On September 8, 2022 Champions Oncology, Inc. (Nasdaq: CSBR), a leading global technology-enabled biotech that is transforming drug discovery through innovative AI-driven pharmaco-pheno-multiomic integration, reported its financial results for its first quarter of fiscal 2023, ended July 31, 2022 (Press release, Champions Oncology, SEP 8, 2022, View Source [SID1234619305]).
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First Quarter and Recent Highlights:
•Record quarterly revenue of $13.7 million, an increase of 22% year over year
•Adjusted EBITDA of $450,000
•Record quarterly bookings
•Series of antibody hits established in Alloy Therapeutics partnership
Ronnie Morris, CEO of Champions, commented, "We continued to deliver on our long-term vision in the first quarter by growing our service business while investing in transformative opportunities. Our bookings reached a quarterly record high and we achieved an important milestone in our target discovery program."
David Miller, CFO of Champions, added, "We began our first quarter of fiscal 2023 with another quarterly revenue record reaching $13.7 million, representing 22% year over year growth. Our adjusted EBITDA, which excludes stock-based compensation and depreciation expenses, was $450,000 and we anticipate EBITDA expansion over the course of the year."
First Fiscal Quarter Financial Results
Total revenue for the first quarter of fiscal 2023, was a record $13.7 million, an increase of 22.1%, compared to $11.3 million for the same period last year. The increase in revenue was due to continued
Exhibit 99.1
demand for our services, leading to larger pharmacology studies in both our in-vivo and ex-vivo platforms. Total costs and operating expenses for the first quarter of fiscal 2023 were $14.0 million compared to $11.4 million for the first quarter of fiscal 2022, an increase of $2.6 million or 22.8%.
For the first quarter of fiscal 2023, Champions reported a loss from operations of $284,000, including $206,000 in stock-based compensation and $528,000 in depreciation and amortization expenses, compared to a loss from operations of $175,000, inclusive of $280,000 in stock-based compensation and $317,000 in depreciation and amortization expenses, in the first quarter of fiscal 2021. Excluding stock-based compensation, depreciation and amortization expenses, Champions reported adjusted EBITDA for the quarter of $450,000 compared to $422,000 in the prior year period.
Cost of oncology solutions was $7.1 million for the three-months ended July 31, 2022, an increase of $1.7 million, or 30.7% compared to $5.4 million for the three-months ended July 31, 2021. The increase in cost of sales was primarily from compensation, mice and lab supply expenses for pharmacology studies and an increase in compensation expense for our SaaS platform. For the three- months ended July 31, 2022, gross margin was 49% compared to 52% for the three-months ended July 31, 2021. The lower margin resulted from an increase in study related expenses in advance of the revenue recognition and from SaaS expenses that were capitalized in the prior year period.
Research and development expense for the three-months ended July 31, 2022 was $2.9 million, an increase of $583,000 or 25.3%, compared to $2.3 million for the three-months ended July 31, 2021. The increase was primarily from compensation and lab supply expenses related to the investment in our therapeutic discovery platform. Sales and marketing expense for the three-months ended July 31, 2022 was $1.7 million, an increase of $118,000, or 7.5%, compared to $1.6 million for the three-months ended July 31, 2021. The increase was primarily due to compensation expense. General and administrative expense for the three-months ended July 31, 2022 was $2.4 million, an increase of $244,000, or 11.3%, compared to $2.2 million for the three-months ended July 31, 2021. The increase was primarily due to depreciation and amortization expenses and IT related costs to support the growth of the business.
Net cash used in operating activities was $195,000 for the three-months ended July 31, 2022. The cash utilized in operating activities was primarily due to a reduction in our accounts payable and accrued liability balances during the ordinary course of business. Net cash used in investing activities was $754,000 and primarily for the purchase of lab and computer equipment.
The Company ended the quarter with a strong cash position of $8.1 million. The Company has no debt.
Conference Call Information:
The Company will host a conference call today at 4:30 p.m. EDT (1:30 p.m. PDT) to discuss its first quarter financial results. To participate in the call, please call 888-506-0062 (Domestic) or 973-528-0011 (International) and enter the access code 618777, or provide the verbal reference "Champions Oncology".
Full details of the Company’s financial results will be available by Monday, September 12, 2022 in the Company’s Form 10-Q at www.championsoncology.com.
* Non-GAAP Financial Information
Exhibit 99.1
See the attached Reconciliation of GAAP net income (loss) to Non-GAAP net income for an explanation of the amounts excluded to arrive at Non-GAAP net income and related Non-GAAP earnings per share amounts for the three months ended July 31, 2022 and 2021. Non-GAAP financial measures provide investors and management with supplemental measures of operating performance and trends that facilitate comparisons between periods before and after certain items that would not otherwise be apparent on a GAAP basis. Certain unusual or non-recurring items that management does not believe affect the Company’s basic operations do not meet the GAAP definition of unusual or non-recurring items. Non-GAAP net income and Non-GAAP earnings per share are not, and should not, be viewed as a substitute for similar GAAP items. Champions defines Non-GAAP dilutive earnings per share amounts as Non-GAAP net earnings divided by the weighted average number of diluted shares outstanding. Champions’ definition of Non-GAAP net earnings and Non-GAAP diluted earnings per share may differ from similarly named measures used by other companies.