GenMark Diagnostics, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 1, 2017

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Exhibit 99.1
August 1, 2017

GenMark Reports Second Quarter 2017 Results
Second Quarter Revenue of $12.4 million
Ended the Quarter with Over 80 ePlex® Instruments Installed at Customer Sites


CARLSBAD, Calif.-(BUSINESS WIRE) - GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the second quarter ended June 30, 2017.

Revenue for the second quarter of 2017 was $12.4 million, a decrease of 1% over the prior year period. Annuity per XT-8 analyzer was $69 thousand in the second quarter and in the mid-$70 thousand range over the last 4 quarters.

Gross profit for the second quarter was $4.9 million, or 40% of revenue, compared with $7.8 million, or 62% of revenue in the same period of 2016.

“We are delighted to have accomplished several important goals in the second quarter. Our team achieved FDA 510(k) clearance of the ePlex instrument and Respiratory Pathogen Panel as well as CE Mark for all three of our Blood Culture ID Panels,” said Hany Massarany, President and Chief Executive Officer of GenMark. “In addition, we significantly strengthened our balance sheet, which will enable us to bring even more focus to the global commercialization of our ePlex System and its menu expansion,” added Massarany.

Operating expenses for the second quarter of 2017 were $22.2 million compared to $20.4 million in the same period for 2016. The increase was mainly driven by Marketing and Sales expenses as the Company continues to expand its commercial organization in support of the global ePlex product launch.

Loss per share was $0.37 per share for the second quarter of 2017, compared to a $0.30 loss per share in the second quarter of 2016.

The Company ended the quarter with $106.5 million in cash and cash equivalents.

The Company will be hosting a conference call to discuss second quarter results in further detail on Tuesday, August 1, 2017 starting at 8:30 a.m. ET. The conference call will be concurrently webcast. The link to the webcast will be available on the GenMark Diagnostics, Inc. website at www.genmarkdx.com under the investor relations section and will be archived for future reference. To listen to the conference call, please dial (877) 312-5847 (US/Canada) or (253) 237-1154 (International) and use the conference ID number 48903152 approximately five minutes prior to the start time.

ABOUT GENMARK DIAGNOSTICS
GenMark Diagnostics (NASDAQ: GNMK) is a leading provider of multiplex molecular diagnostic solutions designed to enhance patient care, improve key quality metrics, and reduce the total cost-of-care. Utilizing GenMark's proprietary eSensor® detection technology, GenMark's eSensor XT-8® and ePlex® systems are designed to support a broad range of molecular diagnostic tests with compact, easy-to-use workstations and self-contained, disposable test cartridges. GenMark’s ePlex: The True Sample-to-Answer Solution™ is designed to optimize laboratory efficiency and address a broad range of infectious disease testing needs, including respiratory, bloodstream, and gastrointestinal infections. For more information, visit www.genmarkdx.com.





SAFE HARBOR STATEMENT
This press release includes forward-looking statements regarding events, trends and business prospects, which may affect our future operating results and financial position. Such statements, including, but not limited to, those regarding our future financial performance and the timely and effective commercialization and clinical impact of our ePlex system, are all subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, our ability to successfully commercialize our ePlex system and its related test menu in a timely manner, constraints or inefficiencies caused by unanticipated acceleration and deceleration of customer demand, our ability to successfully expand sales of our product offerings outside the United States, and third-party payor reimbursement to our customers, as well as other risks and uncertainties described under the “Risk Factors” in our public filings with the Securities and Exchange Commission. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.











GENMARK DIAGNOSTICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)

 
June 30,
2017
 
December 31,
2016
Current assets
 
 
 
Cash and cash equivalents
$
88,427

 
$
15,959

Marketable securities
18,091

 
25,607

Accounts receivable, net of allowances of $2,773 and $2,740, respectively
7,268

 
9,048

Inventories
7,105

 
6,633

Prepaid expenses and other current assets
1,324

 
1,202

Total current assets
122,215

 
58,449

Property and equipment, net
19,778

 
18,268

Intangible assets, net
2,923

 
2,670

Restricted cash
758

 
758

Other long-term assets
179

 
179

Total assets
$
145,853

 
$
80,324

Current liabilities
 
 
 
Accounts payable
$
6,665

 
$
8,703

Accrued compensation
4,502

 
5,650

Loan payable
19,275

 
7,935

Other current liabilities
3,557

 
4,133

Total current liabilities
33,999

 
26,421

Long-term liabilities
 
 
 
Deferred rent
3,378

 
3,652

Long-term debt
14,901

 
11,880

Other non-current liabilities
222

 
220

Total liabilities
52,500

 
42,173

Stockholders’ equity
 
 
 
Preferred stock, $0.0001 par value; 5,000 authorized, none issued
—

 
—

Common stock, $0.0001 par value; 100,000 authorized; 54,665 and 46,554 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively
6

 
4

Additional paid-in capital
480,507

 
393,322

Accumulated deficit
(387,176)

 
(355,270)

Accumulated other comprehensive income
16

 
95

Total stockholders’ equity
93,353

 
38,151

Total liabilities and stockholders’ equity
$
145,853

 
$
80,324







GENMARK DIAGNOSTICS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per share data)

 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2017
 
2016
 
2017
 
2016
Revenue
 
 
 
 
 
 
 
Product revenue
$
12,291

 
$
12,425

 
$
24,761

 
$
23,384

License and other revenue
68

 
87

 
133

 
192

Total revenue
12,359

 
12,512

 
24,894

 
23,576

Cost of revenue
7,475

 
4,720

 
13,827

 
9,095

Gross profit
4,884

 
7,792

 
11,067

 
14,481

Operating expenses
 
 
 
 
 
 
 
Sales and marketing
5,159

 
3,300

 
9,853

 
7,009

General and administrative
3,978

 
3,876

 
7,988

 
7,296

Research and development
13,014

 
13,204

 
24,049

 
25,472

Total operating expenses
22,151

 
20,380

 
41,890

 
39,777

Loss from operations
(17,267
)
 
(12,588
)
 
(30,823
)
 
(25,296
)
Other income (expense)
 
 
 
 
 
 
 
Interest income
54

 
26

 
106

 
55

Interest expense
(755
)
 
(308
)
 
(1,261
)
 
(585
)
Other income
56

 
(42
)
 
151

 
(9
)
Total other expense
(645
)
 
(324
)
 
(1,004
)
 
(539
)
Loss before provision for income taxes
(17,912
)
 
(12,912
)
 
(31,827
)
 
(25,835
)
Income tax expense
77

 
(5
)
 
78

 
31

Net loss
$
(17,989
)
 
$
(12,907
)
 
$
(31,905
)
 
$
(25,866
)
Net loss per share, basic and diluted
$
(0.37
)
 
$
(0.30
)
 
$
(0.67
)
 
$
(0.60
)
Weighted average number of shares outstanding, basic and diluted
48,067

 
42,864

 
47,460

 
42,768

Other comprehensive loss
 
 
 
 
 
 
 
Net loss
$
(17,989
)
 
$
(12,907
)
 
$
(31,905
)
 
$
(25,866
)
Foreign currency translation adjustments
3

 
(34
)
 
94

 
13

Net unrealized gains (losses) on marketable securities, net of tax
1

 
(5
)
 
(15
)
 
(21
)
Comprehensive loss
$
(17,985
)
 
$
(12,946
)
 
$
(31,826
)
 
$
(25,874
)






GENMARK DIAGNOSTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Six Months Ended June 30,
 
2017
 
2016
Operating activities
 
 
 
Net loss
$
(31,905
)
 
$
(25,866
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
2,454

 
1,791

Amortization of premiums on investments
30

 
35

Amortization of deferred debt issuance costs
493

 
169

Stock-based compensation
5,602

 
4,540

Provision for bad debt
32

 
23

Non-cash inventory adjustments
565

 
92

Other non-cash adjustments
(123
)
 
19

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
1,795

 
1,406

Inventories
(2,563
)
 
306

Prepaid expenses and other assets
(119
)
 
(721
)
Accounts payable
(3,134
)
 
1,289

Accrued compensation
(1,170
)
 
1,119

Other liabilities
(124
)
 
303

Net cash used in operating activities
(28,167
)
 
(15,495
)
Investing activities
 
 
 
Payments for intellectual property licenses
—

 
(800
)
Purchases of property and equipment
(2,535
)
 
(2,404
)
Purchases of marketable securities
(10,496
)
 
(2,532
)
Proceeds from sales of marketable securities
13,896

 
—

Maturities of marketable securities
4,100

 
4,650

Net cash provided by (used in) investing activities
4,965

 
(1,086
)
Financing activities
 
 
 
Proceeds from issuance of common stock
86,835

 
449

Costs incurred in conjunction with stock issuance
(5,171
)
 
—

Principal repayment of borrowings
(964
)
 
(17
)
Proceeds from borrowings
15,000

 
10,000

Costs associated with debt issuance
(187
)
 
(30
)
Proceeds from stock option exercises
170

 
352

Net cash provided by financing activities
95,683

 
10,754

Effect of exchange rate changes on cash
(13
)
 
3

Net increase (decrease) in cash and cash equivalents
72,468

 
(5,824
)
Cash and cash equivalents at beginning of period
15,959

 
35,385

Cash and cash equivalents at end of period
$
88,427

 
$
29,561

Non-cash investing and financing activities
 
 
 
Transfer of instruments from (to) property and equipment into (from) inventory
$
(1,534
)
 
$
42

Property and equipment costs included in accounts payable
713

 
588

Intellectual property acquisitions included in other current liabilities
500

 
—

Supplemental cash flow disclosures
 
 
 
Cash paid for income taxes, net
54

 
13

Cash received for interest
187

 
51

Cash paid for interest
574

 
408







GenMark Diagnostics, Inc.
Hany MassaranyPresident/Chief Executive Officer
760-448-4325

Source: GenMark Diagnostics, Inc.

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GenMark Diagnostics, Inc. Reports