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GenMark Diagnostics Reports Third Quarter 2013 Results

Stocks in this article: GNMK

GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today reported financial results for the quarter ended September 30, 2013.

Revenues for the quarter ended September 30, 2013 were $4.6 million compared with $5.3 million during the third quarter of 2012. The 12% year-over-year decrease in total revenue was attributable to a lack of purchases from Natural Molecular Testing Corporation (NMTC) during the current quarter, offset by significant growth from other customers. NMTC accounted for 66% of total revenues in the quarter ended September 30, 2012 and 26% of total revenues in the quarter ended June 30, 2013. NMTC did not make any purchases in the third quarter of 2013. Reagent revenues for the third quarter declined 22% year-over-year to $4.0 million from $5.1 million. Instrument and other revenues increased by 314% year-over-year to $651,000 from $158,000, due mainly to sales of XT-8 instruments. The Company placed 41 new analyzers during the current quarter to support its base business and removed 50 analyzers from NMTC, the majority of which were placed in 2012, bringing its total installed base to 375, all in end-user laboratories within the U.S. market.

“Our base business, which excludes NMTC, demonstrated impressive revenue growth on both a year-over-year and sequential basis, growing by 159% in the third quarter of 2013 compared with the third quarter of 2012, and growing approximately 21% quarter-over-quarter ahead of the flu season. We believe the significant growth of our base business confirms the increasing implementation of our eSensor technology across a growing customer base and validates its unique value proposition in advance of releasing our sample-to-answer NexGen system,” stated GenMark’s President & CEO Hany Massarany. “On October 2 nd, we filed a law suit against NMTC seeking the collection of past due amounts from earlier product sales and for damages resulting from unsatisfied contract purchase commitments. On October 21 st, NMTC filed a voluntary petition in the United States Bankruptcy Court seeking relief under Chapter 11. As a result, this quarter we have made appropriate adjustments to our financial statements to account for NMTC’s bankruptcy filing.”

Gross profit for the quarter ended September 30, 2013 was $0.5 million, or 11% of revenue, compared with a gross profit of $2.2 million, or 42% of revenue for the same period in 2012. During the current quarter, the Company reserved $0.9 million of inventory made for NMTC and impaired $0.3 million of manufacturing equipment procured to support NMTC’s previous purchasing volumes. On a non-GAAP basis, which excludes the effect of NMTC related adjustments during the current quarter, gross profit for the quarter ended September 30, 2013 was $1.7 million, or 36% of revenue.

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