- Total Revenue of $66.2 million
- Record Core Revenue of $62.7 million, growth of 150%
year-over-year
- Raises Full Year 2023 Core Revenue Guidance to $250
million
Fulgent Genetics, Inc. (NASDAQ: FLGT) (“Fulgent” or the
“Company”), a technology-based company with a well-established
clinical diagnostic business and a therapeutic development
business, today announced financial results for its first quarter
ended March 31, 2023.
First Quarter 2023 Results:
- Total Revenue of $66.2 million
- Core Revenue1 grew 150% year-over-year to $62.7 million
- GAAP loss of $15.3 million, or $0.52 per share
- Non-GAAP loss of $6.5 million, or $0.22 per share
- Adjusted EBITDA loss of $7.2 million
- Cash, cash equivalents, and investments in marketable
securities, excluding investment pending cash settlement, of $867.8
million as of March 31, 2023
Note:
1) Core Revenue excludes revenue from
COVID-19 testing products and services including COVID-19 NGS
testing revenue.
Non-GAAP income (loss), non-GAAP income (loss) per share, and
adjusted EBITDA income (loss) 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.
Commenting on the results, Ming Hsieh, Chairman of the Board and
Chief Executive Officer, said, “We are off to a strong start in
2023, with strength in our core genetics business across our three
main areas – precision diagnostics, anatomic pathology, and pharma
services. We are encouraged by the early interest in our expanded
carrier screening through Beacon787. In our therapeutics business,
we look forward to sharing Phase 1b data next month at the American
Society of Clinical Oncology annual meeting for our lead drug
candidate, FID-007, in various cancers, and furthering this
clinical program.”
Paul Kim, Chief Financial Officer, added, “We are raising our
guidance for the year due to our outperformance in the first
quarter. While we are still not guiding to COVID-19 revenue, we are
pleased with our results in the core business and continue to see
financial strength. Our cash position continues to afford us the
flexibility to be opportunistic and strategic in building a
sustainable business for the long-term.”
Outlook:
For the second quarter of 2023, Fulgent expects:
- Core Revenue of approximately $62 million
For the full year 2023, Fulgent now expects:
- Core Revenue of approximately $250 million
- GAAP loss of approximately $2.50 per share
- Non-GAAP loss of approximately $1.25 per share
Conference Call Information
Fulgent will host a conference call for the investment community
today at 8:30 AM ET (5:30 AM PT) to discuss its first quarter 2023
results. The call may be accessed through a live audio webcast in
the Investor Relations section of the Company’s website,
http://ir.fulgentgenetics.com. An audio replay will be available at
the same location.
Note Regarding Non-GAAP Financial Measures
Certain information set forth in this press release, including
non-GAAP income (loss), non-GAAP income (loss) per share, and
adjusted EBITDA income (loss) are non-GAAP financial measures.
Fulgent believes this information is useful to investors because it
provides a basis for measuring the performance of the Company’s
business, excluding certain income or expense items that management
believes are not directly attributable to the Company’s operating
results. Fulgent defines non-GAAP income (loss) as net income
(loss) calculated in accordance with accounting principles
generally accepted in the United States of America, or GAAP, plus
amortization of intangible assets, plus restructuring costs, plus
acquisition-related costs, including banking fees and legal fees
associated with acquisitions, plus equity-based compensation
expense, plus or minus the non-GAAP tax effect, and plus or minus
other charges or gains, as identified, that management believes are
not representative of the Company’s operations. The non-GAAP tax
effect is calculated by applying the statutory corporate tax rate
on the amortization of intangible assets, restructuring costs,
acquisition-related costs, and equity-based compensation expense.
Fulgent defines adjusted EBITDA income (loss) as GAAP income (loss)
plus or minus interest (expense) income, plus or minus provisions
(benefits) for income taxes, plus restructuring costs, plus
acquisition-related costs, plus equity-based compensation expense,
plus depreciation and amortization, and plus or minus other charges
or gains, as identified, that management believes are not
representative of the Company’s operations. Fulgent may continue to
incur expenses similar to the items added to or subtracted from
GAAP income (loss) to calculate non-GAAP income (loss) and adjusted
EBITDA income (loss); accordingly, the exclusion of these items in
the presentation of these non-GAAP financial measures should not be
construed as an implication that these items are unusual,
infrequent or non-recurring. Management uses these non-GAAP
financial measures along with the most directly comparable GAAP
financial measure of net income (loss) in evaluating the Company's
operating performance. Non-GAAP financial measures should not be
considered in isolation from, or as a substitute for, financial
information presented in conformity with GAAP, and non-GAAP
financial measures as reported by Fulgent may not be comparable to
similarly titled metrics reported by other companies.
About Fulgent
Fulgent is a technology-based company with a well-established
clinical diagnostic business and a therapeutic development
business. Fulgent’s clinical diagnostic business offers molecular
diagnostic testing services, comprehensive genetic testing, and
high-quality anatomic pathology laboratory services designed to
provide physicians and patients with clinically actionable
diagnostic information to improve the quality of patient care.
Fulgent’s therapeutic development business is focused on developing
drug candidates for treating a broad range of cancers using a novel
nanoencapsulation and targeted therapy platform designed to improve
the therapeutic window and pharmacokinetic profile of new and
existing cancer drugs. The Company aims to transform from a genomic
diagnostic business into a fully integrated precision medicine
company.
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: future performance;
guidance regarding expected quarterly and annual financial results,
core revenues, GAAP loss, and non-GAAP loss; evaluations and
judgments regarding the stability of certain revenue sources,
momentum, vision, future opportunities and future growth the
Company’s testing services and technologies and expansion; the
Company’s identification and evaluation of opportunities and its
ability to capitalize on opportunities, capture market share, or
expand its presence in certain markets; and the Company’s 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 market potential
for, and the rate and degree of market adoption of, the Company’s
tests, including its Beacon787 panel; 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; the Company’s ability to maintain an
acceptable margin; 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 level
of success in obtaining coverage and adequate reimbursement and
collectability levels from third-party payors for its tests and
testing services; the Company’s level of success in establishing
and obtaining the intended benefits from partnerships, strategic
investments, joint ventures, acquisitions, or other relationships;
the success of the Company’s development efforts, including the
Company’s ability to progress its candidates through clinical
trials on the timelines expected; the Company’s compliance with the
various evolving and complex laws and regulations applicable to its
business and its industry; and the Company’s ability to protect its
proprietary technology and intellectual property. 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 U.S. Securities and
Exchange Commission, or the SEC, including its annual report on
Form 10-K for the year ended December 31, 2022, filed with the SEC
on February 28, 2023, and the other reports it files from time to
time, including subsequently filed annual, quarterly and current
reports, are made available on the Company’s website upon their
filing with the SEC. These reports contain more information about
the Company, its business and the risks affecting its business, as
well as its results of operations for the periods covered by the
financial results included in this press release.
FULGENT GENETICS, INC.
Condensed Consolidated Balance Sheet
Data
March 31, 2023 and December 31,
2022
(in thousands)
March 31,
December 31,
2023
2022
ASSETS:
Cash and cash equivalents
$
66,172
$
79,506
Investments in marketable securities
805,146
773,377
Accounts receivable, net
43,549
52,749
Property, plant, and equipment, net
79,083
81,353
Other assets
382,817
399,068
Total assets
$
1,376,767
$
1,386,053
LIABILITIES & EQUITY:
Accounts payable, accrued liabilities and
other liabilities
$
107,848
$
116,178
Total stockholders’ equity
1,268,919
1,269,875
Total liabilities & equity
$
1,376,767
$
1,386,053
FULGENT GENETICS, INC.
Condensed Consolidated Statement of
Operations Data
Three Months Ended March 31, 2023 and
2022
(in thousands, except per share
data)
(unaudited)
Three Months Ended March
31,
2023
2022
Revenue
$
66,168
$
320,268
Cost of revenue (1)
47,357
77,725
Gross profit
18,811
242,543
Operating expenses:
Research and development (1)
9,782
5,989
Selling and marketing (1)
10,083
7,940
General and administrative (1)
21,802
25,775
Amortization of intangible assets
1,968
906
Total operating expenses
43,635
40,610
Operating (loss) income
(24,824
)
201,933
Interest and other income, net
3,775
45
(Loss) income before income taxes
(21,049
)
201,978
(Benefit from) provision for income
taxes
(5,200
)
48,421
Net (loss) income from consolidated
operations
(15,849
)
153,557
Net loss attributable to noncontrolling
interests
509
422
Net (loss) income attributable to
Fulgent
$
(15,340
)
$
153,979
Net (loss) income per common share
attributable to Fulgent:
Basic
$
(0.52
)
$
5.09
Diluted
$
(0.52
)
$
4.93
Weighted average common shares:
Basic
29,536
30,234
Diluted
29,536
31,240
(1) Equity-based compensation expense was
allocated as follows:
Cost of revenue
$
2,394
$
1,465
Research and development
3,448
1,921
Selling and marketing
1,361
825
General and administrative
3,062
1,405
Total equity-based compensation
expense
$
10,265
$
5,616
FULGENT GENETICS, INC.
Non-GAAP Income (Loss)
Reconciliation
Three Months Ended March 31, 2023 and
2022
(in thousands, except per share
data)
Three Months Ended March
31,
2023
2022
Net (loss) income attributable to
Fulgent
$
(15,340
)
$
153,979
Amortization of intangible assets
1,968
906
Equity-based compensation expense
10,265
5,616
Non-GAAP tax effect (1)
(3,425
)
(1,826
)
Non-GAAP (loss) income attributable to
Fulgent
$
(6,532
)
$
158,675
Net (loss) income per common share
attributable to Fulgent:
Basic
$
(0.52
)
$
5.09
Diluted
$
(0.52
)
$
4.93
Non-GAAP (loss) income per common share
attributable to Fulgent:
Basic
$
(0.22
)
$
5.25
Diluted
$
(0.22
)
$
5.08
Weighted average common shares:
Basic
29,536
30,234
Diluted
29,536
31,240
(1) Tax rates as follows:
Corporate tax rate of 28% for the three
months ended March 31, 2023 and March 31, 2022.
FULGENT GENETICS, INC.
Non-GAAP Adjusted EBITDA
Reconciliation
Three Months Ended March 31, 2023 and
2022
(in thousands)
Three Months Ended March
31,
2023
2022
Net (loss) income attributable to
Fulgent
$
(15,340
)
$
153,979
Interest (income) expense, net
(3,772
)
739
(Benefit from) provision for income
taxes
(5,200
)
48,421
Equity-based compensation expense
10,265
5,616
Depreciation and amortization
6,879
4,695
Adjusted EBITDA
$
(7,168
)
$
213,450
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version on businesswire.com: https://www.businesswire.com/news/home/20230505005070/en/
Investor Relations Contact: The Blueshirt Group Melanie
Solomon, melanie@blueshirtgroup.com
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