OXFORD, United Kingdom and MARLBOROUGH, Mass., March 11, 2019 (GLOBE NEWSWIRE) -- Oxford Immunotec Global PLC (Nasdaq: OXFD) (the "Company"), a global, high-growth diagnostics company, today announced fourth quarter and full year 2018 financial results.
By revenue type, total revenues were, in millions:
| Three Months Ended December 31, | Full Year Ended December 31, | ||||||||||||||
| 2018 | 2017 | Percent Change (1) | 2018 | 2017 | Percent Change (1) | ||||||||||
| Product | $ | 14.5 | $ | 11.2 | 29% | $ | 54.7 | $ | 48.9 | 12% | |||||
| Service | 0.9 | 1.4 | -36% | 5.1 | 5.8 | -13% | |||||||||
| Total Revenue | $ | 15.4 | $ | 12.6 | 22% | $ | 59.8 | $ | 54.7 | 9% | |||||
By geography, total revenues were, in millions:
| Three Months Ended December 31, | Full Year Ended December 31, | ||||||||||||||||||
| Percent Change | Percent Change | ||||||||||||||||||
| 2018 | 2017 | As Reported(1) | Constant Currency (2) | 2018 | 2017 | As Reported (1) | Constant Currency (2) | ||||||||||||
| United States | $ | 4.8 | $ | 3.2 | 50% | 50% | $ | 16.4 | $ | 15.7 | 5% | 5% | |||||||
| Europe & ROW | 2.4 | 2.2 | 9% | 12% | 9.2 | 8.1 | 13% | 8% | |||||||||||
| Asia | 8.2 | 7.2 | 13% | 13% | 34.2 | 30.9 | 11% | 10% | |||||||||||
| Total Revenue | $ | 15.4 | $ | 12.6 | 22% | 22% | $ | 59.8 | $ | 54.7 | 9% | 8% | |||||||
(1) Oxford Immunotec completed its previously announced sale of the Company’s U.S. laboratory services business on November 6, 2018 (the “Closing Date”). As such, Total Revenue, Product Revenue and United States Revenue for the three months and full year ended December 31, 2018 and the three months and full year ended December 31, 2017 are not fully comparable. Total Revenue, Product Revenue, and United States Revenue for the three months and full year ended December 31, 2017 include sales to our former U.S. laboratory services business at our intercompany transfer price that were formerly eliminated in consolidation. Total Revenue, Product Revenue, and United States Revenue for the three months and full year ended December 31, 2018 include sales to our former U.S. laboratory services business at our intercompany transfer price that were formerly eliminated in consolidation, as well as revenue from T-SPOT®.TB test kits and related accessories sold to Quest Diagnostics after November 6, 2018 under the terms of a long-term supply agreement.
(2) Changes in revenue include the impact of changes in foreign currency exchange rates. We use the non-GAAP financial measure "constant currency basis" in our filings to show changes in our revenue without giving effect to period-to-period currency fluctuations. We consider the use of a period over period revenue comparison on a constant currency basis to be helpful to investors, as it provides a revenue growth measure free of positive or negative volatility due to currency fluctuations.
Fourth Quarter 2018 Financial Results
Total revenue for the fourth quarter of 2018 was $15.4 million, representing a 22% increase over fourth quarter 2017 revenue of $12.6 million on an as reported and constant currency basis.
2018 fourth quarter product revenue was $14.5 million, representing a 29% increase from product revenue of $11.2 million in the fourth quarter of 2017. Service revenue for the fourth quarter of 2018 was $900 thousand, down 36% from 2017 fourth quarter service revenue of $1.4 million.
United States revenue was $4.8 million in the fourth quarter of 2018, representing 50% growth over revenue of $3.2 million in the prior year period.
Europe & ROW revenue was $2.4 million in the fourth quarter of 2018, representing a 9% increase compared to revenue of $2.2 million in fourth quarter of 2017. On a constant currency basis, Europe & ROW increased 12% versus the fourth quarter of 2017.
Asia revenue was $8.2 million in the fourth quarter of 2018, representing a 13% increase compared to 2017 fourth quarter revenue of $7.2 million. On a constant currency basis, Asia also grew 13% versus the fourth quarter of 2017.
Gross profit for the fourth quarter of 2018 was $11.4 million, an increase of $2.4 million over gross profit of $9.0 million in the same period of 2017.
Operating expenses were $15.7 million in the fourth quarter of 2018, a decrease of $7.3 million compared to $23.0 million in the same period last year.
Net income for the fourth quarter of 2018 was $141.6 million, or $5.23 per share on a diluted basis, compared to net income of $8.8 million, or $0.33 per share in the fourth quarter of 2017. Diluted net income per share was based on 27,054,822 and 26,828,912 weighted average ordinary shares and ordinary share equivalents outstanding for the fourth quarters of 2018 and 2017, respectively.
EBITDA for the fourth quarter of 2018 was a loss of $3.2 million compared to a profit of $13.3 million in the fourth quarter of 2017. Adjusted EBITDA was a loss of $1.2 million for the fourth quarter of 2018 compared to a loss of $5.2 million in the same period in 2017. Both EBITDA and Adjusted EBITDA are non-GAAP measures.
Full Year 2018 Financial Results
Revenue for the full year 2018 was $59.8 million, representing 9% growth over the full year 2017 revenue of $54.7 million. On a constant currency basis, revenue growth was 8% versus the prior year period.
2018 full year product revenue was $54.7 million representing a 12% increase from product revenue of $48.9 million in the full year 2017. Service revenue for the full year 2018 was $5.1 million, down 13% from $5.8 million in the full year 2017.
United States revenue was $16.4 million in the full year 2018, representing 5% growth compared to full year 2017 revenue of $15.7 million.
Europe & ROW revenue was $9.2 million in the full year 2018, representing a 13% increase compared to full year 2017 revenue of $8.1 million. On a constant currency basis, Europe & ROW grew 8% versus the full year 2017.
Asia revenue was $34.2 million in the full year 2018, representing an 11% increase compared to full year 2017 revenue of $30.9 million. On a constant currency basis, Asia grew 10% versus the full year 2017.
Gross profit for the full year 2018 was $42.9 million, an increase of $6.6 million over gross profit of $36.3 million in the full year 2017.
Operating expenses were $63.6 million in the full year 2018, a decrease of $26.6 million compared to $90.2 million in the full year 2017.
Net income for the full year 2018 was $121.3 million, or $4.56 per share on a diluted basis, compared to a net loss of $32.9 million, or $1.38 per share for the full year 2017. Diluted net income per share was based on 26,568,075 weighted average ordinary shares and ordinary share equivalents outstanding for the full year 2018. Net loss per share was based on 23,757,902 weighted average ordinary shares outstanding for the full year 2017.
EBITDA for the full year 2018 was a loss of $19.2 million compared to a loss of $26.9 million for the full year 2017. Adjusted EBITDA was a loss of $9.9 million for the full year 2018 compared to a loss of $23.2 million for the full year 2017. Both EBITDA and Adjusted EBITDA are non-GAAP measures.
Cash and cash equivalents were $192.8 million as of December 31, 2018. This compares to cash and cash equivalents of $90.3 million as of December 31, 2017.
Business Outlook
For full year 2019, the Company expects revenue of between $69 and $72 million.
Supplemental Financial Information
On November 6, 2018 (the “Closing Date”), Oxford Immunotec completed its previously announced sale of the Company’s U.S. laboratory services business for gross proceeds of $170 million in cash to Quest Diagnostics Incorporated (“Quest”) pursuant to a Limited Liability Company Interest Purchase Agreement, dated September 25, 2018 (the “Transaction”). As part of the Transaction, Oxford Immunotec began selling T-SPOT.TB test kits and related accessories to Quest Diagnostics under the terms of a long-term supply agreement. In addition, the parties have entered into a strategic collaboration agreement to drive continued growth of T-SPOT.TB testing in the U.S.
The Transaction represented a strategic business shift having a major effect on the Company’s operations and financial results. Accordingly, the assets and liabilities of this business have been classified as discontinued operations and the related results of operations have been reported in discontinued operations in our consolidated financial statements for all periods presented.
To assist investors in understanding the fourth quarter and full year 2018 results of the Company’s continuing operations, Oxford Immunotec has provided unaudited non-GAAP pro forma consolidated statements of operations for the quarterly and annual periods ended December 31, 2018, as Exhibit 99.1 to a current report on Form 8-K filed with the Securities and Exchange Commission on March 11, 2019. These non-GAAP financials reflect the Company’s estimated revenue and cost of revenue as if the Closing Date of the Transaction had occurred prior to the respective periods and the Company’s long-term Supply Agreement with Quest had been in effect for the full respective periods. The pro forma adjustments in these tables are based on the best information available and assumptions that management believes are factually supportable and reasonable. However, such adjustments are subject to change and the methodology used may not be indicative of the Company’s future consolidated results of operations or the future timing of revenue.
Conference Call
Oxford Immunotec will host a conference call on Monday, March 11, 2019 at 4:30 p.m. Eastern Time to review fourth quarter and full year 2018 financial results. The call will be concurrently webcast. To listen to the conference call on your telephone, please dial (855) 363-5047 for United States callers and +1 (484) 365-2897 for international callers and reference confirmation code 1990647, approximately ten minutes prior to start time. To access the live audio webcast or subsequent archived recording, visit the Investor Relations section of Oxford Immunotec's website at www.oxfordimmunotec.com. The replay will be available on the Company's website for approximately 60 days.
About Oxford Immunotec
Oxford Immunotec Global PLC is a global, high-growth diagnostics company focused on developing and commercializing proprietary assays for immunology and infectious disease. The Company's T-SPOT.TB test has been approved for sale in over 50 countries, including the United States, where it has received pre-market approval from the Food and Drug Administration, Europe, where it has obtained a CE mark, as well as Japan and China. The Company is headquartered near Oxford, U.K. and in Marlborough, MA. Additional information can be found at www.oxfordimmunotec.com.
T-SPOT and the Oxford Immunotec logo are trademarks of Oxford Immunotec Ltd.
Forward-Looking Statements
This release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this release are forward-looking statements. This includes statements about Oxford Immunotec's anticipated plans and objectives, future performance and revenues, financial condition, prospects for sales of its products, growth, strategies, expectations and objectives of management. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements contained in this release reflect Oxford Immunotec's current expectations and are subject to risks and uncertainties. Actual results may differ materially from those projected or implied by forward-looking statements. Other factors that could adversely affect Oxford Immunotec's business and prospects are described under the "Risk Factors" section in its filings with the Securities and Exchange Commission ("SEC"). Oxford Immunotec's SEC filings are available for free by visiting the investor section of its website, www.oxfordimmunotec.com, or the SEC's website, www.sec.gov.
Investors should give careful consideration to these risks and uncertainties. Forward-looking statements contained herein are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. Investors should not place undue reliance on forward-looking statements contained herein, which speak only as of the date of this release. Oxford Immunotec does not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law.
CONTACT:
For Media and Investor Inquiries:
Karen Koski
Vice President, Strategy and Investor Relations
Oxford Immunotec
Tel: +1 (508) 556-1377
kkoski@oxfordimmunotec.com
Oxford Immunotec Global PLC
Condensed consolidated statements of operations
(unaudited)
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands, except share and per share data) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Revenue | ||||||||||||||||
| Product | $ | 14,451 | $ | 11,186 | $ | 54,687 | $ | 48,899 | ||||||||
| Service | 916 | 1,423 | 5,066 | 5,834 | ||||||||||||
| Total revenue | 15,367 | 12,609 | 59,753 | 54,733 | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Product | 3,675 | 2,545 | 13,668 | 13,864 | ||||||||||||
| Service | 281 | 1,093 | 3,158 | 4,606 | ||||||||||||
| Total cost of revenue | 3,956 | 3,638 | 16,826 | 18,470 | ||||||||||||
| Gross profit | 11,411 | 8,971 | 42,927 | 36,263 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,153 | 2,743 | 8,122 | 10,835 | ||||||||||||
| Sales and marketing | 5,845 | 6,878 | 26,500 | 29,053 | ||||||||||||
| General and administrative | 6,603 | 5,994 | 25,952 | 25,450 | ||||||||||||
| Change in fair value of contingent purchase price consideration | — | — | — | (3,475 | ) | |||||||||||
| Impairment charges | 879 | 7,236 | 879 | 18,300 | ||||||||||||
| Settlement expense | 214 | 197 | 2,193 | 10,028 | ||||||||||||
| Total operating expenses | 15,694 | 23,048 | 63,646 | 90,191 | ||||||||||||
| Operating loss from continuing operations | (4,283 | ) | (14,077 | ) | (20,719 | ) | (53,928 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income (expense), net | 214 | (694 | ) | (1,797 | ) | (3,105 | ) | |||||||||
| Loss on extinguishment of debt | (2,105 | ) | — | (2,105 | ) | — | ||||||||||
| Foreign exchange gains (losses) | 417 | (573 | ) | 111 | (1,850 | ) | ||||||||||
| Other (expense) income | (29 | ) | 53 | (271 | ) | (209 | ) | |||||||||
| Litigation settlement income | — | 27,500 | — | 27,500 | ||||||||||||
| (Loss) income from continuing operations before income taxes | (5,786 | ) | 12,209 | (24,781 | ) | (31,592 | ) | |||||||||
| Income tax benefit (expense) from continuing operations | 39,521 | (3,823 | ) | 38,339 | (1,634 | ) | ||||||||||
| Income (loss) from continuing operations | 33,735 | 8,386 | 13,558 | (33,226 | ) | |||||||||||
| Discontinued operations: | ||||||||||||||||
| Income from discontinued operations before income taxes | 1,831 | 414 | 1,727 | 341 | ||||||||||||
| Gain on disposition | 145,982 | — | 145,982 | — | ||||||||||||
| Income tax expense | (39,992 | ) | — | (39,992 | ) | — | ||||||||||
| Income from discontinued operations | 107,821 | 414 | 107,717 | 341 | ||||||||||||
| Net income (loss) | $ | 141,556 | $ | 8,800 | $ | 121,275 | $ | (32,885 | ) | |||||||
| Net income (loss) per ordinary share—basic: | ||||||||||||||||
| Income (loss) from continuing operations | $ | 1.28 | $ | 0.33 | $ | 0.52 | $ | (1.40 | ) | |||||||
| Income from discontinued operations | 4.10 | 0.02 | 4.15 | 0.01 | ||||||||||||
| Net income (loss) | $ | 5.38 | $ | 0.34 | $ | 4.67 | $ | (1.38 | ) | |||||||
| Net income (loss) per ordinary share—diluted: | ||||||||||||||||
| Income (loss) from continuing operations | $ | 1.25 | $ | 0.31 | $ | 0.51 | $ | (1.40 | ) | |||||||
| Income from discontinued operations | 3.99 | 0.02 | 4.05 | 0.01 | ||||||||||||
| Net income (loss) | $ | 5.23 | $ | 0.33 | $ | 4.56 | $ | (1.38 | ) | |||||||
| Weighted-average shares used to compute net income (loss) per ordinary share—basic | 26,326,419 | 25,532,152 | 25,982,809 | 23,757,902 | ||||||||||||
| Weighted-average shares used to compute net income (loss) per ordinary share—diluted | 27,054,822 | 26,828,912 | 26,568,075 | 23,757,902 | ||||||||||||
Reconciliation of net loss to Adjusted EBITDA (1)
(unaudited)
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net income loss | $ | 141,556 | $ | 8,800 | $ | 121,275 | $ | (32,885 | ) | |||||||
| Income from discontinued operations | 107,821 | 414 | 107,717 | 341 | ||||||||||||
| Income (loss) from continuing operations | 33,735 | 8,386 | 13,558 | (33,226 | ) | |||||||||||
| Income tax (benefit) expense | (39,521 | ) | 3,823 | (38,339 | ) | 1,634 | ||||||||||
| Interest (income) expense, net | (214 | ) | 553 | 1,376 | 2,535 | |||||||||||
| Loss on extinguishment of debt | 2,105 | — | 2,105 | — | ||||||||||||
| Depreciation and amortization of intangible assets | 704 | 365 | 1,658 | 1,618 | ||||||||||||
| Accretion and amortization of loan fees | — | 141 | 421 | 570 | ||||||||||||
| EBITDA | (3,191 | ) | 13,268 | (19,221 | ) | (26,869 | ) | |||||||||
| Reconciling items: | ||||||||||||||||
| Share-based compensation expense | 955 | 1,542 | 4,507 | 5,671 | ||||||||||||
| Unrealized exchange (gains) losses | (900 | ) | 72 | (1,617 | ) | 686 | ||||||||||
| Change in fair value of contingent purchase price consideration | — | — | — | (3,475 | ) | |||||||||||
| Intangible assets impairment charges | 879 | 7,236 | 879 | 18,300 | ||||||||||||
| Settlement expense | 214 | 197 | 2,193 | 10,028 | ||||||||||||
| Litigation settlement income | — | (27,500 | ) | — | (27,500 | ) | ||||||||||
| Transaction expenses | 888 | — | 3,333 | — | ||||||||||||
| Adjusted EBITDA | $ | (1,155 | ) | $ | (5,185 | ) | $ | (9,926 | ) | $ | (23,159 | ) | ||||
(1) EBITDA and Adjusted EBITDA are non-GAAP measures that we calculate as net loss, adjusted for the impact of earnings or charges resulting from matters that we consider not to be indicative of our ongoing operations. We believe that these measures provide useful information to investors in understanding and evaluating our operating results in the same manner as our management and Board of Directors. Our presentation of these measures is not made in accordance with U.S. GAAP, and our computation of these measures may vary from others in the industry. Our use of these measures has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
The above table presents a reconciliation of net loss, the most comparable U.S. GAAP measure, to EBITDA and Adjusted EBITDA for each of the periods indicated.
Oxford Immunotec Global PLC
Condensed consolidated balance sheets
(unaudited)
| December 31, | ||||||||
| (in thousands, except share and per share data) | 2018 | 2017 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 192,844 | $ | 90,332 | ||||
| Accounts receivable, net | 9,158 | 6,021 | ||||||
| Other receivable | 4,500 | — | ||||||
| Inventory, net | 7,767 | 7,137 | ||||||
| Prepaid expenses and other assets | 2,539 | 2,711 | ||||||
| Current assets of discontinued operations | — | 14,281 | ||||||
| Total current assets | 216,808 | 120,482 | ||||||
| Restricted cash, non-current | 100 | 200 | ||||||
| Other receivable | 4,500 | — | ||||||
| Property and equipment, net | 7,144 | 2,764 | ||||||
| Goodwill | 2,483 | 2,483 | ||||||
| Other intangible assets, net | 61 | 1,036 | ||||||
| Deferred tax asset | 1,055 | 2,486 | ||||||
| Noncurrent assets of discontinued operations | — | 14,785 | ||||||
| Total assets | $ | 232,151 | $ | 144,236 | ||||
| Liabilities and shareholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,801 | $ | 5,552 | ||||
| Accrued liabilities | 10,343 | 7,807 | ||||||
| Settlement liability | 4,106 | 4,342 | ||||||
| Deferred income | 125 | 36 | ||||||
| Current portion of loans payable | 85 | 78 | ||||||
| Current liabilities of discontinued operations | — | 4,630 | ||||||
| Total current liabilities | 17,460 | 22,445 | ||||||
| Long-term portion of loans payable | 106 | 29,856 | ||||||
| Settlement liability | — | 3,894 | ||||||
| Other liabilities | — | 364 | ||||||
| Noncurrent liabilities of discontinued operations | — | 48 | ||||||
| Total liabilities | 17,566 | 56,607 | ||||||
| Shareholders’ equity: | ||||||||
| Ordinary shares, £0.006705 nominal value; 38,978,604 and 36,183,293 shares authorized at | ||||||||
| December 31, 2018 and 2017, respectively, 26,439,334 and 25,661,634 shares issued and outstanding at December 31, 2018 and 2017, respectively | 276 | 269 | ||||||
| Additional paid-in capital | 303,015 | 294,613 | ||||||
| Accumulated deficit | (80,266 | ) | (201,541 | ) | ||||
| Accumulated other comprehensive loss | (8,440 | ) | (5,712 | ) | ||||
| Total shareholders’ equity | 214,585 | 87,629 | ||||||
| Total liabilities and shareholders’ equity | $ | 232,151 | $ | 144,236 | ||||