Chembio Diagnostics Reports Second Quarter 2020 Financial Results
August 06 2020 - 3:05PM
Chembio Diagnostics, Inc. (Nasdaq: CEMI), a leading point-of-care
diagnostics company focused on infectious diseases, today reported
financial results for the quarter ended June 30, 2020.
Recent Accomplishments & Highlights
- Announced plans to seek U.S. Food and Drug Administration (FDA)
Emergency Use Authorization (EUA) approval for a revised DPP
COVID-19 IgM/IgG System in the third quarter and subsequently for
the DPP COVID-19 Antigen System
- Awarded BARDA contract for $628,071 to assist in the
development of, and an EUA application for, a DPP COVID-19 Antigen
System
- Received FDA 510(k) clearance for DPP Zika IgM System,
including the first FDA approval for the company’s Micro
Reader
- Received $1.5 million order from UNICEF for additional
multiplex DPP Zika, Chikungunya and Dengue Systems
- Strengthened the balance sheet with $28.4 million of net
proceeds raised in a public offering of common stock
“Despite challenging circumstances in the quarter, we are
optimistic that our scientific expertise and platform flexibility
will allow us to develop additional high quality, easy to use
point-of-care COVID-19 tests that will contribute to the
decentralization of testing. Central laboratories are currently
facing extreme testing volumes that are creating delays in
returning results to patients and our technology can contribute to
improving the current situation,” said Richard Eberly, Chembio’s
President and Chief Executive Officer. “I am proud of the
resiliency and dedication of our team over the past months. We are
excited about the opportunities ahead of us.”
The DPP COVID-19 Antigen System has been funded in part with
Federal funds from the Department of Health and Human Services,
Office of the Assistant Secretary for Preparedness and Response;
Biomedical Advanced Research and Development Authority (BARDA),
under Contract No. 75A50120C00138.
Second Quarter 2020 Financial ResultsTotal
revenue for the second quarter of 2020 was $5.1 million, a decrease
of 48.3% compared to the prior year period. Financial results for
the second quarter of 2020 reflected the impact of the product
recall in the United States and the potential response by other
regulators following the FDA’s revocation of the EUA for Chembio’s
initial DPP COVID-19 IgM/IgG System. Net product sales for the
second quarter of 2020 were $3.8 million, a decrease of 56.8%
compared to the prior year period. License and royalty revenue and
R&D and grant revenue for the second quarter of 2020 totaled
$1.3 million, an increase of 19.7% compared to the prior year
period.
Gross product margin for the second quarter of 2020 was negative
$1.9 million, compared to $1.8 million for the prior year period.
Gross product margin percentage for the second quarter of 2020 was
negative 49.6%, compared to 20.4% for the prior year period. Gross
product margin in the second quarter of 2020 was impacted by the
cost of COVID-19 product returned by US customers and the cost of
COVID-19 product shipments outside the US for which revenue was not
recognized.
Research and development expenses decreased by $0.2 million, or
8.5%, in the second quarter of 2020 compared to the prior year
period. Selling, general and administrative expenses increased by
$0.3 million, or 7.3%, in the second quarter of 2020 compared to
the prior year period, primarily related to one-time period costs
and equity compensation costs.
Net loss for the second quarter of 2020 was $7.8 million, or
$0.42 per diluted share, compared to a net loss of $3.2 million, or
$0.19 per diluted share, for the prior year period.
Cash and cash equivalents as of June 30, 2020 totaled $36.4
million, including net proceeds of $28.4 million from the public
offering of common stock.
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 844-369-8770 from the United
States or 862-298-0840 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 August 20, 2020 by dialing
877-481-4010 from the United States or 919-882-2331 from outside
the United States and using the conference ID: 35830.
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. The company’s
proprietary DPP technology platform, which uses a small drop of
blood from the fingertip or alternative sample types, 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 the first sentence following the bulleted items under “Recent
Accomplishments & Highlights: above are not historical facts
and may be forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements regarding the intent, belief or
current expectations with respect to the further development of
COVID-19 tests. Such statements, which are expectations 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 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 following, any of which could be exacerbated even further by
the continuing COVID-19 outbreak in the United States and globally:
the ability of Chembio to maintain existing, and timely obtain
additional, regulatory approvals, particularly for its proposed DPP
COVID-19 diagnostic tests; Chembio’s dependence upon, and limited
experience with, COVID-19 diagnostic tests; the highly competitive
and rapidly developing market for testing solutions for COVID-19,
which includes a number of competing companies with strong
relationships with current and potential customers, including
governmental authorities, and with significantly greater financial
and other resources that are available to Chembio; 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.”
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 ContactPhilip
TaylorGilmartin Group(415) 937-5406investor@chembio.com
CHEMBIO DIAGNOSTICS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended |
|
For The Six Months Ended |
|
|
|
June 30, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
REVENUES: |
|
|
|
|
|
|
|
|
|
Net product sales |
|
|
$ |
3,791,574 |
|
|
$ |
8,785,041 |
|
|
$ |
9,508,166 |
|
|
$ |
15,409,336 |
|
R&D and grant revenue |
|
|
|
1,193,973 |
|
|
|
854,264 |
|
|
|
2,101,660 |
|
|
|
2,556,053 |
|
License and royalty
revenue |
|
|
|
125,625 |
|
|
|
248,831 |
|
|
|
360,929 |
|
|
|
465,022 |
|
TOTAL
REVENUES |
|
|
|
5,111,172 |
|
|
|
9,888,136 |
|
|
|
11,970,755 |
|
|
|
18,430,411 |
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
|
Cost of product sales |
|
|
|
5,670,737 |
|
|
|
6,989,975 |
|
|
|
10,045,179 |
|
|
|
12,001,611 |
|
Research and development
expenses |
|
|
|
1,922,306 |
|
|
|
2,101,020 |
|
|
|
3,881,159 |
|
|
|
4,318,652 |
|
Selling, general and
administrative expenses |
|
|
|
4,397,593 |
|
|
|
4,096,942 |
|
|
|
8,554,234 |
|
|
|
8,110,013 |
|
Severance, restructuring and
other related costs |
|
|
|
387,540 |
|
|
|
- |
|
|
|
1,110,658 |
|
|
|
- |
|
Acquisition Costs |
|
|
|
- |
|
|
|
- |
|
|
|
63,497 |
|
|
|
395,612 |
|
|
|
|
|
12,378,176 |
|
|
|
12,891,187 |
|
|
|
23,654,727 |
|
|
|
24,825,888 |
|
LOSS FROM
OPERATIONS |
|
|
|
(7,267,004 |
) |
|
|
(3,299,801 |
) |
|
|
(11,683,972 |
) |
|
|
(6,395,487 |
) |
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME: |
|
|
|
|
|
|
|
|
|
Interest (expense) income |
|
|
|
(712,052 |
) |
|
|
5,918 |
|
|
|
(1,374,192 |
) |
|
|
12,602 |
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME
TAXES |
|
|
|
(7,979,056 |
) |
|
|
(3,293,883 |
) |
|
|
(13,058,164 |
) |
|
|
(6,382,885 |
) |
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
|
|
(135,259 |
) |
|
|
(107,203 |
) |
|
|
(214,818 |
) |
|
|
(379,672 |
) |
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
|
$ |
(7,843,797 |
) |
|
$ |
(3,186,680 |
) |
|
$ |
(12,843,346 |
) |
|
$ |
(6,003,213 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
|
|
$ |
(0.42 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.71 |
) |
|
$ |
(0.36 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding, basic and diluted |
|
|
|
18,868,144 |
|
|
|
16,914,171 |
|
|
|
18,032,723 |
|
|
|
16,906,936 |
|
CHEMBIO DIAGNOSTICS, INC. AND
SUBSIDIARIES |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
AS OF |
|
|
(Unaudited) |
|
|
|
|
|
June 30, 2020 |
|
December 31, 2019 |
|
|
|
|
|
|
|
- ASSETS - |
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
36,427,468 |
|
$ |
18,271,352 |
|
Accounts
receivable, net of allowance for doubtful accounts of $156,000 and
$62,000 as of June 30, 2020 and December 31, 2019,
respectively |
|
2,610,587 |
|
3,661,325 |
|
Inventories,
net |
|
14,131,540 |
|
9,598,030 |
|
Prepaid expenses
and other current assets |
|
742,908 |
|
693,013 |
|
TOTAL
CURRENT ASSETS |
|
53,912,503 |
|
32,223,720 |
|
|
|
|
|
|
|
FIXED
ASSETS: |
|
|
|
|
|
Property, Plant
and Equipment, net |
|
7,705,890 |
|
5,933,569 |
|
Finance lease
right-of-use asset, net |
|
258,884 |
|
210,350 |
|
TOTAL
FIXED ASSETS, net |
|
7,964,774 |
|
6,143,919 |
|
|
|
|
|
|
|
OTHER
ASSETS: |
|
|
|
|
|
Operating lease
right-of-use assets, net |
|
6,515,282 |
|
7,030,744 |
|
Intangible assets,
net |
|
3,605,194 |
|
3,914,352 |
|
Goodwill |
|
5,534,624 |
|
5,872,690 |
|
Deposits and other
assets |
|
429,884 |
|
543,539 |
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
77,962,261 |
|
$ |
55,728,964 |
|
|
|
|
|
|
|
- LIABILITIES AND STOCKHOLDERS’ EQUITY - |
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
Accounts payable
and accrued liabilities |
|
$ |
9,290,887 |
|
$ |
5,526,243 |
|
Deferred
revenue |
|
4,097,155 |
|
125,000 |
|
Finance lease
liabilities |
|
55,712 |
|
41,894 |
|
Operating lease
liabilities |
|
776,691 |
|
568,294 |
|
Note payable |
|
75,708 |
|
180,249 |
|
TOTAL
CURRENT LIABILITIES |
|
14,296,153 |
|
6,441,680 |
|
|
|
|
|
|
|
OTHER
LIABILITIES: |
|
|
|
|
|
Long-term
operating lease liabilities |
|
6,565,019 |
|
6,969,603 |
|
Long-term finance
lease liabilities |
|
210,408 |
|
171,953 |
|
Long-term debt,
less current portion, net |
|
17,903,401 |
|
17,644,149 |
|
Deferred tax
liability |
|
250,326 |
|
466,326 |
|
TOTAL
LIABILITIES |
|
39,225,307 |
|
25,252,031 |
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
|
Preferred stock –
10,000,000 shares authorized, none outstanding |
|
- |
|
- |
|
Common stock -
$0.01 par value; 100,000,000 shares authorized; 20,194,832 shares
and 17,733,617 shares issued at June 30, 2020 and December 31,
2019, respectively |
|
201,948 |
|
177,335 |
|
Additional paid-in
capital |
|
124,143,171 |
|
95,433,077 |
|
Accumulated
deficit |
|
(84,428,349) |
|
(71,585,003) |
|
Treasury stock
33,290 and 0 shares at cost as of June 30, 2020 and December 31,
2019, respectively |
|
(150,919) |
|
- |
|
Accumulated other
comprehensive (loss) income |
|
(1,028,897) |
|
9,844 |
|
TOTAL
STOCKHOLDERS’ EQUITY |
|
38,736,954 |
|
24,035,253 |
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
77,962,261 |
|
$ |
55,728,964 |
|
CHEMBIO DIAGNOSTICS, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
|
|
|
For The Six Months Ended |
|
|
June 30, 2020 |
|
June 30, 2019 |
|
|
|
|
|
Net cash used in operating activities |
|
$ |
(7,330,984) |
|
$ |
(7,086,415) |
Net cash used in
investing activities |
|
(2,449,346) |
|
(1,003,738) |
Net cash provided
(used in) by financing activities |
|
27,965,541 |
|
(92,158) |
Effect of exchange
rate changes on cash |
|
(29,095) |
|
161,835 |
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS |
|
18,156,116 |
|
(8,020,476) |
Cash and cash equivalents -
beginning of the period |
|
18,271,352 |
|
12,524,551 |
Cash and cash
equivalents - end of the period |
|
$ |
36,427,468 |
|
$ |
4,504,075 |
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