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CareDx Reports Fourth Quarter and Full Year 2019 Results

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SOUTH SAN FRANCISCO, Calif., Feb. 27, 2020 (GLOBE NEWSWIRE) -- CareDx, Inc. (CDNA), a leading precision medicine company focused on the discovery, development, and commercialization of clinically differentiated, high value healthcare solutions for transplant patients and caregivers, today reported financial results for the fourth quarter and full year ended December 31, 2019.

Recent Highlights:

  • Achieved total revenue of $35.8 million for the three months ended December 31, 2019, increasing 52% year-over-year

  • Provided over 14,000 patient results in the fourth quarter and approximately 49,000 patient results in 2019

  • As of December 31, 2019, over 30 U.S.-based transplant centers have adopted an AlloSure Kidney testing protocol

  • Generated GAAP net loss of $4.8 million, non-GAAP net income of $1.6 million, and positive adjusted EBITDA of $1.5 million

"We are very pleased with our fourth quarter and 2019 annual financial results," said Peter Maag, CareDx Chief Executive Officer. "2019 was an exceptional year for CareDx, as we continued to build an incredible moat in Transplantation. With AlloSure and AlloMap, we impact more transplant patients every day. With our transplant focused clinical activities and our pipeline advancing, our platform is promising to deliver continued stellar growth."

Fourth Quarter 2019 Financial Results

Revenue for the three months ended December 31, 2019 was $35.8 million, an increase of 52% compared with $23.5 million in the fourth quarter of 2018. Testing services revenue for the fourth quarter was $29.1 million, compared with $18.9 million in the same period of 2018. Product revenue in the three months ended December 31, 2019 was $5.1 million, compared to $4.6 million in the same period of 2018. Digital and other revenue for the fourth quarter of 2019 was $1.6 million.

For the fourth quarter of 2019, net loss was $4.8 million compared to a net loss of $3.8 million in the same period of 2018. Basic and diluted net loss per share was $0.11 in the fourth quarter of 2019, compared to basic and diluted net loss per share of $0.09 in the fourth quarter of 2018.

Non-GAAP net income was $1.6 million in the fourth quarter of 2019 compared to a $0.3 million non-GAAP net income in the fourth quarter of 2018. Basic and diluted non-GAAP net income per share was $0.04 in the fourth quarter of 2019, compared to a basic and diluted non-GAAP net income per share of $0.01 in the fourth quarter of 2018.

Adjusted EBITDA for the fourth quarter of 2019 was a gain of $1.5 million, compared to an adjusted EBITDA gain of $0.8 million in the fourth quarter of 2018.

Net cash used in operating activities in the fourth quarter of 2019 was $1.1 million compared to $2.0 million net cash provided by operating activities in the comparative 2018 period. Cash and cash equivalents were $38.2 million as of December 31, 2019.

Full Year 2019 Financial Results

Revenue for the full year ended December 31, 2019 was $127.1 million, an increase of 66% compared with $76.6 million in full year 2018 revenue. Testing revenue for the year ended December 31, 2019 was $104.6 million, compared to $60.3 million in the same period of 2018. Product revenue for the full year 2019 was $18.3 million, compared to $15.7 million in 2018. Digital and other revenue for the full year 2019 was $4.2 million.

Net loss for the full year ended December 31, 2019 was $22.0 million compared to a net loss of $46.8 million in 2018. Basic and diluted net loss per share for the full year ended December 31, 2019 were $0.52 compared to a basic and diluted net loss per share of $1.31 in the full year 2018.

Non-GAAP net income was $4.6 million for the full year ended December 31, 2019 compared to a non-GAAP net loss of $5.3 million in 2018. Non-GAAP basic and diluted net income per share were $0.11 and $0.10, respectively, in the full year 2019, compared to basic and diluted net loss per share of $0.15 in 2018.

For additional information regarding non-GAAP financial measures discussed herein, please see "Use of Non-GAAP Financial Measures," "Reconciliation of GAAP to Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Adjusted EBITDA Financial Measures" below.

2020 Guidance

For the full year 2020, CareDx expects revenue to be in the range of $165 million to $168 million.

About CareDx

CareDx, Inc., headquartered in South San Francisco, California, is a leading precision medicine solutions company focused on the discovery, development, and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers. CareDx offers testing services, products, and digital solutions along the pre- and post-transplant patient journey, and is a leading provider of genomics-based information for transplant patients.

For more information, please visit: www.CareDx.com.

Forward Looking Statements

This press release includes forward-looking statements, including expectations regarding the Company's fiscal 2020 revenue, achievement of our financial and operational goals and our prospects. These forward-looking statements are based upon information that is currently available to CareDx and its current expectations, speak only as of the date hereof, and are subject to numerous risks and uncertainties, including general economic and market factors, among others discussed in CareDx's filings with the SEC, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed by CareDx with the SEC on March 6, 2019 and the periodic reports that CareDx has subsequently filed with the SEC. Any of these may cause CareDx's actual results, performance or achievements to differ materially and adversely from those anticipated or implied by CareDx's forward-looking statements. CareDx expressly disclaims any obligation, except as required by law, or undertaking to update or revise any such forward-looking statements.

Use of Non-GAAP Financial Measures

CareDx has presented in this release certain financial information in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and also on a non-GAAP basis, including non-GAAP net income, non-GAAP net loss, non-GAAP basic and diluted net income and net loss per share and adjusted EBITDA. We define non-GAAP net income and non-GAAP net loss and per share results as the GAAP net income or loss and per share results excluding the impacts of stock-based compensation; changes in estimated fair value of warrants, derivative liabilities and contingent consideration; acquisition related impairment charges and amortization of intangible assets, purchase accounting adjustments and related tax effects; costs involved with completing an acquisition; amortization of debt discount; and certain other financing charges. We define adjusted EBITDA as non-GAAP net income/(loss) before net interest expense, income tax expense, depreciation and amortization, other expense, and net loss attributable to noncontrolling interest. We are presenting these non-GAAP financial measures to assist investors in assessing our operating results through the eyes of management and because we believe that these measures provide an additional tool for investors to use in comparing our core business operating results over multiple periods. Management believes this non-GAAP information is useful for investors, when considered in conjunction with CareDx's GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of CareDx's operating results as reported under GAAP. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not necessarily comparable to similarly-titled measures presented by other companies. A reconciliation between GAAP and non-GAAP financial information is provided immediately following the financial tables.

Investor Relations Contact

Greg Chodaczek
646-924-1769
investor@caredx.com


CareDx, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)

Three Months Ended December 31,

Twelve Months Ended December 31,

2019

2018

2019

2018

Revenue:

Testing services revenue

$

29,129

$

18,852

$

104,550

$

60,300

Product revenue

5,053

4,594

18,279

15,674

Digital and other revenue

1,639

63

4,239

595

Total revenue

$

35,821

$

23,509

127,068

76,569

Cost of revenue

12,716

10,509

45,455

32,987

Gross profit

23,105

13,000

81,613

43,582

Operating expenses:

Research and development

8,946

3,782

30,711

14,514

Sales and marketing

10,267

5,754

38,894

21,670

General and administrative

9,437

5,879

36,540

22,976

Total operating expenses

28,650

15,415

106,145

59,160

Loss from operations

(5,545

)

(2,415

)

(24,532

)

(15,578

)

Other income (expense):

Interest income (expense), net

306

(174

)

985

(3,701

)

Debt extinguishment expenses

(2,974

)

(5,780

)

Change in estimated fair value of common stock warrant and derivative liabilities

333

1,562

319

(22,978

)

Other expense, net

(75

)

(93

)

(719

)

(178

)

Total other income (expense)

564

(1,679

)

585

(32,637

)

Loss before income taxes

(4,981

)

(4,094

)

(23,947

)

(48,215

)

Income tax benefit

204

339

1,979

1,434

Net loss

(4,777

)

(3,755

)

(21,968

)

(46,781

)

Net loss attributable to noncontrolling interest

(25

)

Net loss attributable to CareDx, Inc.

$

(4,777

)

$

(3,755

)

$

(21,968

)

$

(46,756

)

Net loss per share attributable to CareDx, Inc.

Basic

$

(0.11

)

$

(0.09

)

$

(0.52

)

$

(1.31

)

Diluted

$

(0.11

)

$

(0.09

)

$

(0.52

)

$

(1.31

)

Weighted-average shares used to compute net loss per share attributable to CareDx, Inc.:

Basic

42,457,171

40,104,341

42,151,617

35,638,956

Diluted

42,457,171

40,104,341

42,151,617

35,638,956


CareDx, Inc.
Consolidated Balance Sheets
(in thousands)

As of December 31,

2019

2018

Assets

Current assets:

Cash and cash equivalents

$

38,223

$

64,616

Accounts receivable

24,057

9,760

Inventory

6,014

4,943

Prepaid and other current assets

3,628

1,795

Total current assets

71,922

81,114

Property and equipment, net

4,430

4,134

Operating leases right-of-use assets

4,730

Intangible assets, net

45,541

33,252

Goodwill

23,857

12,005

Restricted cash

256

192

Other assets

1,000

Total assets

$

151,736

$

130,697

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

5,506

$

4,711

Accrued compensation

12,484

9,156

Accrued and other liabilities

16,838

5,637

Total current liabilities

34,828

19,504

Deferred tax liability

1,973

2,968

Common stock warrant liability

6,607

10,003

Deferred payments for intangible assets

5,207

Other liabilities

4,121

2,294

Total liabilities

52,736

34,769

Commitments and contingencies

Stockholders’ equity:

Common stock

42

41

Additional paid-in capital

437,976

412,010

Accumulated other comprehensive loss

(5,205

)

(4,278

)

Accumulated deficit

(333,813

)

(311,845

)

Total stockholders' equity

99,000

95,928

Total liabilities and stockholders' equity

$

151,736

$

130,697


CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)

Three Months Ended December 31,

Twelve Months Ended December 31,

2019

2018

2019

2018

Net loss attributable to CareDx, Inc.

$

(4,777

)

$

(3,755

)

$

(21,968

)

$

(46,756

)

Stock-based compensation expense

5,407

2,060

22,417

7,138

Acquisition related-amortization of purchased intangibles

1,154

779

3,642

3,241

Acquisition related fees and expenses

654

Change in estimated fair value of contingent consideration

210

210

1,017

Change in estimated fair value of common stock warrant liability and derivative liability

(333

)

(1,562

)

(319

)

22,978

Amortization of debt discount

47

2,095

Debt extinguishment

2,974

5,780

Accretion of liability

108

281

Tax effect related to amortization of purchased intangibles

(129

)

(195

)

(493

)

(811

)

Impairment

150

Non-GAAP net income (loss)

$

1,640

$

348

$

4,574

$

(5,318

)

GAAP basic and diluted net loss per share

$

(0.11

)

$

(0.09

)

$

(0.52

)

$

(1.31

)

Non-GAAP basic net income (loss) per share

$

0.04

$

0.01

$

0.11

$

(0.15

)

Non-GAAP diluted net income (loss) per share

$

0.04

$

0.01

$

0.10

$

(0.15

)

Shares used in computing non-GAAP basic net income (loss) per share

42,457,171

40,104,341

42,151,617

35,638,956

Shares used in computing non-GAAP diluted net income (loss) per share

43,464,685

41,270,703

44,344,803

35,638,956


CareDx, Inc.
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
(In thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2019

2019

2019

2019

Non-GAAP net income (loss)

$

1,640

$

348

$

4,574

$

(5,318

)

Interest income

(306

)

127

(985

)

1,606

Income tax benefit

(75

)

(144

)

(1,486

)

(623

)

Depreciation expense

424

355

1,623

1,155

Other expense, net

(206

)

93

438

178

Net loss attributable to noncontrolling interest

(25

)

Adjusted EBITDA

$

1,477

$

779

$

4,164

$

(3,027

)


CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)

Three Months Ended December 31, 2019

Total revenue

Cost of revenue

Research and development

Sales and marketing

General and administrative

Total other income (expense)

Income tax benefit

Net income (loss)

GAAP

$

35,821

$

12,716

$

8,946

$

10,267

$

9,437

$

564

$

204

$

(4,777

)

Non-GAAP adjustments:

Stock-based compensation expense

(478

)

(1,196

)

(1,212

)

(2,521

)

5,407

Acquisition related-amortization of purchased intangibles

(788

)

(366

)

1,154

Acquisition related fees and expenses

Change in estimated fair value of contingent consideration

(210

)

210

Change in estimated fair value of common stock warrant liability and derivative liability

(333

)

(333

)

Accretion of liability

108

108

Tax effect related to amortization of purchased intangibles

(129

)

(129

)

Impairment

Non-GAAP

$

35,821

$

11,450

$

7,750

$

8,689

$

6,706

$

339

$

75

$

1,640


Twelve Months Ended December 31, 2019

Total revenue

Cost of revenue

Research and development

Sales and marketing

General and administrative

Total other income (expense)

Income tax benefit

Net income (loss)

GAAP

$

127,068

$

45,455

$

30,711

$

38,894

$

36,540

$

585

$

1,979

$

(21,968

)

Non-GAAP adjustments:

Stock-based compensation expense

(2,244

)

(4,366

)

(4,004

)

(11,803

)

22,417

Acquisition related-amortization of purchased intangibles

(2,394

)

(1,248

)

3,642

Acquisition related fees and expenses

(654

)

654

Change in estimated fair value of contingent consideration

(210

)

210

Change in estimated fair value of common stock warrant liability and derivative liability

(319

)

(319

)

Accretion of liability

281

281

Tax effect related to amortization of purchased intangibles

(493

)

(493

)

Impairment

(150

)

150

Non-GAAP

$

127,068

$

40,817

$

26,345

$

33,492

$

23,873

$

547

$

1,486

$

4,574


CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)

Three Months Ended December 31, 2018

Total revenue

Cost of revenue

Research and development

Sales and marketing

General and administrative

Total other income (expense)

Income tax benefit

Net loss attributable to noncontrolling interest

Net loss attributable to CareDx, Inc.

GAAP

23,509

10,509

3,782

5,754

5,879

(1,679

)

339

(3,755

)

Non-GAAP adjustments:

Stock-based compensation expense

(446

)

(193

)

(258

)

(1,163

)

2,060

Acquisition related-amortization of purchased intangibles

(514

)

(265

)

779

Change in estimated fair value of common stock warrant liability and derivative liability

(1,562

)

(1,562

)

Amortization of debt discount

47

47

Debt extinguishment

2,974

2,974

Tax effect related to amortization of purchased intangibles

(195

)

(195

)

Non-GAAP

23,509

9,549

3,589

5,231

4,716

(220

)

144

348


Twelve Months Ended December 31, 2018

Total revenue

Cost of revenue

Research and development

Sales and marketing

General and administrative

Total other income (expense)

Income tax benefit

Net loss attributable to noncontrolling interest

Net loss attributable to CareDx, Inc.

GAAP

76,569

32,987

14,514

21,670

22,976

(32,637

)

1,434

(25

)

(46,756

)

Non-GAAP adjustments:

Stock-based compensation expense

(821

)

(1,635

)

(982

)

(3,700

)

7,138

Acquisition related-amortization of purchased intangibles

(2,207

)

(1,034

)

3,241

Change in estimated fair value of contingent consideration

1,017

1,017

Change in estimated fair value of common stock warrant liability and derivative liability

22,978

22,978

Amortization of debt discount

2,095

2,095

Debt extinguishment

5,780

5,780

Tax effect related to amortization of purchased intangibles

(811

)

(811

)

Non-GAAP

76,569

29,959

12,879

19,654

20,293

(1,784

)

623

(25

)

(5,318

)