On February 28, 2023 Fulgent Genetics, Inc. (NASDAQ: FLGT) ("Fulgent", or the "Company"), a technology-based company with a well-established clinical diagnostic business and a therapeutic development business, reported financial results for its fourth quarter and full year ended December 31, 2022 (Press release, Fulgent Genetics, FEB 28, 2023, View Source [SID1234627913]).
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Fourth Quarter 2022 Results:
Total Revenue of $67.7 million
Core Revenue1 grew 97% year-over-year to $55.0 million
GAAP loss of $23.8 million, or $0.80 per share
Non-GAAP loss of $14.2 million, or $0.48 per share
Adjusted EBITDA loss of $15.1 million
Cash from operations of $33.2 million
Cash, cash equivalents, and investments in marketable securities, including investments pending settlement, of $872.0 million as of December 31, 2022
Repurchased approximately 815,000 shares of common stock at an aggregate cost of $29.1 million under the stock repurchase program announced in March 2022
Full Year 2022 Results:
Total Revenue of $619.0 million
Core Revenue1 grew 95% year-over-year to $181.5 million
GAAP income of $143.4 million, or $4.63 per share
Non-GAAP income of $179.4 million, or $5.79 per share
Adjusted EBITDA of $257.1 million
Cash from operations of $253.5 million
Repurchased over 1.8 million shares of common stock at an aggregate cost of $74.3 million under the stock repurchase program announced in March 2022
Note:
1) Core Revenue excludes revenue from COVID-19 testing products and services including COVID-19 NGS testing revenue.
Non-GAAP income (loss), non-GAAP income (loss) per share, and adjusted EBITDA income (loss) are described below under "Note Regarding Non-GAAP Financial Measures" and are reconciled to the most directly comparable GAAP financial measure, GAAP income (loss), in the accompanying tables.
Ming Hsieh, Chairman of the Board and Chief Executive Officer, said, "2022 was a transitional and transformative year for Fulgent, as we integrated the acquisitions of Inform Diagnostics and CSI Laboratories and acquired the Pharma business. As the COVID-19 pandemic continues to have a lesser impact, we are excited about the growth and momentum in our core business, with strength across our 3 business areas – precision diagnostics, anatomic pathology, and pharma services – and momentum in oncology and reproductive health, particularly with the expansion of oncologic carrier screening through Beacon787, also announced today. We have reorganized our Board of Directors and are on the path to transforming Fulgent from a genomic diagnostic service business into a fully integrated precision medicine company, focusing on oncology. In the meantime, we have a long runway of opportunity in the core business and see diagnostics as a dependable source of revenue and growth for Fulgent in the years ahead."
Paul Kim, Chief Financial Officer, said, "We are pleased with our results in 2022 and the trajectory of our core business. While the revenue profile of the Company without COVID testing revenue has implications for our bottom line, I believe we are poised for sustainable growth in the core business and to continue to generate cash. We are well positioned to execute our strategy while maintaining flexibility to capitalize on additional acquisition and strategic investment opportunities in the future."
Outlook:
For the first quarter of 2023, Fulgent expects:
Total Revenue of approximately $56.0 million
For the full year 2023, Fulgent expects:
Total Revenue of approximately $240.0 million
GAAP loss of approximately $2.50 per share
Non-GAAP loss of approximately $1.25 per share
Conference Call Information
Fulgent will host a conference call for the investment community today at 4:30 PM ET (1:30 PM PT) to discuss its fourth quarter and full year 2022 results. The call may be accessed through a live audio webcast in the Investor Relations section of the Company’s website, View Source An audio replay will be available at the same location.
Note Regarding Non-GAAP Financial Measures
Certain information set forth in this press release, including non-GAAP income (loss), non-GAAP income (loss) per share, and adjusted EBITDA income (loss) are non-GAAP financial measures. Fulgent believes this information is useful to investors because it provides a basis for measuring the performance of the Company’s business, excluding certain income or expense items that management believes are not directly attributable to the Company’s operating results. Fulgent defines non-GAAP income (loss) as net income (loss) calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP, plus amortization of intangible assets, plus restructuring costs, plus acquisition-related costs, including banking fees and legal fees associated with the recent acquisitions, plus equity-based compensation expense, plus or minus the non-GAAP tax effect, and plus or minus other charges or gains, as identified, that management believes are not representative of the Company’s operations. The non-GAAP tax effect is calculated by applying the statutory corporate tax rate on the amortization of intangible assets, restructuring costs, acquisition-related costs, and equity-based compensation expense. Fulgent defines adjusted EBITDA income (loss) as GAAP income (loss) plus or minus interest (expense) income, plus or minus provisions (benefits) for income taxes, plus restructuring costs, plus acquisition-related costs, plus equity-based compensation expense, plus depreciation and amortization, and plus or minus other charges or gains, as identified, that management believes are not representative of the Company’s operations. Fulgent may continue to incur expenses similar to the items added to or subtracted from GAAP income (loss) to calculate non-GAAP income (loss) and adjusted EBITDA income (loss); accordingly, the exclusion of these items in the presentation of these non-GAAP financial measures should not be construed as an implication that these items are unusual, infrequent or non-recurring. Management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measure of net income (loss) in evaluating the Company’s operating performance. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in conformity with GAAP, and non-GAAP financial measures as reported by Fulgent may not be comparable to similarly titled metrics reported by other companies.