CareDx Reports Third Quarter 2020 Results

SOUTH SAN FRANCISCO, Calif., Oct. 29, 2020 (GLOBE NEWSWIRE) -- CareDx, Inc. (Nasdaq: 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 quarter ended September 30, 2020.

Third Quarter 2020 and Recent Highlights:

  • Achieved total revenue of $53.4 million for the three months ended September 30, 2020, increasing 58% year-over-year

  • Provided over 21,800 AlloSure Kidney and AlloMap Heart patient results

  • Received final positive Medicare coverage decision for AlloSure Heart

  • Announced publication of pivotal AlloSure Lung data

“Our team continues to deliver the winning formula for CareDx. Beginning with a decision to drive our initiatives with a singular focus on transplantation, we continue to execute on our objectives and achieve tremendous results as we march forward with our mission to improve transplant patient care,” said Peter Maag, CareDx Chairman and Chief Executive Officer. “We truly have an imminent opportunity to make our solutions be the standard of care for transplanted organ surveillance, and our efforts are centered on making this a reality.”

Third Quarter 2020 Financial Results

Revenue for the three months ended September 30, 2020 was $53.4 million, compared with $33.8 million in the third quarter of 2019. Testing services revenue for the third quarter was $45.5 million, compared with $28.2 million in the same period of 2019. Product revenue in the three months ended September 30, 2020 was $5.4 million, compared to $4.2 million in the same period of 2019. Digital and other revenue for the third quarter 2020 was $2.5 million, compared to $1.4 million in the same period of 2019.

For the third quarter of 2020, the net loss was $2.8 million compared to a net loss of $1.8 million in the same period of 2019. Diluted net loss per share was $0.06 in the third quarter of 2020, compared to a diluted net loss per share of $0.04 in the third quarter of 2019.

Non-GAAP net income was $5.1 million in the third quarter of 2020 compared to $0.9 million non-GAAP net income in the third quarter of 2019. Diluted non-GAAP net income per share was $0.10 in the third quarter of 2020, compared to a diluted non-GAAP net income per share of $0.02 in the third quarter of 2019.

Adjusted EBITDA for the third quarter of 2020 was a gain of $5.6 million, compared to an adjusted EBITDA gain of $0.8 million in the third quarter of 2019.

Cash and cash equivalents were $213.8 million as of September 30, 2020.

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

While CareDx experienced improved trends in the third quarter, due to the continued uncertainties with respect to the COVID-19 pandemic, CareDx will not be providing revenue guidance at this time.

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 healthcare solutions along the pre- and post-transplant patient journey, and is the 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 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, 2019, filed by CareDx with the SEC on February 28, 2020, 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 basic and diluted net income per share and adjusted EBITDA. We define non-GAAP net income and per share results as the GAAP net income 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 income/(expense), income tax benefit, depreciation and amortization, and other income and expense. 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
347-620-7010
investor@caredx.com



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

 Three Months Ended September 30, Nine Months Ended September 30,
 2020 2019 2020 2019
Revenue:       
Testing services revenue$45,529  $28,226  $113,264  $75,421 
Product revenue5,383  4,200  13,369  13,226 
Digital and other revenue2,457  1,385  6,917  2,600 
Total revenue53,369  33,811  133,550  91,247 
Operating expenses:       
Cost of testing services11,900  7,421  30,631  21,928 
Cost of product3,705  2,986  9,635  9,161 
Cost of digital and other1,210  1,087  3,966  1,650 
Research and development12,474  8,521  35,616  21,765 
Sales and marketing13,870  11,058  37,727  28,627 
General and administrative13,117  9,485  35,436  27,103 
Total operating expenses56,276  40,558  153,011  110,234 
Loss from operations(2,907) (6,747) (19,461) (18,987)
Other income (expense):       
Interest income, net29  37  146  679 
Change in estimated fair value of common stock warrant liability79  4,346  (990) (14)
CARES Act Provider Relief Fund    4,813   
Other expense, net(254) (398) (572) (644)
Total other (expense) income(146) 3,985  3,397  21 
Loss before income taxes(3,053) (2,762) (16,064) (18,966)
Income tax benefit235  949  865  1,775 
Net loss$(2,818) $(1,813) $(15,199) $(17,191)
Net loss per share:       
Basic$(0.06) $(0.04) $(0.33) $(0.41)
Diluted$(0.06) $(0.04) $(0.33) $(0.41)
Weighted-average shares used to compute net loss per share:       
Basic49,010,680  42,393,550  45,526,810  42,048,647 
Diluted49,010,680  42,393,550  45,526,810  42,048,647 
 



CareDx, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

 September 30, 2020 December 31, 2019
Assets   
Current assets:   
Cash and cash equivalents$213,798  $38,223 
Accounts receivable30,610  24,057 
Inventory9,906  6,014 
Prepaid and other current assets4,345  3,628 
Total current assets258,659  71,922 
Property and equipment, net10,144  4,430 
Operating leases right-of-use assets15,802  4,730 
Intangible assets, net43,830  45,541 
Goodwill23,857  23,857 
Restricted cash260  256 
Other assets1,000  1,000 
Total assets$353,552  $151,736 
Liabilities and stockholders’ equity   
Current liabilities:   
Accounts payable$9,519  $5,506 
Accrued compensation13,791  12,484 
Accrued and other liabilities18,617  16,838 
Deferred revenue - CMS advance payment20,496   
Total current liabilities62,423  34,828 
Deferred tax liability1,187  1,973 
Common stock warrant liability532  6,607 
Deferred payments for intangible assets3,480  5,207 
Operating lease liability, less current portion16,539  2,370 
Other liabilities747  1,751 
Total liabilities84,908  52,736 
Commitments and contingencies   
Stockholders’ equity:   
Common stock47  42 
Additional paid-in capital621,961  437,976 
Accumulated other comprehensive loss(4,352) (5,205)
Accumulated deficit(349,012) (333,813)
Total stockholders’ equity268,644  99,000 
Total liabilities and stockholders’ equity$353,552  $151,736 
 



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

 Three Months Ended September 30, Nine Months Ended September 30,
 2020 2019 2020 2019
Cost of testing services reconciliation:       
GAAP cost of testing services$11,900  $7,421  $30,631  $21,928 
Stock-based compensation expense(431) (294) (1,101) (1,423)
Acquisition related-amortization of purchased intangibles(329) (156) (987) (408)
Non-GAAP cost of testing services$11,140  $6,971  $28,543  $20,097 
Cost of product reconciliation:       
GAAP cost of product$3,705  $2,986  $9,635  $9,161 
Stock-based compensation expense(97) (77) (289) (192)
Acquisition related-amortization of purchased intangibles(445) (346) (1,210) (1,067)
Non-GAAP cost of product$3,163  $2,563  $8,136  $7,902 
Cost of digital and other reconciliation:       
GAAP cost of digital and other$1,210  $1,087  $3,966  $1,650 
Stock-based compensation expense(124) (54) (338) (90)
Acquisition related-amortization of purchased intangibles(86) (74) (259) (131)
Non-GAAP cost of digital and other$1,000  $959  $3,369  $1,429 
Research and development expenses reconciliation:       
GAAP research and development expenses$12,474  $8,521  $35,616  $21,765 
Stock-based compensation expense(1,224) (954) (3,490) (3,227)
Non-GAAP research and development expenses$11,250  $7,567  $32,126  $18,538 
Sales and marketing expenses reconciliation:       
GAAP sales and marketing expenses$13,870  $11,058  $37,727  $28,627 
Stock-based compensation expense(1,623) (1,125) (4,175) (2,796)
Acquisition related-amortization of purchased intangibles(376) (336) (1,089) (882)
Impairment      (150)
Non-GAAP sales and marketing expenses$11,871  $9,597  $32,463  $24,799 
General and administrative expenses reconciliation:       
GAAP general and administrative expenses$13,117  $9,485  $35,436  $27,103 
Stock-based compensation expense(3,249) (3,460) (8,031) (9,282)
Change in estimated fair value of contingent consideration(35)   (301)  
Acquisition related fees and expenses  (86)   (654)
Non-GAAP general and administrative expenses$9,833  $5,939  $27,104  $17,167 
Total other income (expense) reconciliation:       
GAAP other income (expense), net$(146) $3,985  $3,397  $21 
Change in estimated fair value of common stock warrant liability(79) (4,346) 990  14 
Accretion of liability80  173  272  173 
Non-GAAP other income (expense), net$(145) $(188) $4,659  $208 
Income tax benefit reconciliation:       
GAAP income tax benefit$235  $949  $865  $1,775 
Tax effect related to amortization of purchased intangibles(130) (119) (369) (364)
Non-GAAP income tax benefit$105  $830  $496  $1,411 
 



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

 Three Months Ended September 30, Nine Months Ended September 30,
 2020 2019 2020 2019
        
Net loss$(2,818) $(1,813) $(15,199) $(17,191)
Stock-based compensation expense6,748  5,964  17,424  17,010 
Acquisition related-amortization of purchased intangibles1,236  912  3,545  2,488 
Acquisition related fees and expenses  86    654 
Change in estimated fair value of contingent consideration35    301   
Change in estimated fair value of common stock warrant liability(79) (4,346) 990  14 
Accretion of liability80  173  272  173 
Tax effect related to amortization of purchased intangibles(130) (119) (369) (364)
Impairment      150 
Non-GAAP net income$5,072  $857  $6,964  $2,934 
        
GAAP basic and diluted net loss per share$(0.06) $(0.04) $(0.33) $(0.41)
        
Non-GAAP basic net income per share$0.10  $0.02  $0.15  $0.07 
Non-GAAP diluted net income per share$0.10  $0.02  $0.15  $0.07 
        
Shares used in computing non-GAAP basic net income per share49,010,680  42,393,550  45,526,810  42,048,647 
Shares used in computing non-GAAP diluted net income per share50,446,939  43,775,682  46,571,527  44,111,648 
 



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

 Three Months Ended September 30, Nine Months Ended September 30,
 2020 2019 2020 2019
        
Non-GAAP net income$5,072  $857  $6,964  $2,934 
Interest income(29) (37) (146) (679)
Income tax benefit(105) (830) (496) (1,411)
Depreciation expense486  395  1,235  1,199 
CARES Act Provider Relief Fund    (4,813)  
Other expense, net174  398  300  644 
Adjusted EBITDA$5,598  $783  $3,044  $2,687 

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