Fulgent Genetics Reports Record Third Quarter 2020 Financial Results and Raises Full Year 2020 Revenue Guidance by $100 Million
Third Quarter 2020 Results:
- Record Revenue of
$101.7 million , growing more than 880% year-over-year - Record Billable tests delivered approximately 1.04 million, growing more than 4,800% year-over-year
- Gross Margin improved approximately 19 percentage points sequentially and approximately 12 percentage points year-over-year; cost per test improved approximately 42% sequentially
- Non-COVID Revenue grew 57% sequentially
- Bolsters reimbursement capability; revenue from reimbursement constituted majority of third quarter revenue
- Record GAAP earnings of
$46.6 million , or$1.98 per share - Record Non-GAAP earnings of
$49.0 million , or$2.08 per share - Record Adjusted EBITDA of
$67.4 million - Raises Full Year 2020 revenue guidance to
$235 million from$135 million previously
Third quarter revenue was
Adjusted EBITDA was
Non-GAAP income (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.
For the fourth quarter of 2020, the company expects to generate revenue of at least
Conference Call Information
The call can be accessed through a live audio webcast in the Investors section of the company’s website, http://ir.fulgentgenetics.com, and through a live conference call by dialing (855) 321-9535 using the conference ID 1466548. An audio replay will be available in the Investors section of the company’s website or by calling (855) 859-2056 using passcode 1466548 through
Note Regarding Non-GAAP Financial Measures
Certain of the information set forth in this press release, including non-GAAP income (loss), non-GAAP earnings per share and adjusted EBITDA, are non-GAAP financial measures.
About
Fulgent Genetics’ proprietary technology platform has created a broad, flexible test menu and the ability to continually expand and improve its proprietary genetic reference library while maintaining accessible pricing, high accuracy and competitive turnaround times. Combining next generation sequencing (“NGS”) with its technology platform, the Company performs full-gene sequencing with deletion/duplication analysis in an array of panels that can be tailored to meet specific customer needs. In 2019, the Company launched its first patient-initiated product, Picture Genetics, a new line of at-home screening tests that combines the Company’s advanced NGS solutions with actionable results and genetic counseling options for individuals. Since
About Picture Genetics
Through its Picture Genetics platform launched in 2019,
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 the company’s and its technology platform’s ability to scale, the company’s evaluations and judgments regarding momentum, partnerships, relationships, inflection points, evaluations of the company’s testing services as compared to competitors and the company’s recent and future performance; 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, capture market share and its ability to continue 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 ongoing impacts of the COVID-19 pandemic, including the preventive public health measures that may continue to impact demand for its tests and the pandemic’s effects on the global supply chain; the market potential for, and the rate and degree of market adoption of, the company’s tests, including its newly-developed tests for COVID-19 and genetic testing generally; the company’s ability to capture a sizable share of the developing market for genetic and COVID-19 testing and to compete successfully in these markets, including its ability to continue to develop new tests that are attractive to its various customer markets, its ability to maintain turnaround times 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 Contact:
CONDENSED CONSOLIDATED BALANCE SHEET DATA | ||||||
(in thousands) | ||||||
ASSETS: | 2020 | 2019 | ||||
Cash and cash equivalents | $ | 53,031 | $ | 11,965 | ||
Investments in marketable securities | 50,939 | 58,251 | ||||
Accounts receivable, net | 90,680 | 6,555 | ||||
Property and equipment, net | 17,385 | 5,974 | ||||
Other assets | 35,276 | 6,011 | ||||
Total assets | $ | 247,311 | $ | 88,756 | ||
LIABILITIES & EQUITY: | ||||||
Accounts payable, accrued liabilities and other liabilities | $ | 60,356 | $ | 5,979 | ||
Total stockholders’ equity | 186,955 | 82,777 | ||||
Total liabilities & equity | $ | 247,311 | $ | 88,756 |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA | |||||||||||||||
Three and Nine Months Ended |
|||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue | $ | 101,716 | $ | 10,347 | $ | 126,734 | $ | 24,141 | |||||||
Cost of revenue (1) | 26,261 | 3,885 | 38,035 | 10,473 | |||||||||||
Gross profit | 75,455 | 6,462 | 88,699 | 13,668 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development (1) | 3,177 | 1,744 | 7,004 | 4,742 | |||||||||||
Selling and marketing (1) | 5,014 | 1,687 | 9,871 | 4,263 | |||||||||||
General and administrative (1) | 3,741 | 1,522 | 7,575 | 4,682 | |||||||||||
Total operating expenses | 11,932 | 4,953 | 24,450 | 13,687 | |||||||||||
Operating income (loss) | 63,523 | 1,509 | 64,249 | (19 | ) | ||||||||||
Interest income and other, net | 421 | 189 | 937 | 588 | |||||||||||
Income before income taxes, equity loss in investee and impairment loss | 63,944 | 1,698 | 65,186 | 569 | |||||||||||
Provision for income taxes | 14,526 | 61 | 13,961 | 81 | |||||||||||
Income before equity loss in investee and impairment loss | 49,418 | 1,637 | 51,225 | 488 | |||||||||||
Equity loss in investee | (189 | ) | (175 | ) | (631 | ) | (603 | ) | |||||||
Impairment loss in equity-method investment | (2,591 | ) | — | (2,591 | ) | — | |||||||||
Net income (loss) | $ | 46,638 | $ | 1,462 | $ | 48,003 | $ | (115 | ) | ||||||
Net income (loss) per common share: | |||||||||||||||
Basic | $ | 2.11 | $ | 0.08 | $ | 2.20 | $ | (0.01 | ) | ||||||
Diluted | $ | 1.98 | $ | 0.08 | $ | 2.07 | $ | (0.01 | ) | ||||||
Weighted average common shares: | |||||||||||||||
Basic | 22,062 | 18,501 | 21,793 | 18,358 | |||||||||||
Diluted | 23,539 | 19,456 | 23,135 | 18,358 | |||||||||||
(1) Equity-based compensation expense was allocated as follows: | |||||||||||||||
Cost of revenue | $ | 428 | $ | 174 | $ | 929 | $ | 483 | |||||||
Research and development | 887 | 279 | 1,563 | 690 | |||||||||||
Selling and marketing | 1,184 | 332 | 1,577 | 643 | |||||||||||
General and administrative | 651 | 166 | 1,085 | 455 | |||||||||||
Total equity-based compensation expense | $ | 3,150 | $ | 951 | $ | 5,154 | $ | 2,271 | |||||||
Non-GAAP Income Reconciliation | ||||||||||||||
Three and Nine Months Ended |
||||||||||||||
(in thousands, except per share data) | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Net income (loss) | $ | 46,638 | $ | 1,462 | $ | 48,003 | $ | (115 | ) | |||||
Provision for income taxes | 14,526 | 61 | 13,961 | 81 | ||||||||||
Equity-based compensation expense | 3,150 | 951 | 5,154 | 2,271 | ||||||||||
Non-GAAP tax effect (1) | (18,115 | ) | — | (18,992 | ) | — | ||||||||
Equity loss in investee | 189 | 175 | 631 | 603 | ||||||||||
Impairment loss in equity-method investment | 2,591 | — | 2,591 | — | ||||||||||
Non-GAAP income | $ | 48,979 | $ | 2,649 | $ | 51,348 | $ | 2,840 | ||||||
Net income (loss) per common share: | ||||||||||||||
Basic | $ | 2.11 | $ | 0.08 | $ | 2.20 | $ | (0.01 | ) | |||||
Diluted | $ | 1.98 | $ | 0.08 | $ | 2.07 | $ | (0.01 | ) | |||||
Non-GAAP income per common share: | ||||||||||||||
Basic | $ | 2.22 | $ | 0.14 | $ | 2.36 | $ | 0.15 | ||||||
Diluted | $ | 2.08 | $ | 0.14 | $ | 2.22 | $ | 0.15 | ||||||
Weighted average common shares: | ||||||||||||||
Basic | 22,062 | 18,501 | 21,793 | 18,358 | ||||||||||
Diluted | 23,539 | 19,456 | 23,135 | 18,358 | ||||||||||
(1) Tax rates as follows: | ||||||||||||||
Corporate tax rate of 27% for the three and nine months ended |
||||||||||||||
Corporate tax rate of zero for the three and nine months ended |
||||||||||||||
Non-GAAP Adjusted EBITDA Reconciliation | |||||||||||||||
Three and Nine Months Ended |
|||||||||||||||
(in thousands) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) | $ | 46,638 | $ | 1,462 | $ | 48,003 | $ | (115 | ) | ||||||
Interest income, net | (424 | ) | (202 | ) | (999 | ) | (619 | ) | |||||||
Provision for income taxes | 14,526 | 61 | 13,961 | 81 | |||||||||||
Equity-based compensation expense | 3,150 | 951 | 5,154 | 2,271 | |||||||||||
Depreciation | 722 | 503 | 1,840 | 1,549 | |||||||||||
Equity loss in investee | 189 | 175 | 631 | 603 | |||||||||||
Impairment loss in equity-method investment | 2,591 | — | 2,591 | — | |||||||||||
Adjusted EBITDA | $ | 67,392 | $ | 2,950 | $ | 71,181 | $ | 3,770 | |||||||
Source: Fulgent Genetics, Inc.