GlobeNewswire Inc | Feb 24, 2021 04:01PM EST

February 24, 2021

SOUTH SAN FRANCISCO, Calif., Feb. 24, 2021 (GLOBE NEWSWIRE) -- CareDx, Inc. (NASDAQ: CDNA), a leading precision medicine company focused on the discovery, development, and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers, today reported financial results for the fourth quarter and full year ended December31, 2020.

Recent Highlights:

-- Achieved total revenue of $58.6 million for the three months ended December31, 2020, increasing 64% over prior year fourth quarter -- Delivered record full year revenue of $192.2 million, an increase of 51% compared with full year 2019 revenue -- Provided over 25,000 patient results in the fourth quarter and approximately 79,000 patient results in 2020 -- Generated GAAP net loss of $3.5 million, non-GAAP net income of $4.3 million, and positive adjusted EBITDA of $4.9 million in the fourth quarter -- As of December31, 2020, over 55 U.S.-based transplant centers have adopted an AlloSure Kidney testing protocol -- Received Medicare reimbursement pricing for AlloSure Heart

"Our record fourth quarter result was the culmination of an extraordinary year for CareDx," said Reg Seeto, President and Chief Executive Officer of CareDx. "2020 was transformational for CareDx, because we extended our leadership position in transplant centers through RemoTraC, implemented and validated the next wave of innovation through our multi-modality platforms, HeartCare and KidneyCare, and accelerated the direct to patient journey through AlloCare. We look forward to 2021 and beyond as we invest in advancing our robust pipeline and continue our mission to serve transplant patients and improve outcomes."

Fourth Quarter 2020 Financial Results

Revenue for the three months ended December31, 2020 was $58.6 million, an increase of 64% compared with $35.8 million in the fourth quarter of 2019. Testing services revenue for the fourth quarter was $50.3 million, compared with $29.1 million in the same period of 2019. Product revenue in the three months ended December31, 2020 was $5.9 million, compared to $5.1 million in the same period of 2019. Digital and other revenue for the fourth quarter of 2020 was $2.4 million.

For the fourth quarter of 2020, net loss was $3.5 million compared to a net loss of $4.8 million in the same period of 2019. Basic and diluted net loss per share was $0.07 in the fourth quarter of 2020, compared to basic and diluted net loss per share of $0.11 in the fourth quarter of 2019.

Non-GAAP net income was $4.3 million in the fourth quarter of 2020 compared to a $1.6 million non-GAAP net income in the fourth quarter of 2019. Basic and diluted non-GAAP net income per share was $0.09 and $0.08 respectively, in the fourth quarter of 2020, compared to a basic and diluted non-GAAP net income per share of $0.04 in the fourth quarter of 2019.

Adjusted EBITDA for the fourth quarter of 2020 was a gain of $4.9 million, compared to an adjusted EBITDA gain of $1.5 million in the fourth quarter of 2019.

Net cash provided by operating activities in the fourth quarter of 2020 was $7.2 million compared to $1.1 million net cash used in operating activities in the comparative 2019 period. Cash, cash equivalents and marketable securities were $224.7 million as of December31, 2020.

Full Year 2020 Financial Results

Revenue for the full year ended December31, 2020 was $192.2 million, an increase of 51% compared with $127.1 million in full year 2019 revenue. Testing revenue for the year ended December31, 2020 was $163.6 million, compared to $104.6 million in the same period of 2019. Product revenue for the full year 2020 was $19.3 million, compared to $18.3 million in 2019. Digital and other revenue for the full year 2020 was $9.3 million.

Net loss for the full year ended December31, 2020 was $18.7 million compared to a net loss of $22.0 million in 2019. Basic and diluted net loss per share for the full year ended December31, 2020 were $0.40 compared to a basic and diluted net loss per share of $0.52 in the full year 2019.

Non-GAAP net income was $11.3 million for the full year ended December31, 2020 compared to a non-GAAP net income of $4.6 million in 2019. Non-GAAP basic and diluted net income per share were $0.24 and $0.23, respectively, in the full year 2020, compared to basic and diluted net income per share of $0.11 and $0.10, respectively, in the full year 2019.

For additional information regarding non-GAAP financial measures discussed herein, please see "Use of Non-GAAP Financial Measures," "Reconciliation of GAAP to Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Adjusted EBITDA Financial Measures" below.

2021 Guidance

For the full year 2021, CareDx expects revenue to be in the range of $255 million to $265 million.

AboutCareDx

CareDx, Inc., headquartered in South San Francisco, California, is a leading precision medicine solutions company focused on the discovery, development, and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers. CareDx offers testing services, products, and digital healthcare solutions along the pre- and post-transplant patient journey, and is the leading provider of genomics-based information for transplant patients. For more information, please visit: www.CareDx.com.

Forward Looking Statements

This press release includes forward-looking statements, including expectations regarding the Company's fiscal 2021 revenue, achievement of our financial and operational goals and our prospects. These forward-looking statements are based upon information that is currently available to CareDx and its current expectations, speak only as of the date hereof, and are subject to numerous risks and uncertainties, including general economic and market factors, among others discussed in CareDx's filings with the SEC, including the Annual Report on Form 10-K for the fiscal year ended December31, 2019 filed by CareDx with the SEC on February 28, 2020, and the periodic reports that CareDx has subsequently filed with the SEC. Any of these may cause CareDx's actual results, performance or achievements to differ materially and adversely from those anticipated or implied by CareDx's forward-looking statements. CareDx expressly disclaims any obligation, except as required by law, or undertaking to update or revise any such forward-looking statements.

Use of Non-GAAP Financial Measures

CareDx has presented in this release certain financial information in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and also on a non-GAAP basis, including non-GAAP net income, non-GAAP basic and diluted net income per share and adjusted EBITDA. We define non-GAAP net income and per share results as the GAAP net income and per share results excluding the impacts of stock-based compensation; changes in estimated fair value of warrants, derivative liabilities and contingent consideration; acquisition related impairment charges and amortization of intangible assets, purchase accounting adjustments and related tax effects; costs involved with completing an acquisition; amortization of debt discount; and certain other financing charges. We define adjusted EBITDA as non-GAAP net income/(loss) before net interest income/(expense), income tax benefit, depreciation and amortization, and other income and expense. We are presenting these non-GAAP financial measures to assist investors in assessing our operating results through the eyes of management and because we believe that these measures provide an additional tool for investors to use in comparing our core business operating results over multiple periods. Management believes this non-GAAP information is useful for investors, when considered in conjunction with CareDx's GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of CareDx's operating results as reported under GAAP. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not necessarily comparable to similarly-titled measures presented by other companies. A reconciliation between GAAP and non-GAAP financial information is provided immediately following the financial tables.

Investor Relations Contact

Greg Chodaczek347-620-7010 investor@caredx.com

CareDx, Inc.Consolidated Statements of Operations (Unaudited)(In thousands, except share and per share data)

Three Months Ended December Twelve Months Ended 31, December 31, 2020 2019 2020 2019Revenue: Testing services $ 50,346 $ 29,129 $ 163,610 $ 104,550 revenueProduct revenue 5,933 5,053 19,302 18,279 Digital and other 2,365 1,639 9,282 4,239 revenueTotal revenue 58,644 35,821 192,194 127,068 Operating expenses: Cost of testing 13,301 7,694 43,932 29,622 servicesCost of product 4,212 3,758 13,847 12,919 Cost of digital and 1,372 1,264 5,338 2,914 otherResearch and 13,325 8,946 48,941 30,711 developmentSales and marketing 16,131 10,267 53,858 38,894 General and 13,370 9,437 48,806 36,540 administrativeTotal operating 61,711 41,366 214,722 151,600 expensesLoss from (3,067 ) (5,545 ) (22,528 ) (24,532 )operationsOther income (expense):Interest income, 125 306 271 985 netChange in estimatedfair value of (505 ) 333 (1,495 ) 319 common stockwarrant liabilityCARES Act Provider ? ? 4,813 ? Relief FundOther expense, net (239 ) (75 ) (811 ) (719 )Total other income (619 ) 564 2,778 585 (expense)Loss before income (3,686 ) (4,981 ) (19,750 ) (23,947 )taxesIncome tax benefit 171 204 1,036 1,979 Net loss $ (3,515 ) $ (4,777 ) $ (18,714 ) $ (21,968 )Net loss per share: Basic $ (0.07 ) $ (0.11 ) $ (0.40 ) $ (0.52 )Diluted $ (0.07 ) $ (0.11 ) $ (0.40 ) $ (0.52 )Weighted-averageshares used to compute net lossper share:Basic 49,325,898 42,457,171 46,481,772 42,151,617 Diluted 49,325,898 42,457,171 46,481,772 42,151,617

CareDx, Inc.Consolidated Balance Sheets(in thousands)

As of December 31, 2020 2019Assets Current assets: Cash and cash equivalents $ 134,669 $ 38,223 Marketable securities 90,034 ? Accounts receivable 34,624 24,057 Inventory 10,012 6,014 Prepaid and other current assets 3,758 3,628 Total current assets 273,097 71,922 Property and equipment, net 10,704 4,430 Operating leases right-of-use assets 15,228 4,730 Intangible assets, net 44,355 45,541 Goodwill 23,857 23,857 Restricted cash 270 256 Other assets 1,000 1,000 Total assets $ 368,511 $ 151,736 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 9,653 $ 5,506 Accrued compensation 18,466 12,484 Accrued and other liabilities 20,602 16,838 Refund liability - CMS advance payment 20,496 ? Total current liabilities 69,217 34,828 Deferred tax liability 1,299 1,973 Common stock warrant liability 447 6,607 Deferred payments for intangible assets 3,560 5,207 Operating lease liability, less current portion 16,069 2,370 Other liabilities 240 1,751 Total liabilities 90,832 52,736 Commitments and contingencies Stockholders? equity: Common stock 49 42 Additional paid-in capital 632,253 437,976 Accumulated other comprehensive loss (2,096 ) (5,205 )Accumulated deficit (352,527 ) (333,813 )Total stockholders' equity 277,679 99,000 Total liabilities and stockholders' equity $ 368,511 $ 151,736

CareDx, Inc.Reconciliation of GAAP to Non-GAAP Financial Measures(Unaudited)(In thousands)

Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019Cost of testing services reconciliation:GAAP cost of testing $ 13,301 $ 7,694 $ 43,932 $ 29,622 servicesStock-based compensation (392 ) (328 ) (1,493 ) (1,751 )expenseAcquisitionrelated-amortization of (329 ) (330 ) (1,316 ) (738 )purchased intangiblesNon-GAAP cost of testing $ 12,580 $ 7,036 $ 41,123 $ 27,133 servicesCost of product reconciliation:GAAP cost of product $ 4,212 $ 3,758 $ 13,847 $ 12,919 Stock-based compensation (102 ) (88 ) (391 ) (280 )expenseAcquisitionrelated-amortization of (455 ) (379 ) (1,665 ) (1,446 )purchased intangiblesNon-GAAP cost of product $ 3,655 $ 3,291 $ 11,791 $ 11,193 Cost of digital and other reconciliation:GAAP cost of digital and $ 1,372 $ 1,264 $ 5,338 $ 2,914 otherStock-based compensation (111 ) (62 ) (449 ) (152 )expenseAcquisitionrelated-amortization of (86 ) (79 ) (345 ) (210 )purchased intangiblesNon-GAAP cost of digital $ 1,175 $ 1,123 $ 4,544 $ 2,552 and otherResearch and development expenses reconciliation:GAAP research and $ 13,325 $ 8,946 $ 48,941 $ 30,711 development expensesStock-based compensation (1,186 ) (1,196 ) (4,676 ) (4,422 )expenseNon-GAAP research and $ 12,139 $ 7,750 $ 44,265 $ 26,289 development expensesSales and marketing expenses reconciliation:GAAP sales and marketing $ 16,131 $ 10,267 $ 53,858 $ 38,894 expensesStock-based compensation (1,620 ) (1,212 ) (5,795 ) (4,008 )expenseAcquisitionrelated-amortization of (383 ) (366 ) (1,472 ) (1,248 )purchased intangiblesImpairment ? ? ? (150 )Non-GAAP sales and $ 14,128 $ 8,689 $ 46,591 $ 33,488 marketing expensesGeneral and administrative expenses reconciliation:GAAP general and $ 13,370 $ 9,437 $ 48,806 $ 36,540 administrative expensesStock-based compensation (2,566 ) (2,521 ) (10,597 ) (11,804 )expenseChange in estimated fairvalue of contingent (8 ) (210 ) (309 ) (210 )considerationAcquisition related fees (115 ) ? (115 ) (654 )and expensesNon-GAAP general and $ 10,681 $ 6,706 $ 37,785 $ 23,872 administrative expensesTotal other income (expense) reconciliation:GAAP other income $ (619 ) $ 564 $ 2,778 $ 585 (expense), netChange in estimated fairvalue of common stock 505 (333 ) 1,495 (319 )warrant liabilityAccretion of liability 80 108 352 281 Non-GAAP other income $ (34 ) $ 339 $ 4,625 $ 547 (expense), netIncome tax benefit reconciliation:GAAP income tax benefit $ 171 $ 204 $ 1,036 $ 1,979 Tax effect related toamortization of purchased (134 ) (129 ) (503 ) (493 )intangibles

CareDx, Inc.Reconciliation of GAAP to Non-GAAP Financial Measures(Unaudited)(In thousands, except share and per share data)

Three Months Ended December Twelve Months Ended 31, December 31, 2020 2019 2020 2019GAAP net loss $ (3,515 ) $ (4,777 ) $ (18,714 ) $ (21,968 )Stock-based 5,977 5,407 23,401 22,417 compensation expenseAcquisitionrelated-amortization 1,253 1,154 4,798 3,642 of purchasedintangiblesAcquisition related 115 ? 115 654 fees and expensesChange in estimatedfair value of 8 210 309 210 contingentconsiderationChange in estimatedfair value of common 505 (333 ) 1,495 (319 )stock warrantliabilityAccretion of 80 108 352 281 liabilityTax effect relatedto amortization of (134 ) (129 ) (503 ) (493 )purchasedintangiblesImpairment ? ? ? 150 Non-GAAP net income $ 4,289 $ 1,640 $ 11,253 $ 4,574 GAAP basic anddiluted net loss per $ (0.07 ) $ (0.11 ) $ (0.40 ) $ (0.52 )share Non-GAAP basic net $ 0.09 $ 0.04 $ 0.24 $ 0.11 income per shareNon-GAAP diluted net $ 0.08 $ 0.04 $ 0.23 $ 0.10 income per share Shares used incomputing non-GAAP 49,325,898 42,457,171 46,481,772 42,151,617 basic net income pershareShares used incomputing non-GAAP 52,005,987 43,464,685 48,274,038 44,344,803 diluted net incomeper share

CareDx, Inc.Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures(Unaudited)(In thousands)

Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019Non-GAAP net income $ 4,289 $ 1,640 $ 11,253 $ 4,574 Interest income (125 ) (306 ) (271 ) (985 )Income tax benefit (37 ) (75 ) (533 ) (1,486 )Depreciation expense 632 424 1,867 1,623 CARES Act Provider ? ? (4,813 ) ? Relief FundOther expense (income), 159 (206 ) 459 438 netAdjusted EBITDA $ 4,918 $ 1,477 $ 7,962 $ 4,164