Genomic Health Announces Second Quarter 2018 Financial Results and Reports Recent Business Progress

Published: Aug 02, 2018

 

Reported Record Revenue of $95.6M and Delivered 14 Percent Growth on a Pre-606 Adjusted Revenue Basis
Delivered $8.3M Profit on a GAAP Basis and $9.4M Profit on a Non-GAAP Basis
12th Consecutive Quarter of Improved Non-GAAP Profitability

REDWOOD CITY, Calif., Aug. 2, 2018 /PRNewswire/ -- Genomic Health, Inc. (NASDAQ: GHDX) today reported financial results and business progress for the quarter ended June 30, 2018.

"We delivered record results in the first half of 2018, including 14 percent growth in revenue and an $8.3 million profit in the second quarter, driven by successful execution across our entire business, enhanced operational efficiency and greater leverage, strong reimbursement for the Oncotype DX Breast Recurrence Score test including the benefit from PAMA, and increased private payor reimbursement for the Genomic Prostate Score test," said Kim Popovits, chairman of the board, chief executive officer and president of Genomic Health. "With increasing reimbursement in our U.S. urology business and the global impact of the recently published landmark TAILORx results, we are on track to deliver double-digit revenue growth and full year profitability."

Pre-606 Adjusted Product Revenue
Effective January 1, 2018, the company adopted the new ASC 606 accounting standard for revenue, using the modified retrospective method, which applies the new standard prospectively and does not impact prior years' financial statements. Since the as-reported 2017 quarterly and annual financial statements will not be restated to reflect the new accounting standard, the company has provided a supplemental financial schedule in the non-GAAP tables at the end of this press release, reflecting an estimate of revenue as if the new standard had been applied to the historical 2017 product revenue portion of revenue as of January 1, 2017, referred to herein as "pre-606 adjusted revenue."

Second Quarter and Six Months Ended June 30, 2018, Financial Results
Total revenue was $95.6 million in the second quarter of 2018, compared with pre-606 adjusted revenue of $83.8 million for the second quarter of 2017, an increase of 14 percent, and an increase of 13 percent on a non-GAAP constant currency basis. Reported revenue was $85.5 million in the second quarter of 2017.

U.S. product revenue was $81.4 million in the second quarter of 2018, compared with pre-606 adjusted revenue of $71.0 million for the second quarter of 2017, an increase of 15 percent. U.S. product reported revenue was $72.4 million in the second quarter of 2017. U.S. invasive breast revenue from Oncotype DX Breast Recurrence Score® tests was $72.5 million in the second quarter of 2018, compared with U.S. invasive breast pre-606 adjusted revenue of $64.2 million for the second quarter of 2017, an increase of 13 percent. U.S. invasive breast revenue was $65.6 million in the second quarter of 2017. U.S. prostate test revenue from Oncotype DX® Genomic Prostate Score™ (GPS™) tests was $6.7 million in the second quarter of 2018, compared with $4.1 million in the second quarter of 2017, an increase of 63 percent.

International product revenue was $14.2 million in the second quarter of 2018, compared with pre-606 adjusted revenue of $12.8 million for the second quarter of 2017, an increase of 11 percent, and a 6 percent increase on a non-GAAP constant currency basis. International product reported revenue was $13.1 million in the second quarter of 2017.

Net income was $8.3 million, or $0.23 per share on a basic and diluted basis, in the second quarter of 2018, an improvement of $11.0 million, compared with a net loss of $2.7 million, or $0.08 per share on a basic and diluted basis, in the second quarter of 2017. Operating income was $7.1 million in the second quarter of 2018, an improvement of $10.2 million, compared with an operating loss of $3.1 million in the second quarter of 2017.

On a non-GAAP basis, net income was $9.4 million in the second quarter of 2018, compared with a $2.7 million non-GAAP net loss in the second quarter of 2017. Non-GAAP operating income was $9.4 million in the second quarter of 2018, compared with a non-GAAP operating loss of $3.1 million in the second quarter of 2017.

More than 33,590 Oncotype™ test results were delivered in the second quarter of 2018, an increase of 6 percent, compared with more than 31,550 test results delivered in the same period in 2017. Oncotype DX Breast Recurrence Score tests delivered in the U.S. grew 4 percent in the second quarter of 2018, compared with the same period in 2017. Oncotype DX GPS tests delivered in the U.S. grew 32 percent in the second quarter of 2018, compared with the same period in 2017. The number of international tests delivered in the second quarter of 2018 was consistent with the same period in 2017 and represented approximately 23 percent of total test volume in the quarter.

Total revenue for the six months ended June 30, 2018, was $188.2 million, compared with pre-606 adjusted revenue of $166.1 million for the same period in 2017, an increase of 13 percent, with a similar increase of 13 percent on a non-GAAP constant currency basis. Reported revenue was $169.5 million for the six months ended June 30, 2017.

International product revenue was $27.9 million for the six months ended June 30, 2018, compared with pre-606 adjusted revenue of $25.9 million for the six months ended June 30, 2017, an increase of 8 percent, and a 4 percent increase on a non-GAAP constant currency basis. International product reported revenue was $26.5 million for the six months ended June 30, 2017.

Net income was $4.5 million for the six months ended June 30, 2018, an improvement of $8.0 million, compared with a net loss of $3.5 million for the six months ended June 30, 2017. Operating income increased to $2.7 million for the six months ended June 30, 2018, an improvement of $8.7 million, compared with an operating loss of $6.0 million for the six months ended June 30, 2017.

Non-GAAP net income was $14.0 million for the first six months ended June 30, 2018, compared with a $5.5 million non-GAAP net loss for the six months ended June 30, 2017. Non-GAAP operating income was $13.6 million for the first six months ended June 30, 2018, compared with a non-GAAP operating loss of $6.0 million for the same period in 2017.

Cash and cash equivalents and short-term marketable securities at June 30, 2018 were $152.9 million, which included the fair value of the company's investment in marketable equity securities of $3.7 million, compared with $129.6 million at December 31, 2017, which included the fair value of the company's investment in marketable securities of $3.5 million.

2018 Financial Outlook

The company is confirming guidance for the full year ending December 31, 2018 under ASC 606 revenue recognition standards:

                                  Low       High
                                  ---       ----

    Revenue(1)                         $366       $382

    Revenue Growth(2)                   10%       15%


    Net Income (GAAP) (1)                $0         $5

    GAAP Basic EPS (3)                $0.00      $0.14


    Net Income (Non-GAAP) (1) (4)       $14        $20

    Non-GAAP Basic EPS (3)            $0.39      $0.56

    (1)            In millions.

    (2)             The outlook for 10% to 15% revenue
                    growth in 2018 represents
                    management's estimates for 2018
                    versus 2017 reported revenues
                    adjusted to reflect the impact of
                    ASC 606 revenue recognition rules,
                    which were effective January 1,
                    2018. Under the new rules, the
                    company will report most
                    uncollectible balances as a
                    reduction in net revenues;
                    historically, certain uncollectible
                    amounts were classified as bad debt
                    expense and were approximately 2.5%
                    of revenue and classified within
                    selling, general and administrative
                    expenses. The company does not
                    expect ASC 606 to impact net income
                    or EPS.

    (3)             Based on 36 million estimated shares
                    outstanding.

    (4)             Non-GAAP net income excludes
                    charges for personnel reductions
                    and asset write-offs associated
                    with product cessation, and
                    clinical and commercial development
                    milestone payments.

Recent Business Highlights

  • Results from the landmark ECOG-ACRIN Cancer Research Group TAILORx study were published in The New England Journal of Medicine and presented in the Plenary Session at the American Society of Clinical Oncology (ASCO) Annual Meeting. Results demonstrated that the Oncotype DX Breast Recurrence Score test identified 70 percent of early-stage breast cancer patients who receive no benefit from chemotherapy and can be effectively treated with endocrine therapy alone. Additionally, the trial established that chemotherapy may provide life-saving benefit to 30 percent of patients.
  • Following the TAILORx study publication, the U.K.'s National Institute for Health and Care Excellence (NICE) confirmed that it has requested that the External Assessment Group (EAG) review the results before finalizing its updated guidance on tumor profiling tests, and the German Federal Joint Committee (G-BA) commissioned the Institute for Quality and Efficiency in Health Care (IQWiG) to evaluate the new evidence before making a final coverage decision in Germany.
  • Established public coverage with the province of New Brunswick for the use of the Oncotype DX Breast Recurrence Score test in early-stage breast cancer patients with node-negative disease, increasing the total number of covered lives in Canada to more than 35 million. With this decision, all 10 provinces in Canada now cover the test.
  • Multiple private insurers, including a top five national payor, established new coverage for the Oncotype DX GPS test, bringing the total number of U.S. covered lives to more than 92 million, including Medicare.
  • Results from two studies demonstrating the positive impact of the Oncotype DX GPS test on risk assessment for better treatment decisions in clinically low-risk prostate cancer patients in real-world practice were presented at the 2018 American Urological Association (AUA) Annual Meeting.
  • JAMA Oncology published a study that demonstrated that the Oncotype DX AR-V7 Nucleus Detect™ test can identify patients with metastatic castration-resistant prostate cancer (mCRPC) who may live longer if they switch from targeted androgen receptor-signaling inhibitor (ARSi) therapy, such as enzalutamide and abiraterone, to taxane-based chemotherapy.
  • The company discontinued its early-stage development of the IsoPSA assay and terminated its milestone-based licensing agreement with Cleveland Diagnostics.

Non-GAAP Disclosure
The company makes reference in this press release to "non-GAAP operating income (loss)," which excludes 2018 expenses resulting from the restructuring charges for the cessation of the Oncotype SEQ® Liquid Select™ test product development and commercialization activities in the first quarter of 2018, the expenses for a milestone payment to Biocartis N.V., and the cessation of its collaboration with Cleveland Diagnostics in the second quarter of 2018. Additionally, the company references "non-GAAP net income (loss)," which also excludes fair value adjustments related to its collaborations with Biocartis, Epic Sciences and Cleveland Diagnostics in the first and second quarters of 2018, and the gain on sale of marketable equity securities in the first quarter of 2017. The company believes that excluding these items and their related tax effects from its financial results reflects operating results that are more indicative of the company's ongoing operating performance while improving comparability to prior periods, and, as such, may provide investors with an enhanced understanding of the company's past financial performance and prospects for the future. The company also considers the impact of foreign currency exchange rates on its global business as described in the constant currency table accompanying this press release. The company's management uses such non-GAAP measures internally to evaluate and assess its core operations and to make ongoing operating decisions. This information is not intended to be considered in isolation or as a substitute for income (loss) from operations or net income (loss) information prepared in accordance with GAAP. An explanation and reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the tables accompanying this press release.

Conference Call Details
To access the live conference call today, August 2, at 4:30 p.m. Eastern Time via phone, please dial (877) 303-7208 from the United States and Canada, or +1 (224) 357-2389 internationally. The conference call ID is 2089377. Please dial in approximately ten minutes prior to the start of the call. To access the live and subsequently archived webcast of the conference call, go to the Investor Relations section of the company's website at http://investor.genomichealth.com. Please connect to the website at least 15 minutes prior to the presentation to allow for any software download that may be necessary.

About Genomic Health
Genomic Health, Inc. (NASDAQ: GHDX) is the world's leading provider of genomic-based diagnostic tests that help optimize cancer care, including addressing the overtreatment of the disease, one of the greatest issues in healthcare today. With its Oncotype IQ® Genomic Intelligence Platform, the company is applying its world-class scientific and commercial expertise and infrastructure to lead the translation of clinical and genomic big data into actionable results for treatment planning throughout the cancer patient journey, from diagnosis to treatment selection and monitoring. The Oncotype IQ portfolio of genomic tests and services currently consists of the company's flagship line of Oncotype DX® gene expression tests that have been used to guide treatment decisions for more than 900,000 cancer patients worldwide. Genomic Health is expanding its test portfolio to include additional liquid- and tissue-based tests, including the recently launched Oncotype DX® AR-V7 Nucleus Detect™ test. The company is based in Redwood City, California, with international headquarters in Geneva, Switzerland. For more information, please visit www.GenomicHealth.com and follow the company on Twitter: @GenomicHealth, Facebook, YouTube and LinkedIn.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the company's beliefs regarding its future performance, including guidance, the company's beliefs regarding its revenue growth for the remainder of 2018 and the drivers of growth; the commercial performance of its tests; the favorable impact of TAILORx results on revenue in 2018; the attributes and focus of the company's product pipeline; the ability of any potential tests the company may develop to optimize cancer treatment; the ability of the company to develop and commercialize and collaborate with third parties to commercialize additional tests in the future; the ability of the company to increase worldwide access through the development of in vitro diagnostic tests; expectations regarding additional public and private reimbursement coverage for our tests worldwide and the ability of additional coverage to result in additional revenue; and the company's methodology for calculating financial performance under the new ASC 606 accounting standard as compared against prior periods under the previously applicable ASC 605 accounting standard. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to: the risk that the company may not achieve expected revenue growth for the remainder of 2018; the risks and uncertainties associated with the regulation of the company's tests; the results of clinical studies and their impact on reimbursement and adoption; the applicability of clinical study results to actual outcomes; the company's ability to develop and commercialize new tests and expand into new markets domestically and internationally; the commercial success of any collaborations entered into by the company; the risk that the company may not obtain or maintain sufficient levels of reimbursement, domestically or abroad, for its existing tests and any future tests it may develop; the risks of competition; unanticipated costs or delays in research and development efforts; the company's ability to obtain capital when needed and the other risks set forth in the company's filings with the Securities and Exchange Commission, including the risks set forth in the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018. These forward-looking statements speak only as of the date hereof. Genomic Health disclaims any obligation to update these forward-looking statements.

NOTE: The Genomic Health logo, Oncotype, Oncotype DX, Breast Recurrence Score, DCIS Score, Oncotype SEQ, Liquid Select, Genomic Prostate Score, GPS, Oncotype DX AR-V7 Nucleus Detect, and Oncotype IQ are trademarks or registered trademarks of Genomic Health, Inc. All other trademarks and service marks are the property of their respective owners.

                                                                         GENOMIC HEALTH, INC.

                                                           Condensed Consolidated Statements of Operations

                                                               (In thousands, except per share amounts)

                                                                             (Unaudited)


                                 Three Months Ended               Six Months Ended

                                      June 30,                      June 30,
                                      --------                      --------

                                               2018                 2017                                   2018 2017
                                               ----                 ----                                   ---- ----

    REVENUES:

    Product revenues -United
     States                                         $81,440                                            $72,409       160,307  $142,998

    Product revenues -Outside
     of the United States                            14,179                                             13,078        27,937    26,469
                                                     ------                                             ------        ------    ------

    Total revenues                                   95,619                                             85,487       188,244   169,467


    OPERATING EXPENSES (1):

    Cost of product revenues                         14,383                                             13,798        33,116    27,471

    Research and development                         15,312                                             15,781        32,119    30,655

    Selling and marketing                            40,337                                             40,656        82,092    82,163

    General and administrative                       18,487                                             18,395        38,205    35,146
                                                     ------                                             ------        ------    ------

    Total operating expenses                         88,519                                             88,630       185,532   175,435
                                                     ------                                             ------       -------   -------


    Income (loss) from
     operations                                       7,100                                            (3,143)        2,712   (5,968)


    Interest income                                     400                                                206           817       364

    Unrealized gain on
     investments, net                                 1,283                                                  -        1,410         -

    Gain on sales of marketable
     securities                                           -                                                 -            -    2,807

    Other income (expense), net                       (248)                                               357            61       452
                                                       ----                                                ---           ---       ---

    Income (loss) before income
     taxes                                            8,535                                            (2,580)        5,000   (2,345)

    Income tax expense                                  218                                                159           458     1,200
                                                        ---                                                ---           ---     -----

    Net income (loss)                                $8,317                                           $(2,739)       $4,542  $(3,545)
                                                     ======                                            =======        ======   =======

    Basic net income (loss) per
     share                                            $0.23                                            $(0.08)        $0.13   $(0.10)
                                                      =====                                             ======         =====    ======

    Diluted net income (loss)
     per share                                        $0.23                                            $(0.08)        $0.12   $(0.10)
                                                      =====                                             ======         =====    ======

    Shares used in computing
     basic net income (loss) per
     share                                           35,544                                             34,428        35,372    34,219
                                                     ======                                             ======        ======    ======

    Shares used in computing
     diluted net income (loss)
     per share.                                      36,716                                             34,428        36,360    34,219
                                                     ======                                             ======        ======    ======


    (1)              Included in operating expenses for the three months
                     ended June 30, 2018, were non-cash charges of $8.3
                     million, including $5.2 million of stock-based
                     compensation expense and $3.1 million of depreciation
                     and amortization expenses, compared with non-cash
                     charges for the same period in 2017 of $8.2 million,
                     including $5.2 million of stock-based compensation
                     expense and $3.0 million of depreciation and
                     amortization expenses.


    (2)              Included in operating expenses for the six months ended
                     June 30, 2018, were non-cash charges of $16.5
                     million, including $10.3 million of stock-based
                     compensation expense and $6.2 million of depreciation
                     and amortization expenses, compared with non-cash
                     charges for the same period in 2017 of $15.7 million,
                     including $10.3 million of stock-based compensation
                     expense and $5.4 million of depreciation and
                     amortization expenses.

 

                                                GENOMIC HEALTH, INC.

                                       Condensed Consolidated Balance Sheets

                                                   (In thousands)


                                   As of                                     As of

                                 June 30,                                December 31,

                                       2018                                       2017
                                       ----                                       ----

                                (Unaudited)                                       (1)


    Cash and cash equivalents                                  $53,847                  $45,518

    Short-term marketable
     securities (2)                                             99,098                   84,057

    Accounts receivable, net                                    48,982                   31,161

    Prepaid expenses and other
     current assets                                             13,449                   13,524
                                                                ------                   ------

    Total current assets                                       215,376                  174,260


    Property and equipment, net                                 40,054                   46,440

    Other assets                                                13,586                   10,917
                                                                ------                   ------

    Total assets                                              $269,016                 $231,617
                                                              ========                 ========


    Accounts payable                                            $5,192                     $156

    Accrued expenses and other
     current liabilities                                        34,795                   39,360

    Other liabilities                                            3,826                    3,810

    Stockholders' equity                                       225,203                  188,291
                                                               -------                  -------

    Total liabilities and
     stockholders' equity                                     $269,016                 $231,617
                                                              ========                 ========


    (1)              The condensed consolidated balance sheet at December
                     31, 2017, has been derived from the audited
                     consolidated financial statements at that date
                     included in the company's Annual Report on Form 10-K
                     for the fiscal year ended December 31, 2017.


    (2)              Included in short-term marketable securities as of
                     June 30, 2018, and December 31, 2017, is $3.7 million
                     and $3.5 million, respectively, of corporate equity
                     securities, representing the company's investment in
                     Biocartis N.V.

 

                                                                         GENOMIC HEALTH, INC.

                                                                   GAAP to Non-GAAP Reconciliations

                                                                            (In thousands)

                                                                              (Unaudited)


                                        Three Months Ended          Six Months Ended

                                             June 30,                 June 30,
                                             --------                 --------

                                                      2018            2017                               2018 2017
                                                      ----            ----                               ---- ----

    Income (loss) from operations
     reconciliation:

    GAAP income (loss) from operations                      $7,100                                  $(3,143)         $2,712   $(5,968)

    Cost of product revenues -
     cessation of Oncotype SEQ                                (57)                                        -          3,519          -

    Research and development -
     cessation of Oncotype SEQ                                (23)                                        -          3,039          -

    Selling and marketing - cessation
     of Oncotype SEQ                                            69                                         -          1,064          -

    General and administrative -
     cessation of Oncotype SEQ                                   -                                        -            909          -

    Research and development -
     milestone payment Biocartis                               990                                         -            990          -

    Research and development -
     Cleveland Diagnostics cancellation
     of collaboration agreement                              1,329                                         -          1,329          -
                                                             -----                                       ---          -----        ---

    Non-GAAP income (loss) from
     operations                                             $9,408                                  $(3,143)        $13,562   $(5,968)
                                                            ======                                   =======         =======    =======


    Net income (loss) reconciliation:

    GAAP net income (loss)                                  $8,317                                  $(2,739)         $4,542   $(3,545)

    Cost of product revenues -
     cessation of Oncotype SEQ                                (57)                                        -          3,519          -

    Research and development -
     cessation of Oncotype SEQ                                (23)                                        -          3,039          -

    Selling and marketing - cessation
     of Oncotype SEQ                                            69                                         -          1,064          -

    General and administrative -
     cessation of Oncotype SEQ                                   -                                        -            909          -

    Research and development -
     milestone payment Biocartis                               990                                         -            990          -

    Research and development -
     Cleveland Diagnostics cancellation
     of collaboration agreement                              1,329                                         -          1,329          -

    Other income - Biocartis -change
     in fair value                                           (112)                                        -          (239)         -

    Other income - Epic Sciences -
     revaluation of investment                             (1,171)                                        -        (1,171)

    Other income - Cleveland
     Diagnostics -note discount
     accretion                                                  62                                         -              -         -

    Non-recurring gain on sale of
     marketable securities                                       -                                        -              -   (2,807)

    Reduced income tax expense from the
     sale of marketable securities                               -                                        -                      821
                                                               ---                                      ---                      ---

    Non-GAAP net income (loss)                              $9,404                                  $(2,739)        $13,982   $(5,531)
                                                            ======                                   =======         =======    =======

 

                                                                                  GENOMIC HEALTH, INC.

                                                                       Non-GAAP Constant Currency Reconciliations

                                                                                     (In thousands)

                                                                                       (Unaudited)


                                            Three Months Ended           Six Months Ended

                                                 June 30,                  June 30,
                                                 --------                  --------

                                                          2018             2017                                       2018 2017
                                                          ----             ----                                       ---- ----

    Constant currency reconciliations:

    International Revenue:

    International revenue (1)                                  $14,179                                            $12,816         $27,937  $25,940

       Currency exchange adjustments (2)                         (613)                                                 -        (1,089)       -
                                                                  ----                                                ---         ------      ---

    Non-GAAP International revenue                             $13,566                                            $12,816         $26,848  $25,940
                                                               =======                                            =======         =======  =======

       Period over period constant currency
        increase                                                   750                                                               908

       Period over period constant currency
        increase percentage                                         6%                                                               4%


    Total Revenue:

    Total revenue (1)                                          $95,619                                            $83,782        $188,244 $166,088

       Currency exchange adjustments (2)                         (613)                                                 -        (1,089)       -
                                                                  ----                                                ---         ------      ---

    Non-GAAP total revenue                                     $95,006                                            $83,782        $187,155 $166,088
                                                               =======                                            =======        ======== ========

       Period over period constant currency
        increase                                                11,224                                                            21,068

       Period over period constant currency
        increase percentage                                        13%                                                              13%


    (1)              For the three and six months ended June 30, 2018,
                     International revenue and total revenue is based on
                     GAAP under ASC 606 and for the three and six months
                     ended June 30, 2017, International revenue and total
                     revenue is based on the Pre-606 Adjusted revenue on
                     the following table.


    (2)              Constant currency is a non-GAAP measure that is
                     calculated by comparing the company's quarterly
                     average foreign exchange rates for the three months
                     ended March 31, 2018, and 2017. The constant currency
                     disclosures take current local currency revenue and
                     translate it into U.S. dollars based upon the foreign
                     currency exchange rates used to translate the local
                     currency revenue for the applicable comparable period
                     in the prior year, rather than the actual exchange
                     rates in effect during the current period. It does not
                     include any other effect of changes in foreign
                     currency rates on the company's results or business.

 

                                                            GENOMIC HEALTH, INC.

                                               Non-GAAP Supplemental Financial Information (1)

                                                               (In thousands)

                                                                 (Unaudited)


                                    Three Months Ended                                         Six Months Ended

                                          June 30,                                                 June 30,

                                                  2017                                                      2017
                                                  ----                                                      ----

    U.S. Product revenue, under ASC
     605:

    Invasive breast test revenue                                                      $65,629                    $130,467

    Prostate test revenue                                                               4,124                       7,439

    All other test revenue                                                              2,656                       5,092
                                                                                        -----                       -----

    Total U.S. product revenue                                                         72,409                     142,998
                                                                                       ------                     -------

    Adjustment related to new ASC
     606 accounting standard:

    Invasive breast test revenue                                                        1,432                       2,838

    Prostate test revenue                                                                   -                          -

    All other test revenue                                                                  -                          -
                                                                                          ---                        ---

    Total ASC 606 adjustment to
     U.S. product revenue                                                               1,432                       2,838
                                                                                        -----                       -----

    Pre-606 Adjusted U.S. Product
     revenue, net of adjustments:

    Invasive breast test revenue                                                       64,197                     127,629

    Prostate test revenue                                                               4,124                       7,439

    All other test revenue                                                              2,656                       5,091
                                                                                        -----                       -----

    Total Pre-606 Adjusted U.S.
     product revenue                                                                  $70,977                    $140,160
                                                                                      =======                    ========


    International product revenue,
     under ASC 605:

    Invasive breast test revenue                                                      $12,888                     $26,108

    Prostate test revenue                                                                  30                          65

    All other test revenue                                                                160                         296
                                                                                          ---                         ---

    Total International product
     revenue                                                                           13,078                      26,469
                                                                                       ------                      ------

    Adjustment related to new ASC
     606 accounting standard:

    Invasive breast test revenue                                                          273                         541

    Prostate test revenue                                                                   -                          -

    All other test revenue                                                                  -                          -
                                                                                          ---                        ---

    Total ASC 606 adjustment to
     International product revenue                                                        273                         541
                                                                                          ---                         ---

    Pre-606 Adjusted International
     product revenue, net of
     adjustments:

    Invasive breast test revenue                                                       12,615                      25,567

    Prostate test revenue                                                                  30                          65

    All other test revenue                                                                160                         296
                                                                                          ---                         ---

    Total Pre-606 Adjusted
     International product revenue                                                    $12,805                     $25,928
                                                                                      =======                     =======


    Total Product Revenue, under
     ASC 605:

    Invasive breast test revenue                                                      $78,517                    $156,575

    Prostate test revenue                                                               4,154                       7,504

    All other test revenue                                                              2,816                       5,388
                                                                                        -----                       -----

    Total product revenue                                                              85,487                     169,467
                                                                                       ------                     -------

    Adjustment related to new ASC
     606 accounting standard:

    Invasive breast test revenue                                                        1,705                       3,379

    Prostate test revenue                                                                   -                          -

    All other test revenue                                                                  -                          -
                                                                                          ---                        ---

    Total ASC 606 adjustment to
     total product revenue                                                              1,705                       3,379
                                                                                        -----                       -----

    Pre-606 Adjusted Total product
     revenue, net of adjustments:

    Invasive breast test revenue                                                       76,812                     153,196

    Prostate test revenue                                                               4,154                       7,504

    All other test revenue                                                              2,816                       5,388
                                                                                        -----                       -----

    Total Pre-606 Adjusted total
     product revenue                                                                  $83,782                    $166,088
                                                                                      =======                    ========

 

              GENOMIC HEALTH, INC.

        Non-GAAP Supplemental Financial
                 Information (1)

                 (In thousands)

                  (Unaudited)


    (1)                                 Effective January 1, 2018, the
                                        company adopted new accounting
                                        guidance ASC Topic 606 ("ASC
                                        606"), related to revenue from
                                        contracts with customers, using
                                        a modified retrospective method.
                                        Since the 2017 annual and
                                        quarterly financial statements
                                        will not be restated to reflect
                                        ASC 606, the company is
                                        providing this supplemental
                                        schedule to present 2017 revenue
                                        reflecting an estimate as if ASC
                                        606 had been applied effective
                                        January 1, 2017. This Pre-606
                                        adjusted product revenue
                                        information is intended to
                                        provide investors with a basis
                                        for considering the potential
                                        directional impact the adoption
                                        of ASC 606 might have on the
                                        company's financial information
                                        that will be reported in 2018.
                                        The Pre-606 adjusted product
                                        revenue information is provided
                                        only for illustrative purposes
                                        and does not constitute a
                                        restatement of the company's
                                        historical financial statements
                                        previously filed with the SEC,
                                        which should be considered by
                                        investors in their entirety as
                                        filed.

GHDX-F

 

 

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SOURCE Genomic Health, Inc.

Company Codes: NASDAQ-NMS:GHDX

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