Chembio Diagnostics Reports First Quarter 2020 Financial Results
May 04 2020 - 4:05PM
Chembio Diagnostics, Inc. (Nasdaq: CEMI), a leading point-of-care
diagnostics company focused on infectious diseases, today reported
financial results for the quarter ended March 31, 2020.
Recent Accomplishments & Highlights
- Attained FDA Emergency Use Authorization for the DPP COVID-19
IgM/IgG System serological test• Announced the U.S. launch and
shipments to customers of the DPP COVID-19 System• Selected by
Stony Brook Medicine as the testing solution to identify COVID-19
survivors for study on COVID-19 convalescent plasma
therapy• Received a $4.0 million purchase order from
Bio-Manguinhos for our DPP COVID-19 System
- Completed the reproducibility study and submitted data to the
FDA for our DPP HIV-Syphilis test
- Appointed Richard Eberly as President and Chief Executive
Officer and director and appointed Gail Page as Executive Chair of
the Board
- Achieved total revenue of $6.9 million and product revenue of
$5.7 million
“During the first quarter, we refocused our business strategy to
address the escalating need for COVID-19 diagnostic tests. In a
short period of time, we developed a COVID-19 serological testing
system, received FDA Emergency Use Authorization and began shipping
tests to customers in the United States and Brazil in April. Our
differentiated testing system offers numerical discrete detection
of both IgM and IgG antibodies in approximately 15 minutes from a
fingerstick. Then, in approximately 15 seconds, the DPP COVID-19
System reads the test to provide numerical results using the
portable Micro Reader analyzers that are engineered and produced by
our wholly owned subsidiary in Germany. Numerical results reduce
the possibility of the types of human error that can be experienced
in the visual interpretations required by many other serological
tests,” said Gail Page, Chembio’s Executive Chair of the Board. “We
are proud to be serving the needs of clinicians and the broader
healthcare community in this time of crisis.”
“It has been an extremely productive first few weeks in my new
role as CEO. Amid these challenging circumstances, the skill and
hard work of this team has enabled a successful strategic pivot as
we prioritize manufacturing and commercialization of our DPP
COVID-19 System,” said Richard Eberly, Chembio’s Chief Executive
Officer. “Through efficient use of our resources and technical
ability, we are scaling production of these tests due to the strong
demand we are experiencing. We believe the features and benefits
offered by our DPP COVID-19 System will make it a preferred
solution.”
First Quarter 2020 Financial ResultsTotal
revenue for the first quarter of 2020 was $6.9 million, a decrease
of 20% compared to the prior year period. Net product sales for the
first quarter of 2020 were $5.7 million, a decrease of 14% compared
to the prior year period. License and royalty revenue together with
R&D and grant revenue for the first quarter of 2020 was $1.1
million, a decrease of 40% compared to the prior year period.
Gross product margin for the first quarter of 2020 was $1.3
million, compared to $1.6 million for the prior year period. Gross
product margin percentage for the first quarter of 2020 was 23.5%,
compared to 24.3% for the prior year period, a decrease resulting
primarily from unfavorable average selling prices due to geographic
mix.
Research and development expenses decreased by $0.3 million, or
12%, for the first quarter of 2020 compared to the prior year
period. Selling, general and administrative expenses increased by
$0.5 million, or 12%, for the first quarter of 2020 compared to the
prior year period, with $0.4 million of the increase representing
severance and related costs and acquisition costs, for a net
increase of $0.1 million, or 4%.
Net loss for the first quarter of 2020 was $5.0 million, or
$(0.29) per diluted share, compared to a net loss of $2.8 million,
or $(0.16) per diluted share, for the prior year period.
Cash and cash equivalents as of March 31, 2020 totaled $11.2
million.
Conference CallChembio will host a conference
call today beginning at 4:30 pm ET to discuss its financial results
and recent business highlights. Investors interested in listening
to the call may do so by dialing 844-602-0380 from the United
States or 862-298-0970 from outside the United States. To listen to
a live webcast of the call, please visit the Investor Relations
section of Chembio's website at www.chembio.com. Following the
call, a replay will be available on the Investor Relations section
of Chembio’s website for 90 days. A telephone replay will be
available until 4:30 pm ET on May 18, 2020 by dialing 877-481-4010
from the United States or 919-882-2331 from outside the United
States and using the conference ID: 34409.
About Chembio DiagnosticsChembio is a leading
point-of-care diagnostics company focused on detecting and
diagnosing infectious diseases including COVID-19, sexually
transmitted disease and fever and tropical disease. Chembio’s
patented DPP technology platform, which uses a small drop of blood
from the fingertip, provides high-quality, cost-effective results
in approximately 15 minutes. Coupled with Chembio’s extensive
scientific expertise, its novel DPP technology offers broad market
applications beyond infectious disease. Chembio’s products are sold
globally, directly and through distributors, to hospitals and
clinics, physician offices, clinical laboratories, public health
organizations, government agencies and consumers. Learn more at
www.chembio.com.
Forward-Looking StatementsStatements contained
in this release 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 Chembio and
its management. Such statements reflect management's current views,
are based on certain assumptions, and involve risks and
uncertainties. Actual results, events, or performance may differ
materially from forward-looking statements due to a number of
important factors, and will be dependent upon a variety of factors,
including, but not limited to: the impact to our business, our
suppliers and our customers of the COVID-19 pandemic and the
actions taken to combat the COVID-19 pandemic; the ability of
Chembio to maintain existing, and timely obtain additional,
regulatory approvals, particularly for our DPP COVID-19 System; and
the risks of doing business with foreign governmental entities,
including geopolitical, international and other challenges as well
as potential material adverse effects of tariffs and other changes
in U.S. trade policy. Chembio undertakes no obligation to publicly
update forward-looking statements in this release to reflect events
or circumstances that occur after the date hereof or to reflect any
change in Chembio's expectations with regard to the forward-looking
statements or the occurrence of unanticipated events. Factors that
may impact Chembio's success are more fully disclosed in Chembio's
public filings with the U.S. Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended
December 31, 2019 and its subsequent Quarterly Reports on Form
10-Q, particularly under the heading “Risk Factors.” You should
interpret many of the risks identified in these reports as being
heightened as a result of the ongoing and numerous adverse impacts
of the COVID-19 pandemic.
DPP is Chembio’s registered trademark. For convenience, this
trademark appears in this release without ® symbols, but that
practice does not mean that Chembio will not assert, to the fullest
extent under applicable law, its rights to the trademark.
Investor Relations ContactLynn Pieper
LewisGilmartin Group(415) 937-5402investor@chembio.com
CHEMBIO DIAGNOSTICS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited) |
|
|
|
|
|
For the three months ended |
|
March 31, 2020 |
|
March 31, 2019 |
REVENUES: |
|
|
|
Net product revenue |
$ |
5,716,593 |
|
|
$ |
6,624,285 |
|
R&D and grant revenue |
|
907,687 |
|
|
|
1,701,789 |
|
License and royalty
revenue |
|
235,304 |
|
|
|
216,191 |
|
TOTAL
REVENUES |
|
6,859,584 |
|
|
|
8,542,265 |
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
Cost of product revenue |
|
4,374,442 |
|
|
|
5,011,636 |
|
Research and development
expenses |
|
1,958,853 |
|
|
|
2,217,632 |
|
Selling, general and
administrative expenses |
|
4,156,641 |
|
|
|
4,013,071 |
|
Severance and related
costs |
|
723,118 |
|
|
|
- |
|
Acquisition costs |
|
63,497 |
|
|
|
395,612 |
|
|
|
11,276,551 |
|
|
|
11,637,951 |
|
LOSS FROM
OPERATIONS |
|
(4,416,967 |
) |
|
|
(3,095,686 |
) |
|
|
|
|
OTHER
INCOME: |
|
|
|
Interest (expense) income,
net |
|
(662,141 |
) |
|
|
6,684 |
|
|
|
|
|
LOSS BEFORE INCOME
TAXES |
|
(5,079,108 |
) |
|
|
(3,089,002 |
) |
|
|
|
|
Income tax (benefit) |
|
(79,559 |
) |
|
|
(272,469 |
) |
|
|
|
|
NET LOSS |
$ |
(4,999,549 |
) |
|
$ |
(2,816,533 |
) |
|
|
|
|
Basic and Diluted loss
per share |
$ |
(0.29 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
Weighted-average
number of shares outstanding, basic |
|
17,197,301 |
|
|
|
17,166,459 |
|
|
|
|
|
Weighted-average
number of shares outstanding, diluted |
|
17,197,301 |
|
|
|
17,166,459 |
|
|
|
|
|
|
|
|
|
CHEMBIO DIAGNOSTICS, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
AS OF |
|
|
|
|
|
(Unaudited)March 31, 2020 |
|
December 31, 2019 |
- ASSETS - |
|
|
|
CURRENT
ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
11,238,017 |
|
|
$ |
18,271,352 |
|
Accounts receivable, net |
|
4,877,842 |
|
|
|
3,661,325 |
|
Inventories, net |
|
10,930,159 |
|
|
|
9,598,030 |
|
Prepaid expenses and other
current assets |
|
798,228 |
|
|
|
693,013 |
|
TOTAL CURRENT
ASSETS |
|
27,844,246 |
|
|
|
32,223,720 |
|
|
|
|
|
|
|
|
|
FIXED
ASSETS: |
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
6,659,279 |
|
|
|
5,933,569 |
|
Finance lease right-of-use
asset |
|
226,305 |
|
|
|
210,350 |
|
TOTAL FIXED ASSETS,
net |
|
6,885,584 |
|
|
|
6,143,919 |
|
|
|
|
|
|
|
|
|
OTHER
ASSETS: |
|
|
|
|
|
|
|
Operating lease right-of-use
asset, net |
|
6,785,668 |
|
|
|
7,030,744 |
|
Intangible assets, net |
|
3,655,858 |
|
|
|
3,914,352 |
|
Goodwill |
|
5,493,045 |
|
|
|
5,872,690 |
|
Deposits and other assets |
|
528,261 |
|
|
|
543,539 |
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
$ |
51,192,662 |
|
|
$ |
55,728,964 |
|
|
|
|
|
|
|
|
|
- LIABILITIES AND STOCKHOLDERS’ EQUITY - |
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
$ |
6,536,134 |
|
|
$ |
5,526,243 |
|
Deferred revenue |
|
543,345 |
|
|
|
125,000 |
|
Note payable |
|
112,928 |
|
|
|
180,249 |
|
Finance lease liabilities |
|
47,192 |
|
|
|
41,894 |
|
Operating lease
liabilities |
|
766,896 |
|
|
|
568,294 |
|
TOTAL CURRENT
LIABILITIES |
|
8,006,495 |
|
|
|
6,441,680 |
|
|
|
|
|
|
|
|
|
OTHER
LIABILITIES: |
|
|
|
|
|
|
|
Long-term operating lease
liabilities |
|
6,770,005 |
|
|
|
6,969,603 |
|
Long-term finance lease
liabilities |
|
184,095 |
|
|
|
171,953 |
|
Long-Term debt, less current
portion, and debt discount and issuance costs |
|
17,771,268 |
|
|
|
17,644,149 |
|
Deferred tax liability |
|
327,542 |
|
|
|
466,326 |
|
TOTAL
LIABILITIES |
|
33,059,405 |
|
|
|
31,693,711 |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
|
|
Preferred stock – 10,000,000
shares authorized, none outstanding |
|
- |
|
|
|
- |
|
Common stock - $0.01 par
value; 100,000,000 shares authorized, 17,327,235 shares and
17,733,617 shares issued at March 31, 2020 and December 31, 2019,
respectively |
|
173,272 |
|
|
|
177,335 |
|
Additional paid-in
capital |
|
95,543,043 |
|
|
|
95,433,077 |
|
Accumulated deficit |
|
(76,584,552 |
) |
|
|
(71,585,003 |
) |
Treasury Stock, 31,486 shares
at cost |
|
(145,056 |
) |
|
|
- |
|
Accumulated other
comprehensive (loss) income |
|
(853,450 |
) |
|
|
9,844 |
|
TOTAL STOCKHOLDERS’
EQUITY |
|
18,133,257 |
|
|
|
24,035,253 |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
51,192,662 |
|
|
$ |
55,728,964 |
|
|
|
|
|
CHEMBIO DIAGNOSTICS, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
|
For the three months ended |
|
March 31, 2020 |
|
March 31, 2019 |
|
|
|
|
Net cash used in operating activities |
$ |
(5,651,960 |
) |
|
$ |
(4,754,878 |
) |
Net cash used in
investing activities |
|
(1,078,271 |
) |
|
|
(577,472 |
) |
Net cash provided by
financing activities |
|
(223,290 |
) |
|
|
(29,930 |
) |
Effect of exchange
rate changes on cash |
|
(79,814 |
) |
|
|
208,407 |
|
DECREASE IN CASH AND
CASH EQUIVALENTS |
|
(7,033,335 |
) |
|
|
(5,153,873 |
) |
Cash and cash equivalents -
beginning of the period |
|
18,271,352 |
|
|
|
12,524,551 |
|
Cash and cash
equivalents - end of the period |
$ |
11,238,017 |
|
|
$ |
7,370,678 |
|
|
|
|
|
|
|
|
|
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