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Chembio Diagnostics Reports First Quarter 2019 Financial Results

MEDFORD, N.Y., May 01, 2019 (GLOBE NEWSWIRE) -- Chembio Diagnostics, Inc. (CEMI), a leading point-of-care diagnostics company focused on infectious diseases, today reported financial results for the quarter ended March 31, 2019.

Recent Accomplishments & Highlights

  • Achieved total revenue of $8.3 million for the first quarter of 2019, growth of 8% compared to the prior year period
  • Commenced production of DPP tests on fully automated manufacturing line
  • Received ANVISA approval in Brazil for DPP Zika/Dengue/Chikungunya multiplex test
  • Signed agreement with Perseus Science to advance development of a point-of-care test for concussion
  • Completed Zika 510(k) study, funded by BARDA

“The first quarter of 2019 was marked by a number of accomplishments that demonstrate execution across the business,” said John Sperzel, Chembio’s Chief Executive Officer. “We are pleased with our progress toward our three priorities: expanding our commercialization, advancing our R&D pipeline, and preparing for additional growth. Our revenue increased by 8% during the first quarter, and we made several advances in our R&D pipeline, including the approval of our DPP Zika/Dengue/Chikungunya multiplex test in Brazil that creates an opportunity for incremental sales. The production of DPP tests on our first automated manufacturing line is a milestone that represents our commitment to efficiently scaling operations in preparation for additional growth. We look forward to building upon our momentum and are confident we will continue to execute across the business.”

First Quarter 2019 Financial Results
Total revenue for the first quarter of 2019 was $8.3 million, an increase of 8% compared to the first quarter of 2018. Net product sales for the first quarter of 2019 were $6.4 million, flat compared to the first quarter of 2018.  License and royalty, and R&D and grant revenue for the first quarter of 2019 was $1.9 million, an increase of 45% compared to the first quarter of 2018. 

Gross product margin for the first quarter of 2019 was $1.6 million, a decrease of 29% compared to the first quarter of 2018. Gross product margin percent for the first quarter of 2019 was 25.3% compared to 35.6% for the first quarter of 2018. The lower gross product margin percent for the 2019 first quarter resulted primarily from costs associated with labor for the manual product assembly process and the impact of geographic mix on average selling prices.

Research and development expenses increased $0.4 million, or 20%, for the three months ended March 31, 2019 compared to the three months ended March 31, 2018, corresponding with the increase in R&D and grant revenue. Selling, general and administrative expenses, excluding $0.4 million of acquisition costs, increased by $1.6 million, or 67%, for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The increase was primarily associated with incremental expenses associated with Chembio Diagnostics GmbH (formerly opTricon), leasing the new corporate headquarters, and non-cash equity compensation costs.

Net loss, including $0.4 million acquisition costs, for the first quarter of 2019 was $2.8 million, or $0.16 per diluted share, compared with a net loss of $0.7 million, or $0.05 per diluted share, for the first quarter of 2018.

Cash and cash equivalents as of March 31, 2019 totaled $7.4 million.

2019 Financial Outlook
Management expects 2019 full year revenue to be in the range of $36.0 million to $40.0 million

Conference Call
Chembio will host a conference call today beginning at 4:30pm ET to discuss financial results and recent business highlights. Investors interested in listening to the call may do so by dialing 877-407-0778 from the U.S. or 201-689-8565 from outside the U.S.  To listen to a live webcast, please visit the Investor Relations section of Chembio's website at www.chembio.com. Following the call, a replay will be available on the Investor Relations section of the company’s website for 90 days. A telephone replay will be available by dialing 877-481-4010 from the U.S. or (919) 882-2331 from outside the U.S. using the conference ID: 45991 until 4:30pm ET on May 8, 2019. 

About Chembio Diagnostics
Chembio is a leading point-of-care diagnostics company focused on detecting and diagnosing infectious diseases. The company’s patented DPP technology platform, which uses a small drop of blood from the fingertip, provides high-quality, cost-effective results in 15-20 minutes. Coupled with Chembio’s extensive scientific expertise, its novel DPP technology offers broad market applications beyond infectious disease, a number of which are under active development with collaboration partners. Chembio’s products are sold globally, directly and through distributors, to hospitals and clinics, physician offices, clinical laboratories, public health organizations, government agencies, and consumers. Learn more at www.chembio.com.

Forward-Looking Statements
Statements contained in the last paragraph under “Recent Accomplishments & Highlights” and in the paragraph under “2019 Financial Outlook” that are not historical facts may be forward-looking statements within the meaning of the Securities Act of 1933, as amended. Forward-looking statements include statements regarding the intent, belief or current expectations of the Company and its management. Such statements, which are estimates only, reflect management's current views, are based on certain assumptions, and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to Chembio's ability to obtain regulatory approvals in a timely manner, as well as the demand for Chembio's products. Chembio undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in Chembio's expectations with regard to these forward-looking statements or the occurrence of unanticipated events. Factors that may impact Chembio's success are more fully disclosed in Chembio's most recent public filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2018, particularly under the heading “Risk Factors.”

DPP is our registered trademark. For convenience, this trademark appears in this release without ® symbols, but that practice does not mean that we will not assert, to the fullest extent under applicable law, our rights to the trademark.

(Tables to follow)

Investor Relations Contact
Lynn Pieper Lewis
Gilmartin Group
(415) 937-5402
investor@chembio.com

             
  CHEMBIO DIAGNOSTICS, INC. AND SUBSIDIARIES  
  CONDENSED CONSOLIDATED BALANCE SHEETS  
  AS OF  
     
      March 31, 2019   December 31, 2018  
      (Unaudited)      
  - ASSETS -          
  CURRENT ASSETS:          
  Cash and cash equivalents   $    7,370,678     $   12,524,551    
  Accounts receivable, net       7,717,865         7,373,971    
  Inventories, net       9,855,824         7,851,222    
  Prepaid expenses and other current assets       2,242,264         702,010    
  TOTAL CURRENT ASSETS       27,186,631         28,451,754    
             
  FIXED ASSETS, net       9,012,001         2,873,920    
             
  OTHER ASSETS:          
  Intangible assets, net       3,772,226         3,884,831    
  Goodwill       4,854,946         4,983,127    
  Deposits and other assets       770,653         717,551    
          9,397,825         9,585,509    
             
  TOTAL ASSETS   $    45,596,457     $   40,911,183    
             
  - LIABILITIES AND STOCKHOLDERS’ EQUITY -          
  CURRENT LIABILITIES:          
  Accounts payable and accrued liabilities    $    6,373,927     $   5,888,681    
  Deferred revenue       200,000         422,905    
  Current portion of operating lease liability       514,118         -     
  Current portion of note payable       207,694         207,694    
  TOTAL CURRENT LIABILITIES       7,295,739         6,519,280    
             
  OTHER LIABILITIES:          
  Note payable       141,508         171,821    
  Operating lease liability       6,466,603         -     
  Deferred tax liability       631,673         892,308    
             
  TOTAL LIABILITIES       14,535,523         7,583,409    
             
  STOCKHOLDERS’ EQUITY:          
  Preferred stock – 10,000,000 shares authorized, none outstanding       -          -     
  Common stock - $.01 par value; 100,000,000 shares authorized,
  17,166,459 shares issued and outstanding at March 31, 2019 and
  December 31, 2018
      171,664         171,664    
  Additional paid-in capital       91,301,295         90,953,788    
  Accumulated deficit       (60,726,407 )       (57,909,874 )  
  Accumulated other comprehensive income       314,382         112,196    
  TOTAL STOCKHOLDERS’ EQUITY       31,060,934         33,327,774    
             
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $    45,596,457     $   40,911,183    
             

 

             
  CHEMBIO DIAGNOSTICS, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  (Unaudited)
             
        For the three months ended 
        March 31, 2019   March 31, 2018
  REVENUES:          
  Net product sales     $    6,382,986     $   6,398,227  
  License and royalty revenue         216,191         201,931  
  R&D and grant revenue         1,701,789         1,116,974  
  TOTAL REVENUES         8,300,966         7,717,132  
             
  COSTS AND EXPENSES:          
  Cost of product sales          4,770,337         4,117,779  
  Research and development expenses         2,217,632         1,847,102  
                     
  Selling, general and administrative expenses         4,013,071         2,406,569  
  Acquisition Costs         395,612         -   
            11,396,652         8,371,450  
  LOSS FROM OPERATIONS         (3,095,686 )       (654,318 )
             
  OTHER INCOME:          
  Interest income, net         6,684         1,975  
             
  LOSS BEFORE INCOME TAXES         (3,089,002 )       (652,343 )
             
  Income tax provision (benefit)         (272,469 )       -   
             
  NET LOSS     $    (2,816,533 )   $   (652,343 )
             
  Basic and diluted loss per share     $    (0.16 )   $   (0.05 )
             
  Weighted average number of shares outstanding,
  basic and diluted
        17,166,459         13,267,246  
             

 

           
  CHEMBIO DIAGNOSTICS, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Unaudited)
       
      For the three months ended 
      March 31, 2019   March 31, 2018
           
  CASH FLOWS FROM OPERATING ACTIVITIES:        
  Net Loss   $    (2,816,533 )   $   (652,343 )
  Adjustments:        
  Depreciation and amortization       355,468         222,955  
  Share-based compensation       347,507         97,250  
  Provision for (benefit from) deferred tax liability       (272,469 )       -   
  Changes in assets and liabilities:        
  Accounts receivable       (208,894 )       (1,727,747 )
  Inventories       (1,992,906 )       (1,378,732 )
  Prepaid expenses and other current assets       (366,990 )       (282,003 )
  Deposits and other assets       (62,402 )       67,542  
  Accounts payable and accrued liabilities       485,246         1,285,807  
  Deferred revenue       (222,905 )       50,000  
  Net cash used in operating activities   $    (4,754,878 )   $   (2,317,271 )
           
  Net cash used in investing activities       (577,472 )       (41,530 )
           
  Net cash (used in) provided by financing activities       (29,930 )       11,006,266  
           
  Effect of exhange rate changes on cash       208,407         19,771  
  INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS       (5,153,873 )       8,667,236  
  Cash and cash equivalents - beginning of the period       12,524,551         3,790,302  
  Cash and cash equivalents - end of the period   $    7,370,678     $   12,457,538  
           
   
  Supplemental disclosures for non-cash investing and
  financing activities
   
  Deposits on manufacturing equipment transferred to fixed
  assets
  $    -      $   58,495  
  Additions to right-of-use assets and deferred rent obtained from
  new operating lease liabilities
      5,807,458         -   
  Measurement period acquisition adjustment to accounts
  receivable
    135,000         -