CARLSBAD, Calif., July 30, 2018 (GLOBE NEWSWIRE) -- GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the second quarter ended June 30, 2018.

Highlights

-- Recognized revenues of $14.9 million, an increase of 21% over the prior year period -- Placed 39 net new ePlex analyzers, expanding the global installed base to 267 placements -- Submitted the ePlex BCID Gram Positive panel to the FDA -- Completed clinical testing for FDA submission of the ePlex BCID Gram Negative panel -- Commenced clinical study for FDA submission of the ePlex Fungal Pathogen panel

“Our second quarter results reflect solid execution on our strategic priorities of growth through ePlex commercialization and menu expansion, as well as improving manufacturing efficiencies. Top line performance was largely driven by strong ePlex placements and demand for our respiratory pathogen test cartridges. We also submitted to the FDA the first of three blood culture identification panels being developed on our ePlex system, which was a significant milestone for the company. We expect FDA submission of the remaining two blood culture panels in the third and fourth quarters of this year, as previously communicated,” said Hany Massarany, President and Chief Executive Officer. “Based on this momentum and our continued focus on commercial and operational execution, I am confident we will achieve our goals for 2018 and beyond.”

Second Quarter Financial ResultsRevenue was $14.9 million in the second quarter of 2018, an increase of 21% versus $12.4 million in the second quarter of 2017. Gross profit was $4.4 million, or 30% of revenue, compared with $4.9 million, or 40% of revenue in the same period of 2017, reflecting the increased proportion of ePlex revenues in the quarter versus prior year.

Operating expenses for the second quarter of 2018 were $20.2 million compared to $22.2 million in the same period for 2017. The decrease was largely due to reduced ePlex development expenses.

Loss per share was $0.30 per share for the second quarter of 2018, compared to a $0.37 loss per share in the second quarter of 2017.

The Company ended the quarter with $55.2 million in cash and investments, reflecting the impact of reductions in operating expenses and efforts to minimize working capital needs.

Guidance for Full Year 2018GenMark is reconfirming 2018 revenue guidance of $68 to $72 million. Gross margin is expected to be in the 30% range. The Company continues to expect ePlex placements of 140-170 net new analyzers, and an annuity per ePlex placement in the $100,000 to $120,000 range.

Webcast and Conference Call InformationGenMark will be hosting a conference call to discuss second quarter results in further detail on Monday, July 30, 2018 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 4473539 approximately five minutes prior to the start time.

About GenMark DiagnosticsGenMark 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 StatementThis 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, regulatory submissions and approvals, and the timely and effective commercialization and clinical impact of our ePlex system, 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.

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

GENMARK DIAGNOSTICS, INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except par value)

June 30, December 2018 31, 2017 ---------- ----------- ASSETS: Current Assets: Cash and cash equivalents $ 28,891 $ 26,754 Short-term marketable securities 26,358 45,236 Accounts receivable, net of allowances of $86 and $2,754, respectively 7,144 10,676 Inventories 8,828 10,949 Prepaid expenses and other current assets 1,912 2,216 Total current assets 73,133 95,831 Property and equipment, net 21,159 22,581 Intangible assets, net 2,327 2,624 Restricted cash 758 758 Other long-term assets 522 505 Total assets $ 97,899 $ 122,299 - ------ - - ------- - LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 9,219 $ 11,171 Accrued compensation 4,872 5,419 Current portion of long-term debt 19,009 7,927 Other current liabilities 2,710 3,226 Total current liabilities 35,810 27,743 Deferred rent 2,715 3,059 Long-term debt 9,579 20,099 Other noncurrent liabilities 146 241 Total liabilities 48,250 51,142 -------- - --------- - Stockholders' equity: Preferred stock, $0.0001 par value; 5,000 authorized, none issued — — Common stock, $0.0001 par value; 100,000 authorized; 55,753 and 55,066 shares issued 6 6 and outstanding, respectively Additional paid-in capital 493,921 487,525 Accumulated deficit (444,329 ) (416,383 ) Accumulated other comprehensive income 51 9 Total stockholders’ equity 49,649 71,157 Total liabilities and stockholders’ equity $ 97,899 $ 122,299 - ------ - - ------- -

GENMARK DIAGNOSTICS, INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(In thousands, except per share data)

Three Months Ended Six Months Ended June 30, June 30, ------------------------ ------------------------ 2018 2017 2018 2017 ----------- ----------- ----------- ----------- Revenue: Product revenue $ 14,867 $ 12,291 $ 35,443 $ 24,761 License and other revenue 74 68 143 133 --------- - --------- - --------- - --------- - Total revenue 14,941 12,359 35,586 24,894 Cost of revenue 10,527 7,475 27,007 13,827 --------- - --------- - --------- - --------- - Gross profit 4,414 4,884 8,579 11,067 Operating expenses: Sales and marketing 5,187 5,159 10,589 9,853 General and administrative 4,547 3,978 8,680 7,988 Research and development 10,482 13,014 15,902 24,049 --------- - --------- - --------- - --------- - Total operating expenses 20,216 22,151 35,171 41,890 Loss from operations (15,802 ) (17,267 ) (26,592 ) (30,823 ) --------- - --------- - --------- - --------- - Other income (expense): Interest income 202 54 389 106 Interest expense (797 ) (755 ) (1,585 ) (1,261 ) Other income (expense) (90 ) 56 (102 ) 151 --------- - --------- - Total other income (expense) (685 ) (645 ) (1,298 ) (1,004 ) --------- - --------- - --------- - --------- - Loss before provision for income taxes (16,487 ) (17,912 ) (27,890 ) (31,827 ) Income tax expense 34 77 54 78 --------- - --------- - --------- - --------- - Net loss $ (16,521 ) $ (17,989 ) $ (27,944 ) $ (31,905 ) - ------- - - ------- - - ------- - - ------- - Net loss per share, basic and diluted $ (0.30 ) $ (0.37 ) $ (0.50 ) $ (0.67 ) - ------- - - ------- - - ------- - - ------- - Weighted average number of shares outstanding, basic and 55,547 48,067 55,377 47,460 diluted --------- - --------- - --------- - --------- - Other comprehensive loss: Net loss $ (16,521 ) $ (17,989 ) $ (27,944 ) $ (31,905 ) Other comprehensive income/(loss): Foreign currency translation adjustments, net of tax 14 3 (20 ) 94 Net unrealized gains (losses) on marketable securities, net 14 1 22 (15 ) of tax --------- - --------- - --------- - --------- - Total other comprehensive income/(loss) 28 4 2 79 Total comprehensive loss $ (16,493 ) $ (17,985 ) $ (27,942 ) $ (31,826 ) - ------- - - ------- - - ------- - - ------- -

GENMARK DIAGNOSTICS, INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)

Six Months Ended June 30, 2018 2017 ----------- ----------- Operating activities: Net loss $ (27,944 ) $ (31,905 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,507 2,454 Net amortization/(accretion) of premiums/discounts on investments (78 ) 30 Amortization of deferred debt issuance costs 583 493 Stock-based compensation 5,799 5,602 Provision for bad debt 34 32 Non-cash inventory adjustments 809 565 Other non-cash adjustments (13 ) (123 ) Changes in operating assets and liabilities: Accounts receivable 3,501 1,795 Inventories 353 (2,563 ) Prepaid expenses and other assets 340 (119 ) Accounts payable (1,853 ) (3,134 ) Accrued compensation (853 ) (1,170 ) Other current and non-current liabilities (622 ) (124 ) Net cash used in operating activities (16,437 ) (28,167 ) Investing activities: Purchases of property and equipment, net (924 ) (2,535 ) Purchases of marketable securities (23,622 ) (10,496 ) Proceeds from sales of marketable securities — 13,896 Maturities of marketable securities 42,600 4,100 --------- - Net cash provided by investing activities 18,054 4,965 Financing activities: Proceeds from issuance of common stock 535 86,835 Costs incurred in conjunction with public offering — (5,171 ) Principal repayment of borrowings (45 ) (964 ) Proceeds from borrowings — 15,000 Payments associated with debt issuance (20 ) (187 ) Proceeds from stock option exercises 22 170 Net cash provided by financing activities 492 95,683 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 28 (13 ) --------- - --------- - Net increase in cash, cash equivalents, and restricted cash 2,137 72,468 Cash, cash equivalents, and restricted cash at beginning of year 27,512 16,717 Cash, cash equivalents, and restricted cash at end of period $ 29,649 $ 89,185 - ------- - - ------- - Non-cash investing and financing activities: Transfer of systems (from) to property and equipment into (from) inventory $ 956 $ (1,534 ) Property and equipment included in accounts payable $ 168 $ 713 Intellectual property acquisitions included in other current liabilities $ — $ 500 Supplemental cash flow information: Cash paid for income taxes, net $ 113 $ 54 Cash paid for interest $ 1,003 $ 574