Achieves record reproductive health revenues on
higher test volumes and average revenue per test, expands gross
margin, significantly narrows operating loss and reports record
cash collections
CombiMatrix Corporation (NASDAQ:CBMX), a family health molecular
diagnostics company specializing in DNA-based reproductive health
and pediatric testing services, announces financial results for the
three months ended March 31, 2017 and provides a business update.
“We are delighted to be reporting another
quarter of exceptional financial and operational performance,” said
Mark McDonough, CombiMatrix President and CEO. “Revenues
increased 27% year-over-year to $3.8 million, driven by a 32%
increase in our reproductive health segment. Gross margin on
diagnostic services improved to 59.9% from 51.6% a year ago, cash
collections reached a record $3.4 million, and net loss
decreased to $518,000, a nearly $1 million improvement from the
prior year. We believe that we are tracking very well toward
reaching our goal of positive cash flows from operations by the
fourth quarter of 2017.
“Since complementing our reproductive health
offering with in vitro fertilization testing in early 2015, we have
reported record revenues for our reproductive health segment in
each consecutive quarter,” he added. “Over the past several
years we have consistently delivered on our strategic
objectives. Our many accomplishments include upgrading the
talent within our sales organization, introducing new products,
providing clinical validation for our testing that supports
physician adoption and payor reimbursement, and increasing covered
lives under payor contracts. Our continuous improvement in
billing and collections processes coupled with our focus on
delivering high-reimbursed and self-paid diagnostic tests have
resulted in record cash collections. This tight execution on
virtually every aspect of our business plan is resulting in quarter
after quarter of improvements in key metrics, putting us on what we
believe is a path toward sustained profitability.”
2017 First Quarter Financial and
Operating Highlights (all comparisons are with the first
quarter of 2016)
- Total revenues of $3.8 million, up 27%
- Total test volume of 2,938, up 11%
- Reproductive health revenues of $2.9 million, up 32%
- Reproductive health test volume of 1,642, up 15%
- Gross margin of 59.9%, up from 51.6%
- Number of billable customers of 262, up 8%
- Record cash collections of $3.4 million, up 38%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes |
|
Revenues (in
000's) |
|
|
Q1
'17 |
|
Q1
'16 |
|
#
Δ |
|
% Δ |
|
Q1
'17 |
|
Q1
'16 |
|
$
Δ |
|
% Δ |
Prenatal |
|
307 |
|
264 |
|
43 |
|
16 |
% |
|
$ |
510 |
|
$ |
321 |
|
$ |
189 |
|
|
59 |
% |
Miscarriage analysis |
|
1,105 |
|
995 |
|
110 |
|
11 |
% |
|
|
2,037 |
|
|
1,622 |
|
|
415 |
|
|
26 |
% |
PGS |
|
230 |
|
167 |
|
63 |
|
38 |
% |
|
|
309 |
|
|
222 |
|
|
87 |
|
|
39 |
% |
Subtotal
- reproductive health |
|
1,642 |
|
1,426 |
|
216 |
|
15 |
% |
|
|
2,856 |
|
|
2,165 |
|
|
691 |
|
|
32 |
% |
Pediatric |
|
513 |
|
452 |
|
61 |
|
13 |
% |
|
|
606 |
|
|
500 |
|
|
106 |
|
|
21 |
% |
Subtotal |
|
2,155 |
|
1,878 |
|
277 |
|
15 |
% |
|
|
3,462 |
|
|
2,665 |
|
|
797 |
|
|
30 |
% |
FISH and
karyotyping |
|
783 |
|
770 |
|
13 |
|
2 |
% |
|
|
296 |
|
|
265 |
|
|
31 |
|
|
12 |
% |
Total -
all tests |
|
2,938 |
|
2,648 |
|
290 |
|
11 |
% |
|
|
3,758 |
|
|
2,930 |
|
|
828 |
|
|
28 |
% |
Royalties |
|
|
|
|
|
|
|
|
|
|
29 |
|
|
42 |
|
|
(13 |
) |
|
(31 |
%) |
Total
revenues |
|
|
|
|
|
|
|
|
|
$ |
3,787 |
|
$ |
2,972 |
|
$ |
815 |
|
|
27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Results
Total revenues for the first quarter of 2017
increased 27% to $3.8 million from $3.0 million for the first
quarter of 2016. The increase in the 2017 quarter was driven
by higher test volumes across all testing segments and improved
reimbursement resulting in higher average revenue per test across
all segments. Reproductive health diagnostic test revenues,
which include prenatal, miscarriage analysis and PGS testing,
increased 32% to $2.9 million while testing volumes increased 15%
to 1,642.
Total operating expenses were $4.3 million for
the first quarter of 2017 compared with $4.4 million for the
prior-year comparable period. The decrease was due primarily
to lower sales and marketing expenses related to optimized
headcount in the field, partially offset by higher general and
administrative expenses associated primarily with increased
management bonus accruals. Cost of services increased due to
higher test volumes. Gross margin improved to 59.9% for the
first quarter of 2017 from 51.6% in the prior-year comparable
period.
The net loss attributable to common stockholders
for the first quarter of 2017 was $518,000, or $0.19 per
share. This compares with a net loss attributable to common
stockholders for the first quarter of 2016 of $3.1 million, or
$3.63 per share, which reflected one-time, non-cash charges of $1.9
million related to deemed dividends from the issuance of Series F
convertible preferred stock and warrants in the $8.0 million public
offering that closed in March 2016. This increase was
partially offset by the reversal of the $890,000 Series E deemed
dividend recognized in 2015 from the repurchase of those securities
upon closing of a public offering, partially reduced by the
$656,000 deemed dividend paid to the Series E investors in February
2016.
The Company reported $3.2 million in cash, cash
equivalents and short-term investments as of March 31, 2017,
compared with $3.7 million as of December 31, 2016. The
Company used $495,000 in cash to fund operating activities during
the first quarter of 2017, compared with $1.7 million to fund
operating activities during the first quarter of 2016. The
significant decrease in cash used to fund operating activities in
the first quarter of 2017 resulted primarily from improved cash
reimbursement of $3.4 million for the three months ended March 31,
2017, compared with $2.5 million for the three months ended March
31, 2016.
Conference Call and Webcast
CombiMatrix will hold an investment-community
conference call and audio webcast today beginning at 4:30 p.m.
Eastern time (1:30 p.m. Pacific time) to discuss these results and
answer questions. The conference call dial-in numbers are (866)
634-2258 for domestic callers and (330) 863-3454 for international
callers. A live webcast of the call will be available at
http://investor.combimatrix.com/events.cfm.
A recording of the call will be available for
seven days beginning approximately two hours after the completion
of the call by dialing (855) 859-2056 for domestic callers or (404)
537-3406 for international callers, and entering passcode 10856966.
The webcast of the call will be archived for 30 days on the
Company’s website at
http://investor.combimatrix.com/events.cfm.
About CombiMatrix
Corporation
CombiMatrix Corporation provides sophisticated
molecular diagnostic solutions and comprehensive clinical support
to foster the highest quality in patient care. CombiMatrix
specializes in pre-implantation genetic diagnostics and screening,
prenatal diagnosis, miscarriage analysis and pediatric
developmental disorders, offering DNA-based testing for the
detection of genetic abnormalities beyond what can be identified
through traditional methodologies. Our testing focuses on advanced
technologies, including single nucleotide polymorphism chromosomal
microarray analysis, next generation sequencing, fluorescent in
situ hybridization and high resolution karyotyping. Additional
information about CombiMatrix is available at
www.combimatrix.com or by calling (800) 710-0624.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
This press release contains forward-looking
statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These
statements are based upon our current expectations, speak only as
of the date hereof and are subject to change. All statements, other
than statements of historical fact included in this press release,
are forward-looking statements. Forward-looking statements can
often be identified by words such as "anticipates," "expects,"
"intends," "plans," "goal," "predicts," "believes," "seeks,"
"estimates," "may," "will," "should," "would," "could,"
"potential," "continue," "ongoing," “outlook,” “reach,” similar
expressions, and variations or negatives of these words and
include, but are not limited to, statements regarding projected
results of operations, including projected cash flow-positive
operating results, management's future business, operational and
strategic plans, recruiting efforts and test menu expansion. These
forward-looking statements are not guarantees of future results and
are subject to risks, uncertainties and assumptions that could
cause our actual results to differ materially and adversely from
those expressed in any forward-looking statement. The risks and
uncertainties referred to above include, but are not limited to:
our ability to grow revenue and improve gross margin; delays in
achieving and maintaining cash flow-positive operating results; the
risk that operating expenses are not reduced or increase; the risk
that test volumes and reimbursements level off or decline; the risk
that payors decide to not cover our tests or to reduce the amounts
they are willing to pay for our tests; the risk that we will not be
able to grow our business as quickly as we need to; the inability
to raise capital; the loss of members of our sales force; our
ability to successfully expand the base of our customers, add to
the menu of our diagnostic tests, develop and introduce new tests
and related reports, expand and improve our current suite of
services, optimize the reimbursements received for our microarray
testing services, and increase operating margins by improving
overall productivity and expanding sales volumes; our ability to
successfully accelerate sales, steadily increase the size of our
customer rosters in all of our genetic testing markets; our
ability to attract and retain a qualified sales force in wider
geographies; our ability to ramp production from our sales; rapid
technological change in our markets; changes in demand for our
future services; legislative, regulatory and competitive
developments; general economic conditions; and various other
factors. Further information on potential factors that could affect
our financial results is included in our Annual Report on Form
10-K, Quarterly Reports of Form 10-Q, and in other filings with
the Securities and Exchange Commission. We undertake no
obligation to revise or update publicly any forward-looking
statements for any reason, except as required by law.
Company Contact:Mark McDonoughPresident &
CEO, CombiMatrix Corporation(949) 753-0624
Investor Contact:LHAJody Cain(310) 691-7100jcain@lhai.com
Tables to Follow
|
COMBIMATRIX CORPORATION |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands, except share and per share
information) |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
|
2017 |
|
|
|
2016 |
|
Revenues: |
|
|
|
|
Diagnostic services |
|
$ |
3,758 |
|
|
$ |
2,930 |
|
Royalties |
|
|
29 |
|
|
|
42 |
|
Total
revenues |
|
|
3,787 |
|
|
|
2,972 |
|
Operating
expenses: |
|
|
|
|
Cost of
services |
|
|
1,508 |
|
|
|
1,419 |
|
Research
and development |
|
|
85 |
|
|
|
143 |
|
Sales and
marketing |
|
|
1,022 |
|
|
|
1,336 |
|
General
and administrative |
|
|
1,664 |
|
|
|
1,526 |
|
Patent
amortization and royalties |
|
|
25 |
|
|
|
25 |
|
Total
operating expenses |
|
|
4,304 |
|
|
|
4,449 |
|
Operating
loss |
|
|
(517 |
) |
|
|
(1,477 |
) |
Other income
(expense): |
|
|
|
|
Interest
income |
|
|
6 |
|
|
|
4 |
|
Interest
expense |
|
|
(7 |
) |
|
|
(18 |
) |
Total
other income (expense) |
|
|
(1 |
) |
|
|
(14 |
) |
Net
loss |
|
$ |
(518 |
) |
|
$ |
(1,491 |
) |
|
|
|
|
|
Deemed dividend from
issuing Series F convertible |
|
|
|
|
preferred
stock and warrants |
|
$ |
- |
|
|
$ |
(1,877 |
) |
Deemed dividend paid
for right to repurchase Series E |
|
|
|
|
convertible preferred stock |
|
|
- |
|
|
|
(656 |
) |
Deemed dividend from
issuing and modifying Series E |
|
|
|
|
convertible preferred stock and warrants |
|
|
- |
|
|
|
890 |
|
Net loss
attributable to common stockholders |
|
$ |
(518 |
) |
|
$ |
(3,134 |
) |
|
|
|
|
|
Basic
and diluted net loss per share |
|
$ |
(0.19 |
) |
|
$ |
(1.73 |
) |
Deemed dividend from
issuing Series F convertible |
|
|
|
|
preferred
stock and warrants |
|
|
- |
|
|
|
(2.17 |
) |
Deemed dividend paid
for right to repurchase Series E |
|
|
|
|
convertible preferred stock |
|
|
- |
|
|
|
(0.76 |
) |
Deemed dividend from
issuing and modifying Series E |
|
|
|
|
convertible preferred stock and warrants |
|
|
- |
|
|
|
1.03 |
|
Basic and diluted net
loss per share attributable |
|
|
|
|
to common
stockholders |
|
$ |
(0.19 |
) |
|
$ |
(3.63 |
) |
|
|
|
|
|
Basic and diluted
weighted average |
|
|
|
|
common
shares outstanding |
|
|
2,760,887 |
|
|
|
863,931 |
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEET INFORMATION: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2017 |
|
2016 |
Total cash, cash
equivalents and short-term investments |
|
$ |
3,174 |
|
$ |
3,727 |
Total assets |
|
|
8,065 |
|
|
8,478 |
Total liabilities |
|
|
1,896 |
|
|
1,984 |
Total stockholders’
equity |
|
|
6,169 |
|
|
6,494 |
|
|
|
|
|
|
|
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