Fulgent Genetics Reports First Quarter 2019 Financial Results
First Quarter 2019 Results:
-- Revenue totals $5.4 million, growing 15% year over year -- Billable tests delivered total 7,530, growing 63% year over year -- GAAP loss of $1.9 million, or $0.10 per share -- Non-GAAP loss of $1.0 million, or $0.06 per share -- Adjusted EBITDA loss of $712,000 -- Cash flow from operations of positive $1.1 million
TEMPLE CITY, Calif., May 07, 2019 (GLOBE NEWSWIRE) -- Fulgent Genetics (NASDAQ: FLGT) (“Fulgent Genetics” or the “company”) today announced financial results for its first quarter ended March 31, 2019.
First quarter revenue was $5.4 million, an increase of 15% year over year from $4.7 million in the first quarter of 2018. GAAP loss for the first quarter of 2019 was $1.9 million, or $0.10 per share, and non-GAAP loss was $1.0 million, or $0.06 per share.
Adjusted EBITDA was a loss of $712,000 in the first quarter of 2019.
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.
Ming Hsieh, Chairman and Chief Executive Officer, said, “We had a good start to the year with billable tests growing 63% year-over-year, reaching a new quarterly high. Our business mix continues to diversify, and we have continued to invest in our infrastructure in anticipation of accelerating test volume in the coming quarters.”
Paul Kim, Chief Financial Officer, said, “We are pleased with our growth this quarter, but at the same time we made investments in our operations which impacted our gross and operating margins. Despite these investments, we generated approximately $1 million in cash flow from operations. Looking at our pipeline of opportunities, we expect to see further growth throughout the year, and I believe we are well positioned to build on our momentum.”
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
Fulgent Genetics will host a conference call for the investment community today at 4:30 PM ET (1:30 PM PT) to discuss its first quarter results. Press and industry analysts are invited to attend in listen-only mode.
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 9394882. An audio replay will be available in the Investors section of the company’s website or by calling (855) 859-2056 using passcode 9394882 through May 14, 2019.
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. Fulgent Genetics believes this information is useful to investors because it provides a basis for measuring the performance of Fulgent’s business excluding certain income or expense items that management believes are not directly attributable to the company’s core operating results. Fulgent Genetics defines non-GAAP income (loss) as income (loss) calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”), plus or minus provisions (benefits) for income taxes, plus equity-based compensation expenses, plus or minus equity income (loss) in investee, plus or minus the effect of a corporate tax rate, and plus or minus other charges or gains, as identified, that management believes are not representative of the company’s core operations. Fulgent Genetics defines adjusted EBITDA as GAAP income (loss) plus or minus interest expense (income), plus or minus provisions (benefits) for income taxes, plus depreciation, plus equity-based compensation expenses, plus or minus equity income (loss) in investee, and plus or minus other charges or gains, as identified, that management believes are not representative of the company’s core operations.
Fulgent Genetics may continue to incur expenses similar to the items added to or subtracted from GAAP income (loss) to calculate non-GAAP income (loss) and adjusted EBITDA; accordingly, the exclusion of these items in the presentation of these non-GAAP financial measures should not be construed as an implication that these items are unusual, infrequent or non-recurring. Management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measure of income (loss) in evaluating the company’s operating performance. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in conformity with GAAP, and non-GAAP financial measures as reported by Fulgent Genetics may not be comparable to similarly titled metrics reported by other companies.
About Fulgent Genetics
Fulgent Genetics is a technology company with a focus on offering comprehensive genetic testing to provide physicians with clinically actionable diagnostic information they can use to improve the quality of patient care. The company has developed a proprietary technology platform that allows it to offer a broad and flexible test menu and continually expand and improve its proprietary genetic reference library, while maintaining accessible pricing, high accuracy and competitive turnaround times. The company believes its test menu offers more genes for testing than its competitors in today’s market, which enables it to provide expansive options for test customization and clinically actionable results.
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 and expected volume growth of billable tests delivered, and evaluations and judgments regarding diversification and momentum; the success of the company’s investments in its business; the timing, commercial success and impact on the company’s results of new product launches and other initiatives; and the company’s identification and evaluation of opportunities and its 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 Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission on March 22, 2019 and the other reports it files from time to time, including subsequently filed quarterly and current reports, are made available on the company’s website upon their filing with the Securities and Exchange Commission. These reports contain more information about the company, its business and the risks affecting its business, as well as its results of operations for the periods covered by the financial results included in this press release. In particular, you are in encouraged to review the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2019 for any revisions or updates to the information in this release.
Investor Relations Contacts:The Blueshirt GroupNicole Borsje, 415-217-2633, firstname.lastname@example.org
FULGENT GENETICS, INC. CONDENSED CONSOLIDATED BALANCE SHEET DATA March 31, 2019 and December 31, 2018 (in thousands) March December 31, 2019 31, ASSETS: (unaudite 2018 d) -------- - ------ Cash and cash equivalents $ 5,288 $ 6,736 Investments in marketable securities 33,122 30,684 Accounts receivable, net 4,563 5,948 Property and equipment, net 6,046 6,446 Other assets 6,633 4,090 - ------ - ------ Total assets $ 55,652 $ 53,904 LIABILITIES & EQUITY: Accounts payable, accrued liabilities, and other liabilities $ 5,691 $ 2,752 Total stockholders’ equity 49,961 51,152 - ------ - ------ Total liabilities & equity $ 55,652 $ 53,904 - ------ - ------
FULGENT GENETICS, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA Three Months Ended March 31, 2019 and 2018 (in thousands, except per share data) (unaudited) Three months ended March 31, ---------------------- 2019 2018 - ------ - - ------ - Revenue $ 5,370 $ 4,653 Cost of revenue (1) 2,968 2,772 - ------ - - ------ - Gross profit 2,402 1,881 Operating expenses: Research and development (1) 1,424 1,458 Selling and marketing (1) 1,272 1,130 General and administrative (1) 1,529 1,487 - ------ - - ------ - Total operating expenses 4,225 4,075 - ------ - - ------ - Operating loss (1,823 ) (2,194 ) Interest income and other income, net 207 95 - ------ - - ------ - Loss before income taxes and equity loss in investee (1,616 ) (2,099 ) Provision for (benefit from) income taxes 13 (434 ) - ------ - - ------ - Loss before equity loss in investee (1,629 ) (1,665 ) Equity loss in investee (279 ) (245 ) - ------ - - ------ - Net loss $ (1,908 ) $ (1,910 ) - ------ - - ------ - Net loss per common share: Basic $ (0.10 ) $ (0.11 ) Diluted $ (0.10 ) $ (0.11 ) Weighted average common shares: Basic 18,228 17,864 Diluted 18,228 17,864 (1) Equity-based compensation expense was allocated as follows: Cost of revenue $ 142 $ 124 Research and development 178 132 Selling and marketing 125 108 General and administrative 138 181 Total equity-based compensation expense $ 583 $ 545 - ------ - - ------ -
FULGENT GENETICS, INC. Non-GAAP Income (Loss) Reconciliation Three Months Ended March 31, 2019 and 2018 (in thousands, except per share data) Three months ended March 31, ---------------------- 2019 2018 - ------ - - ------ - Net loss $ (1,908 ) $ (1,910 ) Provision for (benefit from) income taxes 13 (434 ) Equity-based compensation expense 583 545 Non-GAAP tax effect (1) — 396 Equity loss in investee 279 245 Non-GAAP loss $ (1,033 ) $ (1,158 ) - ------ - - ------ - Net loss per common share: Basic $ (0.10 ) $ (0.11 ) Diluted $ (0.10 ) $ (0.11 ) Non-GAAP loss per common share: Basic $ (0.06 ) $ (0.06 ) Diluted $ (0.06 ) $ (0.06 ) Weighted average common shares: Basic 18,228 17,864 Diluted 18,228 17,864 (1) Tax rates as follows: Corporate tax rate of zero for the three months ended March 31, 2019 due to full valuation allowance. Corporate tax rate of 22% for the three months ended March 31, 2018.
FULGENT GENETICS, INC. Non-GAAP Adjusted EBITDA Reconciliation Three Months Ended March 31, 2019 and 2018 (in thousands) Three months ended March 31, ---------------------- 2019 2018 - ------ - - ------ - Net loss $ (1,908 ) $ (1,910 ) Interest income (214 ) (126 ) Provision for (benefit from) income taxes 13 (434 ) Equity-based compensation expense 583 545 Depreciation 535 516 Equity loss in investee 279 245 Adjusted EBITDA $ (712 ) $ (1,164 ) - ------ - - ------ -