
) |
Net income (loss) per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
6.55 |
|
|
$ |
(0.01 |
) |
|
$ |
9.44 |
|
|
$ |
(0.02 |
) |
Diluted |
$ |
6.16 |
|
|
$ |
(0.01 |
) |
|
$ |
8.91 |
|
|
$ |
(0.02 |
) |
Weighted average common
shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
25,399 |
|
|
|
19,984 |
|
|
|
22,694 |
|
|
|
18,709 |
|
Diluted |
|
27,015 |
|
|
|
19,984 |
|
|
|
24,056 |
|
|
|
18,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Equity-based compensation expense was
allocated as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
$ |
523 |
|
|
$ |
193 |
|
|
$ |
1,452 |
|
|
$ |
676 |
|
Research and development |
|
1,130 |
|
|
|
334 |
|
|
|
2,693 |
|
|
|
1,024 |
|
Selling and marketing |
|
515 |
|
|
|
202 |
|
|
|
2,092 |
|
|
|
845 |
|
General and
administrative |
|
835 |
|
|
|
209 |
|
|
|
1,920 |
|
|
|
664 |
|
Total equity-based
compensation expense |
$ |
3,003 |
|
|
$ |
938 |
|
|
$ |
8,157 |
|
|
$ |
3,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FULGENT GENETICS, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income
Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three and
Twelve Months Ended December 31, 2020 and 2019 |
|
|
|
|
|
|
|
|
|
(in thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net income (loss) |
$ |
166,307 |
|
|
$ |
(296 |
) |
|
$ |
214,310 |
|
|
$ |
(411 |
) |
Provisions (benefits) for income
taxes |
|
58,571 |
|
|
|
(38 |
) |
|
|
72,532 |
|
|
|
43 |
|
Equity-based compensation
expense |
|
3,003 |
|
|
|
938 |
|
|
|
8,157 |
|
|
|
3,209 |
|
Non-GAAP tax effect (1) |
|
(61,965 |
) |
|
|
— |
|
|
|
(80,957 |
) |
|
|
— |
|
Equity (earnings) loss in
investee |
|
(143 |
) |
|
|
174 |
|
|
|
488 |
|
|
|
777 |
|
Impairment loss in equity-method
investments |
|
1,763 |
|
|
|
— |
|
|
|
4,354 |
|
|
|
— |
|
Non-GAAP income |
$ |
167,536 |
|
|
$ |
778 |
|
|
$ |
218,884 |
|
|
$ |
3,618 |
|
Net income (loss) per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
6.55 |
|
|
$ |
(0.01 |
) |
|
$ |
9.44 |
|
|
$ |
(0.02 |
) |
Diluted |
$ |
6.16 |
|
|
$ |
(0.01 |
) |
|
$ |
8.91 |
|
|
$ |
(0.02 |
) |
Non-GAAP income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
6.60 |
|
|
$ |
0.04 |
|
|
$ |
9.65 |
|
|
$ |
0.19 |
|
Diluted |
$ |
6.20 |
|
|
$ |
0.04 |
|
|
$ |
9.10 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
25,399 |
|
|
|
19,984 |
|
|
|
22,694 |
|
|
|
18,709 |
|
Diluted |
|
27,015 |
|
|
|
19,984 |
|
|
|
24,056 |
|
|
|
18,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax rates as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate tax rate
of 27% for the three and twelve months ended December 31,
2020. |
|
Corporate tax rate
of zero for the three and twelve months ended December 31, 2019 due
to full valuation allowance. |
|
FULGENT GENETICS, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted
EBITDA Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three and
Twelve Months Ended December 31, 2020 and 2019 |
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net income (loss) |
$ |
166,307 |
|
|
$ |
(296 |
) |
|
$ |
214,310 |
|
|
$ |
(411 |
) |
Interest income, net |
|
(540 |
) |
|
|
(252 |
) |
|
|
(1,539 |
) |
|
|
(871 |
) |
Provisions (benefits) for income
taxes |
|
58,571 |
|
|
|
(38 |
) |
|
|
72,532 |
|
|
|
43 |
|
Equity-based compensation
expense |
|
3,003 |
|
|
|
938 |
|
|
|
8,157 |
|
|
|
3,209 |
|
Depreciation |
|
1,122 |
|
|
|
558 |
|
|
|
2,962 |
|
|
|
2,107 |
|
Equity (earnings) loss in
investee |
|
(143 |
) |
|
|
174 |
|
|
|
488 |
|
|
|
777 |
|
Impairment loss in
equity-method investments |
|
1,763 |
|
|
|
— |
|
|
|
4,354 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
230,083 |
|
|
$ |
1,084 |
|
|
$ |
301,264 |
|
|
$ |
4,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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