Full Press Release Details
CareDx Reports Fourth Quarter and FY 2018 Results
AlloSure launch momentum drives 88% fourth quarter revenue growth
BRISBANE, Calif., March 6, 2019 (GLOBE NEWSWIRE) CareDx, Inc. (NASDAQ: CDNA), a molecular diagnostics company focused on the discovery,
development and commercialization of clinically differentiated, high-value diagnostic solutions for transplant patients, today reported financial results for the fourth quarter and full year ended December 31, 2018.
The CareDx team delivered another consecutive record quarter, including 88% year-over-year revenue growth. We achieved positive adjusted EBITDA and
operating cash flow results for the second straight quarter. We strengthened our first mover advantage as the strong clinical value of AlloSure continues to resonate with the transplant community and, just over a year into the launch, we are 3%
penetrated into this patient population, said Peter Maag, CareDx Chief Executive Officer. CareDx is making tremendous strides fortifying its position as the leading provider of genomics-based information in transplantation, with the goal
to leverage these insights to improve long-term patient outcomes. I am very proud of CareDx s accomplishments in 2018, which sets the stage for another year of strong growth in 2019 and beyond.
Fourth Quarter 2018 Financial Results
Revenue for the three months ended December 31, 2018 was $23.5 million, compared with $12.5 million in the fourth quarter of 2017. Testing
services revenue for the fourth quarter was $18.9 million compared with $8.6 million in the same period of 2017. Product revenue in the three months ended December 31, 2018 was $4.6 million, compared to $3.7 million in the
same period of 2017.
For the fourth quarter of 2018, the net loss was $3.8 million compared to a net loss of $31.7 million in the same period
of 2017. The fourth quarter 2018 net loss included $3.0 million of debt extinguishment expenses and a $1.6 million benefit from the change in estimated fair value of common stock warrant and derivative liabilities. Basic and diluted net
loss per share was $0.09 in the fourth quarter of 2018, compared to basic and diluted net loss per share of $1.13 in the fourth quarter of 2017.
Non-GAAP net income was $0.3 million in the fourth quarter of 2018 compared to a $2.6 million net loss in the fourth quarter of 2017. Basic and diluted non-GAAP net
income per share was $0.01 in the fourth quarter of 2018, compared to a net loss per share of $0.09 in the fourth quarter of 2017.
the fourth quarter of 2018 was a gain of $0.8 million, compared to a loss of $2.0 million in the fourth quarter of 2017.
Net cash provided by
operating activities in the fourth quarter of 2018 was $2.0 million compared with $2.2 million net cash used in operations in the comparative 2017 period. Cash and cash equivalents were $64.6 million as of December 31, 2018.
Full Year 2018 Financial Results
Revenue for the full
year ended December 31, 2018 was $76.6 million, an increase of 58% compared with $48.3 million in full year 2017 revenue. Testing revenue for the year ended December 31, 2018 was $60.3 million, compared with
$33.1 million in the same period in 2017. Product revenue for the full year 2018 was $15.7 million, compared to $14.6 million in 2017.
loss for the full year ended December 31, 2018 was $46.8 million compared with a net loss of $55.5 million in 2017. The full year 2018 net loss includes charges totaling $28.8 million for debt extinguishment expenses and changes
in the estimated fair values of warrant and derivative liabilities, which compares to $30.1 million in such charges in 2017. Basic and diluted net loss per share for the full year ended December 31, 2018 were $1.31 compared to $2.38 in the
Non-GAAP net loss was $5.3 million for the full year ended December 31, 2018 compared
to $16.1 million in 2017. Non-GAAP basic and diluted net loss per share were $0.15 in the full year 2018, compared to basic and diluted net loss per share of $0.69 in 2017.
For additional information regarding non-GAAP financial measures discussed herein, please see Use of Non-GAAP financial Measures and Reconciliation of GAAP to Non-GAAP Financial Measures below.
For the full year 2019, CareDx expects revenue to be in the range of $105 million to $107 million.
About CareDx CareDx, Inc., headquartered in Brisbane, California, is a molecular diagnostics company focused on the discovery,
development and commercialization of clinically differentiated, high-value diagnostic solutions for transplant recipients. CareDx offers products along the pre- and post-transplant testing continuum.
For more information, please visit: www.CareDx.com.
This press release includes forward-looking statements, including expectations regarding the Company s fiscal 2019 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 December 31, 2017 filed by CareDx with the SEC on March 22, 2018 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
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 net loss, non-GAAP basic and diluted
net income and net loss per share and adjusted EBITDA. We define non-GAAP net income and non-GAAP net loss and per share results as the GAAP net income or loss 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 expense, income tax expense, depreciation and amortization, other expense, and net loss attributable to noncontrolling interest. 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.
Integrated Corporate Relations, Inc.
Consolidated Statements of Operations
thousands, except share and per share data)
| Three Months Ended December 31, | 12 Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue: | ||||||||||||||||
| Testing services revenue | $ | 18,852 | $ | 8,621 | $ | 60,300 | $ | 33,106 | ||||||||
| Product revenue | 4,594 | 3,718 | 15,674 | 14,634 | ||||||||||||
| Collaboration and license revenue | 63 | 164 | 595 | 584 | ||||||||||||
| Total revenue | 23,509 | 12,503 | 76,569 | 48,324 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of testing services | 7,024 | 3,121 | 21,456 | 12,345 | ||||||||||||
| Cost of product | 3,485 | 2,468 | 11,531 | 9,026 | ||||||||||||
| Research and development | 3,782 | 3,028 | 14,514 | 12,388 | ||||||||||||
| Sales and marketing | 5,754 | 3,061 | 21,670 | 12,808 | ||||||||||||
| General and administrative | 5,879 | 4,241 | 21,959 | 18,913 | ||||||||||||
| Goodwill impairment | 1,958 | |||||||||||||||
| Change in estimated fair value of contingent consideration | 871 | 1,017 | 1,180 | |||||||||||||
| Total operating expenses | 25,924 | 16,790 | 92,147 | 68,618 | ||||||||||||
| Loss from operations | (2,415 | ) | (4,287 | ) | (15,578 | ) | (20,294 | ) | ||||||||
| Interest expense | (174 | ) | (1,708 | ) | (3,701 | ) | (5,863 | ) | ||||||||
| Debt extinguishment expenses | (2,974 | ) | (274 | ) | (5,780 | ) | (459 | ) | ||||||||
| Other expense, net | (93 | ) | (14 | ) | (178 | ) | (1,031 | ) | ||||||||
| Change in estimated fair value of common stock warrant liability and derivative liability | 1,562 | (26,218 | ) | (22,978 | ) | (29,622 | ) | |||||||||
| Loss before income taxes | (4,094 | ) | (32,501 | ) | (48,215 | ) | (57,269 | ) | ||||||||
| Income tax benefit | 339 | 872 | 1,434 | 1,709 | ||||||||||||
| Net loss | (3,755 | ) | (31,629 | ) | (46,781 | ) | (55,560 | ) | ||||||||
| Net loss attributable to noncontrolling interest | 42 | (25 | ) | (91 | ) | |||||||||||
| Net loss attributable to CareDx, Inc. | $ | (3,755 | ) | $ | (31,671 | ) | $ | (46,756 | ) | $ | (55,469 | ) | ||||
| Net loss per share attributable to CareDx, Inc.: | ||||||||||||||||
| Basic | $ | (0.09 | ) | $ | (1.13 | ) | $ | (1.31 | ) | $ | (2.38 | ) | ||||
| Diluted | $ | (0.09 | ) | $ | (1.13 | ) | $ | (1.31 | ) | $ | (2.38 | ) | ||||
| Weighted average shares used to compute net loss per share attributable to CareDx, Inc.: | ||||||||||||||||
| Basic | 40,104,341 | 27,983,033 | 35,638,956 | 23,332,503 | ||||||||||||
| Diluted | 40,104,341 | 27,983,033 | 35,638,956 | 23,332,503 |
Condensed Consolidated Balance Sheets
| December 31, 2018 | December 31, 2017 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 64,616 | $ | 16,895 | ||||
| Accounts receivable | 9,760 | 2,991 | ||||||
| Inventory | 4,943 | 5,529 | ||||||
| Prepaid and other assets | 1,795 | 1,352 | ||||||
| Total current assets | 81,114 | 26,767 | ||||||
| Property and equipment, net | 4,134 | 2,075 | ||||||
| Intangible assets, net | 33,252 | 33,139 | ||||||
| Goodwill | 12,005 | 12,005 | ||||||
| Restricted cash | 192 | 9,579 | ||||||
| Total assets | $ | 130,697 | $ | 83,565 | ||||
| Liabilities and stockholders (deficit) equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,711 | $ | 3,391 | ||||
| Accrued compensation | 9,156 | 5,013 | ||||||
| Accrued and other liabilities | 5,408 | 3,735 | ||||||
| Deferred revenue | 39 | 39 | ||||||
| Deferred purchase consideration | 190 | 407 | ||||||
| Derivative liability | 14,600 | |||||||
| Current debt | 15,721 | |||||||
| Total current liabilities | 19,504 | 42,906 | ||||||
| Deferred rent, net of current portion | 470 | 913 | ||||||
| Deferred revenue, net of current portion | 691 | 730 | ||||||
| Deferred tax liability | 2,968 | 4,933 | ||||||
| Long-term debt, net of current portion | 18,338 | |||||||
| Contingent consideration | 1,672 | |||||||
| Common stock warrant liability | 10,003 | 18,712 | ||||||
| Other liabilities | 1,133 | 1,315 | ||||||
| Total liabilities | 34,769 | 89,519 | ||||||
| Stockholders equity: | ||||||||
| Common stock | 41 | 29 | ||||||
| Additional paid-in capital | 412,010 | 264,204 | ||||||
| Accumulated other comprehensive loss | (4,278 | ) | (2,345 | ) | ||||
| Accumulated deficit | (311,845 | ) | (268,022 | ) | ||||
| Total CareDx, Inc. stockholders equity (deficit) | 95,928 | (6,134 | ) | |||||
| Noncontrolling interest | 180 | |||||||
| Total stockholders equity (deficit) | 95,928 | (5,954 | ) | |||||
| Total liabilities and stockholders equity | $ | 130,697 | $ | 83,565 |
Reconciliation of GAAP to Non-GAAP Financial Measures
| (Unaudited) (In thousands, except share and per share data) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP net loss | $ | (3,755 | ) | $ | (31,671 | ) | $ | (46,756 | ) | $ | (55,469 | ) | ||||
| Stock-based compensation expense | 2,060 | 428 | 7,138 | 1,744 | ||||||||||||
| Acquisition related-amortization of purchased intangibles | 735 | 621 | 2,973 | 2,433 | ||||||||||||
| Change in estimated fair value of contingent consideration | 871 | 1,017 | 1,180 | |||||||||||||
| Amortization of debt discount | 47 | 731 | 2,095 | 2,098 | ||||||||||||
| Debt financing related fees and expenses | 2,974 | 2,974 | 309 | |||||||||||||
| Loss on conversion from debt to equity | 278 | 2,806 | 278 | |||||||||||||
| Change in estimated fair value of common stock warrant and derivative liabilities | (1,562 | ) | 26,218 | 22,978 | 29,622 | |||||||||||
| Tax effect related to amortization of purchased intangibles | (195 | ) | (200 | ) | (811 | ) | (735 | ) | ||||||||
| Acquisition-related amortization of inventory valuation adjustment | 44 | 89 | 268 | 509 | ||||||||||||
| Goodwill impairment | 1,958 | |||||||||||||||
| Non-GAAP net income (loss) | $ | 348 | $ | (2,635 | ) | $ | (5,318 | ) | $ | (16,073 | ) | |||||
| GAAP basic and diluted net loss per share attributable to CareDx | $ | (0.09 | ) | $ | (1.13 | ) | $ | (1.31 | ) | $ | (2.38 | ) | ||||
| Non-GAAP basic and diluted net income (loss) per share attributable to CareDx | $ | 0.01 | $ | (0.09 | ) | $ | (0.15 | ) | $ | (0.69 | ) | |||||
| Shares used in computing non-GAAP basic net income (loss) per share | 40,104,341 | 27,983,033 | 35,638,956 | 23,332,503 | ||||||||||||
| Shares used in computing non-GAAP diluted net income (loss) per share | 41,270,703 | 27,983,033 | 35,638,956 | 23,332,503 |
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
| (Unaudited) (In thousands) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Non-GAAP net income (loss) | $ | 348 | $ | (2,635 | ) | $ | (5,318 | ) | $ | (16,073 | ) | |||||
| Interest expense | 127 | 977 | 1,606 | 3,765 | ||||||||||||
| Income tax benefit | (144 | ) | (672 | ) | (623 | ) | (974 | ) | ||||||||
| Depreciation expense | 355 | 283 | 1,155 | 929 | ||||||||||||
| Other expense | 93 | 10 | 178 | 903 | ||||||||||||
| Net loss attributable to noncontrolling interest | 42 | (25 | ) | (91 | ) | |||||||||||
| Adjusted EBITDA | $ | 779 | $ | (1,995 | ) | $ | (3,027 | ) | $ | (11,541 | ) |