Accelerate Diagnostics Reports 2018 Fourth Quarter and Full-Year Financial Results

Feb 19, 2019

Accelerate Diagnostics Reports 2018 Fourth Quarter and Full-Year Financial Results

TUCSON, Ariz., Feb. 19, 2019 /PRNewswire/ -- Accelerate Diagnostics, Inc. (NASDAQ: AXDX) today announced financial results for the fourth quarter and fiscal year ended December 31, 2018. 

Accelerate Diagnostics, Inc. (PRNewsfoto/Accelerate Diagnostics)

"I am pleased to report an improvement in our commercial progress during the fourth quarter after a challenging start to 2018," said Lawrence Mehren, President and CEO of Accelerate Diagnostics, Inc. "We worked diligently over the first three quarters of the year to implement significant changes to our commercial strategy in order to improve our access to the hospital market.  These efforts began to bear meaningful fruit during the fourth quarter as we added 133 new commercial contracts, including 117 in the U.S., which more than doubles our number of U.S. commercially contracted instruments. We enter 2019 with renewed confidence and belief that careful and consistent execution will enable us to capitalize on the tremendous opportunity in front of us and bring our life-saving technology to an ever-expanding number of patients around the globe."

Fourth Quarter 2018 Highlights

  • Added 133 commercially contracted instruments, compared to 22 in the fourth quarter of 2017.
  • Net sales of $1.8 million, compared to $2.1 million in the fourth quarter of 2017, a decrease attributable to lower capital sales mix as customers began adopting using reagent rental agreements, an option not available in the prior year period.
  • Gross margin was 29%, which included an unfavorable 24 percentage point reduction due to increased costs arising from investments in service and manufacturing capacity ahead of production demand. Gross margin was 69% in the fourth quarter of 2017, which included a benefit of 16 percentage points due to the sale of pre-FDA manufactured instruments which had previously been written off to research and development.
  • Selling, general, and administrative expenses were $13.4 million, compared to $11.5 million for the fourth quarter of 2017, driven by the expansion of our U.S. sales team and costs related to increased global sales and marketing activity.
  • Research and development (R&D) expense was $6.9 million, compared to $6.1 million in the fourth quarter of 2017, due to continued investment in clinical outcomes studies and costs incurred in preparation for respiratory FDA registration and outcomes studies.
  • Net loss was $22.2 million, or $0.41 per share, which included $2.2 million in non-cash stock-based compensation expense.
  • Net cash used was $14.1 million.

Full Year 2018 Highlights

  • Ended the year with 202 global commercially contracted instruments, compared to 78 at the end of 2017.
  • Net sales of $5.7 million, compared to $4.2 million in 2017, driven by increased Accelerate Pheno instrument placements and the resulting sales of Accelerate PhenoTest™ BC test kits.
  • Gross margin was 44%, which included an unfavorable 9 percentage point reduction due to costs arising from investments in service and manufacturing capacity ahead of production demand. Gross margin was 76% in 2017, which included a benefit of 21 percentage due to the sale of pre-FDA manufactured instruments which had previously been written off to R&D.
  • Selling, general, and administrative expenses were $55.2 million, compared to $45.1 million in 2017, driven by expansion of the U.S. sales team and costs related to increased global sales and marketing activity.
  • Research and development expenses for the year were $27.6 million, compared to $22.3 million in 2017, due to continued investment in clinical outcomes studies and costs incurred in preparation for respiratory FDA registration and outcomes studies.
  • Net loss was $88.3 million, or $1.62 per share. Net loss included $14.7 million in non-cash stock-based compensation expense.
  • Net cash used was $64.1 million. The Company ended the year with total cash, investments, and cash-equivalents from all activities of $166.5 million.

Full financial results for the fourth quarter and full-year 2018 will be filed on Form 10-K through the Securities and Exchange Commission's (SEC) website at http://www.sec.gov. Investors are cautioned not to place undue reliance on these preliminary and unaudited estimates in the event of material changes.

Audio Webcast and Conference Call

The Company will host a conference call at 4:30 p.m. ET today to review its fourth quarter and full-year 2018 results. To participate in this conference call, dial +1.877.883.0383 and enter the conference ID: 3234922. International participants may dial +1.412.902.6506.  Please dial in 10-15 minutes before the start of the conference. A replay of the call will be available by telephone at +1.877.344.7529 (U.S.) or +1.412.317.0088 (international) using the replay code 10128408 until May 21, 2019.

This conference call will also be webcast and can be accessed from the "Investors" section of the Company's website at ir.axdx.com. A replay of the audio webcast will be available until May 21, 2019.

About Accelerate Diagnostics, Inc.

Accelerate Diagnostics, Inc. is an in vitro diagnostics company dedicated to providing solutions for the global challenges of antibiotic resistance and sepsis. The Accelerate Pheno™ system and Accelerate PhenoTest™ BC kit combine several technologies aimed at reducing the time clinicians must wait to determine the most optimal antibiotic therapy for serious infections. The FDA-cleared system and kit fully automate sample preparation steps, enabling phenotypic antibiotic susceptibility results in about 7 hours directly from positive blood cultures. Recent external studies indicate the solution offers results 1 to 2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage specific to the individual patient's infection, days earlier.

The "ACCELERATE DIAGNOSTICS" and "ACCELERATE PHENO" and "ACCELERATE PHENOTEST"

and diamond shaped logos and marks are trademarks or registered trademarks of Accelerate Diagnostics, Inc.

For more information about the Company, its products and technology, or recent publications, visit axdx.com.

Forward-Looking Statements

Certain of the statements made in this press release and the related conference call and webcast are forward-looking, such as those, among others, about our projections as to when certain key business milestones may be achieved, the potential of our products or technology, the growth of the market, our estimates as to the size of our market opportunity and potential pricing, our competitive position and estimates of time reduction to results, and our future development plans and growth strategy. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Information about the risks and uncertainties faced by Accelerate Diagnostics, Inc. is contained in the section captioned "Risk Factors" in the company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 1, 2018, and in any other subsequent reports that we file with the Securities and Exchange Commission from time to time. The company's forward-looking statements could be affected by general industry and market conditions. Except as required by federal securities laws, the company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingencies.

ACCELERATE DIAGNOSTICS, INC.

CONSOLIDATED

BALANCE SHEETS

(Unaudited)

(in thousands, except share data)



December 31,


2018

2017

ASSETS

Current assets:



Cash and cash equivalents

$

66,260


$

28,513


Investments

100,218


80,648


Trade accounts receivable

1,860


1,946


Inventory

7,746


8,063


Prepaid expenses

980


850


Other current assets

576


468


Total current assets

177,640


120,488


Property and equipment, net

7,303


4,890


Intellectual property, net

114


134


Other non-current assets

208



Total assets

$

185,265


$

125,512





LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:



Accounts payable

$

1,322


$

2,080


Accrued liabilities

4,962


3,636


Accrued Interest

1,262



Deferred revenue and income

217


1,071


Total current liabilities

7,763


6,787


Other long term liabilities

53


21


Convertible notes

120,074



Total liabilities

127,890


6,808





Commitments and contingencies






Stockholders' equity:



Preferred shares, $0.001 par value;



5,000,000 preferred shares authorized and none outstanding as of December 31, 2018 and 2017



Common stock, $0.001 par value;



75,000,000 common shares authorized with 54,231,876 shares issued and outstanding on December 31, 2018 and 75,000,000 authorized with 55,673,810 shares issued and outstanding on December 31, 2017

54


56


Contributed capital

432,885


360,620


Treasury stock

(45,067)



Accumulated deficit

(330,348)


(241,972)


Accumulated other comprehensive income (loss)

(149)



Total stockholders' equity

57,375


118,704


Total liabilities and stockholders' equity

$

185,265


$

125,512



See accompanying notes to consolidated financial statements.

 

ACCELERATE DIAGNOSTICS, INC.

CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(in thousands, except per share data)



Years Ended December 31,


2018

2017

2016

Net sales

$

5,670


$

4,177


$

246






Cost of sales

3,187


1,002



Gross profit

2,483


3,175


246






Costs and expenses:




Research and development

27,638


22,301


29,564


Sales, general and administrative

55,214


45,058


37,183


Total costs and expenses

82,852


67,359


66,747






Loss from operations

(80,369)


(64,184)


(66,501)






Other income (expense):




Interest expense

(10,113)




Foreign currency exchange loss

(450)


(75)


(77)


Interest and dividend income

2,845


908


494


Other expense, net

(28)


(184)


(23)


Total other income (expense), net

(7,746)


649


394






Net loss before income taxes

(88,115)


(63,535)


(66,107)


Provision for income taxes

(211)


(493)


(267)


Net loss

$

(88,326)


$

(64,028)


$

(66,374)






Basic and diluted net loss per share

$

(1.62)


$

(1.18)


$

(1.29)


Weighted average shares outstanding

54,494


54,073


51,276






Other comprehensive loss:




Net loss

$

(88,326)


$

(64,028)


$

(66,374)


Net unrealized gain (loss) on available-for-sale investments

23


(117)


(64)


Foreign currency translation adjustment

(172)


321


(128)


Comprehensive loss

$

(88,475)


$

(63,824)


$

(66,566)



See accompanying notes to consolidated financial statements.

 

ACCELERATE DIAGNOSTICS, INC.

CONSOLIDATED

STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

(in thousands)



Shares

Common
Stock
Amount

Contributed
Capital

Accumulated
Deficit

Treasury
stock

Accumulated
Other
Comprehensive
Income (Loss)

Total
Stockholders'
Equity

Balances, January 1, 2016

51,191


$

51


$

243,894


$

(110,915)


$


$

(12)


$

133,018


Net loss




(66,374)




(66,374)


Exercise of options and warrants

314


1


1,496





1,497


Issuance of common stock under employee purchase plan

11



226





226


Short swing profits (net of costs)



866





866


Unrealized loss on available-for-sale securities






(64)


(64)


Foreign currency translation adjustment






(128)


(128)


Equity-based compensation



8,775





8,775


Balances, December 31, 2016

51,516


52


255,257


(177,289)



(204)


77,816


Net loss




(64,028)




(64,028)


Issuance of common stock

3,085


3


83,221





83,224


Exercise of options and warrants

1,045


1


6,605





6,606


Issuance of common stock under employee purchase plan

28



597





597


Unrealized loss on available-for-sale securities






(117)


(117)


Foreign currency translation adjustment






321


321


Cumulative impact of accounting change




(655)




(655)


Equity-based compensation



14,940





14,940


Balances, December 31, 2017

55,674


56


360,620


(241,972)




118,704


Net loss




(88,326)




(88,326)


Exercise of options and restricted stock awards issued

382



3,749





3,749


Issuance of common stock under employee purchase plan

35



583





583


Unrealized loss on available-for-sale securities






23


23


Foreign currency translation adjustment






(172)


(172)


Repurchase of common stock under Prepaid Forward contract

(1,859)


(2)




(45,067)



(45,069)


Issuance of convertible note



53,283





53,283


Cumulative impact of accounting change




(50)




(50)


Equity-based compensation



14,650





14,650


Balances, December 31, 2018

54,232


$

54


$

432,885


$

(330,348)


$

(45,067)


$

(149)


$

57,375



See accompanying notes to consolidated financial statements.

 

ACCELERATE DIAGNOSTICS, INC.

CONSOLIDATED

STATEMENT OF CASH FLOWS

(Unaudited)

(in thousands)



Years Ended December 31,


2018

2017

2016

Cash flows from operating activities:




Net loss

$

(88,326)


$

(64,028)


$

(66,374)


Adjustments to reconcile net loss to net cash used in operating activities:




Depreciation and amortization

2,561


2,196


2,351


Amortization of investment discount

(621)


326


374


Equity-based compensation

14,650


13,933


8,775


Amortization of debt discount and issuance costs

6,849




Realized gain on available-for-sale securities



(6)


Loss on disposal of property and equipment

678


240


23


(Increase) decrease in assets:




Accounts receivable

86


(1,912)


43


Inventory

(4,451)


(7,759)



Prepaid expense and other assets

(250)


(459)


1,121


Increase (decrease) in liabilities:




Accounts payable

(748)


1,064


(1,242)


Accrued liabilities

1,426


596


1,619


Accrued interest

1,262




Deferred revenue and income

(904)


36


(92)


Deferred compensation

32


21



Net cash used in operating activities

(67,756)


(55,746)


(53,408)


Cash flows from investing activities:




Purchases of equipment

(998)


(2,966)


(2,409)


Purchase of marketable securities

(120,556)


(82,333)


(74,075)


Proceeds from sales of marketable securities

3,000


11,522


9,716


Maturities of marketable securities

98,416


48,049


17,200


Net cash used in investing activities

(20,138)


(25,728)


(49,568)


Cash flows from financing activities:




Proceeds from exercise of warrants and options

3,749


6,606


1,497


Common stock issuance cost



(814)


Proceeds from issuance of common stocks and warrants

583


83,821


226


Recovery of related party short-swing profits



866


Payments on capital lease obligations



(13)


Proceeds from issuance of convertible note

171,500




Prepayment of forward stock repurchase transaction

(45,069)




Payment of debt issuance costs

(4,992)




Net cash provided by financing activities

125,771


90,427


1,762






Effect of exchange rate on cash

(130)


316


(127)






Increase (decrease) in cash and cash equivalents

37,747


9,269


(101,341)


Cash and cash equivalents, beginning of period

28,513


19,244


120,585


Cash and cash equivalents, end of period

$

66,260


$

28,513


$

19,244



See accompanying notes to consolidated financial statements.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/accelerate-diagnostics-reports-2018-fourth-quarter-and-full-year-financial-results-300798211.html

SOURCE Accelerate Diagnostics, Inc.

Investors, Laura Pierson, Accelerate Diagnostics, +1 520 365-3100, lpierson@axdx.com or Media, Andrew Chasteen, Accelerate Diagnostics, +1 520 365-3100, achasteen@axdx.com

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