Fourth Quarter Revenue $9.8 million, Up 52%
Versus Prior Year
Gross Margin Increases to 61% in the Fourth
Quarter
ePlex™ European Launch on Track for
Mid-Year
GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading
provider of automated, multiplex molecular diagnostic testing
systems, today announced financial results for the fourth quarter
and year ended December 31, 2014.
Revenue for the fourth quarter of 2014 was $9.8 million, an
increase of 52% over the prior year period. Full year 2014 revenue
grew to $30.6 million, an increase of 59% versus 2013 base business
revenue, which excludes revenues from former customer NMTC. During
the quarter, 38 additional XT-8 analyzers were placed in end-user
laboratories, resulting in a total installed base of 540 analyzers
within the U.S. market at year end.
Gross profit for the fourth quarter was $6.0 million, or 61% of
revenue, compared with $3.0 million, or 47% of revenue in same
period of 2013. Full year 2014 gross profit was $17.5 million, or
57% of revenue.
“We are very pleased with our results in 2014, both in terms of
revenue growth and gross margin improvement,” said Hany Massarany,
President and Chief Executive Officer of GenMark. “In 2015, we will
continue to grow and support our XT-8 business in the US market,
while remaining very focused on launching ePlex in Europe in the
middle of the year,” added Massarany.
Operating expenses for the fourth quarter of 2014 were $14.7
million compared to $13.3 million in the same period for 2013. The
increase was mainly driven by Research and Development expenses as
the Company completed the development phase of the ePlex system.
For the full year, 2014 operating expenses were $56.5 million, an
increase of $9.8 million over 2013 primarily driven by Research and
Development investment in ePlex.
Loss per share was $0.21 per share for the fourth quarter of
2014 compared to a loss of $0.26 per share in the same period of
2013. For the full year 2014, loss per share was $0.93.
The Company ended the year with $70.5 million in cash and cash
equivalents and intends to continue utilizing its cash balances to
invest in the global commercialization of the ePlex platform. As
previously announced, the Company also established a debt facility
for up to $40 million to provide additional capital to launch ePlex
internationally as well as domestically.
Business Outlook
For full year 2015, the Company expects revenue in the range of
$38 to $40 million and Gross Margin in the range of 53-55%. The
Company expects to place approximately 50 XT-8 analyzers in the
first half of 2015.
The Company will be hosting a conference call to discuss fourth
quarter results in further detail and release 2015 guidance on
Tuesday, February 24, 2015 starting at 4:30 p.m. Eastern Time. The
conference call will be concurrently webcast. The link to the
webcast will be available on the GenMark Diagnostics, Inc. website
at www.genmarkdx.com under the
investor relations section and will be archived for future
reference. To listen to the conference call, please dial (877)
312-5847 (US/Canada) or (253) 237-1154 (International) and use the
conference ID number 61540488 approximately five minutes prior to
the start time.
ABOUT GENMARK DIAGNOSTICS
GenMark Diagnostics is a leading provider of automated,
multiplex molecular diagnostic testing systems that detect and
measure DNA and RNA targets to diagnose disease and optimize
patient treatment. Utilizing GenMark’s proprietary eSensor®
detection technology, GenMark’s eSensor® XT-8 system is designed to
support a broad range of molecular diagnostic tests with a compact,
easy-to-use workstation and self-contained, disposable test
cartridges. The eSensor® detection technology is also incorporated
into GenMark’s sample-to-answer system, ePlex™. For more
information, visit www.genmarkdx.com.
SAFE HARBOR STATEMENT
This press release includes forward-looking statements regarding
events, trends and business prospects, which may affect our future
operating results and financial position. Such statements,
including, but not limited to, those regarding our future financial
performance, the timely commercialization of our ePlex system, and
the availability of future financing, are all subject to risks and
uncertainties that could cause our actual results and financial
position to differ materially. Some of these risks and
uncertainties include, but are not limited to, our ability to
successfully commercialize our ePlex system and its related test
menu in a timely manner, constraints or inefficiencies caused by
unanticipated acceleration and deceleration of customer demand, our
ability to successfully expand sales of our product offerings
outside the United States, and third-party payor reimbursement to
our customers, as well as other risks and uncertainties described
under the “Risk Factors” in our public filings with the Securities
and Exchange Commission. We assume no responsibility to update or
revise any forward-looking statements to reflect events, trends or
circumstances after the date they are made.
GENMARK DIAGNOSTICS, INC. CONSOLIDATED BALANCE SHEETS
(In thousands, except par value) As of
December 31, 2014
2013 Current assets (Unaudited) Cash and cash
equivalents $ 36,855 $ 35,723 Marketable securities 33,651 69,866
Accounts receivable - net of allowances of $2,702 and $2,736,
respectively 4,889 2,859 Inventories 2,137 2,102 Prepaid expenses
and other current assets 575 552
Total current assets 78,107 111,102 Property and equipment,
net 11,052 8,591 Intangible assets, net 1,870 1,197 Restricted cash
758 758 Other long-term assets 183 106
Total assets $ 91,970 $ 121,754
Current
liabilities Accounts payable $ 3,468 $ 3,863 Accrued
compensation 5,172 3,375 Loan payable — 37 Other current
liabilities 3,653 2,962
Total
current liabilities 12,293 10,237
Long-term liabilities
Deferred rent 1,445 1,601 Other noncurrent liabilities 208
748
Total liabilities 13,946
12,586
Stockholders’ equity Preferred
stock, $0.0001 par value; 5,000 authorized, none issued — — Common
stock, $0.0001 par value; 100,000 authorized; 41,859 and 41,520
shares issued and outstanding as of December 31, 2014 and December
31, 2013, respectively 4 4 Additional paid-in capital 340,502
333,363 Accumulated deficit (262,472 ) (224,209 ) Accumulated other
comprehensive income (loss) (10 ) 10 Total
stockholders’ equity 78,024 109,168
Total liabilities and stockholders’ equity $ 91,970 $
121,754
GENMARK DIAGNOSTICS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In
thousands, except per share data) Three Months
Ended Twelve Month Ended December 31
December 31, 2014
2013 2014
2013 Revenue (Unaudited) (Unaudited)
(Unaudited) Product revenue $ 9,735 $ 6,577 $ 30,328 $ 27,204
License and other revenue 91 (125 ) 266
200
Total revenue 9,826 6,452 30,594
27,404 Cost of revenues 3,827 3,420
13,127 15,570
Gross profit 5,999
3,032 17,467 11,834
Operating expenses Sales and marketing
3,112 2,988 12,629 12,818 General and administrative 3,018 4,041
12,069 11,836 Research and development 8,526
6,274 31,823 22,060
Total
operating expenses 14,656 13,303
56,521 46,714
Loss from
operations (8,657 ) (10,271 ) (39,054 )
(34,880 )
Other income (expense) Interest income 37
124 244 403 Interest expense (1 ) (2 ) (20 ) (19 ) Other income
(expense) 27 (469 ) (6 ) 897
Total other income (expense) 63
(347 ) 218 1,281
Loss before income
taxes (8,594 ) (10,618 ) (38,836 ) (33,599 ) Income tax expense
(benefit) 18 14 (573 ) 44
Net loss $ (8,612 ) $ (10,632 ) $ (38,263 ) $ (33,643
) Net loss per share, basic and diluted $ (0.21 ) $ (0.26 ) $ (0.93
) $ (0.95 ) Weighted average number of shares outstanding, basic
and diluted 41,569 40,957 41,346
35,253
Other comprehensive loss Net
loss $ (8,612 ) $ (10,632 ) $ (38,263 ) $ (33,643 ) Net unrealized
losses on marketable securities, net of tax (14 ) (16
) (20 ) (4 )
Comprehensive loss $ (8,626 ) $
(10,648 ) $ (38,283 ) $ (33,647 )
GENMARK DIAGNOSTICS,
INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In
thousands) Year ended December 31,
2014 2013
2012 Operating activities: (Unaudited) Net
loss $ (38,263 ) $ (33,643 ) $ (22,103 ) Adjustments to reconcile
net loss to net cash used in operating activities: Depreciation and
amortization 2,656 2,530 1,198 Amortization of premiums on
marketable securities 702 314 — Stock-based compensation 5,796
3,893 2,352 Provision for bad debt — 2,721 (24 ) Non-cash inventory
adjustments 450 1,779 (482 ) Gain on sales of investment in
preferred stock — (1,392 ) — Elimination of cumulative foreign
currency translation adjustments upon liquidation of foreign
subsidiary — 450 — Impairment of intangible asset — 1,624 — Other
non-cash adjustments 185 — — Changes in operating assets and
liabilities: Accounts receivable (2,030 ) (2,390 ) (2,068 )
Inventories (229 ) (1,313 ) 880 Prepaid expenses and other assets
(184 ) (119 ) 68 Accounts payable 85 1,343 728 Accrued compensation
1,797 951 1,811 Other liabilities (537 ) (544 )
1,397
Net cash used in operating activities
(29,572 ) (23,796 ) (16,243 )
Investing
activities Change in restricted cash — 585 (1,343 ) Purchase of
marketable securities (28,054 ) (76,190 ) (1,000 ) Payments for
intellectual property licenses (350 ) (882 ) (1,327 ) Purchases of
property and equipment (5,726 ) (4,270 ) (3,476 ) Proceeds from
sales of marketable securities 7,497 6,643 — Maturities of
marketable securities 56,050 1,550
5,000
Net cash provided by (used in) investing
activities 29,417 (72,564 ) (2,146
)
Financing activities Proceeds from issuance of common
stock 812 86,547 48,300 Cost incurred in conjunction with public
offering — (5,510 ) (3,211 ) Proceeds from borrowings — 166 991
Principal repayment of borrowings (56 ) (766 ) (1,984 ) Proceeds
from stock option exercises 531 396
223
Net cash provided by financing activities
1,287 80,833 44,319
Net (decrease) increase in cash and cash equivalents 1,132
(15,527 ) 25,930 Cash and cash equivalents at beginning of period
35,723 51,250 25,320 Cash
and cash equivalents at end of period $ 36,855 $ 35,723
$ 51,250
Non-cash investing and financing
activities: Property and equipment purchased with capital lease
$ — $ — $ 109 Transfer of systems from property and equipment into
inventory $ 256 $ 575 $ 223 Property and equipment costs incurred
but not paid included in accounts payable $ 124 $ 603 $ 592
Leasehold improvements related to lease incentives $ — $ — $ 1,359
Intellectual property acquisition included in other noncurrent
liabilities $ 550 $ 450 $ — Offering costs incurred but not paid
included in other liabilities — 65 —
Supplemental cash flow
disclosures: Cash paid for interest $ 20 $ 19 $ 90 Cash
received for interest $ 244 $ 403 $ 42 Cash paid for income taxes,
net $ 24 $ 21 $ 91
GenMark Diagnostics, Inc.Hany MassaranyPresident/Chief Executive
Officer760-448-4358
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