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Champions Oncology Reports
Results for the Quarter Ended July 31, 2013
September 13, 2013 - Champions Oncology, Inc. (OTC: CSBR), engaged in the development of advanced technology solutions and
services to personalize the development and use of oncology drugs, announced today its financial results for the fiscal quarter
ended July 31, 2013.
Joel Ackerman, Champions
Oncology CEO, stated, "The first fiscal quarter of 2014 was a great start for the year. Our financial results were strong
in both segments, driven by robust growth and margins. We also had a number of accomplishments that don't show up in the
numbers but set the stage for the future".
Revenue was $3.02 million,
as compared to $2.1 million for the three months ended July 31, 2012, an increase of 43%. Total operating expenses were $3.8 million,
as compared to $3.7 million for the three months ended July 31, 2012.
Champions reported a loss
from operations of $0.77 million as compared to a loss from operations of $1.6 million for the three months ended July 31, 2012.
Excluding stock-based compensation of $0.55 million and $0.74 million for the three months ended July 31, 2013 and 2012, Champions
recognized a loss from operations of $0.2 million and a loss from operations of $0.9 million for three months ended July 31, 2013
and 2012, respectively.
Personalized Oncology Solutions
of implants during the quarter was 65, an increase of 141% over the same period last year. The increase in implants is the result
of growing visibility with patients and physicians, the reduction in patient costs per implant and expanding our international
operations. The number of patients for whom studies were completed was 22 for the quarter, an increase of 69% over the same period
last year. The increase in patient studies is the result of higher implant volumes in the recent quarters which lead to studies
in subsequent quarters. POS revenues were $0.6 million and $0.9 million for the three months ended July 31, 2013 and 2012, respectively,
a decrease of $0.3 million or 32.2%. The decrease is due to the decrease in non-core physician
panel revenue of $0.3 million. This is due to the strategic decision to focus on our core products and services.
POS cost of sales was $0.79
million and $0.77 million for the three months ended July 31, 2013 and 2012, respectively, an increase of $0.02 million, or 2.7%.
For the three months ended July 31, 2013 and 2012, gross margins for POS were -27.5% and 16%, respectively. The gross margin in
this business segment fluctuates based on a number of factors including business mix, pricing and volumes.
Translational Oncology
TOS revenues were $2.39
million and $1.18 million for the three months ended July 31, 2013 and 2012, respectively, an increase of $1.21 million, or 102%.
TOS cost of sales was $0.88
million and $0.7 million for the three months ended July 31, 2013 and 2012, respectively, an increase of $0.2 million, or 26%.
For the three months ended July 31, 2013 and 2012, gross margins for TOS were 63% and 41%. The increase in gross margin is due
to the leveraging of the fixed component of cost of sales over a higher revenue amount and the absorption of certain costs associated
with this quarter's revenue in previous quarters.
Research and development
expense was $0.4 million for three months ended July 31, 2013 and 2012, respectively. Sales and marketing expense was $0.6 million
and $0.7 million for the three months ended July 31, 2013 and 2012, respectively, a decrease of $0.1 million, or 9.4%. General
and administrative expense was $1.07 million and $1.14 million for the three months ended July 31, 2013 and 2012, respectively,
a decrease of $0.07 million, or 5.9% due to the decrease in stock compensation expense.
Conference Call Information:
The Company will host a
conference call on Friday, September 13, 2013, at 8:30 a.m. ET to discuss its fourth quarter financial results. To access the conference
call, domestic participants should dial 800-875-3456, Canadian participants should dial 800-648-0973, and international participants
should dial 302-607-2001. The participant passcode is "Champions Oncology".
of the Company's financial results will be available in the Company's Form 10-K at www.championsoncology.com.
* Non-GAAP Financial
See the attached Reconciliation
of GAAP loss from operations to non-GAAP loss from operations for an explanation of the amounts excluded to arrive at non-GAAP
loss from operations and related non-GAAP loss from operations per share amounts for the three months ended July 31, 2013 and 2012.
Non-GAAP financial measures provide investors and management with supplemental measures of operating performance and trends that
facilitate comparisons between periods before and after certain items that would not otherwise be apparent on a GAAP basis. Certain
unusual or non-recurring items that management does not believe affect the Company's basic operations do not meet the GAAP
definition of unusual or non-recurring items. Non-GAAP loss from operations and non-GAAP loss per share are not, and should not
be viewed as a substitute for similar GAAP items. We define non-GAAP dilutive loss per share amounts as non-GAAP loss from operations
divided by the weighted average number of diluted shares outstanding. Our definition of non-GAAP loss from operations and non-GAAP
diluted loss per share may differ from similarly named measures used by others.
About Champions Oncology, Inc.
Champions Oncology, Inc. is engaged in
the development of advanced technology solutions and services to personalize the development and use of oncology drugs. The Company's
TumorGraft Technology Platform is a novel approach to personalizing cancer care based upon the implantation of primary human tumors
in immune deficient mice followed by propagation of the resulting engraftments, or TumorGrafts, in a manner that preserves the
biological characteristics of the original human tumor in order to determine the efficacy of a treatment regimen. The Company uses
this technology in conjunction with related services to offer solutions for two customer groups: Personalized Oncology Solutions,
in which results help guide the development of personalized treatment plans, and Translational Oncology Solutions, in which pharmaceutical
and biotechnology companies seeking personalized approaches to drug development can lower the cost and increase the speed of developing
new drugs. TumorGrafts are procured through agreements with a number of institutions in the U.S. and overseas as well as through
its Personalized Oncology Solutions business.
This press release may contain "forward-looking
statements" (within the meaning of the Private Securities Litigation Act of 1995) that inherently involve risk and uncertainties.
Champions Oncology generally uses words such as "believe," "may," "could," "will," "intend,"
"expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. One
should not place undue reliance on these forward-looking statements. The Company's actual results could differ materially from
those anticipated in the forward-looking statements for many unforeseen factors. See Champions Oncology's Form 10-K for the fiscal
year ended April 30, 2013 for a discussion of such risks, uncertainties and other factors. Although the Company believes the expectations
reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are
made, and Champions Oncology's future results, levels of activity, performance or achievements may not meet these expectations.
The Company does not intend to update any of the forward-looking statements after the date of this press release to conform these
statements to actual results or to changes in Champions Oncology's expectations, except as required by law.
Champions Oncology, Inc.
(Dollars in thousands
except per share amounts)
Reconciliation of GAAP
to Non-GAAP Loss from Operations (Unaudited)
| Three Months Ended July 31, | ||||||||
| 2013 | 2012 | |||||||
| Loss from Operations - GAAP | $ | (766 | ) | $ | (1,599 | ) | ||
| Less: | ||||||||
| Stock-based compensation | 552 | 739 | ||||||
| Loss from Operations - non-GAAP | $ | (214 | ) | $ | (860 | ) |
Reconciliation of GAAP
EPS to Non-GAAP EPS Loss from Operations (Unaudited)
| Three Months Ended July 31, | ||||||||
| 2013 | 2012 | |||||||
| EPS - GAAP | $ | (0.011 | ) | $ | (0.033 | ) | ||
| Less: | ||||||||
| Effect of stock-based compensation on EPS | 0.008 | 0.016 | ||||||
| EPS - non-GAAP | $ | (0.003 | ) | $ | (0.017 | ) |
Condensed Consolidated
Statements of Operations (Unaudited)
| Three Months Ended July 31, | ||||||||
| 2013 | 2012 | |||||||
| POS operating revenue | $ | 622 | $ | 918 | ||||
| TOS operating revenue | 2,398 | 1,188 | ||||||
| Total operating revenue | $ | 3,020 | $ | 2,106 | ||||
| Cost of POS | 793 | 772 | ||||||
| Cost of TOS | 878 | 699 | ||||||
| Research and development | 402 | 387 | ||||||
| Sales and marketing | 642 | 709 | ||||||
| General and administrative | 1,071 | 1,138 | ||||||
| Loss from Operations | $ | (766 | ) | $ | (1,599 | ) | ||
| Other (Loss) Income | (1,463 | ) | 279 | |||||
| Net Loss before income tax expense | $ | (2,229 | ) | $ | (1,320 | ) | ||
| Income taxes | 3 | 3 | ||||||
| Net Loss | $ | (2,232 | ) | $ | (1,323 | ) |
Condensed Consolidated
Balance Sheets as of (Unaudited)
| July 31, 2013 | April 30, 2013 | |||||||
| Cash and cash equivalents | $ | 7,365 | $ | 9,561 | ||||
| Accounts receivable | 1,784 | 500 | ||||||
| Other current assets | 255 | 315 | ||||||
| Total current assets | 9,404 | 10,376 | ||||||
| Restricted cash | 193 | 192 | ||||||
| Property and equipment, net | 404 | 414 | ||||||
| Goodwill | 669 | 669 | ||||||
| Total assets | $ | 10,670 | $ | 11,651 | ||||
| Accounts payable and accrued liabilities | $ | 1,316 | $ | 1,815 | ||||
| Deferred revenue | 859 | 1,114 | ||||||
| Total current liabilities | 2,175 | 2,929 | ||||||
| Warrant liability | 2,508 | 1,046 | ||||||
| Redeemable common stock | 16,882 | 16,882 | ||||||
| Stockholders' deficit | (10,895 | ) | (9,206 | ) | ||||
| Total liabilities, redeemable common stock and stockholders' deficit | $ | 10,670 | $ | 11,651 |
Condensed Consolidated
Statements of Cash Flows (Unaudited)