PR Newswire | Aug 5, 2021 04:06PM EDT

08/05 15:05 CDT

Accelerate Diagnostics Reports Second Quarter 2021 Financial Results TUCSON, Ariz., Aug. 5, 2021

TUCSON, Ariz., Aug. 5, 2021 /PRNewswire/ -- Accelerate Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results for the second quarter for the period ended June 30, 2021.

"Second quarter and year to date financial results were consistent with our expectations," commented Jack Phillips, Chief Executive Officer of Accelerate Diagnostics, Inc. "We also launched our AST focused test kit, concluded our multi-hospital registry study with compelling new data, and advanced other key commercial and product development priorities during the quarter."

Second Quarter 2021 Highlights

* Added 15 contracted instruments and brought 24 instruments live in the U.S. in the quarter. * Ended the second quarter with 298 U.S. clinically live and revenue-generating instruments, with another 102 U.S. contracted instruments in the process of being implemented and not yet revenue-generating. * Net sales were $2.8 million, compared to $2.1 million in the second quarter of 2020, or an 32% increase. Instrument revenue remained consistent while consumable revenue grew by 35%. * Gross margin was 38% for the quarter, compared to 45% in the second quarter of 2020. The decline in gross margins resulted from inflation to manufacturing costs and other factors. * Selling, general, and administrative (SG&A) costs for the quarter were $12.9 million, compared to $11.3 million from the same quarter of the prior year. SG&A costs for the quarter excluding non-cash stock-based compensation were $7.7 million, compared to $8.3 million from the same quarter of the prior year. This decrease was the result of the ongoing benefits from cost-cutting efforts put in place during 2020. * Research and development (R&D) costs for the quarter were $5.7 million, compared to $5.4 million from the same quarter of the prior year. R&D costs excluding non-cash stock-based compensation expense for the quarter were $4.4 million, compared to $5.0 million from the quarter of the prior year. This decrease was the result of improved internal efficiencies and lower external study-related costs. * Net loss was $21.7 million in the second quarter, resulting in $0.36 net loss per share. Net loss excluding non-cash stock-based compensation expense for the second quarter was $15.1 million. * Net cash used in the quarter excluding financing was $9.3 million

Year-to-date 2021 Highlights

* Net sales were $5.3 million year-to-date, compared to $4.5 million from the same period of 2020, or an 18% increase. Instrument revenue remained constant while consumable revenue grew by 24%. * Gross margin was 37% year-to-date, compared to 45% from the same period in 2020. The decline in gross margins resulted from ongoing pandemic-related impacts to manufacturing costs and other factors. * Selling, general, and administrative (SG&A) costs year-to-date were $26.9 million, compared to $24.3 million from the same period of the prior year. SG&A costs excluding non-cash stock-based compensation were $15.8 million year to date, compared to $18.2 million from the same period of the prior year. This decrease was the result of the ongoing benefits from cost-cutting efforts put in place during 2020. * Research and development (R&D) costs were $12.6 million year to date, compared to $11.2 million from the same period of the prior year. R&D costs excluding non-cash stock-based compensation expense were $8.6 million year to date, compared to $9.7 million from the same period of the prior year. This decrease was the result of improved internal efficiencies and lower external study-related costs. * Net loss was $45.9 million year to date, resulting in $0.77 net loss per share. Net loss excluding non-cash stock-based compensation expense was $30.5 million. * Net cash used excluding financing was $21.6 million * Closed on two of three equal $10.7 million tranches of previously announced insider financing for $21.4 million. * Closed a single transaction of $0.8 million against our ATM financing vehicle. * Ended the quarter with total cash, investments, and cash equivalents of $68.8 million.

Full financial results for the quarter ending June 30, 2021 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

To listen to the 2021 second quarter financial results, call by phone, +1.877.883.0383 and enter Elite Entry Number: 5467079. 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 10157979 until August 26, 2021.

This conference call will also be webcast and can be accessed from the company's website at ir.axdx.com. A replay of the audio webcast will be available until November 5, 2021.

Use of Non-GAAP Financial Measures

This press release contains certain financial measures that are not recognized measures under accounting principles generally accepted in the United States of America ("GAAP"), which include SG&A, R&D, and Net income (loss) amounts excluding stock-based compensation expenses.

Our management and board of directors use expenses excluding the cost of stock-based compensation to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operating and financing plans. Accordingly, we believe that expenses excluding the cost of stock-based compensation provides useful information for investors in understanding and evaluating our operating results in the same manner as our management and our board of directors. Expenses excluding the cost of stock-based compensation is a non-GAAP financial measure and should be considered in addition to, not as superior to, or as a substitute for, SG&A expenses, R&D expenses, and net income (loss) reported in accordance with GAAP. The following tables present a reconciliation of SG&A expenses, R&D expenses and net income (loss) excluding stock-based compensation to comparable GAAP measures for the periods indicated:

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) (in thousands)

2021 2020 2021 2020

Sales, general and $ 12,910 $ 11,332 $ 26,938 $ 24,275administrative

Non-cash equity-basedcompensation as acomponent of sales, 5,188 3,022 11,180 6,027general andadministrative

Sales, general andadministrative less $ 7,722 $ 8,310 $ 15,758 $ 18,248non-cash equity-basedcompensation

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) (in thousands)

2021 2020 2021 2020

Research and development $ 5,733 $ 5,347 $ 12,629 $ 11,189

Non-cash equity-basedcompensation as a 1,328 335 4,074 1,458component of researchand development

Research and developmentless non-cash $ 4,405 $ 5,012 $ 8,555 $ 9,731equity-basedcompensation

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) (in thousands)

2021 2020 2021 2020

Loss from operations $ (17,590) $ (15,725) $ (37,616) $ (33,455)

Non-cash equity-basedcompensation as a 6,590 3,416 15,429 7,615component of loss fromoperations

Loss from operationsless non-cash $ (11,000) $ (12,309) $ (22,187) $ (25,840)equity-basedcompensation

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(r) system and Accelerate PhenoTest(r) 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 or may have forward looking implications. 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 March 2, 2021, 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 CONSOLIDATEDBALANCE SHEETS(in thousands, except share data)



June 30, December 31,

2021 2020

Unaudited

ASSETS

Current assets:

Cash and cash equivalents $ 44,580 $ 35,781

Investments 24,251 32,488

Trade accounts receivable 2,114 1,550

Inventory 9,572 9,216

Prepaid expenses 1,680 1,172

Other current assets 1,498 1,780

Total current assets 83,695 81,987

Property and equipment, net 5,548 6,135

Right of use assets 2,848 3,183

Other non-current assets 1,898 2,120

Total assets $ 93,989 $ 93,425



LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:

Accounts payable $ 1,877 $ 1,290

Accrued liabilities 3,832 2,991

Accrued interest 1,262 1,262

Deferred revenue 282 376

Current portion of long-term debt 1,452 553

Current operating lease liability 612 497

Total current liabilities 9,317 6,969

Non-current operating lease liability 2,747 3,063

Other non-current liabilities 580 335

Long-term debt 3,805 4,659

Convertible notes 147,290 141,211

Total liabilities $ 163,739 $ 156,237

Commitments and contingencies

Stockholders' deficit:

Preferred shares, $0.001 par value;

5,000,000 preferred shares authorized and noneoutstanding as of June 30, 2021 and December 31, - -2020

Common stock, $0.001 par value;

100,000,000 common shares authorized with 61,489,475shares issued and outstanding on June 30, 2021 and 61 5885,000,000 common shares authorized with 57,607,939shares issued and outstanding on December 31, 2020

Contributed capital 514,122 475,072

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

Accumulated deficit (538,879) (492,966)

Accumulated other comprehensive income (loss) 13 91

Total stockholders' deficit (69,750) (62,812)

Total liabilities and stockholders' deficit $ 93,989 $ 93,425



See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.CONDENSED CONSOLIDATEDSTATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSUnaudited(in thousands, except per share data)



Three Months Ended Six Months Ended

June 30, June 30, June 30, June 30,

2021 2020 2021 2020

Net sales $ 2,798 $ 2,125 $ 5,316 $ 4,468

Cost of sales 1,745 1,171 3,365 2,459

Gross profit 1,053 954 1,951 2,009

Costs and expenses:

Research and development 5,733 5,347 12,629 11,189

Sales, general and 12,910 11,332 26,938 24,275administrative

Total costs and expenses 18,643 16,679 39,567 35,464

Loss from operations (17,590) (15,725) (37,616) (33,455)

Other income (expense):

Interest expense (4,177) (3,835) (8,267) (7,584)

Foreign currency exchange gain - 91 (159) (37)(loss)

Interest income 12 224 55 604

Other income (expense), net 81 15 74 (67)

Total other expense, net (4,084) (3,505) (8,297) (7,084)

Net loss before income taxes (21,674) (19,230) (45,913) (40,539)

Provision for income taxes - - - -

Net loss $ (21,674) $ (19,230) $ (45,913) $ (40,539)

Basic and diluted net loss per $ (0.36) $ (0.35) $ (0.77) $ (0.74)share

Weighted average shares 61,049 55,445 59,790 55,139outstanding

Other comprehensive loss:

Net loss $ (21,674) $ (19,230) $ (45,913) $ (40,539)

Net unrealized (loss) gain ondebt securities - (44) (18) 179available-for-sale

Foreign currency translation 22 34 (60) 19adjustment

Comprehensive loss $ (21,652) $ (19,240) $ (45,991) $ (40,341)



See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.CONDENSED CONSOLIDATEDSTATEMENTS OF CASH FLOWSUnaudited(in thousands)



Six Months Ended

June 30, June 30,

2021 2020

Cash flows from operating activities:

Net loss $ (45,913) $ (40,539)

Adjustments to reconcile net loss to net cash used inoperating activities:

Depreciation and amortization 1,248 1,571

Amortization of investment discount 97 13

Equity-based compensation 15,429 7,615

Amortization of debt discount and issuance costs 6,079 5,426

(Gain) loss on disposal of property and equipment (100) 527

Contributions to deferred compensation plan (236) (160)

(Increase) decrease in assets:

Accounts receivable (539) 550

Inventory and instruments in property and equipment (524) (1,979)

Prepaid expense and other 35 (360)

Increase (decrease) in liabilities:

Accounts payable 564 390

Accrued liabilities, and other 736 (581)

Accrued interest 45 -

Deferred revenue and income (94) (39)

Deferred compensation 245 171

Net cash used in operating activities (22,928) (27,395)

Cash flows from investing activities:

Purchases of equipment (29) (643)

Purchase of marketable securities (15,699) (21,509)

Maturities of marketable securities 23,992 27,844

Net cash provided by investing activities 8,264 5,692

Cash flows from financing activities:

Proceeds from issuance of common stock 22,283 216

Proceeds from exercise of options 1,222 3,031

Proceeds from debt - 4,791

Net cash provided by financing activities 23,505 8,038

Effect of exchange rate on cash (42) 19

Increase (decrease) in cash and cash equivalents 8,799 (13,646)

Cash and cash equivalents, beginning of period 35,781 61,014

Cash and cash equivalents, end of period $ 44,580 $ 47,368



See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.CONDENSED CONSOLIDATEDSTATEMENTS OF CASH FLOWS (CONTINUED)Unaudited(in thousands)



Six Months Ended

June 30, June 30,

2021 2020

Non-cash investing activities:

Net transfer of instruments from inventory to property and $ 500 $ 1,288equipment

Supplemental cash flow information:

Interest paid $ 2,144 $ 2,144

Income taxes paid, net of refunds $ - $ 26



See accompanying notes to condensed consolidated financial statements.

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SOURCE Accelerate Diagnostics, Inc.