GenMark Diagnostics, Inc. (Nasdaq:GNMK)
today reported financial results for the first quarter ended March 31, 2011.
Revenues and net loss for the three months ended March 31, 2011 were $764,000 and $0.56 per share compared with $399,000 and $0.68 per share during the first quarter of 2010. The 91% increase in revenue reflects an increase in the number of systems in the field, growth in the Company’s test menu and increased volumes of tests sold. Reagent revenues grew 114% year over year to $621,000, while instrument and other revenues grew 31%. The Company placed 20 analyzers during the quarter.
Gross margin was a loss of $879,000, reflecting the manufacturing overhead spend due to duplicative manufacturing facilities. During the quarter the Company ceased manufacturing in its Pasadena, CA facility and is consolidating manufacturing in its Carlsbad, CA facility. The Company expects that the transition will be completed during the second quarter of 2011.
Operating expenses increased $1.1 million to $5.8 million during the first quarter of 2011, driven primarily by research and development spending as well as additional quality and regulatory costs associated with certifying the Carlsbad, CA manufacturing facility. Other operating expenses were approximately unchanged from the same quarter in 2010.
The Company ended the first quarter with $17.1 million in cash compared with $18.3 million at year-end, having used $3.1 million in cash flow from operations during the first quarter of 2011 compared with $5.0 million in the first quarter of 2010. The Company collected a $1.6 million Therapeutic Tax Credit in the period, which had been recorded in other assets at year end. Depreciation and amortization was $289,000 and capital expenditures were $346,000. The Company drew $2 million on its loan facility.
“The first quarter of 2011 marks a milestone in the evolution of GenMark,” commented Christopher Gleeson, GenMark’s Chairman and CEO. “With the addition of CEO, Hany Massarany and CFO, Paul Ross, we now have a complete and highly capable management team in place. In addition, our manufacturing is now consolidated into one facility, and customer interest in our products is growing at an accelerated pace. As such, our operational focus is on execution, as we manage the high level of growth we expect to experience in the near and long term,” Gleeson further stated.