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Burning Rock Reports Second Quarter 2022 Financial Results

Key Takeaway: Burning Rock Reports Second Quarter 2022 Financial Results GUANGZHOU, China, August 31, 2022 Burning Rock Biotech Limited (NASDAQ: BNR, the Company or Burning Rock ), a company focused on the application of next generation sequencing (NGS) technology in the field of precision o

Full Press Release Details

Burning Rock Reports Second Quarter 2022 Financial Results
GUANGZHOU, China, August 31, 2022 Burning Rock Biotech Limited (NASDAQ: 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 June 30, 2022.
Recent Business Updates
In-hospital and MRD driving growth uplift, but patient volumes negatively impacted by Covid related
Second Quarter 2022 Financial Results
Revenues were RMB130.8 million (US$19.5 million) for the three months ended June 30, 2022, representing a 2.8% increase from RMB127.3 million
for the same period in 2021.
Cost of revenues was RMB48.2 million (US$7.2 million) for the three months ended June 30, 2022,
representing a 30.2% increase from RMB37.0 million for the same period in 2021, primarily due to the increased depreciation in relation to our new laboratory and inventory write downs.
Gross profit was RMB82.6 million (US$12.3 million) for the three months ended June 30, 2022, representing a 8.5% decrease from
RMB90.2 million for the same period in 2021. Gross margin was 63.1% for the three months ended June 30, 2022, which decreased from 70.9% for the same period in 2021, primarily due to increased depreciation in relation to our new laboratory
and inventory write downs.
Non-GAAP gross profit was RMB90.9 million (US$13.6 million) for
the three months ended June 30, 2022, representing a 0.3% increase from RMB90.7 million for the same period in 2021. Non-GAAP gross margin was 69.5% for the three months ended June 30, 2022,
compared to 71.2% for the same period in 2021 primarily due to a 0.7% decrease of gross margin resulting from increase of RMB0.9 million in inventory write down.
Operating expenses were RMB348.1 million (US$52.0 million) for the three months ended June 30, 2022, representing a 19.1% increase from
RMB292.3 million for the same period in 2021.
Net loss was RMB262.1 million (US$39.1 million) for the three months ended June 30, 2022,
compared to RMB203.7 million for the same period in 2021.
Net cash used in operating activities was RMB109.3 million (US$16.3 million) for the
three months ended June 30, 2022, compared to RMB119.0 million for the same period in 2021. The balance of cash, cash equivalents, restricted cash and short-term investments was RMB1,153.1 million (US$172.1 million) as of
2022 Financial Guidance
quarter business volumes have been significantly impacted by Covid related restrictions, with severe volume drops in Shanghai and Beijing; however, pharma service revenues, new products and the in-hospital
business outside of Shanghai and Beijing have shown strong growth momentum. Burning Rock therefore retains its full year 2022 revenue guidance of approximately RMB620 million (US$92.6 million) for now, and would like to highlight the risks of
further Covid related impact in the second half of 2022 which is beyond the Company s control and inherently difficult to forecast.
Further to the Company s announcement on June 21, 2022 of a US$10 million share repurchase program, we are pleased to
announce that the repurchase program has been completed in full. The Company has repurchased a total of 3,023,138 Class A ordinary shares in the form of ADSs under the share repurchase program. The repurchased shares will be retained as
treasury shares and have not been taken out of the calculation of loss per share for the second quarter 2022 financial results.
Burning Rock will host a conference call to discuss the second quarter 2022 financial results at 8:30 a.m. U.S. Eastern Time (8:30 p.m.
Hong Kong time) on August 31, 2022.
Please 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 registering.
https://register.vevent.com/register/BI1f6043e15b804286b8c6f5db40d78456. Additionally, a live and archived webcast of the conference call will also be available on the company s investor relations website at
A replay of the webcast will be available for 12
months via the same link above.
Burning Rock Biotech Limited (NASDAQ: 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.
Selected Operating Data
For the three months ended
March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022
Central Laboratory Channel:
Number of patients tested 7,716 8,155 7,808 8,235 7,743 8,060
Number of ordering physicians (1) 1,082 1,013 920 917 994 767
Number of ordering hospitals (2) 303 300 287 306 318 264
As of
March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022
In-hospital Channel:
Pipeline partner hospitals (1) 22 22 24 23 24 25
Contracted partner hospitals (2) 32 34 34 41 41 43
Total number of partner hospitals 54 56 58 64 65 68
Selected Financial Data
For the three months ended
Revenues March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022
(RMB in thousands)
Central laboratory channel 74,561 79,999 78,817 85,976 74,211 78,597
In-hospital channel 28,994 40,502 43,714 51,906 48,957 34,177
Pharma research and development channel 3,068 6,778 4,084 9,463 12,356 18,072
Total revenues 106,623 127,279 126,615 147,345 135,524 130,846
For the three months ended
Gross profit March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022
(RMB in thousands)
Central laboratory channel 55,212 58,681 58,387 65,985 50,574 57,575
In-hospital channel 20,070 29,426 31,111 34,194 33,396 20,012
Pharma research and development channel 1,658 2,124 2,098 5,200 3,610 5,015
Total gross profit 76,940 90,231 91,596 105,379 87,580 82,602
For the three months ended
Share-based compensation expenses March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022
(RMB in thousands)
Cost of revenues 339 406 267 492 365 441
Research and development expenses 22,404 20,825 (9,559 ) (4,033 ) 12,299 11,923
Selling and marketing expenses 2,633 2,809 2,044 2,126 1,774 2,158
General and administrative expenses 59,382 59,369 60,803 62,126 65,715 62,615
Total share-based compensation expenses 84,758 83,409 53,555 60,711 80,153 77,137
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, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 June 30, 2022
RMB RMB RMB RMB RMB RMB US$
Revenues 106,623 127,279 126,615 147,345 135,524 130,846 19,534
Cost of revenues (29,683 ) (37,048 ) (35,019 ) (41,966 ) (47,944 ) (48,244 ) (7,203 )
Gross profit 76,940 90,231 91,596 105,379 87,580 82,602 12,331
Operating expenses:
Research and development expenses (77,414 ) (108,071 ) (69,649 ) (112,724 ) (119,496 ) (92,112 ) (13,752 )
Selling and marketing expenses (55,130 ) (68,058 ) (76,687 ) (103,221 ) (89,211 ) (105,634 ) (15,771 )
General and administrative expenses (116,259 ) (116,130 ) (116,304 ) (141,563 ) (141,733 ) (150,316 ) (22,442 )
Total operating expenses (248,803 ) (292,259 ) (262,640 ) (357,508 ) (350,440 ) (348,062 ) (51,965 )
Loss from operations (171,863 ) (202,028 ) (171,044 ) (252,129 ) (262,860 ) (265,460 ) (39,634 )
Interest income 787 681 958 1,031 1,832 2,685 401
Interest expenses (510 ) (565 ) (367 ) (94 ) 119 (29 ) (4 )
Other income (expense), net 118 433 20 (372 ) 298 127 19
Foreign exchange gain (loss), net 57 (560 ) 380 (731 ) (777 ) 624 93
Loss before income tax (171,411 ) (202,039 ) (170,053 ) (252,295 ) (261,388 ) (262,053 ) (39,125 )
Income tax (expenses) benefits (1,626 ) (424 ) 1,151 (84 ) (13 )
Net loss (171,411 ) (203,665 ) (170,477 ) (251,144 ) (261,388 ) (262,137 ) (39,138 )
Net loss attributable to Burning Rock Biotech Limited s shareholders (171,411 ) (203,665 ) (170,477 ) (251,144 ) (261,388 ) (262,137 ) (39,138 )
Net loss attributable to ordinary shareholders (171,411 ) (203,665 ) (170,477 ) (251,144 ) (261,388 ) (262,137 ) (39,138 )
Loss per share for class A and class B ordinary shares:
Class A ordinary shares - basic and diluted (1.65 ) (1.96 ) (1.64 ) (2.40 ) (2.50 ) (2.50 ) (0.37 )
Class B ordinary shares - basic and diluted (1.65 ) (1.96 ) (1.64 ) (2.40 ) (2.50 ) (2.50 ) (0.37 )
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted 86,721,263 86,764,260 86,908,975 87,128,297 87,179,752 87,532,539 87,532,539
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 17,324,848
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments 14,080 (34,980 ) 6,146 (24,726 ) (3,065 ) 29,715 4,436
Total comprehensive loss (157,331 ) (238,645 ) (164,331 ) (275,870 ) (264,453 ) (232,422 ) (34,702 )
Total comprehensive loss attributable to Burning Rock Biotech Limited s shareholders (157,331 ) (238,645 ) (164,331 ) (275,870 ) (264,453 ) (232,422 ) (34,702 )
Burning Rock Biotech Limited
Unaudited Condensed Statements of Comprehensive Loss
(in thousands, except for number of shares and per share data)
For the six months ended
June 30, 2021 June 30, 2022 June 30, 2022
RMB RMB US$
Revenues 233,902 266,370 39,768
Cost of revenues (66,731 ) (96,188 ) (14,361 )
Gross profit 167,171 170,182 25,407
Operating expenses:
Research and development expenses (185,485 ) (211,608 ) (31,592 )
Selling and marketing expenses (123,188 ) (194,845 ) (29,090 )
General and administrative expenses (232,389 ) (292,049 ) (43,602 )
Total operating expenses (541,062 ) (698,502 ) (104,284 )
Loss from operations (373,891 ) (528,320 ) (78,877 )
Interest income 1,468 4,517 674
Interest expenses (1,075 ) 90 13
Other income, net 551 425 63
Foreign exchange loss, net (503 ) (153 ) (23 )
Loss before income tax (373,450 ) (523,441 ) (78,150 )
Income tax expenses (1,626 ) (84 ) (13 )
Net loss (375,076 ) (523,525 ) (78,163 )
Net loss attributable to Burning Rock Biotech Limited s shareholders (375,076 ) (523,525 ) (78,163 )
Net loss attributable to ordinary shareholders (375,076 ) (523,525 ) (78,163 )
Loss per share for class A and class B ordinary shares:
Class A ordinary shares - basic and diluted (3.60 ) (5.00 ) (0.75 )
Class B ordinary shares - basic and diluted (3.60 ) (5.00 ) (0.75 )
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted 86,742,880 87,357,120 87,357,120
Class B ordinary shares - basic and diluted 17,324,848 17,324,848 17,324,848
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments (20,900 ) 26,650 3,979
Total comprehensive loss (395,976 ) (496,875 ) (74,184 )
Total comprehensive loss attributable to Burning Rock Biotech Limited s shareholders (395,976 ) (496,875 ) (74,184 )
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets
As of
December 31, 2021 June 30, 2022 June 30, 2022
RMB RMB US$
ASSETS
Current assets:
Cash and cash equivalents 1,431,317 1,148,597 171,481
Restricted cash 7,795 4,453 665
Short-term investments 63,757
Accounts receivable, net 92,197 100,960 15,073
Contract assets, net 42,391 44,593 6,657
Inventories, net 123,210 129,637 19,355
Prepayments and other current assets, net 60,279 34,845 5,205
Total current assets 1,820,946 1,463,085 218,436
Non-current assets:
Equity method investment 910 733 109
Convertible note receivable 5,000 746
Property and equipment, net 325,438 301,249 44,975
Operating right-of-use assets 81,007 66,655 9,951
Intangible assets, net 5,150 3,354 500
Other non-current assets 45,136 21,198 3,165
Total non-current assets 457,641 398,189 59,446
TOTAL ASSETS 2,278,587 1,861,274 277,882
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets (Continued)
As of
December 31, 2021 June 30, 2022 June 30, 2022
RMB RMB US$
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable 63,080 56,495 8,434
Deferred revenue 142,871 163,093 24,349
Accrued liabilities and other current liabilities 127,892 98,435 14,696
Customer deposits 972 1,052 157
Short-term borrowing 2,370 2,370 354
Current portion of operating lease liabilities 34,999 38,005 5,674
Total current liabilities 372,184 359,450 53,664
Non-current liabilities:
Non-current portion of operating lease liabilities 49,316 32,349 4,830
Other non-current liabilities 11,776 37,242 5,560
Total non-current liabilities 61,092 69,591 10,390
TOTAL LIABILITIES 433,276 429,041 64,054
Shareholders equity:
Class A ordinary shares 116 116 18
Class B ordinary shares 21 21 3
Additional paid-in capital 4,280,956 4,431,603 661,621
Contra equity-prepayment for equity forward (66,850 ) (9,980 )
Accumulated deficits (2,228,713 ) (2,752,238 ) (410,898 )
Accumulated other comprehensive loss (207,069 ) (180,419 ) (26,936 )
Total shareholders equity 1,845,311 1,432,233 213,828
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 2,278,587 1,861,274 277,882
Burning Rock Biotech Limited
Unaudited Condensed Statements of Cash Flows
For the three months ended
June 30, 2021 June 30, 2022 June 30, 2022
RMB RMB US$
Net cash used in operating activities (118,998 ) (109,274 ) (16,318 )
Net cash (used in) generated from investing activities (67,577 ) 30,729 4,590
Net cash used in financing activities (8,961 ) (69,559 ) (10,384 )
Effect of exchange rate on cash, cash equivalents and restricted cash (34,085 ) 26,279 3,924
Net decrease in cash, cash equivalents and restricted cash (229,621 ) (121,825 ) (18,188 )
Cash, cash equivalents and restricted cash at the beginning of period 2,112,886 1,274,875 190,334
Cash, cash equivalents and restricted cash at the end of period 1,883,265 1,153,050 172,146
For the six months ended
June 30, 2021 June 30, 2022 June 30, 2022
RMB RMB US$
Net cash used in operating activities (232,143 ) (253,634 ) (37,871 )
Net cash generated from investing activities 220,752 17,718 2,649
Net cash used in financing activities (13,123 ) (73,493 ) (10,971 )
Effect of exchange rate on cash, cash equivalents and restricted cash (17,427 ) 23,347 3,485
Net decrease in cash, cash equivalents and restricted cash (41,941 ) (286,062 ) (42,708 )
Cash, cash equivalents and restricted cash at the beginning of period 1,925,206 1,439,112 214,854
Cash, cash equivalents and restricted cash at the end of period 1,883,265 1,153,050 172,146
Burning Rock Biotech Limited
Reconciliations of GAAP and Non-GAAP Results
For the three months ended
March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022
(RMB in thousands)
Gross profit:
Central laboratory channel 55,212 58,681 58,387 65,985 50,574 57,575
In-hospital channel 20,070 29,426 31,111 34,194 33,396 20,012
Pharma research and development channel 1,658 2,124 2,098 5,200 3,610 5,015
Total gross profit 76,940 90,231 91,596 105,379 87,580 82,602
Add: depreciation and amortization:
Central laboratory channel 117 284 1,254 995 2,553 2,545
In-hospital channel 79 113 109 130 93 1,428
Pharma research and development channel 10 40 19 856 2,493 4,327
Total depreciation and amortization included in cost of revenues 206 437 1,382 1,981 5,139 8,300
Non-GAAP gross profit:
Central laboratory channel 55,329 58,965 59,641 66,980 53,127 60,120
In-hospital channel 20,149 29,539 31,220 34,324 33,489 21,440
Pharma research and development channel 1,668 2,164 2,117 6,056 6,103 9,342
Total non-GAAP gross profit 77,146 90,668 92,978 107,360 92,719 90,902
Non-GAAP gross margin:
Central laboratory channel 74.2 % 73.7 % 75.7 % 77.9 % 71.6 % 76.5 %
In-hospital channel 69.5 % 72.9 % 71.4 % 66.1 % 68.4 % 62.7 %
Pharma research and development channel 54.4 % 31.9 % 51.8 % 64.0 % 49.4 % 51.7 %
Total non-GAAP gross margin 72.4 % 71.2 % 73.4 % 72.9 % 68.4 % 69.5 %
Last updated: Aug 31, 2022