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Response Biomedical Corp. Announces Second Quarter 2015 Financial Results - Revenue Up 39%
Monday, August 17, 2015Company Profile | Follow Company
Vancouver, BC, August 17, 2015--(T-Net)-Response Biomedical Corp. (RBM.TO) today reported financial results for its second quarter and six months ended June 30, 2015 including a 39% increase in total revenue, a 16% increase in product sales, positive Adjusted EBITDA of $631,000, and a GAAP net loss of $2,000.
"We are pleased to report both substantial revenue growth and positive Adjusted EBITDA for the second quarter," said Dr. Barbara Kinnaird, Chief Executive Officer of Response. "We continue to make progress in our collaboration with Joinstar, earning a US$360,000 milestone in the second quarter," noted Dr. Kinnaird.
"Our national distribution partner met their minimum purchase targets for the first half of 2015, representing approximately 70% of our revenues in the period. However, they are still in the process of expanding into additional territories within China and determining their end-user buying patterns. They recently indicated to us that they have built up inventory at a higher rate than their current sales to end-users. They therefore may make significantly lower, or possibly no, purchases from us during the third quarter of 2015. As a result, we have executed several cost cutting and cash conservation initiatives while we work through this period.
"To support our plans to expand our future sales and marketing initiatives in China, we are also pleased to announce the hiring of a new General Manager for China, Mr. Julius Wu. Mr. Wu brings to Response extensive experience in medical device sales and marketing in China as well as in the establishment and growth of China based operations for a multinational company," said Dr. Kinnaird.
Julius Wu has over 20 years in the medical device industry in China where he succeeded in a number of key marketing & sales related positions for international companies from Johnson & Johnson and Bayer Diagnostics to Philips Healthcare. Notable is his recent experience as VP of Business Operations for B. Braun Medical Inc., where he directed major partnering initiatives and led a 140-staff organization to successfully support the overall China business.
Wu is responsible for Response's marketing programs, brand management, and business development in China, Taiwan and Hong Kong. Mr. Wu's greatest strengths are his creativity, leadership and results-driven behaviors. He thrives on challenges, particularly those that expand the company's reach, according to the company.
His most recent projects involved strategic partnerships with distribution networks in the fast-growing Asia-Pacific market. He was a major driver of an M&A deal in 2009 as well as turning around market position against a local competitor with annual revenues exceeding $145 million in 2012. In addition, he had primary responsibility for setting up a full-fledged organization in China with sales, marketing, technology & service and research & development with a staff of over 100 employees.
Financial highlights for the second quarter of 2015 include the following:
Financial results for the three months ended June 30, 2015:
Financial results for the six months ended June 30, 2015:
For a further discussion of the Company's financial results for the three and six months ended June 30, 2015, please refer to the Company's consolidated financial statements and related Management Discussion and Analysis, which can be found at www.responsebio.com, SEDAR (Canada)www.sedar.com or EDGAR (U.S.) www.sec.gov/edgar/searchedgar/webusers.htm. Information at these sites is typically available within 72 hours of the distribution of the news release.
Non-GAAP Financial Measures
Management has presented its operating results in accordance with United States Generally Accepted Accounting Principles (GAAP) and on an "adjusted" (or non-GAAP) basis for the three and six months ended June 30, 2015 and 2014. We believe that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP. These measures may be different from non-GAAP financial measures used by other companies, even when similar terms are used to identify such measures. Further, our reconciliation of GAAP Net income (loss) and comprehensive income (loss) to Adjusted EBITDA and Adjusted Net income (loss) are included in the tables below to facilitate a reader's understanding of the impact of these adjustments to our GAAP financial results and are not intended to place any undue prominence on our Adjusted EBITDA and/or our Adjusted Net loss.
About Response Biomedical Corp.
Response develops, manufactures and markets rapid on-site diagnostic tests for use with its RAMP® platform for clinical, biodefense and environmental applications. RAMP® represents a unique paradigm in diagnostics that provides reliable, quality results in minutes. The RAMP®platform consists of a reader and single-use disposable test cartridges and has the potential to be adapted to any other medical and non-medical immunoassay based test currently performed in laboratories. Response clinical tests are commercially available for the aid in early detection of heart attack, congestive heart failure, influenza A and B and RSV. In the non-clinical market, RAMP®tests are currently available for the environmental detection of West Nile Virus antigen and for Biodefense applications including the rapid on-site detection of anthrax, smallpox, ricin and botulinum toxin. Response is a publicly traded company listed on the TSX under the trading symbol "RBM" and quoted on the OTCQB under the symbol "RPBIF". For further information, please visit the Company's website at www.responsebio.com.
Forward-Looking Statements
This press release may contain forward-looking statements. These statements relate to future events and are subject to risks, uncertainties and assumptions about Response Biomedical Corp. Examples of forward-looking statements in this press release include statements regarding our belief that our national distributor in China may have sufficient inventory to support their expected sales in the short term and consequently may not make significant or possibly any purchases from us during the third quarter of 2015; that our cost cutting and cash conservation including selected staff layoffs and work-sharing programs, reductions in discretionary spending, and additional efforts to sell inventory accumulated late in the second quarter will stabilize and strengthen our financial position; that our new China General Manager being actively engaged in expanding our sales and marketing activities in China will expand our sales; and that that we continue to make progress in our collaboration with Joinstar and we are eligible to receive a further US$2.2 million in milestones during the remaining approximately nine months of the Joinstar development project. These statements are only predictions based on our current expectations and projections about future events. Although we believe the expectations reflected in such forward-looking statements, and the assumptions upon which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct and if such expectations are not met, our business may suffer.
Readers should not place undue reliance on these statements. Actual events or results may differ materially. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Many factors may cause the Company's actual results to differ materially from any forward-looking statement, including the factors detailed in our filings with the Securities and Exchange Commission and Canadian securities regulatory authorities, including but not limited to our annual report on Form 10-K, our quarterly reports on Form 10-Q, our Current Reports on Form 8-K, our Annual Information Form and other filings with the Securities and Exchange Commission and Canadian securities regulatory authorities.
The forward-looking statements contained in this news release are current as of the date hereof and are qualified in their entirety by this cautionary statement. Except as expressly required by applicable securities laws, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Selected Financial Data (in thousands of Canadian dollars except per share data):
Unaudited | ||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Product sales | $ | 3,563 | $ | 3,077 | $ | 6,834 | $ | 5,636 | ||||
Collaborative revenue | 703 | - | 972 | - | ||||||||
Total revenue | $ | 4,266 | $ | 3,077 | $ | 7,806 | $ | 5,636 | ||||
Cost of sales | 2,120 | 1,705 | 4,296 | 3,145 | ||||||||
Gross profit | $ | 2,146 | $ | 1,372 | $ | 3,510 | $ | 2,491 | ||||
Gross margin on product sales | 40.5 | % | 44.6 | % | 37.1 | % | 44.2 | % | ||||
Operating expenses | 1,771 | 1,882 | 3,923 | 4,150 | ||||||||
Other expenses (excluding unrealized loss (gain) on revaluation of warrant liability) | 227 | 241 | 594 | 454 | ||||||||
Adjusted net income (loss) | $ | 148 | $ | (751 | ) | $ | (1,007 | ) | $ | (2,113 | ) | |
Unrealized loss (gain) on revaluation of warrant liability | 150 | (1,039 | ) | 95 | (878 | ) | ||||||
Net income (loss) and comprehensive income (loss) for the period | $ | (2 | ) | $ | 288 | $ | (1,102 | ) | $ | (1,235 | ) | |
Earnings (loss) per share - basic | $ | (0.00 | ) | $ | 0.04 | $ | (0.11 | ) | $ | (0.16 | ) | |
Earnings (loss) per share - diluted | $ | (0.00 | ) | $ | 0.04 | $ | (0.11 | ) | $ | (0.16 | ) |
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (in thousands of Canadian dollars):
Unaudited | ||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Adjusted EBITDA | $ | 631 | $ | (242 | ) | $ | (27 | ) | $ | (1,061 | ) | |
Interest expense and amortization of deferred financing costs and debt discount | 225 | 226 | 460 | 423 | ||||||||
Interest income | (2 | ) | (4 | ) | (5 | ) | (9 | ) | ||||
Depreciation and amortization | 210 | 205 | 420 | 405 | ||||||||
Stock-based compensation | 50 | 82 | 105 | 233 | ||||||||
Unrealized (gain) loss on revaluation of warrant liability | 150 | (1,039 | ) | 95 | (878 | ) | ||||||
Net income (loss) and comprehensive income (loss) for the period | $ | (2 | ) | $ | 288 | $ | (1,102 | ) | $ | (1,235 | ) |
Reconciliation of Adjusted Net Income (Loss) to GAAP Net Income (Loss) (in thousands of Canadian dollars):
Unaudited | ||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Adjusted net loss | $ | 148 | $ | (751 | ) | $ | (1,007 | ) | $ | (2,113 | ) | |
Unrealized (gain) loss on revaluation of warrant liability | 150 | (1,039 | ) | 95 | (878 | ) | ||||||
Net income (loss) and comprehensive income (loss) for the period | $ | (2 | ) | $ | 288 | $ | (1,102 | ) | $ | (1,235 | ) |
Contact:
Response Biomedical Corp.
W.J. (Bill) Adams
Chief Financial Officer
604-456-6010
ir@responsebio.com
www.responsebio.com
Company Snapshot |
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Response Biomedical Corporation
Burnaby (Biotech/Life Sciences)
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