GenMark Diagnostics, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - May 1, 2018

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Exhibit 99.1
May 1, 2018


GenMark Diagnostics Reports First Quarter 2018 Results

CARLSBAD, Calif - GenMark Diagnostics, Inc. (Nasdaq: GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the first quarter ended March 31, 2018.

Highlights
•
Revenues of $20.6 million, an increase of 65% over the prior year period
•
ePlex net new placements of 32 analyzers, expanding the global installed base to 228 placements
•
Five abstracts and posters on the benefits of ePlex BCID panels presented at ECCMID, the largest microbiology meeting in Europe

“We’re off to a solid start in 2018, with revenue growth in the first quarter driven by high respiratory testing volumes in an exceptionally strong flu season, as well as a growing number of customers utilizing ePlex for routine clinical testing. As a result, ePlex contributed meaningfully to first quarter sales and for the first time, surpassed revenues from our XT-8 products,” said Hany Massarany, President and Chief Executive Officer. “We’re encouraged by the steady positive customer feedback we receive on the performance, ease of use and processing capacity of ePlex, and we’re very pleased with its strong market acceptance across all segments. We’re also excited about the potential for our uniquely differentiated BCID panels and look forward to accelerating future placements and revenue, as we launch them in the U.S. market.”

First Quarter Financial Results
Revenue was $20.6 million in the first quarter of 2018, an increase of 65% versus $12.5 million in the first quarter of 2017. Gross profit was $4.2 million, or 20% of revenue, compared with $6.2 million, or 49% of revenue in the same period of 2017, reflecting the increased proportion of ePlex revenues in the quarter, driven by extraordinary flu season demand.

Operating expenses for the first quarter of 2018 were $15.0 million compared to $19.7 million in the same period for 2017. The decrease was largely due to reduced ePlex development expenses, partially offset by an increase in Sales and Marketing expenses.

Loss per share was $0.21 per share for the first quarter of 2018, compared to a $0.30 loss per share in the first quarter of 2017.

The Company ended the quarter with $65.5 million in cash and investments, reflecting the impact of reductions in operating expenses and the focus on minimizing working capital needs.

Guidance for Full Year 2018
GenMark is reconfirming prior 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 Information
The Company will be hosting a conference call to discuss fourth quarter results in further detail on Tuesday, May 1, 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 9384229 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 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)
 
March 31,
2018
 
December 31,
2017
ASSETS:
Current Assets:
 
 
 
Cash and cash equivalents
$
30,278

 
$
26,754

Short-term marketable securities
35,185

 
45,236

Accounts receivable, net of allowances of $52 and $2,754, respectively
8,081

 
10,676

Inventories
10,452

 
10,949

Prepaid expenses and other current assets
1,490

 
2,216

Total current assets
85,486

 
95,831


 
 
 
Property and equipment, net
21,881

 
22,581

Intangible assets, net
2,475

 
2,624

Restricted cash
758

 
758

Other long-term assets
507

 
505

Total assets
$
111,107

 
$
122,299


 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
 
 
 
Accounts payable
$
9,688

 
$
11,171

Accrued compensation
4,577

 
5,419

Current portion of long-term debt
13,428

 
7,927

Other current liabilities
2,912

 
3,226

Total current liabilities
30,605

 
27,743


 
 
 
Deferred rent
2,893

 
3,059

Long-term debt
14,868

 
20,099

Other noncurrent liabilities
187

 
241

Total liabilities
48,553

 
51,142


 
 
 
Stockholders' equity:
 
 
 
Preferred stock, $0.0001 par value; 5,000 authorized, none issued
—

 
—

Common stock, $0.0001 par value; 100,000 authorized; 55,412 and 55,066 shares issued and outstanding, respectively
6

 
6

Additional paid-in capital
490,306

 
487,525

Accumulated deficit
(427,808
)
 
(416,383
)
Accumulated other comprehensive income
50

 
9

Total stockholders’ equity
62,554

 
71,157

Total liabilities and stockholders’ equity
$
111,107

 
$
122,299







GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per share data)
 
Three months ended
 
March 31,
 
2018
 
2017
Revenue
 
 
 
Product revenue
$
20,576

 
$
12,470

License and other revenue
69

 
65

Total revenue
20,645

 
12,535

Cost of revenue
16,480

 
6,352

Gross profit
4,165

 
6,183

Operating expenses:
 
 
 
Sales and marketing
5,402

 
4,693

General and administrative
4,133

 
4,011

Research and development
5,420

 
11,035

Total operating expenses
14,955

 
19,739

Loss from operations
(10,790
)
 
(13,556
)
Other income (expense):
 
 
 
Interest income
187

 
52

Interest expense
(788
)
 
(507
)
Other income (expense)
(12
)
 
95

Total other income (expense)
(613
)
 
(360
)
Loss before provision for income taxes
(11,403
)
 
(13,916
)
Income tax expense
20

 
1

Net loss
$
(11,423
)
 
$
(13,917
)
Net loss per share, basic and diluted
$
(0.21
)
 
$
(0.30
)
Weighted average number of shares outstanding basic and diluted
55,205

 
46,846


 
 
 
Other comprehensive loss:
 
 
 
Net loss
$
(11,423
)
 
$
(13,917
)
Other comprehensive income/(loss):
 
 
 
Foreign currency translation adjustments, net of tax
(34
)
 
91

Net unrealized losses on marketable securities, net of tax
8

 
(16
)
Total other comprehensive income/(loss)
(26
)
 
75

Total comprehensive loss
$
(11,449
)
 
$
(13,842
)





GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Three months ended March 31,
 
2018
 
2017
 
 
 
 
Operating activities:
 
 
 
Net loss
$
(11,423
)
 
$
(13,917
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
1,740

 
1,217

Net amortization/(accretion) of premiums/discounts on investments
(42
)
 
19

Amortization of deferred debt issuance costs
290

 
151

Stock-based compensation
2,724

 
2,808

Provision for bad debt
—

 
9

Non-cash inventory adjustments
449

 
317

Other non-cash adjustments
84

 
(85
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
2,566

 
1,558

Inventories
(526
)
 
(3,118
)
Prepaid expenses and other assets
760

 
(216
)
Accounts payable
(1,361
)
 
(2,821
)
Accrued compensation
(992
)
 
(1,144
)
Other current and non-current liabilities
(321
)
 
(343
)
Net cash used in operating activities
(6,052
)
 
(15,565
)
Investing activities:
 
 
 
Purchases of property and equipment
(465
)
 
(1,888
)
Purchases of marketable securities
(7,900
)
 
—

Proceeds from sales of marketable securities
—

 
13,896

Maturities of marketable securities
18,000

 
700

Net cash provided by investing activities
9,635

 
12,708

Financing activities:
 
 
 
Principal repayment of borrowings
(22
)
 
(6
)
Payments associated with debt issuance
(20
)
 
(20
)
Proceeds from stock option exercises
17

 
88

Net cash provided by (used in) financing activities
(25
)
 
62

Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(34
)
 
14

Net increase (decrease) in cash, cash equivalents, and restricted cash
3,524

 
(2,781
)
Cash, cash equivalents, and restricted cash at beginning of year
27,512

 
16,717

Cash, cash equivalents, and restricted cash at end of period
$
31,036

 
$
13,936

Non-cash investing and financing activities:
 
 
 
Transfer of systems to property and equipment from inventory
$
569

 
$
415

Property and equipment included in accounts payable
$
147

 
$
183

Supplemental cash flow information:
 
 
 
Cash paid for income taxes, net
$
33

 
$
5

Cash paid for interest
$
508

 
$
347




GenMark Diagnostics, Inc. Reports