Fulgent Genetics Reports Third Quarter 2018 Financial Results
Third Quarter 2018 Results:
- Revenue totals
$5.6 million , growing 25% year over year and 4% sequentially - Billable tests delivered total 5,569, growing 37% year over year
- GAAP gross margin improves 70 basis points sequentially
- Non-GAAP gross margin remains flat sequentially
- GAAP loss of
$595,000 , or$0.03 per share - Non-GAAP loss of
$40,000 , or$0.00 per share - Adjusted EBITDA of
$281,000
Third quarter revenue was
Non-GAAP 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.
Mr. Kim added, “We will provide an update on our guidance regarding certain financial measures during our investment community conference call to shortly follow the issuance of this press release.”
Conference Call Information
The call can be accessed through a live audio webcast in the Investor Relations section of the company’s website, www.fulgentgenetics.com, and through a live conference call by dialing (855) 321-9535 using the conference ID 4694975. An audio replay will be available in the Investors section of the company’s website or by calling (855) 859-2056 using passcode 4694975 through
Note Regarding Non-GAAP Financial Measures
Certain of the information set forth in this press release, including non-GAAP income (loss) and adjusted EBITDA, are non-GAAP financial measures.
About
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: anticipated growth of and increased stability in the company’s business and performance, including its volume of billable tests delivered, margin improvements relating to costs per test and increased efficiencies; the success of the company’s investments in its business, including its technology platform, operational capabilities and sales organization, as well as the timing and extent of the impact of these investments, if any, on the company’s performance; the timing, commercial success and impact on the company’s results of new product launches and other initiatives, including its sequencing as a service contracts; and the company’s ability to capitalize on opportunities 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 market potential for, and the rate and degree of market adoption of, the company’s tests and genetic testing generally; the company’s ability to capture a sizable share of the developing market for genetic testing and compete successfully in this market, including its ability to continue to develop new tests that are attractive to its various customer markets 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
Investor Relations Contacts:
FULGENT GENETICS, INC. | |||||
CONDENSED CONSOLIDATED BALANCE SHEET DATA | |||||
September 30, 2018 and December 31, 2017 | |||||
(in thousands) | |||||
September 30, 2018 | December 31, | ||||
ASSETS: | (unaudited) | 2017 | |||
Cash and cash equivalents | $ | 8,489 | $ | 6,490 | |
Investments in marketable securities | 28,364 | 34,877 | |||
Accounts receivable, net | 6,077 | 4,005 | |||
Property and equipment, net | 6,853 | 7,272 | |||
Other assets | 5,063 | 4,540 | |||
Total assets | $ | 54,846 | $ | 57,184 | |
LIABILITIES & EQUITY: | |||||
Accounts payable and accrued liabilities | $ | 2,266 | $ | 3,006 | |
Total stockholders’ equity | 52,580 | 54,178 | |||
Total liabilities & equity | $ | 54,846 | $ | 57,184 | |
FULGENT GENETICS, INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA | ||||||||||||||||
Three and Nine Months Ended September 30, 2018 and 2017 | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenue | $ | 5,625 | $ | 4,503 | $ | 15,678 | $ | 14,449 | ||||||||
Cost of revenue (1) | 2,612 | 2,268 | 7,928 | 6,006 | ||||||||||||
Gross profit | 3,013 | 2,235 | 7,750 | 8,443 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development (1) | 1,438 | 1,128 | 4,108 | 2,899 | ||||||||||||
Selling and marketing (1) | 1,115 | 1,383 | 3,524 | 3,125 | ||||||||||||
General and administrative (1) | 1,306 | 1,205 | 4,159 | 3,831 | ||||||||||||
Total operating expenses | 3,859 | 3,716 | 11,791 | 9,855 | ||||||||||||
Operating loss | (846 | ) | (1,481 | ) | (4,041 | ) | (1,412 | ) | ||||||||
Interest income and other income | 143 | 145 | 336 | 384 | ||||||||||||
Loss before income taxes and equity loss in investee | (703 | ) | (1,336 | ) | (3,705 | ) | (1,028 | ) | ||||||||
Benefit from income taxes | (318 | ) | (415 | ) | (852 | ) | (419 | ) | ||||||||
Loss before equity loss in investee | (385 | ) | (921 | ) | (2,853 | ) | (609 | ) | ||||||||
Equity loss in investee | (210 | ) | (172 | ) | (701 | ) | (277 | ) | ||||||||
Net loss | $ | (595 | ) | $ | (1,093 | ) | $ | (3,554 | ) | $ | (886 | ) | ||||
Net loss per common share: | ||||||||||||||||
Basic | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.20 | ) | $ | (0.05 | ) | ||||
Diluted | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.20 | ) | $ | (0.05 | ) | ||||
Weighted average common shares: | ||||||||||||||||
Basic | 18,012 | 17,752 | 17,931 | 17,713 | ||||||||||||
Diluted | 18,012 | 17,752 | 17,931 | 17,713 | ||||||||||||
(1) Equity-based compensation expense was allocated as follows: | ||||||||||||||||
Cost of revenue | $ | 121 | $ | 133 | $ | 396 | $ | 341 | ||||||||
Research and development | 214 | 194 | 517 | 602 | ||||||||||||
Selling and marketing | 115 | 93 | 336 | 213 | ||||||||||||
General and administrative | 138 | 129 | 457 | 382 | ||||||||||||
Total equity-based compensation expense | $ | 588 | $ | 549 | $ | 1,706 | $ | 1,538 | ||||||||
FULGENT GENETICS, INC. | |||||||||||||||
Non-GAAP Income (Loss) Reconciliation | |||||||||||||||
Three and Nine Months Ended September 30, 2018 and 2017 | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net loss | $ | (595 | ) | $ | (1,093 | ) | $ | (3,554 | ) | $ | (886 | ) | |||
Benefit from income taxes | (318 | ) | (415 | ) | (852 | ) | (419 | ) | |||||||
Equity-based compensation expense | 588 | 549 | 1,706 | 1,538 | |||||||||||
Non-GAAP tax effect (1) | 75 | 336 | 621 | (82 | ) | ||||||||||
Equity loss in investee | 210 | 172 | 701 | 277 | |||||||||||
Non-GAAP income (loss) | $ | (40 | ) | $ | (451 | ) | $ | (1,378 | ) | $ | 428 | ||||
Net loss per common share: | |||||||||||||||
Basic | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.20 | ) | $ | (0.05 | ) | |||
Diluted | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.20 | ) | $ | (0.05 | ) | |||
Non-GAAP income (loss) per common share: | |||||||||||||||
Basic | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.08 | ) | $ | 0.02 | ||||
Diluted | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.08 | ) | $ | 0.02 | ||||
Weighted average common shares: | |||||||||||||||
Basic | 18,012 | 17,752 | 17,931 | $ | 17,713 | ||||||||||
Diluted | 18,012 | 17,752 | 17,931 | $ | 17,713 | ||||||||||
(1) Tax rates as follows: | |||||||||||||||
Corporate tax rate of 23% for the three and nine months ended September 30, 2018. Corporate tax rate of 35% for the three and nine months ended September 30, 2017. |
|||||||||||||||
FULGENT GENETICS, INC. | |||||||||||||||
Non-GAAP Adjusted EBITDA Reconciliation | |||||||||||||||
Three and Nine Months Ended September 30, 2018 and 2017 | |||||||||||||||
(in thousands) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net loss | $ | (595 | ) | $ | (1,093 | ) | $ | (3,554 | ) | $ | (886 | ) | |||
Interest income | (151 | ) | (109 | ) | (410 | ) | (342 | ) | |||||||
Benefit from income taxes | (318 | ) | (415 | ) | (852 | ) | (419 | ) | |||||||
Equity-based compensation expense | 588 | 549 | 1,706 | 1,538 | |||||||||||
Depreciation | 547 | 438 | 1,625 | 1,255 | |||||||||||
Equity loss in investee | 210 | 172 | 701 | 277 | |||||||||||
Adjusted EBITDA | $ | 281 | $ | (458 | ) | $ | (784 | ) | $ | 1,423 | |||||