Full Press Release Details
CareDx Reports Third Quarter 2020 Results
SOUTH SAN FRANCISCO, CA, October 29, 2020 CareDx, Inc. (Nasdaq: CDNA), a leading precision medicine company focused on the discovery, development,
and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers, today reported financial results for the quarter ended September 30, 2020.
Third Quarter 2020 and Recent Highlights:
Our team continues to deliver the winning formula for CareDx. Beginning with a decision to drive our initiatives with a singular focus on
transplantation, we continue to execute on our objectives and achieve tremendous results as we march forward with our mission to improve transplant patient care, said Peter Maag, CareDx Chairman and Chief Executive Officer. We truly have
an imminent opportunity to make our solutions be the standard of care for transplanted organ surveillance, and our efforts are centered on making this a reality.
Third Quarter 2020 Financial Results
three months ended September 30, 2020 was $53.4 million, compared with $33.8 million in the third quarter of 2019. Testing services revenue for the third quarter was $45.5 million, compared with $28.2 million in the same
period of 2019. Product revenue in the three months ended September 30, 2020 was $5.4 million, compared to $4.2 million in the same period of 2019. Digital and other revenue for the third quarter 2020 was $2.5 million, compared
to $1.4 million in the same period of 2019.
For the third quarter of 2020, the net loss was $2.8 million compared to a net loss of
$1.8 million in the same period of 2019. Diluted net loss per share was $0.06 in the third quarter of 2020, compared to a diluted net loss per share of $0.04 in the third quarter of 2019.
Non-GAAP net income was $5.1 million in the third quarter of 2020 compared to $0.9 million non-GAAP net income in the third quarter of 2019. Diluted non-GAAP net income per share was $0.10 in the third quarter of 2020, compared to a diluted non-GAAP net income per share of $0.02 in the third quarter of 2019.
Adjusted EBITDA for the third quarter of 2020 was a gain of $5.6 million, compared to an adjusted
EBITDA gain of $0.8 million in the third quarter of 2019.
Cash and cash equivalents were $213.8 million as of September 30, 2020.
For additional information regarding non-GAAP financial measures discussed herein, please see Use of Non-GAAP Financial Measures, Reconciliation of GAAP to Non-GAAP Financial Measures, and Reconciliation of GAAP to
Non-GAAP Adjusted EBITDA Financial Measures below.
While CareDx experienced improved trends in the third quarter, due to the continued uncertainties with respect to the
COVID-19 pandemic, CareDx will not be providing revenue guidance at this time.
CareDx, Inc., headquartered in South San Francisco, California, is a leading precision medicine solutions company focused on the discovery, development, and
commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers. CareDx offers testing services, products, and digital healthcare solutions along the pre-
and post-transplant patient journey, and is the leading provider of genomics-based information for transplant patients. For more information, please visit: www.CareDx.com.
Forward-Looking Statements
This press release includes
forward-looking statements, including expectations regarding the 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, 2019, filed by CareDx with the SEC on February 28, 2020, 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 statements.
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 basic and diluted net income per
share and adjusted EBITDA. We define non-GAAP net income and per share results as the GAAP net income 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
income/(expense), income tax benefit, depreciation and amortization, and other income and expense. 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.
Investor Relations Contact
Condensed Consolidated Statements of Operations
thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenue: | ||||||||||||||||
| Testing services revenue | $ | 45,529 | $ | 28,226 | $ | 113,264 | $ | 75,421 | ||||||||
| Product revenue | 5,383 | 4,200 | 13,369 | 13,226 | ||||||||||||
| Digital and other revenue | 2,457 | 1,385 | 6,917 | 2,600 | ||||||||||||
| Total revenue | 53,369 | 33,811 | 133,550 | 91,247 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of testing services | 11,900 | 7,421 | 30,631 | 21,928 | ||||||||||||
| Cost of product | 3,705 | 2,986 | 9,635 | 9,161 | ||||||||||||
| Cost of digital and other | 1,210 | 1,087 | 3,966 | 1,650 | ||||||||||||
| Research and development | 12,474 | 8,521 | 35,616 | 21,765 | ||||||||||||
| Sales and marketing | 13,870 | 11,058 | 37,727 | 28,627 | ||||||||||||
| General and administrative | 13,117 | 9,485 | 35,436 | 27,103 | ||||||||||||
| Total operating expenses | 56,276 | 40,558 | 153,011 | 110,234 | ||||||||||||
| Loss from operations | (2,907 | ) | (6,747 | ) | (19,461 | ) | (18,987 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income, net | 29 | 37 | 146 | 679 | ||||||||||||
| Change in estimated fair value of common stock warrant liability | 79 | 4,346 | (990 | ) | (14 | ) | ||||||||||
| CARES Act Provider Relief Fund | 4,813 | |||||||||||||||
| Other expense, net | (254 | ) | (398 | ) | (572 | ) | (644 | ) | ||||||||
| Total other (expense) income | (146 | ) | 3,985 | 3,397 | 21 | |||||||||||
| Loss before income taxes | (3,053 | ) | (2,762 | ) | (16,064 | ) | (18,966 | ) | ||||||||
| Income tax benefit | 235 | 949 | 865 | 1,775 | ||||||||||||
| Net loss | $ | (2,818 | ) | $ | (1,813 | ) | $ | (15,199 | ) | $ | (17,191 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | (0.06 | ) | $ | (0.04 | ) | $ | (0.33 | ) | $ | (0.41 | ) | ||||
| Diluted | $ | (0.06 | ) | $ | (0.04 | ) | $ | (0.33 | ) | $ | (0.41 | ) | ||||
| Weighted-average shares used to compute net loss per share: | ||||||||||||||||
| Basic | 49,010,680 | 42,393,550 | 45,526,810 | 42,048,647 | ||||||||||||
| Diluted | 49,010,680 | 42,393,550 | 45,526,810 | 42,048,647 |
Condensed Consolidated Balance Sheets
| September 30, 2020 | December 31, 2019 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 213,798 | $ | 38,223 | ||||
| Accounts receivable | 30,610 | 24,057 | ||||||
| Inventory | 9,906 | 6,014 | ||||||
| Prepaid and other current assets | 4,345 | 3,628 | ||||||
| Total current assets | 258,659 | 71,922 | ||||||
| Property and equipment, net | 10,144 | 4,430 | ||||||
| Operating leases right-of-use assets | 15,802 | 4,730 | ||||||
| Intangible assets, net | 43,830 | 45,541 | ||||||
| Goodwill | 23,857 | 23,857 | ||||||
| Restricted cash | 260 | 256 | ||||||
| Other assets | 1,000 | 1,000 | ||||||
| Total assets | $ | 353,552 | $ | 151,736 | ||||
| Liabilities and stockholders equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 9,519 | $ | 5,506 | ||||
| Accrued compensation | 13,791 | 12,484 | ||||||
| Accrued and other liabilities | 18,617 | 16,838 | ||||||
| Deferred revenue - CMS advance payment | 20,496 | |||||||
| Total current liabilities | 62,423 | 34,828 | ||||||
| Deferred tax liability | 1,187 | 1,973 | ||||||
| Common stock warrant liability | 532 | 6,607 | ||||||
| Deferred payments for intangible assets | 3,480 | 5,207 | ||||||
| Operating lease liability, less current portion | 16,539 | 2,370 | ||||||
| Other liabilities | 747 | 1,751 | ||||||
| Total liabilities | 84,908 | 52,736 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders equity: | ||||||||
| Common stock | 47 | 42 | ||||||
| Additional paid-in capital | 621,961 | 437,976 | ||||||
| Accumulated other comprehensive loss | (4,352 | ) | (5,205 | ) | ||||
| Accumulated deficit | (349,012 | ) | (333,813 | ) | ||||
| Total stockholders equity | 268,644 | 99,000 | ||||||
| Total liabilities and stockholders equity | $ | 353,552 | $ | 151,736 |
Reconciliation of GAAP to Non-GAAP Financial Measures
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Cost of testing services reconciliation: | ||||||||||||||||
| GAAP cost of testing services | $ | 11,900 | $ | 7,421 | $ | 30,631 | $ | 21,928 | ||||||||
| Stock-based compensation expense | (431 | ) | (294 | ) | (1,101 | ) | (1,423 | ) | ||||||||
| Acquisition related-amortization of purchased intangibles | (329 | ) | (156 | ) | (987 | ) | (408 | ) | ||||||||
| Non-GAAP cost of testing services | $ | 11,140 | $ | 6,971 | $ | 28,543 | $ | 20,097 | ||||||||
| Cost of product reconciliation: | ||||||||||||||||
| GAAP cost of product | $ | 3,705 | $ | 2,986 | $ | 9,635 | $ | 9,161 | ||||||||
| Stock-based compensation expense | (97 | ) | (77 | ) | (289 | ) | (192 | ) | ||||||||
| Acquisition related-amortization of purchased intangibles | (445 | ) | (346 | ) | (1,210 | ) | (1,067 | ) | ||||||||
| Non-GAAP cost of product | $ | 3,163 | $ | 2,563 | $ | 8,136 | $ | 7,902 | ||||||||
| Cost of digital and other reconciliation: | ||||||||||||||||
| GAAP cost of digital and other | $ | 1,210 | $ | 1,087 | $ | 3,966 | $ | 1,650 | ||||||||
| Stock-based compensation expense | (124 | ) | (54 | ) | (338 | ) | (90 | ) | ||||||||
| Acquisition related-amortization of purchased intangibles | (86 | ) | (74 | ) | (259 | ) | (131 | ) | ||||||||
| Non-GAAP cost of digital and other | $ | 1,000 | $ | 959 | $ | 3,369 | $ | 1,429 | ||||||||
| Research and development expenses reconciliation: | ||||||||||||||||
| GAAP research and development expenses | $ | 12,474 | $ | 8,521 | $ | 35,616 | $ | 21,765 | ||||||||
| Stock-based compensation expense | (1,224 | ) | (954 | ) | (3,490 | ) | (3,227 | ) | ||||||||
| Non-GAAP research and development expenses | $ | 11,250 | $ | 7,567 | $ | 32,126 | $ | 18,538 | ||||||||
| Sales and marketing expenses reconciliation: | ||||||||||||||||
| GAAP sales and marketing expenses | $ | 13,870 | $ | 11,058 | $ | 37,727 | $ | 28,627 | ||||||||
| Stock-based compensation expense | (1,623 | ) | (1,125 | ) | (4,175 | ) | (2,796 | ) | ||||||||
| Acquisition related-amortization of purchased intangibles | (376 | ) | (336 | ) | (1,089 | ) | (882 | ) | ||||||||
| Impairment | (150 | ) | ||||||||||||||
| Non-GAAP sales and marketing expenses | $ | 11,871 | $ | 9,597 | $ | 32,463 | $ | 24,799 | ||||||||
| General and administrative expenses reconciliation: | ||||||||||||||||
| GAAP general and administrative expenses | $ | 13,117 | $ | 9,485 | $ | 35,436 | $ | 27,103 | ||||||||
| Stock-based compensation expense | (3,249 | ) | (3,460 | ) | (8,031 | ) | (9,282 | ) | ||||||||
| Change in estimated fair value of contingent consideration | (35 | ) | (301 | ) | ||||||||||||
| Acquisition related fees and expenses | (86 | ) | (654 | ) | ||||||||||||
| Non-GAAP general and administrative expenses | $ | 9,833 | $ | 5,939 | $ | 27,104 | $ | 17,167 | ||||||||
| Total other income (expense) reconciliation: | ||||||||||||||||
| GAAP other income (expense), net | $ | (146 | ) | $ | 3,985 | $ | 3,397 | $ | 21 | |||||||
| Change in estimated fair value of common stock warrant liability | (79 | ) | (4,346 | ) | 990 | 14 | ||||||||||
| Accretion of liability | 80 | 173 | 272 | 173 | ||||||||||||
| Non-GAAP other income (expense), net | $ | (145 | ) | $ | (188 | ) | $ | 4,659 | $ | 208 | ||||||
| Income tax benefit reconciliation: | ||||||||||||||||
| GAAP income tax benefit | $ | 235 | $ | 949 | $ | 865 | $ | 1,775 | ||||||||
| Tax effect related to amortization of purchased intangibles | (130 | ) | (119 | ) | (369 | ) | (364 | ) | ||||||||
| Non-GAAP income tax benefit | $ | 105 | $ | 830 | $ | 496 | $ | 1,411 |
Reconciliation of GAAP to Non-GAAP Financial Measures
thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net loss | $ | (2,818 | ) | $ | (1,813 | ) | $ | (15,199 | ) | $ | (17,191 | ) | ||||
| Stock-based compensation expense | 6,748 | 5,964 | 17,424 | 17,010 | ||||||||||||
| Acquisition related-amortization of purchased intangibles | 1,236 | 912 | 3,545 | 2,488 | ||||||||||||
| Acquisition related fees and expenses | 86 | 654 | ||||||||||||||
| Change in estimated fair value of contingent consideration | 35 | 301 | ||||||||||||||
| Change in estimated fair value of common stock warrant liability | (79 | ) | (4,346 | ) | 990 | 14 | ||||||||||
| Accretion of liability | 80 | 173 | 272 | 173 | ||||||||||||
| Tax effect related to amortization of purchased intangibles | (130 | ) | (119 | ) | (369 | ) | (364 | ) | ||||||||
| Impairment | 150 | |||||||||||||||
| Non-GAAP net income | $ | 5,072 | $ | 857 | $ | 6,964 | $ | 2,934 | ||||||||
| GAAP basic and diluted net loss per share | $ | (0.06 | ) | $ | (0.04 | ) | $ | (0.33 | ) | $ | (0.41 | ) | ||||
| Non-GAAP basic net income per share | $ | 0.10 | $ | 0.02 | $ | 0.15 | $ | 0.07 | ||||||||
| Non-GAAP diluted net income per share | $ | 0.10 | $ | 0.02 | $ | 0.15 | $ | 0.07 | ||||||||
| Shares used in computing non-GAAP basic net income per share | 49,010,680 | 42,393,550 | 45,526,810 | 42,048,647 | ||||||||||||
| Shares used in computing non-GAAP diluted net income per share | 50,446,939 | 43,775,682 | 46,571,527 | 44,111,648 |
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Non-GAAP net income | $ | 5,072 | $ | 857 | $ | 6,964 | $ | 2,934 | ||||||||
| Interest income | (29 | ) | (37 | ) | (146 | ) | (679 | ) | ||||||||
| Income tax benefit | (105 | ) | (830 | ) | (496 | ) | (1,411 | ) | ||||||||
| Depreciation expense | 486 | 395 | 1,235 | 1,199 | ||||||||||||
| CARES Act Provider Relief Fund | (4,813 | ) | ||||||||||||||
| Other expense, net | 174 | 398 | 300 | 644 | ||||||||||||
| Adjusted EBITDA | $ | 5,598 | $ | 783 | $ | 3,044 | $ | 2,687 |