PR Newswire | Nov 5, 2020 04:29PM EST

11/05 15:29 CST

Accelerate Diagnostics Reports Third Quarter 2020 Financial Results TUCSON, Ariz., Nov. 5, 2020

TUCSON, Ariz., Nov. 5, 2020 /PRNewswire/ -- Accelerate Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results for the third quarter ended September 30, 2020.

"We achieved solid revenue growth in the third quarter, driven by continued steady utilization within our installed base of live Pheno instruments, an improving go-live cadence, and a large capital deal in the U.S.," commented Jack Phillips, President and CEO of Accelerate Diagnostics, Inc. "While COVID-related delays in the go-live process have begun to moderate, our ability to contract new customers continues to be affected by the pandemic. However, we are beginning to see an improvement in customer engagement as our recent product approvals and upcoming product releases are beginning to stimulate new interest in Accelerate Diagnostics. I am very pleased with the efforts put forth by everyone on the Accelerate team during the quarter, as we have continued to make meaningful operational and financial progress in the face of an unprecedented macro-environment."

Third Quarter 2020 Highlights

* Added 5 contracted instruments in the quarter and brought 22 instruments live in the U.S. * Ended the third quarter with 223 U.S. live revenue-generating instruments, with another 192 U.S. contracted Pheno instruments not yet live. * Net sales of $3.6 million, compared to $2.3 million in the third quarter of 2019, or 57% growth. * Gross margin was 36% for the quarter, compared to 51% in the third quarter of 2019. This decrease was the result of pandemic-related effects on manufacturing and dilution from the large capital deal in the quarter. * Selling, general, and administrative expenses for the quarter were $11.5 million, compared to $12.7 million in the third quarter of 2019. This decrease was driven by pandemic-related reductions in sales and marketing spend related to travel and trade shows. * Research and development (R&D) costs for the quarter were $5.0 million, compared to $6.1 million in the third quarter of 2019. This decrease was the result of increased efficiencies and lower external study spend. * Net loss was $18.8 million in the third quarter, or $0.33 per share, which included $4.7 million in non-cash stock-based compensation expense. * Net cash used in the quarter was $11.2 million, and the company ended the quarter with total cash, investments, and cash equivalents of $77.5 million. * Received 510k approval for a new suite of product enhancements to the Accelerate Pheno(r) system, which improve performance and expand Pheno's antimicrobial susceptibility testing (AST) menu for bloodstream infections. * Received FDA Emergency Use Authorization for the MS Fast fully automated chemiluminescence immunoassay analyzer and SARS-CoV-2 tests for the detection of IgG and IgM.

Year to Date 2020 Highlights

* Net sales were $8.1 million year-to-date as compared to $5.8 million from the same period in the prior year, or 40% growth. * Gross margin was 41% year-to-date, compared to 50% from the same period in the prior year. This decrease was the result of pandemic related effects on supply chain and dilution from the large capital deal in the quarter. * Selling, general, and administrative expenses were $35.7 million year-to-date, compared to $38.3 million from the same period in the prior year. This decrease was driven by pandemic-related reductions in sales and marketing spend related to travel and trade shows. * Research and development (R&D) costs were $16.2 million year-to-date, compared to $19.1 million from the same period in the prior year. This decrease was the result of increased efficiencies and lower external study spend. * Net loss was $59.3 million year-to-date, or $1.07 per share, which included $12.3 million in non-cash stock-based compensation expense. * Net cash used was $31.0 million year-to-date, and the company ended the quarter with total cash, investments, and cash equivalents of $77.5 million.

Full financial results for the quarter ending September 30, 2020 will be filed on Form 10-Q through the Securities and Exchange Commission's (SEC) website at http://www.sec.gov.

Audio Webcast and Conference Call

The company will host a conference call at 4:30PM ET today to review its third quarter results. To listen to the 2020 third quarter financial results call by phone, dial +1.877.883.0383 and enter the conference ID: 0113821. International participants may dial +1.412.902.6506. Please dial in 10-15 minutes prior to the start of the conference. A replay of the call will be available by telephone at +1.877.344.7529 (U.S.) or +1.412.317.0088 (international) using the replay code 10148610 until November 26, 2020.

This conference call will also be webcast and can be accessed from the "Investors" section of the company's website at axdx.com/investors. A replay of the audio webcast will be available until November 7, 2020.

About Accelerate Diagnostics, Inc.

Accelerate Diagnostics, Inc. is an in vitro diagnostics company dedicated to providing solutions for the global challenges of antibiotic resistance and sepsis. The Accelerate Pheno(tm) system and Accelerate PhenoTest(tm) BC kit combine several technologies aimed at reducing the time clinicians must wait to determine the most optimal antibiotic therapy for deadly infections. The FDA cleared system and kit fully automate the sample preparation steps to report phenotypic antibiotic susceptibility results in approximately 7 hours direct from positive blood cultures. Recent external studies indicate the solution offers results 1-2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage specific to the individual patient days earlier.

The "ACCELERATE DIAGNOSTICS" and "ACCELERATE PHENO" and "ACCELERATE PHENOTEST" and diamond shaped logos and marks are trademarks or registered trademarks of Accelerate Diagnostics, Inc.

For more information about the company, its products and technology, or recent publications, visit axdx.com.

Forward-Looking Statements

Certain of the statements made in this press release are forward looking, such as, among others, Mr. Phillips statements about COVID-related delays in the go-live process moderating, and improvement in customer engagement beginning to stimulate new interest in our company and products. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Information about the risks and uncertainties faced by Accelerate Diagnostics is contained in the section captioned "Risk Factors" in the company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 27, 2020, and in any other reports that the company files with the Securities and Exchange Commission. The company's forward-looking statements could be affected by general industry and market conditions. Except as required by federal securities laws, the company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingencies.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEET

(in thousands, except share data)



September 30,December 31,

2020 2019

Unaudited

ASSETS

Current assets:

Cash and cash equivalents $27,029 $61,014

Investments 50,463 47,437

Trade accounts receivable 2,610 3,222

Inventory 9,459 8,059

Prepaid expenses 961 955

Other current assets 1,517 1,165

Total current assets 92,039 121,852

Property and equipment, net 7,104 7,905

Right of use assets 3,402 3,917

Other non-current assets 1,674 750

Total assets $104,219 $134,424

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $2,372 $2,351

Accrued liabilities 3,176 3,828

Accrued interest 191 1,262

Deferred revenue 338 271

Current portion of long-term debt 511 -

Current operating lease liability 482 450

Total current liabilities 7,070 8,162

Non-current operating lease liability 3,231 3,579

Other non-current liabilities 259 19

Long-term debt 5,028 -

Convertible notes 138,299 130,043

Total liabilities $153,887 $141,803



Commitments and contingencies



Stockholders' deficit:

Preferred shares, $0.001 par value;

5,000,000 preferred shares authorized and none outstanding as of September 30, 2020 and - - December 31, 2019

Common stock, $0.001 par value;

85,000,000 common shares authorized with 57,027,429 shares issued and outstanding on September 30, 2020 and 85,000,000 common shares 57 55 authorized with 54,708,792 shares issued and outstanding on December 31, 2019

Contributed capital 469,302 452,344

Treasury stock (45,067) (45,067)

Accumulated deficit (474,054) (414,653)

Accumulated other comprehensive income (loss) 94 (58)

Total stockholders' deficit (49,668) (7,379)

Total liabilities and stockholders' deficit $104,219 $134,424



See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Unaudited

(in thousands, except per share data)



Three Months Ended Nine Months Ended

September 30,September 30,September 30,September 30,

2020 2019 2020 2019

Net sales $3,588 $2,271 $8,056 $5,827



Cost of sales 2,287 1,117 4,745 2,940

Gross profit 1,301 1,154 3,311 2,887



Costs and expenses:

Research and 5,001 6,064 16,191 19,145 development

Sales, general and 11,465 12,743 35,738 38,302 administrative

Total costs and 16,466 18,807 51,929 57,447 expenses



Loss from operations(15,165) (17,653) (48,618) (54,560)



Other income (expense):

Interest expense (3,955) (3,598) (11,540) (10,585)

Foreign currency 229 (89) 191 (142) exchange gain (loss)

Interest income 149 676 753 2,329

Other income (15) (9) (82) (12) (expense), net

Total other expense,(3,592) (3,020) (10,678) (8,410) net



Net loss before (18,757) (20,673) (59,296) (62,970) income taxes

Provision for income- 239 - - taxes

Net loss $(18,757) $(20,434) $(59,296) $(62,970)



Basic and diluted $(0.33) $(0.37) $(1.07) $(1.16) net loss per share

Weighted average 56,560 54,553 55,617 54,456 shares outstanding



Other comprehensive loss:

Net loss $(18,757) $(20,434) $(59,296) $(62,970)

Net unrealized gain (loss) on debt (117) 10 62 229 securities available-for-sale

Foreign currency translation 71 (113) 90 (139) adjustment

Comprehensive loss $(18,803) $(20,537) $(59,144) $(62,880)



See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Unaudited

(in thousands)



Nine Months Ended

September 30,September 30,

2020 2019

Cash flows from operating activities:

Net loss $(59,296) $(62,970)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 2,270 1,862

Amortization of investment discount 43 (400)

Equity-based compensation 12,291 9,409

Amortization of debt discount and issuance costs 8,256 7,370

Realized loss on sale of investments 3 -

Loss on disposal of property and equipment 546 577

Contributions to deferred compensation plan (248) -

(Increase) decrease in assets:

Accounts receivable 532 (782)

Inventory and instruments in property and (1,734) (3,286) equipment

Prepaid expense and other (1,267) (319)

Increase (decrease) in liabilities:

Accounts payable 76 788

Accrued liabilities, and other (759) (2,115)

Accrued interest (1,071) (1,071)

Deferred revenue and income 67 33

Deferred compensation 240 (25)

Net cash used in operating activities (40,051) (50,929)



Cash flows from investing activities:

Purchases of equipment (1,364) (148)

Purchase of marketable securities (44,589) (20,710)

Proceeds from sales of marketable securities - 13,400

Maturities of marketable securities 41,707 78,922

Net cash (used in) provided by investing (4,246) 71,464 activities



Cash flows from financing activities:

Proceeds from issuance of common stock 296 1,363

Proceeds from exercise of options 4,458 4,879

Proceeds from debt 5,552 -

Payment of debt (13) -

Net cash provided by financing activities 10,293 6,242



Effect of exchange rate on cash 19 (99)



(Decrease) increase in cash and cash equivalents (33,985) 26,678

Cash and cash equivalents, beginning of period 61,014 66,260

Cash and cash equivalents, end of period $27,029 $92,938



See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS (CONTINUED)

Unaudited

(in thousands)



Nine Months Ended

September 30,September 30,

2020 2019

Non-cash investing activities:

Net transfer of instruments from inventory to $ 1,284 $ 3,225 property and equipment

Supplemental cash flow information:

Interest paid $ 4,288 $ 4,288

Income taxes paid, net of refunds $ 46 $ 54



See accompanying notes to condensed consolidated financial statements.

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SOURCE Accelerate Diagnostics, Inc.