CareDx Reports Fourth Quarter and Full Year 2020 Results

CareDx, Inc., a leading precision medicine company focused on the discovery, development, and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers, reported financial results for the fourth quarter and full year ended December 31, 2020.

SOUTH SAN FRANCISCO, Calif., Feb. 24, 2021 (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 fourth quarter and full year ended December 31, 2020.

Recent Highlights:

  • Achieved total revenue of $58.6 million for the three months ended December 31, 2020, increasing 64% over prior year fourth quarter
  • Delivered record full year revenue of $192.2 million, an increase of 51% compared with full year 2019 revenue
  • Provided over 25,000 patient results in the fourth quarter and approximately 79,000 patient results in 2020
  • Generated GAAP net loss of $3.5 million, non-GAAP net income of $4.3 million, and positive adjusted EBITDA of $4.9 million in the fourth quarter
  • As of December 31, 2020, over 55 U.S.-based transplant centers have adopted an AlloSure Kidney testing protocol
  • Received Medicare reimbursement pricing for AlloSure Heart

"Our record fourth quarter result was the culmination of an extraordinary year for CareDx," said Reg Seeto, President and Chief Executive Officer of CareDx. "2020 was transformational for CareDx, because we extended our leadership position in transplant centers through RemoTraC, implemented and validated the next wave of innovation through our multi-modality platforms, HeartCare and KidneyCare, and accelerated the direct to patient journey through AlloCare. We look forward to 2021 and beyond as we invest in advancing our robust pipeline and continue our mission to serve transplant patients and improve outcomes."

Fourth Quarter 2020 Financial Results

Revenue for the three months ended December 31, 2020 was $58.6 million, an increase of 64% compared with $35.8 million in the fourth quarter of 2019. Testing services revenue for the fourth quarter was $50.3 million, compared with $29.1 million in the same period of 2019. Product revenue in the three months ended December 31, 2020 was $5.9 million, compared to $5.1 million in the same period of 2019. Digital and other revenue for the fourth quarter of 2020 was $2.4 million.

For the fourth quarter of 2020, net loss was $3.5 million compared to a net loss of $4.8 million in the same period of 2019. Basic and diluted net loss per share was $0.07 in the fourth quarter of 2020, compared to basic and diluted net loss per share of $0.11 in the fourth quarter of 2019.

Non-GAAP net income was $4.3 million in the fourth quarter of 2020 compared to a $1.6 million non-GAAP net income in the fourth quarter of 2019. Basic and diluted non-GAAP net income per share was $0.09 and $0.08 respectively, in the fourth quarter of 2020, compared to a basic and diluted non-GAAP net income per share of $0.04 in the fourth quarter of 2019.

Adjusted EBITDA for the fourth quarter of 2020 was a gain of $4.9 million, compared to an adjusted EBITDA gain of $1.5 million in the fourth quarter of 2019.

Net cash provided by operating activities in the fourth quarter of 2020 was $7.2 million compared to $1.1 million net cash used in operating activities in the comparative 2019 period. Cash, cash equivalents and marketable securities were $224.7 million as of December 31, 2020.

Full Year 2020 Financial Results

Revenue for the full year ended December 31, 2020 was $192.2 million, an increase of 51% compared with $127.1 million in full year 2019 revenue. Testing revenue for the year ended December 31, 2020 was $163.6 million, compared to $104.6 million in the same period of 2019. Product revenue for the full year 2020 was $19.3 million, compared to $18.3 million in 2019. Digital and other revenue for the full year 2020 was $9.3 million.

Net loss for the full year ended December 31, 2020 was $18.7 million compared to a net loss of $22.0 million in 2019. Basic and diluted net loss per share for the full year ended December 31, 2020 were $0.40 compared to a basic and diluted net loss per share of $0.52 in the full year 2019.

Non-GAAP net income was $11.3 million for the full year ended December 31, 2020 compared to a non-GAAP net income of $4.6 million in 2019. Non-GAAP basic and diluted net income per share were $0.24 and $0.23, respectively, in the full year 2020, compared to basic and diluted net income per share of $0.11 and $0.10, respectively, in the full year 2019.

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.

2021 Guidance

For the full year 2021, CareDx expects revenue to be in the range of $255 million to $265 million.

AboutCareDx

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 Company's fiscal 2021 revenue, 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.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)

    Three Months Ended December 31,   Twelve Months Ended December 31,
    2020   2019   2020   2019
Revenue:                
Testing services revenue   $ 50,346     $ 29,129     $ 163,610     $ 104,550  
Product revenue   5,933     5,053     19,302     18,279  
Digital and other revenue   2,365     1,639     9,282     4,239  
Total revenue   58,644     35,821     192,194     127,068  
Operating expenses:                
Cost of testing services   13,301     7,694     43,932     29,622  
Cost of product   4,212     3,758     13,847     12,919  
Cost of digital and other   1,372     1,264     5,338     2,914  
Research and development   13,325     8,946     48,941     30,711  
Sales and marketing   16,131     10,267     53,858     38,894  
General and administrative   13,370     9,437     48,806     36,540  
Total operating expenses   61,711     41,366     214,722     151,600  
Loss from operations   (3,067 )   (5,545 )   (22,528 )   (24,532 )
Other income (expense):                
Interest income, net   125     306     271     985  
Change in estimated fair value of common stock warrant liability   (505 )   333     (1,495 )   319  
CARES Act Provider Relief Fund           4,813      
Other expense, net   (239 )   (75 )   (811 )   (719 )
Total other income (expense)   (619 )   564     2,778     585  
Loss before income taxes   (3,686 )   (4,981 )   (19,750 )   (23,947 )
Income tax benefit   171     204     1,036     1,979  
Net loss   $ (3,515 )   $ (4,777 )   $ (18,714 )   $ (21,968 )
Net loss per share:                
Basic   $ (0.07 )   $ (0.11 )   $ (0.40 )   $ (0.52 )
Diluted   $ (0.07 )   $ (0.11 )   $ (0.40 )   $ (0.52 )
Weighted-average shares used to compute net loss per share:                
Basic   49,325,898     42,457,171     46,481,772     42,151,617  
Diluted   49,325,898     42,457,171     46,481,772     42,151,617  

CareDx, Inc.
Consolidated Balance Sheets
(in thousands)

    As of December 31,
    2020   2019
Assets        
Current assets:        
Cash and cash equivalents   $ 134,669     $ 38,223  
Marketable securities   90,034      
Accounts receivable   34,624     24,057  
Inventory   10,012     6,014  
Prepaid and other current assets   3,758     3,628  
Total current assets   273,097     71,922  
Property and equipment, net   10,704     4,430  
Operating leases right-of-use assets   15,228     4,730  
Intangible assets, net   44,355     45,541  
Goodwill   23,857     23,857  
Restricted cash   270     256  
Other assets   1,000     1,000  
Total assets   $ 368,511     $ 151,736  
Liabilities and stockholders' equity        
Current liabilities:        
Accounts payable   $ 9,653     $ 5,506  
Accrued compensation   18,466     12,484  
Accrued and other liabilities   20,602     16,838  
Refund liability - CMS advance payment   20,496      
Total current liabilities   69,217     34,828  
Deferred tax liability   1,299     1,973  
Common stock warrant liability   447     6,607  
Deferred payments for intangible assets   3,560     5,207  
Operating lease liability, less current portion   16,069     2,370  
Other liabilities   240     1,751  
Total liabilities   90,832     52,736  
Commitments and contingencies        
Stockholders’ equity:        
Common stock   49     42  
Additional paid-in capital   632,253     437,976  
Accumulated other comprehensive loss   (2,096 )   (5,205 )
Accumulated deficit   (352,527 )   (333,813 )
Total stockholders' equity   277,679     99,000  
Total liabilities and stockholders' equity   $ 368,511     $ 151,736  

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

    Three Months Ended December 31,   Twelve Months Ended December 31,
    2020   2019   2020   2019
Cost of testing services reconciliation:                
GAAP cost of testing services   $ 13,301     $ 7,694     $ 43,932     $ 29,622  
Stock-based compensation expense   (392 )   (328 )   (1,493 )   (1,751 )
Acquisition related-amortization of purchased intangibles   (329 )   (330 )   (1,316 )   (738 )
Non-GAAP cost of testing services   $ 12,580     $ 7,036     $ 41,123     $ 27,133  
Cost of product reconciliation:                
GAAP cost of product   $ 4,212     $ 3,758     $ 13,847     $ 12,919  
Stock-based compensation expense   (102 )   (88 )   (391 )   (280 )
Acquisition related-amortization of purchased intangibles   (455 )   (379 )   (1,665 )   (1,446 )
Non-GAAP cost of product   $ 3,655     $ 3,291     $ 11,791     $ 11,193  
Cost of digital and other reconciliation:                
GAAP cost of digital and other   $ 1,372     $ 1,264     $ 5,338     $ 2,914  
Stock-based compensation expense   (111 )   (62 )   (449 )   (152 )
Acquisition related-amortization of purchased intangibles   (86 )   (79 )   (345 )   (210 )
Non-GAAP cost of digital and other   $ 1,175     $ 1,123     $ 4,544     $ 2,552  
Research and development expenses reconciliation:                
GAAP research and development expenses   $ 13,325     $ 8,946     $ 48,941     $ 30,711  
Stock-based compensation expense   (1,186 )   (1,196 )   (4,676 )   (4,422 )
Non-GAAP research and development expenses   $ 12,139     $ 7,750     $ 44,265     $ 26,289  
Sales and marketing expenses reconciliation:                
GAAP sales and marketing expenses   $ 16,131     $ 10,267     $ 53,858     $ 38,894  
Stock-based compensation expense   (1,620 )   (1,212 )   (5,795 )   (4,008 )
Acquisition related-amortization of purchased intangibles   (383 )   (366 )   (1,472 )   (1,248 )
Impairment               (150 )
Non-GAAP sales and marketing expenses   $ 14,128     $ 8,689     $ 46,591     $ 33,488  
General and administrative expenses reconciliation:                
GAAP general and administrative expenses   $ 13,370     $ 9,437     $ 48,806     $ 36,540  
Stock-based compensation expense   (2,566 )   (2,521 )   (10,597 )   (11,804 )
Change in estimated fair value of contingent consideration   (8 )   (210 )   (309 )   (210 )
Acquisition related fees and expenses   (115 )       (115 )   (654 )
Non-GAAP general and administrative expenses   $ 10,681     $ 6,706     $ 37,785     $ 23,872  
Total other income (expense) reconciliation:                
GAAP other income (expense), net   $ (619 )   $ 564     $ 2,778     $ 585  
Change in estimated fair value of common stock warrant liability   505     (333 )   1,495     (319 )
Accretion of liability   80     108     352     281  
Non-GAAP other income (expense), net   $ (34 )   $ 339     $ 4,625     $ 547  
Income tax benefit reconciliation:                
GAAP income tax benefit   $ 171     $ 204     $ 1,036     $ 1,979  
Tax effect related to amortization of purchased intangibles   (134 )   (129 )   (503 )   (493 )

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

    Three Months Ended December 31,   Twelve Months Ended December 31,
    2020   2019   2020   2019
GAAP net loss   $ (3,515 )   $ (4,777 )   $ (18,714 )   $ (21,968 )
Stock-based compensation expense   5,977     5,407     23,401     22,417  
Acquisition related-amortization of purchased intangibles   1,253     1,154     4,798     3,642  
Acquisition related fees and expenses   115         115     654  
Change in estimated fair value of contingent consideration   8     210     309     210  
Change in estimated fair value of common stock warrant liability   505     (333 )   1,495     (319 )
Accretion of liability   80     108     352     281  
Tax effect related to amortization of purchased intangibles   (134 )   (129 )   (503 )   (493 )
Impairment               150  
Non-GAAP net income   $ 4,289     $ 1,640     $ 11,253     $ 4,574  
                 
GAAP basic and diluted net loss per share   $ (0.07 )   $ (0.11 )   $ (0.40 )   $ (0.52 )
                 
Non-GAAP basic net income per share   $ 0.09     $ 0.04     $ 0.24     $ 0.11  
Non-GAAP diluted net income per share   $ 0.08     $ 0.04     $ 0.23     $ 0.10  
                 
Shares used in computing non-GAAP basic net income per share   49,325,898     42,457,171     46,481,772     42,151,617  
Shares used in computing non-GAAP diluted net income per share   52,005,987     43,464,685     48,274,038     44,344,803  

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

    Three Months Ended December 31,   Twelve Months Ended December 31,
    2020   2019   2020   2019
Non-GAAP net income   $ 4,289     $ 1,640     $ 11,253     $ 4,574  
Interest income   (125 )   (306 )   (271 )   (985 )
Income tax benefit   (37 )   (75 )   (533 )   (1,486 )
Depreciation expense   632     424     1,867     1,623  
CARES Act Provider Relief Fund           (4,813 )    
Other expense (income), net   159     (206 )   459     438  
Adjusted EBITDA   $ 4,918     $ 1,477     $ 7,962     $ 4,164  


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