Standard BioTools Reports First Quarter 2023 Financial Results
Net cash used in operating activities of
GAAP revenue (includes discontinued/COVID-19 products) decreased 5.2% year-over-year to
GAAP product and services margin of 46.6%, an improvement of 567 basis points over fourth quarter 2022; non-GAAP product and service margin grew to 60.9%, a 792 basis point increase over the fourth quarter
GAAP operating expenses of
Cash, cash equivalents and short-term investments of
Company to host conference call and webcast today at
“Our focus continues to be the fundamental transformation of our core business into a cash flow positive, self-sustaining enterprise from which we can build organically and inorganically. To that end in the quarter, we were able to reduce operating cash burn significantly and stimulate early but encouraging growth in our core product and service business lines,” said
Business Update
Proteomics (Mass Cytometry): The company launched the Hyperion XTi™ Imaging System at the
Genomics (
Operations: The company completed its significant restructuring efforts in the quarter with the finalization of the realignment of its European commercial organization. Additionally, the company subleased another 25% of lab and office space in its
Corporate: In January the company announced
First Quarter 2023 Financial Results
First quarter GAAP total revenue was
GAAP product and service margin increased 567 basis points sequentially to 46.6%. Non-GAAP product and service margin, which primarily excludes non-cash amortization, increased 792 basis points sequentially to 60.9%.
GAAP operating expenses were
Net cash used in operating activities in the quarter was
Outlook for 2023
For 2023, Standard BioTools expects flat-to-moderate growth in core product and service revenues relative to 2022 core product and service revenues of $94.5 million.
GAAP product and services margins are currently expected to increase to 52%–55% by the fourth quarter of 2023. Non-GAAP product and services margins are expected to increase to 65%–68% by the fourth quarter of 2023.
Management expects GAAP operating expenses of approximately $118 million to $123 million with non-GAAP operating expenses (which primarily exclude approximately $13 million of non-cash stock-based compensation expense) of approximately $102 million to $107 million for 2023.
Conference Call Information
The company’s management will host a conference call and webcast today at 2:00 p.m. PT,
Individuals interested in listening to the conference call may do so by dialing:
US domestic callers: (888) 346-3970
Outside US callers: (412) 902-4297
Live audio of the webcast will be available online from the Investor Relations page of the company’s website at Events & Presentations. The webcast will be archived and available on the Standard BioTools Investor Relations page at investors.standardbio.com.
Our investor presentation including Supplemental Financial Information has been posted on the investor relations section of our website concurrent with this news release.
Statement Regarding Use of Non-GAAP Financial Information
Use of Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, guidance, including related to revenues, margin, and operating expenses, and statements regarding future financial performance and expectations, operational and strategic plans, deployment of capital, our cash runway and sufficiency of cash resources, potential M&A activity, and expectations with respect to our restructuring plans (including expense reduction activities). Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from currently anticipated results, including but not limited to risks that we may not realize expected cost savings from the restructuring, including the anticipated decrease in operational expenses, at the levels we expect; possible restructuring and transition-related disruption, including through the loss of customers, suppliers, and employees and adverse impacts on our development activities and results of operation; restructuring activities, including our subleasing plans, customer and employee relations, management distraction, and reduced operating performance; risks that internal and external costs required for ongoing and planned activities may be higher than expected, which may cause us to use cash more quickly than we expect or change or curtail some of our plans, or both; risks that our expectations as to expenses, cash usage, and cash needs may prove not to be correct for other reasons such as changes in plans or actual events being different than our assumptions; changes in Standard BioTools’ business or external market conditions; challenges inherent in developing, manufacturing, launching, marketing, and selling new products; interruptions or delays in the supply of components or materials for, or manufacturing of,
About
Available Information
Standard BioTools uses its website (standardbio.com), investor site (investors.standardbio.com), corporate Twitter account (@Standard_BioT), Facebook page (facebook.com/StandardBioT), and LinkedIn page (linkedin.com/company/standard-biotools) as channels of distribution of information about its products, its planned financial and other announcements, its attendance at upcoming investor and industry conferences, and other matters. Such information may be deemed material information, and Standard BioTools may use these channels to comply with its disclosure obligations under Regulation FD. Therefore, investors should monitor Standard BioTools’ website and its social media accounts in addition to following its press releases, SEC filings, public conference calls, and webcasts.
Investor Contacts
ir@standardbio.com
Peter DeNardo
415 389 6400
ir@standardbio.com
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (In thousands, except per share amounts) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended |
||||||||
| 2023 | 2022 | |||||||
| Revenue: | ||||||||
| Product revenue | $ | 17,438 | $ | 20,004 | ||||
| Service revenue | 6,881 | 6,144 | ||||||
| Product and service revenue | 24,319 | 26,148 | ||||||
| Other revenue (1) | 800 | 356 | ||||||
| Total revenue | 25,119 | 26,504 | ||||||
| Costs and expenses: | ||||||||
| Cost of product revenue | 10,203 | 12,339 | ||||||
| Cost of service revenue | 2,792 | 1,928 | ||||||
| Cost of product and service revenue | 12,995 | 14,267 | ||||||
| Research and development | 6,409 | 8,865 | ||||||
| Selling, general and administrative | 22,308 | 30,875 | ||||||
| Total costs and expenses | 41,712 | 54,007 | ||||||
| Loss from operations | (16,593 | ) | (27,503 | ) | ||||
| Interest expense | (1,117 | ) | (1,030 | ) | ||||
| Loss on forward sale of Series B Preferred Stock | — | (37,792 | ) | |||||
| Loss on Bridge Loans | — | (10,655 | ) | |||||
| Other income, net | 1,130 | 118 | ||||||
| Loss before income taxes | (16,580 | ) | (76,862 | ) | ||||
| Income tax benefit (expense) | (263 | ) | 574 | |||||
| Net loss | $ | (16,843 | ) | $ | (76,288 | ) | ||
| Net loss per share, basic and diluted | $ | (0.21 | ) | $ | (0.99 | ) | ||
| Shares used in computing net loss per share, basic and diluted | 79,080 | 77,031 | ||||||
| Notes: | ||||||||
| (1) Other revenue includes product development and license revenue | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
2023 |
2022 (1) |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents (2) | $ | 113,663 | $ | 81,309 | ||||
| Short-term investments (2) | 40,874 | 84,475 | ||||||
| Accounts receivable, net | 14,504 | 17,280 | ||||||
| Inventories, net | 22,513 | 21,473 | ||||||
| Prepaid expenses and other current assets | 3,374 | 4,278 | ||||||
| Total current assets | 194,928 | 208,815 | ||||||
| Property and equipment, net | 25,002 | 25,652 | ||||||
| Operating lease right-of-use asset, net | 32,974 | 33,883 | ||||||
| Other non-current assets | 2,665 | 3,109 | ||||||
| Developed technology, net | 9,800 | 12,600 | ||||||
| 106,285 | 106,251 | |||||||
| Total assets | $ | 371,654 | $ | 390,310 | ||||
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 6,109 | $ | 7,914 | ||||
| Accrued compensation and related benefits | 8,430 | 9,153 | ||||||
| Operating lease liabilities, current | 3,764 | 3,682 | ||||||
| Deferred revenue, current | 11,636 | 10,792 | ||||||
| Deferred grant income, current | 3,637 | 3,644 | ||||||
| Other accrued liabilities | 6,878 | 6,175 | ||||||
| Term loan, current | 3,333 | 2,083 | ||||||
| Total current liabilities | 43,787 | 43,443 | ||||||
| Convertible notes, net | 54,733 | 54,615 | ||||||
| Term loan, non-current | 7,001 | 8,194 | ||||||
| Deferred tax liability | 1,052 | 1,055 | ||||||
| Operating lease liabilities, non-current | 33,151 | 34,081 | ||||||
| Deferred revenue, non-current | 3,828 | 3,816 | ||||||
| Deferred grant income, non-current | 13,452 | 14,359 | ||||||
| Other non-current liabilities | 550 | 961 | ||||||
| Total liabilities | 157,554 | 160,524 | ||||||
| Mezzanine equity: | ||||||||
| Redeemable preferred stock | 311,253 | 311,253 | ||||||
| Total stockholders’ deficit | (97,153 | ) | (81,467 | ) | ||||
| Total liabilities, mezzanine equity and stockholders’ deficit | $ | 371,654 | $ | 390,310 | ||||
| Notes: | ||||||||
| (1) Derived from audited consolidated financial statements | ||||||||
| (2) Cash and cash equivalents and available for sale securities consist of: | ||||||||
| Cash and cash equivalents | $ | 113,663 | $ | 81,309 | ||||
| Short-term investments | 40,874 | 84,475 | ||||||
| Total cash, cash equivalents and available for sale securities | $ | 154,537 | $ | 165,784 | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended |
||||||||
| 2023 | 2022 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (16,843 | ) | $ | (76,288 | ) | ||
| Loss on forward sale of Series B Preferred Stock | — | 37,792 | ||||||
| Loss on bridge loans | — | 10,655 | ||||||
| Stock-based compensation expense | 3,148 | 4,042 | ||||||
| Amortization of developed technology | 2,800 | 2,968 | ||||||
| Depreciation and amortization | 862 | 1,003 | ||||||
| Provision for excess and obsolete inventory | 350 | 851 | ||||||
| Other non-cash items | (110 | ) | 315 | |||||
| Changes in assets and liabilities, net | 1,308 | 3,072 | ||||||
| Net cash used in operating activities | (8,485 | ) | (15,590 | ) | ||||
| Investing activities | ||||||||
| Purchases of short-term investments | (6,836 | ) | — | |||||
| Proceeds from sales and maturities of investments | 51,000 | — | ||||||
| Purchases of property and equipment | (1,010 | ) | (868 | ) | ||||
| Net cash provided by (used in) investing activities | 43,154 | (868 | ) | |||||
| Financing activities | ||||||||
| Proceeds from bridge loans | — | 25,000 | ||||||
| Repayment of advances under revolving credit facility | — | (6,838 | ) | |||||
| Repurchase of common stock | (2,466 | ) | — | |||||
| Payments for employee equity programs, net | (92 | ) | (87 | ) | ||||
| Net cash provided by (used in) financing activities | (2,558 | ) | 18,075 | |||||
| Effect of foreign exchange rate fluctuations on cash and cash equivalents | 23 | (85 | ) | |||||
| Net increase in cash, cash equivalents and restricted cash | 32,134 | 1,532 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 82,324 | 29,467 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 114,458 | $ | 30,999 | ||||
| Cash and cash equivalents, and available for sale securities consist of: | ||||||||
| Cash and cash equivalents | $ | 113,663 | $ | 29,983 | ||||
| Short-term investments | 40,874 | — | ||||||
| Total cash and cash equivalents, and available for sale securities | $ | 154,537 | $ | 29,983 | ||||
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION | ||||||||||||
| (In thousands, except per share amounts and percentages) | ||||||||||||
| (Unaudited) | ||||||||||||
| ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET LOSS | ||||||||||||
| Three Months Ended | ||||||||||||
| Net loss (GAAP) | $ | (16,843 | ) | $ | (20,825 | ) | $ | (76,288 | ) | |||
| Loss on forward sale of Series B Preferred Stock | — | — | 37,792 | |||||||||
| Loss on bridge loans | — | — | 10,655 | |||||||||
| Stock-based compensation expense | 3,148 | 1,681 | 4,042 | |||||||||
| Amortization of developed technology (a) | 2,800 | 2,800 | 2,967 | |||||||||
| Depreciation and amortization | 862 | 819 | 1,003 | |||||||||
| Interest expense (b) | 1,117 | 1,190 | 1,030 | |||||||||
| Loss on disposal of property and equipment (e) | — | 100 | 9 | |||||||||
| Benefit from acquisition related income taxes (c) | — | (742 | ) | (742 | ) | |||||||
| Net loss (Non-GAAP) | $ | (8,916 | ) | $ | (14,977 | ) | $ | (19,532 | ) | |||
| Shares used in net loss per share calculation - | ||||||||||||
| basic and diluted (GAAP and Non-GAAP) | 79,080 | 79,434 | 77,031 | |||||||||
| Net loss per share - basic and diluted (GAAP) | $ | (0.21 | ) | $ | (0.26 | ) | $ | (0.99 | ) | |||
| Net loss per share - basic and diluted (Non-GAAP) | $ | (0.11 | ) | $ | (0.19 | ) | $ | (0.25 | ) | |||
| ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP PRODUCT AND SERVICE MARGIN (In thousands) (Unaudited) |
||||||||||||
| Three Months Ended | ||||||||||||
| Product and service gross profit (GAAP) | $ | 11,324 | $ | 10,970 | $ | 11,881 | ||||||
| Amortization of developed technology (a) | 2,800 | 2,800 | 2,967 | |||||||||
| Depreciation and amortization (d) | 323 | 297 | 315 | |||||||||
| Stock-based compensation expense (d) | 353 | 133 | 141 | |||||||||
| Product and service gross profit (Non-GAAP) | $ | 14,800 | $ | 14,200 | $ | 15,304 | ||||||
| Product and service margin percentage (GAAP) | 46.6 | % | 40.9 | % | 45.4 | % | ||||||
| Product and service margin percentage (Non-GAAP) | 60.9 | % | 52.9 | % | 58.5 | % | ||||||
| ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP OPERATING EXPENSES (In thousands) (Unaudited) |
||||||||||||
| Three Months Ended | ||||||||||||
| Operating expenses (GAAP) | $ | 28,717 | $ | 32,279 | $ | 39,740 | ||||||
| Stock-based compensation expense (e) | (2,795 | ) | (1,548 | ) | (3,901 | ) | ||||||
| Depreciation and amortization (e) | (539 | ) | (523 | ) | (688 | ) | ||||||
| Loss on disposal of property and equipment (e) | — | (100 | ) | (9 | ) | |||||||
| Operating expenses (Non-GAAP) | $ | 25,383 | $ | 30,108 | $ | 35,142 | ||||||
| ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP LOSS FROM OPERATIONS (In thousands) (Unaudited) |
||||||||||||
| Three Months Ended | ||||||||||||
| Loss from operations (GAAP) | $ | (16,593 | ) | $ | (21,112 | ) | $ | (27,503 | ) | |||
| Stock-based compensation expense | 3,148 | 1,681 | 4,042 | |||||||||
| Amortization of developed technology (a) | 2,800 | 2,800 | 2,967 | |||||||||
| Depreciation and amortization | 862 | 819 | 1,003 | |||||||||
| Loss on disposal of property and equipment (e) | — | 100 | 9 | |||||||||
| Loss from operations (Non-GAAP) | $ | (9,783 | ) | $ | (15,712 | ) | $ | (19,482 | ) | |||
| Notes: | ||||||||||||
| (a) Represents amortization of developed technology in connection with the DVS and InstruNor acquisitions | ||||||||||||
| (b) Represents interest expense, primarily on convertible debt and the term loan | ||||||||||||
| (c) Represents the tax impact on the purchase of intangible assets in connection with the DVS acquisition | ||||||||||||
| (d) Represents expense associated with cost of product revenue | ||||||||||||
| (e) Represents expense associated with research and development, and selling, general and administrative activities | ||||||||||||
| RECONCILIATION OF TOTAL REVENUE TO CORE REVENUE | ||||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| Total revenue (GAAP) | $ | 25,119 | $ | 27,021 | $ | 26,504 | ||||||
| Total revenue from discontinued COVID-19 product line | — | — | (2,260 | ) | ||||||||
| Other revenue (a) | (800 | ) | (197 | ) | (356 | ) | ||||||
| Core revenue | $ | 24,319 | $ | 26,824 | $ | 23,888 | ||||||
| Note: | ||||||||||||
| (a) Other revenue includes development and license revenue | ||||||||||||
Source: Standard BioTools Inc.