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GenMark Diagnostics Reports Third Quarter 2019 Results
[November 06, 2019]

GenMark Diagnostics Reports Third Quarter 2019 Results


CARLSBAD, Calif., Nov. 06, 2019 (GLOBE NEWSWIRE) -- GenMark Diagnostics, Inc. (Nasdaq: GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the quarter ended September 30, 2019.

Highlights

  • Recognized total revenue of $20.9 million and achieved total gross margin of 34%
    ?  ePlex revenue of $13.4 million represented 64% of total revenue
    ?  ePlex revenue grew 98% compared to the prior year period
  • Placed 51 net new ePlex analyzers, expanding the global installed base to 489 placements
    ?  ePlex installed base grew 57% compared to the prior year period
  • Obtained a Proprietary Laboratory Analysis (PLA) reimbursement code for the ePlex Respiratory Pathogen Panel

“Our recently launched Blood Culture ID panels, which provide the broadest coverage of molecular targets for the detection of sepsis, are significantly bolstering our competitive position.  With a highly differentiated menu and superior testing efficiency, ePlex is increasingly being recognized in the syndromic testing market as the best-in-class system for delivering high quality, patient-centered care,” said Hany Massarany, President and Chief Executive Officer. “I’m very encouraged by the momentum that our company continues to gain and I’m confident that our strong commercial team and consistent operational execution will continue to drive our performance and growth in this very attractive and rapidly growing market.”

Third Quarter Financial Results
Revenue was $20.9 million in the third quarter of 2019, an increase of 32% versus $15.8 million in the third quarter of 2018.  Gross profit was $7.1 million, or 34% of revenue, compared with $5.6 million, or 36% of revenue in the same period of 2018.

Operating expenses for the third quarter of 2019 were $17.3 million compared to $16.2 million in the same period of 2018.  The increase was largely due to the investment in the launch of the BCID panels.

Loss per share was $0.20 for the third quarter of 2019, compared to a $0.20 loss per share in the third quarter of 2018.

Cash and investments were $33.2 million as of September 30, 2019.

Guidance for Full Year 2019
GenMark continues to expect total revenue for the full year 2019 to be in the range of $85 million to $90 million.

The Company expects global ePlex placements to range from 170 to 190 net new analyzers with an annuity per analyzer of $135,000 to $145,000. 

Gross margin is expected to be in the 31% to 33% range. Operating expenses are expected to be approximately $65 million to $70 million. Cash usage is projected to be in the range of $25 million to $30 million.

Webcast and Conference Call Information
GenMark will be hosting a conference call to discuss third quarter results in further detail on Wednesday, November 6, 2019 starting at 4:30 p.m. ET. 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 2190875 approximately five minutes prior to the start time.

About GenMark Diagnostics
GenMark Diagnostics (NASDAQ: GNMK) is a leading provider of multiplex molecular diagnostic solutions designed to enhance patient care, improve key quality metrics, and reduce the total cost-of-care. Utilizing GenMark's proprietary eSensor® detection technology, GenMark's eSensor XT-8® and ePlex® systems are designed to support a broad range of molecular diagnostic tests with compact, easy-to-use workstations and self-contained, disposable test cartridges. GenMark’s ePlex: The True Sample-to-Answer Solution™ is designed to optimize laboratory efficiency and address a broad range of infectious disease testing needs, including respiratory, bloodstream, and gastrointestinal infections.  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 the Company’s future operating results and financial position. Such statements, including, but not limited to, those regarding its future financial performance, achievement of profitability targets, plans and objectives of management, and the timely and effective commercialization and clinical impact of the Company’s ePlex system, are all subject to risks and uncertainties that could cause actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, GenMark’s 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, the Company’s ability to successfully expand sales of its product offerings outside the United States, and third-party payor reimbursement to its customers, as well as other risks and uncertainties described under the “Risk Factors” in GenMark’s public filings with the Securities and Exchange Commission. The Company assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.

Investor Relations Contact
Leigh Salvo
(415) 937-5404
ir@genmarkdx.com

 
GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
    
 September 30,
 2019
 December 31,
 2018
ASSETS:
Current Assets:   
Cash and cash equivalents$24,308  $36,286 
Short-term marketable securities8,879  8,882 
Accounts receivable, net of allowances of $131 and $75, respectively10,448  11,534 
Inventories, net12,570  10,244 
Prepaid expenses and other current assets2,071  1,483 
Total current assets58,276  68,429 
    
Property and equipment, net18,863  21,070 
Intangible assets, net1,580  2,023 
Restricted cash758  758 
Noncurrent operating lease right-of-use assets4,766   
Other long-term assets809  701 
Total assets$85,052  $92,981 
    
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:   
Accounts payable$10,007  $9,886 
Accrued compensation7,720  7,358 
Current operating lease liability1,828   
Other current liabilities2,089  3,043 
Total current liabilities21,644  20,287 
    
Deferred rent  2,996 
Long-term debt48,720  36,042 
Noncurrent operating lease liability6,071   
Other noncurrent liabilities55  109 
Total liabilities76,490  59,434 
    
Stockholders' equity:   
Preferred stock, $0.0001 par value; 5,000 authorized, none issued   
Common stock, $0.0001 par value; 100,000 authorized; 58,044 and 56,240 shares issued and outstanding, respectively6  6 
Additional paid-in capital512,451  500,344 
Accumulated deficit(503,946) (466,883)
Accumulated other comprehensive income51  80 
Total stockholders’ equity8,562  33,547 
Total liabilities and stockholders’ equity$85,052  $92,981 
        


 
GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per share data)
    
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2019 2018 2019 2018
Revenue:       
Product revenue$20,822  $15,713  $60,413  $51,156 
License and other revenue96  82  412  225 
Total revenue20,918  15,795  60,825  51,381 
Cost of revenue13,868  10,165  41,339  37,172 
Gross profit7,050  5,630  19,486  14,209 
Operating expenses:       
Sales and marketing6,279  5,375  17,991  15,964 
General and administrative4,765  4,718  14,217  13,398 
Research and development6,294  6,105  20,386  22,007 
Total operating expenses17,338  16,198  52,594  51,369 
Loss from operations(10,288) (10,568) (33,108) (37,160)
Other income (expense):       
Interest income126  188  438  577 
Interest expense(1,527) (661) (4,331) (2,246)
Other income (expense)(19) 53  (34) (49)
Total other income (expense)(1,420) (420) (3,927) (1,718)
Loss before provision for income taxes(11,708) (10,988) (37,035) (38,878)
Income tax (benefit) expense(33) 5  28  59 
Net loss$(11,675) $(10,993) $(37,063) $(38,937)
Net loss per share, basic and diluted$(0.20) $(0.20) $(0.65) $(0.70)
Weighted average number of shares outstanding, basic and diluted57,718  55,847  57,161  55,535 
        
Other comprehensive loss:       
Net loss$(11,675) $(10,993) $(37,063) $(38,937)
Other comprehensive income/(loss):       
Foreign currency translation adjustments, net of tax(46) (51) (37) (31)
Net unrealized gains on marketable securities, net of tax  4  8  27 
Total other comprehensive income(46) (47) (29) (4)
Total comprehensive loss$(11,721) $(11,040) $(37,092) $(38,941)
                




 
GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
  
 Nine Months Ended
 September 30,
 2019 2018
Operating activities:   
Net loss$(37,063) $(38,937)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization5,393  5,281 
Net accretion of premiums/discounts on investments(134) (110)
Amortization of deferred debt issuance costs1,266  725 
Stock-based compensation8,840  8,895 
Provision for bad debt93  24 
Non-cash inventory adjustments1,653  1,061 
Other non-cash adjustments175  (62)
Changes in operating assets and liabilities:   
Accounts receivable993  797 
Inventories(5,471) (3,847)
Prepaid expenses and other assets(857) 384 
Accounts payable345  (3,408)
Accrued compensation(406) 1,053 
Other current and non-current liabilities(398) (756)
Net cash used in operating activities(25,571) (28,900)
Investing activities:   
Purchases of property and equipment(1,193) (1,060)
Purchases of marketable securities(26,735) (28,785)
Maturities of marketable securities26,880  56,500 
Net cash (used in) provided by investing activities(1,048) 26,655 
Financing activities:   
Proceeds from issuance of common stock, net of offering costs2,837  535 
Principal repayment of borrowings(35,070) (68)
Proceeds from borrowings50,000   
Payments associated with debt issuance(3,588) (20)
Proceeds from stock option exercises432  22 
Net cash provided by financing activities14,611  469 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash30  27 
Net decrease in cash, cash equivalents, and restricted cash(11,978) (1,749)
Cash, cash equivalents, and restricted cash at beginning of year37,044  27,512 
Cash, cash equivalents, and restricted cash at end of period$25,066  $25,763 
Non-cash investing and financing activities:   
Transfer of systems to property and equipment from inventory$1,492  $2,477 
Property and equipment included in accounts payable$147  $746 
Supplemental cash flow information:   
Cash paid for income taxes, net$85  $133 
Cash paid for interest$2,890  $1,517 
        


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