Oxford Immunotec Reports Third Quarter 2017 Financial Results
(Thomson Reuters ONE) -
* Third quarter revenue of $30.4 million, an increase of 17% compared to prior
year period
* Continued growth from both the Tuberculosis (TB) and Tick-borne disease
franchises, with double-digit revenue growth in all three geographies served
* Gross margin improved by 450 basis points on a sequential basis, driven by
strong progress in TB margins
OXFORD, United Kingdom and MARLBOROUGH, Mass., Oct. 31, 2017 (GLOBE NEWSWIRE) --
Oxford Immunotec Global PLC (Nasdaq:OXFD), a global, high-growth diagnostics
company focused on developing and commercializing proprietary tests for the
management of underserved immune-regulated conditions, today announced third
quarter 2017 financial results.
"We are pleased to report another strong quarter, with solid growth across both
franchises and all three geographies served," said Dr. Peter Wrighton-Smith,
Chief Executive Officer of Oxford Immunotec. "As we move forward through the
remainder of the year and into 2018, we will continue to focus on driving
revenue growth and progressing the company towards profitability."
By revenue type, total revenues were, in millions:
Three Months Ended September 30,
--------------------------------------------
Percent
2017 2016 Change
-------------- -------------- ----------
Product $ 12.0 $ 9.7 24 %
Service 18.4 16.4 12 %
-------------- --------------
Total Revenue $ 30.4 $ 26.1 17 %
-------------- --------------
By indication, total revenues were, in millions:
Three Months Ended September 30,
--------------------------------------------
Percent
2017 2016 Change
-------------- -------------- ----------
Tuberculosis $ 24.4 $ 22.0 11 %
Tick-Borne Disease and Other 6.0 4.1 45 %
-------------- --------------
Total Revenue $ 30.4 $ 26.1 17 %
-------------- --------------
By geography, total revenues were, in millions:
Three Months Ended September 30,
------------------------------------------------
Percent Change
-------------------------
As Constant
2017 2016 Reported Currency (1)
---------- ----------- ----------- -------------
United States $ 18.8 $ 16.2 16 % 16 %
Europe & ROW 2.2 1.7 26 % 22 %
Asia 9.4 8.2 15 % 18 %
---------- -----------
Total Revenue $ 30.4 $ 26.1 17 % 17 %
---------- -----------
(1) Changes in revenue include the impact of changes in foreign currency
exchange rates. We use the non-GAAP financial measure "constant currency basis"
in our filings to show changes in our revenue without giving effect to period-
to-period currency fluctuations. We consider the use of a period over period
revenue comparison on a constant currency basis to be helpful to investors, as
it provides a revenue growth measure free of positive or negative volatility due
to currency fluctuations.
Third Quarter 2017 Financial Results
Revenue for the third quarter of 2017 was $30.4 million, representing 17% growth
over third quarter 2016 revenue of $26.1 million. On a constant currency basis,
revenue growth was also 17% versus the prior year period. Tuberculosis revenue
for the third quarter of $24.4 million increased 11% over the prior year period.
2017 third quarter product revenue was $12.0 million, representing a 24%
increase from product revenue of $9.7 million in the third quarter of 2016. The
increase was primarily driven by sales of tick-borne disease kits, as well as
growth in Asia and Europe & ROW. Service revenue for the third quarter of 2017
was $18.4 million, up 12% from 2016 third quarter revenue of $16.4 million. The
increase in service revenue was primarily driven by strong growth in our tick-
borne disease business, as well as tuberculosis volume increases in the United
States.
United States revenue was $18.8 million in the third quarter of 2017,
representing 16% growth over revenue of $16.2 million in the prior year period.
The increase was due to growth in our tuberculosis and tick-borne disease
businesses.
Europe & ROW revenue was $2.2 million in the third quarter of 2017, representing
a 26% increase compared to the third quarter of 2016. On a constant currency
basis, Europe & ROW increased 22% versus the third quarter of 2016. The increase
was primarily due to tuberculosis growth in the UK and continental European
markets, as well as sales of tick-borne disease kits.
Asia revenue was $9.4 million in the third quarter of 2017, representing an
increase of 15% over 2016 third quarter revenue of $8.2 million. On a constant
currency basis, Asia increased 18% versus the third quarter of 2016. The
increase was primarily due to the timing of orders and higher sales in South
Korea.
Gross profit for the third quarter of 2017 was $17.3 million, an increase
of $2.7 million over gross profit of $14.6 million in the same period of 2016.
Gross margin was 56.7%, an increase of 80 basis points from gross margin of
55.9% in the third quarter of 2016. The third quarter gross margin performance
reflects lower royalty expenses due to the June 2017 Statens Serum Institut
settlement, an underlying improvement in TB margins, and favorable mix, offset
by higher volumes in our tick-borne disease business, which carries lower gross
margins, as well as some early infrastructure investments necessary to meet
future growth.
Operating expenses were $32.5 million in the third quarter of 2017, an increase
of $13.6 million compared to $18.9 million in the same period last year. The
increase in operating expenses was largely due to the inclusion of a one-time
non-cash impairment charge of $11.1 million to write-off certain intangible
assets acquired in conjunction with the 2016 acquisition of Imugen, as well as
expenses related to our BLA submissions and ongoing patent litigation. In the
third quarter, we also recorded a credit of $880,000 related to the change in
fair value of contingent consideration associated with the acquisition of
Immunetics.
Net loss for the third quarter of 2017 was $16.9 million, or $0.70 per share,
compared to $4.0 million, or $0.18 per share, in the third quarter of 2016. Net
loss per share was based on 24,123,574 and 22,365,349 weighted average ordinary
shares outstanding for the third quarters of 2017 and 2016, respectively.
EBITDA for the third quarter was $(14.7) million compared to $(3.0) million in
the third quarter of 2016. Adjusted EBITDA for the third quarter of 2017
was $(2.5) million compared to $(2.2) million in the same period in 2016. Both
EBITDA and Adjusted EBITDA are non-GAAP measures.
Business Outlook
We expect to report revenue of between $25.4 and $26.4 million for the fourth
quarter of 2017.
We now expect to report full year 2017 revenue of between $103.5 and $104.5
million, representing 20% - 21% year-over-year growth. We expect revenue to
increase approximately 21% to 22% for the year using constant exchange rates.
This compares to prior revenue guidance of between $103 and $106 million.
Conference Call
Oxford Immunotec will host a conference call on Tuesday, October
31, 2017 at 8:00 a.m. Eastern Time to discuss its third quarter 2017 financial
results. The call will be concurrently webcast. To listen to the conference call
on your telephone, please dial (855) 363-5047 for United States callers and +1
(484) 365-2897 for international callers and reference confirmation code
99539511 approximately ten minutes prior to start time. To access the live audio
webcast or subsequent archived recording, visit the Investor Relations section
of Oxford Immunotec's website at www.oxfordimmunotec.com. The replay will be
available on the Company's website for approximately 60 days.
About Oxford Immunotec
Oxford Immunotec Global PLC is a global, high-growth diagnostics company focused
on developing and commercializing proprietary tests for the management of
underserved immune-regulated conditions. The Company's first product is the T-
SPOT®.TB test, which is used to test for tuberculosis infection. The T-
SPOT.TB test has been approved for sale in over 50 countries, including the
United States, where it has received pre-market approval from the Food and Drug
Administration, Europe, where it has obtained a CE mark, as well as Japan and
China. The Company's second product line is a range of assays for tick-borne
diseases, such as Lyme disease, obtained through the acquisitions of Imugen and
Immunetics. Also obtained through these acquisitions is the Company's third
product line focused on screening for Babesia in donated blood, for which the
Company is currently seeking FDA licensure. The Company's fourth product line
is focused on the transplantation market. The Company is headquartered near
Oxford, U.K. and in Marlborough, Mass. Additional information can be found
at www.oxfordimmunotec.com.
T-SPOT and the Oxford Immunotec logo are trademarks of Oxford Immunotec Ltd.
Immunetics is a trademark of Immunetics, Inc.
Forward-Looking Statements
This release contains forward-looking statements that involve risks and
uncertainties, including statements about our anticipated plans, objectives,
intentions, including effects on future financial and operating results,
prospects for sales of our products and other statements that are not historical
facts. The forward-looking statements in this release are based on current
expectations, assumptions and data available as of the date of this release and
are subject to known and unknown risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by such statements,
including but not limited to: decisions by regulatory authorities, hospitals and
other health care institutions, laboratories, physicians, patients and third
party payers that could affect the Company's business and prospects; as well as
our ability to expeditiously and successfully expand our sales and distribution
networks. The risks included above are not exhaustive. Other factors that could
adversely affect our business and prospects are described under the "Risk
Factors" section in our filings with the Securities and Exchange Commission
("SEC"). Our filings are available for free by visiting the investor section of
our website, www.oxfordimmunotec.com, or the SEC's website, www.sec.gov.
Investors should give careful consideration to these risks and uncertainties.
Forward-looking statements contained herein are based on current expectations
and assumptions and currently available data and are neither predictions nor
guarantees of future events or performance. You should not place undue reliance
on forward-looking statements contained herein, which speak only as of the date
of this release. We do not undertake to update or revise any forward-looking
statements after they are made, whether as a result of new information, future
events, or otherwise, except as required by applicable law.
CONTACTS:
For Media and Investor Inquiries:
Karen Koski
Head of Strategy and Investor Relations
Oxford Immunotec
Tel: +1 (508) 556-1377
kkoski(at)oxfordimmunotec.com
Oxford Immunotec Global PLC
Condensed consolidated statements of operations
(unaudited)
Three months ended September
30, Nine months ended September 30,
--------------------------------- --------------------------------
(in thousands,
except share
and per share
data) 2017 2016 2017 2016
---------------- ---------------- ---------------- ---------------- ---------------
Revenue
Product $ 12,000 $ 9,713 $ 30,808 $ 27,144
Service 18,429 16,396 47,246 35,229
---------------- ---------------- ---------------- ---------------
Total revenue 30,429 26,109 78,054 62,373
Cost of
revenue
Product 4,027 3,616 11,366 10,421
Service 9,141 7,887 24,791 17,853
---------------- ---------------- ---------------- ---------------
Total cost of
revenue 13,168 11,503 36,157 28,274
---------------- ---------------- ---------------- ---------------
Gross profit 17,261 14,606 41,897 34,099
Operating
expenses:
Research and
development 4,467 3,532 12,220 9,837
Sales and
marketing 9,493 8,794 29,174 26,665
General and
administrative 8,141 6,466 23,007 16,200
Change in fair
value of
contingent
purchase price
consideration (880 ) 60 (3,475 ) 172
Intangible
assets
impairment
charges 11,064 - 11,064 -
Settlement
expense 196 - 9,831 -
---------------- ---------------- ---------------- ---------------
Total
operating
expenses 32,481 18,852 81,821 52,874
---------------- ---------------- ---------------- ---------------
Loss from
operations (15,220 ) (4,246 ) (39,924 ) (18,775 )
Other income
(expense):
Interest
expense, net (781 ) (54 ) (2,411 ) (88 )
Foreign
exchange
(losses) gains (624 ) 470 (1,277 ) 1,707
Other expense - (106 ) (262 ) (243 )
---------------- ---------------- ---------------- ---------------
Loss before
income taxes (16,625 ) (3,936 ) (43,874 ) (17,399 )
Income tax
(expense)
benefit (222 ) (60 ) 2,189 (92 )
---------------- ---------------- ---------------- ---------------
Net loss $ (16,847 ) $ (3,996 ) $ (41,685 ) $ (17,491 )
---------------- ---------------- ---------------- ---------------
Net loss per
ordinary
share-basic
and diluted $ (0.70 ) $ (0.18 ) $ (1.80 ) $ (0.78 )
---------------- ---------------- ---------------- ---------------
Weighted-
average shares
used to
compute net
loss per
ordinary
share-basic
and diluted 24,123,574 22,365,349 23,159,986 22,333,911
---------------- ---------------- ---------------- ---------------
Reconciliation of net loss to Adjusted EBITDA (1)
(unaudited)
Three months ended September Nine months ended September
30, 30,
------------------------------ ------------------------------
(in thousands) 2017 2016 2017 2016
----------------- --------------- -------------- --------------- --------------
Net loss $ (16,847 ) $ (3,996 ) $ (41,685 ) $ (17,491 )
Income tax
expense
(benefit) 222 60 (2,189 ) 92
Interest
expense, net 641 54 1,982 88
Depreciation
and
amortization of
intangible
assets 1,122 862 3,115 2,067
Accretion and
amortization of
loan fees 140 - 429 -
--------------- -------------- --------------- --------------
EBITDA (14,722 ) (3,020 ) (38,348 ) (15,244 )
Reconciling
items:
Share-based
compensation
expense 1,506 1,368 4,266 3,827
Unrealized
exchange losses
(gains) 333 (572 ) 614 (1,990 )
Change in fair
value of
contingent
purchase price
consideration (880 ) 60 (3,475 ) 172
Intangible
assets
impairment
charges 11,064 - 11,064 -
Settlement
expense 196 - 9,831 -
--------------- -------------- --------------- --------------
Adjusted EBITDA $ (2,503 ) $ (2,164 ) $ (16,048 ) $ (13,235 )
--------------- -------------- --------------- --------------
(1) EBITDA and Adjusted EBITDA are non-GAAP measures that we calculate as net
loss, adjusted for the impact of earnings or charges resulting from matters that
we consider not to be indicative of our ongoing operations. We believe that
these measures provide useful information to investors in understanding and
evaluating our operating results in the same manner as our management and Board
of Directors. Our presentation of these measures is not made in accordance with
U.S. GAAP, and our computation of these measures may vary from others in the
industry. Our use of these measures has limitations as an analytical tool, and
you should not consider it in isolation or as a substitute for analysis of our
results as reported under U.S. GAAP.
The above table presents a reconciliation of net loss, the most comparable U.S.
GAAP measure, to EBITDA and Adjusted EBITDA for each of the periods indicated.
Oxford Immunotec Global PLC
Condensed consolidated balance sheets
(unaudited)
September
30, December 31,
(in thousands, except share and per share data) 2017 2016
-------------------------------------------------- -------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 67,743 $ 59,110
Accounts receivable, net 21,652 13,265
Inventory, net 9,174 7,437
Prepaid expenses and other assets 3,147 2,390
-------------- -------------
Total current assets 101,716 82,202
Restricted cash, non-current 200 200
Property and equipment, net 8,927 7,793
In-process research and development 6,970 16,170
Goodwill 3,967 3,822
Other intangible assets, net 8,296 11,017
Deferred tax asset 6,725 2,630
Other assets 190 178
-------------- -------------
Total assets $ 136,991 $ 124,012
-------------- -------------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 3,141 $ 3,201
Accrued liabilities 15,563 14,282
Settlement liability 2,396 -
Contingent purchase price consideration - 882
Deferred income 345 41
Current portion of loans payable 89 84
-------------- -------------
Total current liabilities 21,534 18,490
Long-term portion of loans payable 29,787 29,601
Settlement liability 7,930 -
Contingent purchase price consideration - 2,593
Other liabilities 364 364
-------------- -------------
Total liabilities 59,615 51,048
-------------- -------------
Shareholders' equity:
Ordinary shares, £0.006705 nominal value;
36,183,293 shares authorized at September
30, 2017 and December 31, 2016, and 25,596,345
and 22,635,431 shares issued and outstanding at
September 30, 2017 and December 31, 2016,
respectively 269 243
Additional paid-in capital 292,959 249,128
Accumulated deficit (210,341 ) (168,656 )
Accumulated other comprehensive loss (5,511 ) (7,751 )
-------------- -------------
Total shareholders' equity 77,376 72,964
-------------- -------------
Total liabilities and shareholders' equity $ 136,991 $ 124,012
-------------- -------------
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Oxford Immunotec via GlobeNewswire
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