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Burning Rock Reports First Quarter 2023 Financial Results

Tuesday, May 30, 2023 6 min read
Key Takeaway: Burning Rock Reports First Quarter 2023 Financial Results GUANGZHOU, China, May 30, 2023 Burning Rock Biotech Limited (NASDAQ: BNR and LSE: BNR, the Company or Burning Rock ), a company focused on the application of next generation sequencing (NGS) technology in the field of pr

Full Press Release Details

Burning Rock Reports First Quarter 2023 Financial Results
GUANGZHOU, China, May 30, 2023 Burning Rock Biotech Limited (NASDAQ: BNR and LSE: BNR, the Company or Burning Rock ), a company
focused on the application of next generation sequencing (NGS) technology in the field of precision oncology, today reported financial results for the three months ended March 31, 2023.
Recent Business Updates
First Quarter 2023 Financial Results
Revenues were RMB142.5 million (US$20.8 million) for the three months ended March 31, 2023, representing a 5.2% increase from RMB135.5 million
for the same period in 2022.
Cost of revenues was RMB43.7 million (US$6.4 million) for the three months ended March 31,
2023, representing a 8.8% decrease from RMB47.9 million for the same period in 2022, primarily due to a decrease in cost of central laboratory business, which was in line with the decrease in revenue generated from this business.
Gross profit was RMB98.8 million (US$14.4 million) for the three months ended March 31, 2023, representing a 12.8% increase from
RMB87.6 million for the same period in 2022. Gross margin was 69.3% for the three months ended March 31, 2023, compared to 64.6% for the same period in 2022. By channel, gross margin of central laboratory business was 77.8% for the three
months ended March 31, 2023, compared to 68.1% during the same period in 2022, primarily due to a decrease in inventory write down and royalty fee; gross margin of in-hospital business was 66.7% for the
three months ended March 31, 2023, compared to 68.2% during the same period in 2022; gross margin of pharma research and development services was 55.8% for the three months ended March 31, 2023, compared to 29.2% during the same period of
2022, primarily due to an increase in test volume of higher margin projects.
Non-GAAP gross profit, which excludes depreciation and amortization
expenses, was RMB107.9 million (US$15.7 million) for the three months ended March 31, 2023, representing a 16.4% increase from RMB92.7 million for the same period in 2022. Non-GAAP gross margin
was 75.7% for the three months ended March 31, 2023, compared to 68.4% for the same period in 2022.
Operating expenses were RMB287.2 million
(US$41.8 million) for the three months ended March 31, 2023, representing a 18.0% decrease from RMB350.4 million for the same period in 2022. The decrease was primarily driven by budget control measures and headcount reduction to improve
the Company s operating efficiency.
Net loss was RMB185.3 million (US$27.0 million) for the three months ended March 31, 2023, compared to
RMB261.4 million for the same period in 2022.
Cash, cash equivalents, restricted cash and short-term investments were RMB803.1 million
(US$116.9 million) as of March 31, 2023.
2023 Financial Guidance
We reiterate our 2023 full-year revenue guidance of approximately 20% growth over 2022.
Conference Call Information
Burning Rock will host a
conference call to discuss the first quarter 2023 financial results at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Hong Kong time) on May 30, 2023.
register in advance of the conference using the link provided below and dial in 15 minutes prior to the call, using participant dial-in numbers and unique registrant ID which would be provided upon
PRE-REGISTER LINK: https://register.vevent.com/register/BI70acdaea8afc4d3e8f3eec70e5cc3fa7.
Additionally, a live and archived webcast of the conference call will also be available on the company s investor relations website at
http://ir.brbiotech.com or through link https://edge.media-server.com/mmc/p/p3h6zb7y.
A replay of the webcast will be available for 12
months via the same link above.
Burning Rock Biotech Limited (NASDAQ: BNR and LSE: BNR), whose mission is to guard life via science, focuses on the application of next generation sequencing
(NGS) technology in the field of precision oncology. Its business consists of i) NGS-based therapy selection testing for late-stage cancer patients, and ii) cancer early detection, which has moved beyond proof-of-concept R&D into the clinical validation stage.
information about Burning Rock, please visit: ir.brbiotech.com.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as will,
expects, anticipates, future, intends, plans, believes, estimates, target, confident and similar statements. Burning Rock may also make
written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements about Burning Rock s beliefs and expectations, are forward-looking statements. Such statements are based upon management s current expectations and current market and operating
conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Burning Rock s control. Forward-looking statements involve risks,
uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. All information provided in this press release is as of the date of this press release, and Burning Rock does not
undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
In evaluating the business, the company considers and uses non-GAAP measures, such as
non-GAAP gross profit and non-GAAP gross margin, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the
United States of America ( U.S. GAAP ). The company defines non-GAAP gross profit as gross profit excluding depreciation and amortization. The company defines
non-GAAP gross margin as gross margin excluding depreciation and amortization.
The company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The company believe non-GAAP gross profit and non-GAAP gross margin excluding non-cash impact of depreciation and amortization reflect the company s ongoing business operations in a manner that allows more meaningful
period-to-period comparisons.
Contact: IR@brbiotech.com
Selected Operating Data
For the three months ended
March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023
Central Laboratory Channel:
Number of patients tested 7,743 8,060 7,989 6,419 6,139
Number of ordering physicians (1) 994 767 897 797 792
Number of ordering hospitals (2) 318 264 257 238 241
As of
March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023
In-hospital Channel:
Pipeline partner hospitals (1) 24 25 22 28 29
Contracted partner hospitals (2) 41 43 47 49 49
Total number of partner hospitals 65 68 69 77 78
Selected Financial Data
For the three months ended
Revenues March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023
(RMB in thousands)
Central laboratory channel 74,211 78,597 89,992 71,970 61,804
In-hospital channel 48,957 34,177 49,636 42,526 51,561
Pharma research and development channel 12,356 18,072 15,003 27,741 29,151
Total revenues 135,524 130,846 154,631 142,237 142,516
For the three months ended
Gross profit March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023
(RMB in thousands)
Central laboratory channel 50,574 57,575 69,991 54,507 48,090
In-hospital channel 33,396 20,012 31,593 26,999 34,409
Pharma research and development channel 3,610 5,015 7,010 19,757 16,273
Total gross profit 87,580 82,602 108,594 101,263 98,772
For the three months ended
Share-based compensation expenses March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023
(RMB in thousands)
Cost of revenues 365 441 481 496 353
Research and development expenses 12,299 11,923 13,978 14,673 13,612
Selling and marketing expenses 1,774 2,158 2,346 2,247 1,606
General and administrative expenses 65,715 62,615 61,041 74,232 62,595
Total share-based compensation expenses 80,153 77,137 77,846 91,648 78,166
Burning Rock Biotech Limited
Unaudited Condensed Statements of Comprehensive Loss
(in thousands, except for number of shares and per share data)
For the three months ended
March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 March 31, 2023
RMB RMB RMB RMB RMB US$
Revenues 135,524 130,846 154,631 142,237 142,516 20,752
Cost of revenues (47,944 ) (48,244 ) (46,037 ) (40,974 ) (43,744 ) (6,370 )
Gross profit 87,580 82,602 108,594 101,263 98,772 14,382
Operating expenses:
Research and development expenses (119,496 ) (92,112 ) (109,433 ) (100,827 ) (94,417 ) (13,748 )
Selling and marketing expenses (89,211 ) (105,634 ) (90,275 ) (85,174 ) (64,774 ) (9,432 )
General and administrative expenses (141,733 ) (150,316 ) (143,530 ) (132,705 ) (128,039 ) (18,644 )
Total operating expenses (350,440 ) (348,062 ) (343,238 ) (318,706 ) (287,230 ) (41,824 )
Loss from operations (262,860 ) (265,460 ) (234,644 ) (217,443 ) (188,458 ) (27,442 )
Interest income 1,832 2,685 2,001 2,838 3,144 458
Interest expenses 119 (29 ) 12
Other income (expense), net 298 127 (189 ) (84 ) 599 87
Foreign exchange (loss) gain, net (777 ) 624 1,337 365 (116 ) (17 )
Loss before income tax (261,388 ) (262,053 ) (231,483 ) (214,324 ) (184,831 ) (26,914 )
Income tax expenses (84 ) (1,901 ) (422 ) (61 )
Net loss (261,388 ) (262,137 ) (231,483 ) (216,225 ) (185,253 ) (26,975 )
Net loss attributable to Burning Rock Biotech Limited s shareholders (261,388 ) (262,137 ) (231,483 ) (216,225 ) (185,253 ) (26,975 )
Net loss attributable to ordinary shareholders (261,388 ) (262,137 ) (231,483 ) (216,225 ) (185,253 ) (26,975 )
Loss per share for class A and class B ordinary shares:
Class A ordinary shares - basic and diluted (2.50 ) (2.50 ) (2.23 ) (2.11 ) (1.81 ) (0.26 )
Class B ordinary shares - basic and diluted (2.50 ) (2.50 ) (2.23 ) (2.11 ) (1.81 ) (0.26 )
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted 87,179,752 87,532,539 86,585,322 85,051,882 85,065,585 85,065,585
Class B ordinary shares - basic and diluted 17,324,848 17,324,848 17,324,848 17,324,848 17,324,848 17,324,848
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments (3,065 ) 29,715 20,646 (5,950 ) (5,659 ) (824 )
Total comprehensive loss (264,453 ) (232,422 ) (210,837 ) (222,175 ) (190,912 ) (27,799 )
Total comprehensive loss attributable to Burning Rock Biotech Limited s shareholders (264,453 ) (232,422 ) (210,837 ) (222,175 ) (190,912 ) (27,799 )
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets
As of
December 31, 2022 March 31, 2023 March 31, 2023
RMB RMB US$
ASSETS
Current assets:
Cash and cash equivalents 905,451 793,484 115,540
Restricted cash 19,817 9,658 1,406
Accounts receivable, net 109,954 125,554 18,282
Contract assets, net 41,757 48,887 7,118
Inventories, net 130,321 113,895 16,584
Prepayments and other current assets, net 51,462 47,209 6,874
Total current assets 1,258,762 1,138,687 165,804
Non-current assets:
Equity method investment 690 599 87
Convertible note receivable 5,105 5,105 743
Property and equipment, net 251,829 220,342 32,084
Operating right-of-use assets 48,205 39,351 5,730
Intangible assets, net 1,986 1,701 248
Other non-current assets 20,890 11,583 1,687
Total non-current assets 328,705 278,681 40,579
TOTAL ASSETS 1,587,467 1,417,368 206,383
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets (Continued)
As of
December 31, 2022 March 31, 2023 March 31, 2023
RMB RMB US$
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable 50,947 23,593 3,435
Deferred revenue 147,633 154,317 22,470
Accrued liabilities and other current liabilities 173,832 146,697 21,361
Customer deposits 1,803 1,197 174
Current portion of operating lease liabilities 37,236 32,312 4,705
Total current liabilities 411,451 358,116 52,145
Non-current liabilities:
Non-current portion of operating lease liabilities 13,551 9,144 1,331
Other non-current liabilities 4,124 4,545 661
Total non-current liabilities 17,675 13,689 1,992
TOTAL LIABILITIES 429,126 371,805 54,137
Shareholders equity:
Class A ordinary shares 117 117 17
Class B ordinary shares 21 21 3
Additional paid-in capital 4,582,790 4,660,924 678,683
Treasury stock (58,919 ) (58,919 ) (8,579 )
Accumulated deficits (3,199,946 ) (3,385,199 ) (492,923 )
Accumulated other comprehensive loss (165,722 ) (171,381 ) (24,955 )
Total shareholders equity 1,158,341 1,045,563 152,246
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 1,587,467 1,417,368 206,383
Burning Rock Biotech Limited
Unaudited Condensed Statements of Cash Flows
For the three months ended
March 31, 2022 March 31, 2023 March 31, 2023
RMB RMB US$
Net cash used in operating activities (144,361 ) (113,143 ) (16,475 )
Net cash used in investing activities (13,011 ) (4,059 ) (591 )
Net cash used in financing activities (3,934 ) (32 ) (5 )
Effect of exchange rate on cash, cash equivalents and restricted cash (2,931 ) (4,892 ) (712 )
Net decrease in cash, cash equivalents and restricted cash (164,237 ) (122,126 ) (17,783 )
Cash, cash equivalents and restricted cash at the beginning of period 1,439,112 925,268 134,729
Cash, cash equivalents and restricted cash at the end of period 1,274,875 803,142 116,946
Burning Rock Biotech Limited
Reconciliations of GAAP and Non-GAAP Results
For the three months ended
March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023
(RMB in thousands)
Gross profit:
Central laboratory channel 50,574 57,575 69,991 54,507 48,090
In-hospital channel 33,396 20,012 31,593 26,999 34,409
Pharma research and development channel 3,610 5,015 7,010 19,757 16,273
Total gross profit 87,580 82,602 108,594 101,263 98,772
Add: depreciation and amortization:
Central laboratory channel 2,553 2,545 3,138 3,609 2,567
In-hospital channel 93 1,428 2,479 2,449 2,582
Pharma research and development channel 2,493 4,327 2,805 3,065 3,974
Total depreciation and amortization
included in cost of revenues 5,139 8,300 8,422 9,123 9,123
Non-GAAP gross profit:
Central laboratory channel 53,127 60,120 73,129 58,116 50,657
In-hospital channel 33,489 21,440 34,072 29,448 36,991
Pharma research and development channel 6,103 9,342 9,815 22,822 20,247
Total non-GAAP gross profit 92,719 90,902 117,016 110,386 107,895
Non-GAAP gross margin:
Central laboratory channel 71.6 % 76.5 % 81.3 % 80.8 % 82.0 %
In-hospital channel 68.4 % 62.7 % 68.6 % 69.2 % 71.7 %
Pharma research and development channel 49.4 % 51.7 % 65.4 % 82.3 % 69.5 %
Total non-GAAP gross margin 68.4 % 69.5 % 75.7 % 77.6 % 75.7 %
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Last updated: May 30, 2023