Champions Oncology Reports Quarterly Revenue of $5.1 Million

HACKENSACK, N.J., March 15, 2018 /PRNewswire/ -- Champions Oncology, Inc. (Nasdaq: CSBR), engaged in the development of advanced technology solutions and services to personalize the development and use of oncology drugs, today announced its financial results for the third fiscal quarter and nine months ended January 31, 2018.

Third Quarter and Recent Business Highlights:

• Revenue of $5.1 million, an increase of 42.6% year-over-year
• Recorded Translational Oncology Services (“TOS”) revenue of $4.8 million, an increase of 49.9% year-over-year
• Reiterated expectations for fiscal year 2018 revenue growth of at least 20%
• Reported operating income, excluding non-cash stock based compensation and depreciation, of $183,000
• Collaborated in global research study for patients with ROS1 Cancer

Ronnie Morris, CEO of Champions, commented, “For the third consecutive quarter we delivered revenue in excess of $5 million, maintained disciplined management of expenses and continued on a trajectory towards year-over-year revenue growth of at least 20% in fiscal 2018. With revenue growth of more than 40% in the third fiscal quarter and an extremely modest rise in costs and operating expenses of just under 4%, we continue to demonstrate the leverage in our business model that is propelling us towards long-term profitability as we continue to scale and increase the services we provide to new and existing customers.”

“The level of active engagement with customers for new studies and applications for our tumor bank remains encouraging and signals opportunities for meaningful growth in the coming quarters,” added Morris. “Looking ahead, we have the infrastructure to service our pipeline of new projects and execute our vision to achieve long-term profitability.”

Third Fiscal Quarter Financial Results

For the third quarter of fiscal 2018, revenue increased 42.6% to $5.1 million compared to $3.6 million for the third quarter of fiscal 2017. Total operating expenses for the third quarter of fiscal 2018 were $5.1 million compared to $5.0 million for the third quarter of fiscal 2017, an increase of $183,000 or 3.7%.

For the third quarter of fiscal 2018, Champions reported a loss from operations of $67,000, which includes $257,000 in stock-based compensation and depreciation expense, an improvement of $1.3 million or 95.2% compared to the loss from operations of $1.4 million, inclusive of $277,000 in stock-based compensation and depreciation expense, in the third quarter of fiscal 2017. Excluding stock based compensation and depreciation, Champions recognized income from operations of $183,000 for the third quarter of fiscal 2018 compared to a loss from operations, excluding stock-based compensation and depreciation, of $1.1 million in the third quarter of fiscal 2017.

Net cash generated was $402,000 for the three months ended January 31, 2018. Net cash used for the same period last year was $839,000. The improvement in cash flow is the result of revenue growth and expense management.

The Company ended the quarter with $1.1 million of cash and cash equivalents and reiterated its position that it does not need to raise capital to fund operations.

TOS revenue was $4.8 million for the three months ended January 31, 2018, compared to $3.2 million for the three months ended January 31, 2017, an increase of $1.6 million or 49.9%.

TOS cost of sales was $2.3 million for the three months ended January 31, 2018, an increase of $200,000, or 8%, compared to $2.1 million for the three months ended January 31, 2017. The increase in TOS cost of sales was due to an increase in the number and size of TOS studies. For the three months ended January 31, 2018 and 2017, gross margin for TOS was 53.3% compared to 35.2% for the three months ended January 31, 2017. While the gross margin often fluctuates quarter to quarter, resulting from timing differences between revenue and expense recognition, the improvement in gross margin is mostly attributable to the increase in revenue, leveraged against the fixed cost portion of cost of sales.

Personalized Oncology Services (“POS”) revenue was $259,000 for the three months ended January 31, 2018 compared to $347,000 for the three months ended January 31, 2017, a decrease of $88,000 or (25.4%). The decrease is due mainly to a decrease in implant and drug study revenue.

POS cost of sales was $220,000 for the three months ended January 31, 2018, a decrease of $ 100,000, or (31.3%), compared to $320,000 for the three months ended January 31, 2017. For the three months ended January 31, 2018, gross margin for POS was 15.1% compared to 7.8% for the three months ended January 31, 2017. The improvement is attributed to the increase in higher margin sequencing revenue.

Research and development expense was $1.0 million for both the three months ended January 31, 2018 and 2017. Sales and marketing expense for the three months ended January 31, 2018 was $627,000, a decrease of $99,000, or (13.6%), compared to $726,000 for the three months ended January 31, 2017. The decrease is mainly due to a reduction of marketing resources for the POS division. General and administrative expense was $1.0 million for the three months ended January 31, 2018 compared to $836,000 for the three months ended January 31, 2017, an increase of $164,000 or 20.1%.

Year-to-Date Financial Results

For the first nine months of fiscal 2018, revenue increased 31% to $15.3 million, as compared to $11.7 million for the first nine months of fiscal 2017. Total operating expenses for the first nine months of both fiscal 2018 and 2017 were $16.1 million.

For the first nine months of fiscal 2018, Champions reported a loss from operations of $755,000, which includes $863,000 in stock-based compensation and $253,000 in depreciation, an improvement of $3.6 million, or 83%, compared to the loss from operations of $4.4 million, inclusive of $1.9 million in stock-based compensation and $127,000 in depreciation, in the first nine months of fiscal 2017. Excluding stock-based compensation and depreciation, Champions recognized income from operations of $339,000 for the nine months ended January 31, 2018 compared to a loss from operations, excluding stock-based compensation and depreciation, of $2.4 million for the nine months ended January 31, 2017.

TOS revenue was $14.2 million for the nine months ended January 31, 2018 compared to $10.3 million for the nine months ended January 31, 2017, an increase of $3.9 million or 37.8%.

TOS cost of sales was $6.9 million for the nine months ended January 31, 2018, an increase of $900,000, or 15.1%, compared to $6.0 million for the nine months ended January 31, 2017. Gross margin for TOS was 51.8% for the first nine months of fiscal 2018 compared to 42.3% for the first nine months of fiscal 2017.

POS revenue was $1.0 million for the nine months ended January 31, 2018 compared to $1.4 million for the nine months ended January 31, 2017, a decrease of $400,000 or (20.5%).

POS cost of sales was $900,000 for the nine months ended January 31, 2018, a decrease of $300,000, or 25.4%, compared to $1.2 million for the nine months ended January 31, 2017. Gross margin for POS for the nine months ended January 31, 2018 was 19.1% compared to 13.8% for the nine months ended January 31, 2017.

Research and development expense was $3.3 million for the nine months ended January 31, 2018, an increase of $100,000 or 2.8% compared to $3.2 million for the nine months ended January 31, 2017. Sales and marketing expense for the nine months ended January 31, 2018 was $1.9 million, a decrease of $500,000, or (21.4%), compared to $2.4 million for the nine months ended January 31, 2017. General and administrative expense was $3.2 million for the nine months ended January 31, 2018, a decrease of $200,000 or (6.7%), compared to $3.4 million for the nine months ended January 31, 2017.

Net cash used in operations was $1.2 million for the nine months ended January 31, 2018 compared to $3.2 million for the nine months ended January 31, 2017, a decrease of $2 million or (62.5%).

Cash and cash equivalents were $1.1 million as of January 31, 2018 compared to $3.3 million as of April 30, 2017.

Conference Call Information:

The Company will host a conference call today at 4:30 p.m. EST (1:30:00 p.m. PST) to discuss its third quarter financial results. To participate in the call, please call 877-407-8035 (domestic) or 201-689-8035 (international) 10 minutes ahead of the call and give the verbal reference “Champions Oncology.”

Full details of the Company’s financial results will be available Monday, March 19, 2018 in the Company’s Form 10-Q at www.championsoncology.com.