TUCSON,
Ariz., March 29, 2023 /PRNewswire/ -- Accelerate
Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results
for the fourth quarter and year ended December 31, 2022.
"In 2022, we achieved another year of revenue growth thanks to
our base book of satisfied customers," commented Jack Phillips, Chief Executive Officer of
Accelerate Diagnostics, Inc., "Though we fell short of our guidance
target, we're emboldened by our new partnership with Becton Dickinson and the significant product
development milestones we've achieved. The Accelerate Team is fully
committed to driving growth and delivering value to our
stakeholders."
Fourth Quarter 2022 Highlights
- Added 3 contracted instruments and brought 5 instruments live
in the U.S. in the quarter.
- Ended the fourth quarter with 328 U.S. clinically live and
revenue-generating instruments, with another 69 U.S. contracted
instruments in the process of being implemented and not yet
revenue-generating.
- Net sales were $3.0 million,
compared to $3.3 million in the
fourth quarter of the prior year, or a 9% decrease. This decrease
was driven by the timing of capital equipment sales, while
recurring revenues grew by 8% compared to the same period in the
prior year.
- Gross margin was 28% for the quarter, compared to an adjusted
35% in the fourth quarter of the prior year, excluding non-cash
adjustments for inventory impairment. The decline in gross margins
resulted from inflation in manufacturing related costs and other
factors.
- Selling, general, and administrative (SG&A) costs for the
quarter were $8.8 million, compared
to $11.5 million from the same
quarter of the prior year. SG&A costs for the quarter excluding
non-cash stock-based compensation were $6.8
million, compared to $8.3
million from the same quarter of the prior year. SG&A
reductions over these periods were driven by streamlining our spend
within the scope of our BD collaboration.
- Research and development (R&D) costs for the quarter were
$6.0 million, compared to
$4.6 million from the same quarter of
the prior year. R&D costs excluding non-cash stock-based
compensation expense for the quarter were $5.7 million, compared to $4.8 million from the quarter of the prior year.
This increase was the result of investment in our next generation
AST platform.
- GAAP net loss was $14.6 million
in the fourth quarter, resulting in $0.15 net loss per share. Net loss excluding
non-cash stock-based compensation expense for the fourth quarter
was $12.2 million.
- Net cash used in the quarter excluding financing was
$9.8 million.
- We continue to work with the holders of our convertible notes,
which have matured, and other key stakeholders, and have agreed to
an extension of the forbearance period to facilitate those
continued discussions.
Year-to-date 2022 Highlights
- Net sales were $12.8 million
year-to-date, compared to $11.8
million from the same period of the prior year, or an 8%
increase. Growth was driven from increases in recurring
revenues.
- Gross margin was 26% year-to-date, compared to an adjusted
gross margin of 35% for the same period of the prior year,
excluding non-cash adjustments for inventory impairment. The
overall decline in gross margins resulted from ongoing
pandemic-related impacts to manufacturing costs and other
factors.
- Selling, general, and administrative (SG&A) costs
year-to-date were $39.2 million,
compared to $49.2 million from the
same period of the prior year. SG&A costs excluding non-cash
stock-based compensation were $30.7
million year to date, compared to $31.6 million from the same period of the prior
year.
- Research and development (R&D) costs were $26.9 million year to date, compared to
$21.9 million from the same period of
the prior year. R&D costs excluding non-cash stock-based
compensation expense were $25.5
million year to date, compared to $17.8 million from the same period of the prior
year. These increases were the result of accelerating investment in
our next generation AST platform, Wave.
- GAAP net loss was $62.5 million
year to date, resulting in $0.76 net
loss per share. Net loss excluding non-cash stock-based
compensation expense was $51.9
million.
- Net cash used for the year was $50.9
million, excluding financing.
- Ended the year with total cash, investments, and cash
equivalents of $45.6 million.
Full financial results for the year ended December 31, 2022 will be filed on Form 10-K
through the Securities and Exchange Commission's (SEC) website at
http://www.sec.gov.
Audio Webcast and Conference Call
To listen to the 2022 fourth quarter financial results, call by
phone, +1.877.883.0383 and enter Elite Entry Number: 6648486.
International participants may dial +1.412.902.6506. Please dial in
10–15 minutes prior to the start of the conference. A replay of the
call will be available by telephone at +1.877.344.7529 (U.S.) or
+1.412.317.0088 (International) using the replay code 2450672 until
April 19, 2023.
This conference call will also be webcast and can be accessed
from the company's website at ir.axdx.com. A replay of the audio
webcast will be available for 30 days.
Use of Non-GAAP Financial Measures
This press release contains certain financial measures that are
not recognized measures under accounting principles generally
accepted in the United States of
America ("GAAP"), which include SG&A, R&D, and
operating income (loss) amounts excluding stock-based compensation
expenses.
Our management and board of directors use expenses excluding the
cost of stock-based compensation to understand and evaluate our
operating performance and trends, to prepare and approve our annual
budget and to develop short-term and long-term operating and
financing plans. Accordingly, we believe that expenses excluding
the cost of stock-based compensation provides useful information
for investors in understanding and evaluating our operating results
in the same manner as our management and our board of directors.
Expenses excluding the cost of stock-based compensation is a
non-GAAP financial measure and should be considered in addition to,
not as superior to, or as a substitute for, SG&A expenses,
R&D expenses, and operating income (loss) reported in
accordance with GAAP. The following tables present a reconciliation
of SG&A expenses, R&D expenses and operating income (loss)
excluding stock-based compensation to comparable GAAP measures for
the periods indicated:
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|
(in
thousands)
|
(in
thousands)
|
|
2022
|
2021
|
2022
|
2021
|
Sales, General and
Administrative
|
$
8,772
|
$
11,493
|
$
39,193
|
$
49,236
|
Non-cash equity-based
compensation as a component of sales, general and
administrative
|
1,984
|
3,159
|
8,541
|
17,620
|
Sales, general and
administrative less non-cash equity-based compensation
|
$
6,788
|
$
8,334
|
$
30,652
|
$
31,616
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|
(in
thousands)
|
(in
thousands)
|
|
2022
|
2021
|
2022
|
2021
|
Research and
Development
|
$
6,030
|
$
4,602
|
$
26,915
|
$
21,943
|
Non-cash equity-based
compensation as a component of research and development
|
367
|
(238)
|
1,419
|
4,102
|
Research and
development less non-cash equity-based compensation
|
$
5,663
|
$
4,840
|
$
25,496
|
$
17,841
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|
(in
thousands)
|
(in
thousands)
|
|
2022
|
2021
|
2022
|
2021
|
Loss from
operations
|
$
(13,961)
|
$
(19,413)
|
$
(62,805)
|
$
(71,560)
|
Non-cash equity-based
compensation as a component of loss from operations
|
2,446
|
2,989
|
10,625
|
22,047
|
Loss from operations
less non-cash equity-based compensation
|
$
(11,515)
|
$
(16,424)
|
$
(52,180)
|
$
(49,513)
|
About Accelerate Diagnostics, Inc.
Accelerate Diagnostics, Inc. is an in vitro diagnostics
company dedicated to providing solutions for the global challenges
of antibiotic resistance and sepsis. The Accelerate
Pheno® system and Accelerate PhenoTest® BC
kit combine several technologies aimed at reducing the time
clinicians must wait to determine the most optimal antibiotic
therapy for deadly infections. The FDA cleared system and kit fully
automate the sample preparation steps to report phenotypic
antibiotic susceptibility results in approximately 7 hours direct
from positive blood cultures. Recent external studies indicate the
solution offers results 1–2 days faster than existing methods,
enabling clinicians to optimize antibiotic selection and dosage
specific to the individual patient days earlier.
The "ACCELERATE DIAGNOSTICS" and "ACCELERATE PHENO" and
"ACCELERATE PHENOTEST" and diamond shaped logos and marks are
trademarks or registered trademarks of Accelerate Diagnostics,
Inc.
For more information about the company, its products and
technology, or recent publications, visit axdx.com.
Forward-Looking Statements
Certain of the statements made in this press release and the
related web cast and conference call are forward-looking or may
have forward-looking implications, such as, among others: the
company's future financial performance; the company's future
development plans and growth strategy, including plans and
objectives relating to its future operations, products and
performance, such as the development of the company's next
generation AST platform; the company's expectations regarding the
potential or benefits of its products and technologies; projections
of future demand for the company's products; the anticipated
impacts from the COVID-19 pandemic on the company, including to its
business, results of operations, cash flows and financial position,
as well as the company's future responses to the COVID-19 pandemic;
the company's expectations relating to current supply chain impacts
and inflationary pressures; the company's expectations regarding
its commercial partnership with Becton, Dickinson and Company
("BD"), including anticipated benefits from such collaboration and
BD's commercialization preparations and commitment to the company's
long-term commercial partnership; the company's expectations and
plans relating to regulatory approvals, including with respect to
the U.S. Food and Drug Administration and 510(k) clearance for its
Accelerate Arc products; and the company's expectations and plans
regarding its financial condition, indebtedness and its liquidity
and capital requirements, including, without limitation, as to the
company's ability to continue as a going concern, obligations under
the company's 2.50% Senior Convertible Notes due 2023 ("Notes") and
discussions with holders of the Notes in connection with the
related forbearance agreement. Actual results or developments
may differ materially from those projected or implied in these
forward-looking statements due to significant risks and
uncertainties, including, but not limited to: general industry and
market conditions; regulatory developments; the duration and
severity of the ongoing COVID-19 pandemic, including any new
variants that may become predominant, any government and other
third-party responses to it, the consequences for the global
economy and the businesses of the company's suppliers and
customers, such as the possibility of customer demand fluctuations,
supply chain constraints and inflationary pressures, and ultimate
effect of the COVID-19 pandemic on the company's business, results
of operations, cash flows and financial position, as well as the
company's ability (or inability) to execute on its plans to respond
to the COVID-19 pandemic; and difficulties in resolving the
company's continuing financial condition and ability to obtain
additional capital to meet its financial obligations, including,
without limitation, difficulties in obtaining adequate capital
resources to fund the company's operations and address its debt
obligations, including under the Notes. Other important
factors that could cause the company's actual results to differ
materially from those in its forward-looking statements include
those discussed in the company's filings with the Securities and
Exchange Commission (the "SEC"), including in the "Risk Factors"
sections of the company's most recently filed periodic reports
on Form 10-K and Form 10-Q and subsequent filings with the SEC.
Except as required by federal securities laws, the company
undertakes no obligation to update or revise these forward-looking
statements to reflect new events, uncertainties or other
contingencies.
ACCELERATE
DIAGNOSTICS, INC.
CONDENSED
CONSOLIDATED
BALANCE
SHEETS
(in thousands, except
share data)
|
|
|
December
31,
|
|
2022
|
2021
|
ASSETS
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
34,905
|
$
39,898
|
Investments
|
10,656
|
23,720
|
Trade accounts
receivable, net
|
2,416
|
2,320
|
Inventory
|
5,194
|
5,067
|
Prepaid
expenses
|
818
|
768
|
Other current
assets
|
2,025
|
1,558
|
Total current
assets
|
56,014
|
73,331
|
Property and
equipment, net
|
3,478
|
5,389
|
Finance lease assets,
net
|
2,422
|
—
|
Operating lease right
of use assets, net
|
1,859
|
2,510
|
Other non-current
assets
|
1,242
|
1,817
|
Total assets
|
$
65,015
|
$
83,047
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
Current
liabilities:
|
|
|
Accounts
payable
|
$
4,501
|
$
1,983
|
Accrued
liabilities
|
2,682
|
2,853
|
Accrued
interest
|
472
|
909
|
Deferred
revenue
|
547
|
451
|
Current portion of
convertible notes
|
56,413
|
—
|
Current portion of
long-term debt
|
—
|
80
|
Finance lease,
current
|
1,113
|
—
|
Operating lease,
current
|
829
|
669
|
Total current
liabilities
|
66,557
|
6,945
|
Finance lease,
non-current
|
782
|
—
|
Operating lease,
non-current
|
1,545
|
2,381
|
Other non-current
liabilities
|
874
|
808
|
Accrued interest,
related-party
|
663
|
—
|
Long-term, debt
related-party
|
16,858
|
—
|
Convertible
notes
|
—
|
107,984
|
Total
liabilities
|
87,279
|
118,118
|
|
|
|
Commitments and
contingencies (see note 16)
|
|
|
Stockholders'
deficit:
|
|
|
Preferred shares,
$0.001 par value;
|
|
|
5,000,000
preferred shares authorized and 3,954,546
outstanding as of December 31, 2022 and 2021
|
4
|
4
|
Common stock, $0.001
par value;
|
|
|
200,000,000
common shares authorized with 97,477,546
shares issued and outstanding on December 31, 2022 and
100,000,000 common shares authorized with 67,649,018 shares issued
and outstanding on December 31, 2021
|
97
|
68
|
Contributed
capital
|
630,341
|
580,652
|
Treasury
stock
|
(45,067)
|
(45,067)
|
Accumulated
deficit
|
(607,239)
|
(570,668)
|
Accumulated other
comprehensive loss
|
(400)
|
(60)
|
Total stockholders'
deficit
|
(22,264)
|
(35,071)
|
Total liabilities and
stockholders' deficit
|
$
65,015
|
$
83,047
|
|
See accompanying notes
to condensed consolidated financial statements.
|
ACCELERATE
DIAGNOSTICS, INC.
CONDENSED
CONSOLIDATED
STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
Unaudited
(in thousands, except
per share data)
|
|
|
Years Ended December
31,
|
|
2022
|
2021
|
2020
|
Net
sales
|
$
12,752
|
$
11,782
|
$
11,165
|
|
|
|
|
Cost of
sales:
|
|
|
|
Cost of sales of
products and services
|
9,449
|
7,663
|
6,706
|
Inventory
write-down
|
—
|
4,500
|
—
|
Total cost of
sales
|
9,449
|
12,163
|
6,706
|
|
|
|
|
Gross profit
(loss)
|
3,303
|
(381)
|
4,459
|
|
|
|
|
Costs and
expenses:
|
|
|
|
Research and
development
|
26,915
|
21,943
|
21,255
|
Sales, general and
administrative
|
39,193
|
49,236
|
46,904
|
Total costs and
expenses
|
66,108
|
71,179
|
68,159
|
|
|
|
|
Loss from
operations
|
(62,805)
|
(71,560)
|
(63,700)
|
|
|
|
|
Other income
(expense):
|
|
|
|
Interest
expense
|
(2,274)
|
(15,545)
|
(15,550)
|
Interest expense
related-party
|
(1,497)
|
—
|
—
|
Gain on extinguishment
of debt
|
3,565
|
9,793
|
—
|
Foreign currency
exchange gain (loss)
|
117
|
(413)
|
252
|
Interest
income
|
551
|
88
|
855
|
Other expense,
net
|
(227)
|
(20)
|
(60)
|
Total other income
(expense), net
|
235
|
(6,097)
|
(14,503)
|
|
|
|
|
Net loss before income
taxes
|
(62,570)
|
(77,657)
|
(78,203)
|
Benefit (provision) for
income taxes
|
77
|
(45)
|
(5)
|
Net loss
|
$
(62,493)
|
$
(77,702)
|
$
(78,208)
|
|
|
|
|
Basic and diluted net
loss per share
|
$
(0.76)
|
$
(1.26)
|
$
(1.40)
|
Weighted average shares
outstanding
|
82,161
|
61,727
|
56,010
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
Net loss
|
$
(62,493)
|
$
(77,702)
|
$
(78,208)
|
Net unrealized loss on
investments
|
(14)
|
(34)
|
(2)
|
Foreign currency
translation adjustment
|
(326)
|
(117)
|
151
|
Comprehensive
loss
|
$
(62,833)
|
$
(77,853)
|
$
(78,059)
|
|
See accompanying notes
to condensed consolidated financial statements.
|
ACCELERATE
DIAGNOSTICS, INC.
CONDENSED
CONSOLIDATED
STATEMENTS OF CASH
FLOWS
Unaudited
|
|
|
|
Years Ended December
31,
|
|
2022
|
2021
|
2020
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(62,493)
|
$
(77,702)
|
$
(78,208)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
3,000
|
2,518
|
2,997
|
Amortization of
investment discount
|
98
|
226
|
99
|
Equity-based
compensation expense
|
10,625
|
22,047
|
16,464
|
Amortization of
debt discount and issuance costs
|
474
|
11,542
|
11,168
|
Amortization of
debt discount related party
|
834
|
—
|
—
|
Realized loss on
available-for-sale securities
|
—
|
—
|
3
|
Unrealized loss
on equity investments
|
211
|
—
|
—
|
Loss (gain) on
disposal of property and equipment
|
133
|
(75)
|
785
|
Gain on
extinguishment of debt
|
(3,565)
|
(9,793)
|
—
|
Inventory
write-down
|
—
|
4,500
|
—
|
(Increase) decrease in
assets:
|
|
|
|
Contributions to
deferred compensation plan
|
(298)
|
(484)
|
(357)
|
Accounts
receivable
|
(96)
|
(770)
|
1,592
|
Inventory
|
(236)
|
(415)
|
(1,356)
|
Prepaid expense
and other assets
|
138
|
1,014
|
(2,087)
|
Increase (decrease) in
liabilities:
|
|
|
|
Accounts
payable
|
2,920
|
273
|
(1,006)
|
Accrued
liabilities and other
|
(861)
|
(469)
|
(909)
|
Accrued
interest
|
(437)
|
(283)
|
—
|
Accrued interest
from related-party
|
663
|
—
|
—
|
Deferred revenue
and income
|
96
|
75
|
105
|
Deferred
compensation
|
66
|
473
|
316
|
Net cash used in
operating activities
|
(48,728)
|
(47,323)
|
(50,394)
|
Cash flows from
investing activities:
|
|
|
|
Purchases of
equipment
|
(554)
|
(603)
|
(1,362)
|
Purchase of
marketable securities
|
(27,506)
|
(30,081)
|
(46,933)
|
Proceeds from
sales of marketable securities
|
—
|
250
|
—
|
Maturities of
marketable securities
|
40,477
|
38,738
|
61,901
|
Net cash provided by
investing activities
|
12,417
|
8,304
|
13,606
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
issuance of common and preferred shares, net
|
32,872
|
42,880
|
359
|
Proceeds from
exercise of options
|
7
|
1,620
|
6,062
|
Proceeds from
issuance of common stocks under employee purchase plan
|
224
|
326
|
—
|
Proceeds from
debt
|
—
|
—
|
5,578
|
Payment of
debt
|
(80)
|
(360)
|
(366)
|
Payments on
finance leases
|
(1,201)
|
—
|
—
|
Debt exchange
and common stock issuance cost
|
(192)
|
(1,240)
|
—
|
Net cash provided by
financing activities
|
31,630
|
43,226
|
11,633
|
|
|
|
|
Effect of exchange rate on cash
|
(312)
|
(90)
|
(78)
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
(4,993)
|
4,117
|
(25,233)
|
Cash and cash equivalents, beginning of period
|
39,898
|
35,781
|
61,014
|
Cash and cash equivalents, end of period
|
$
34,905
|
$
39,898
|
$
35,781
|
|
|
|
|
Non-cash investing activities:
|
|
|
|
Net transfer of instruments from inventory to property and
equipment, net
|
$
168
|
$
688
|
$
1,525
|
|
|
|
|
Non-cash financing activities:
|
|
|
|
Extinguishment of convertible senior notes through issuance
of common stock
|
$
10,180
|
$
38,902
|
$
—
|
Convertible notes due from related-party extinguished in
connection with the exchange transaction, net of deferred issuance
costs
|
$
49,624
|
$
—
|
$
—
|
Fair value of new note from related-party issued in
connection with the exchange transaction
|
$
16,024
|
$
—
|
$
—
|
Fair value of common stock warrant issued to related-party
in connection with exchange transaction
|
$
3,753
|
$
—
|
$
—
|
Capital contribution from related-party in connection with
the exchange transaction
|
$
29,847
|
$
—
|
$
—
|
Right-of-use assets obtained in exchange for finance lease
obligations
|
$
3,096
|
$
—
|
$
—
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
Interest paid
|
$
2,214
|
$
4,288
|
$
4,288
|
Income taxes paid, net of refunds
|
$
—
|
$
—
|
$
43
|
|
See accompanying notes
to condensed consolidated financial statements.
|
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SOURCE Accelerate Diagnostics, Inc.