Co-Diagnostics, Inc. Reports Second Quarter 2022 Financial Results

Co-Diagnostics, Inc. (NASDAQ: CODX), a molecular diagnostics company with a unique, patented platform for the development of molecular diagnostic tests, announced today financial results for the second quarter ended June 30, 2022.

 

Second quarter results impacted by volume declines; Further progress on the development of the Co-Dx PCR Home platform

SALT LAKE CITY, Aug. 11, 2022 /PRNewswire/ -- Co-Diagnostics Inc. (NASDAQ: CODX), a molecular diagnostics company with a unique, patented platform for the development of molecular diagnostic tests, announced today financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Financial Results:

  • Revenue of $5.0 million, down from $27.4 million during the prior year period, due primarily to lower demand of the Logix Smart™ COVID-19 Test
  • Gross profit of $4.1 million, representing 81.8% of consolidated revenue stemming from inefficiencies in lower sales volumes
  • Operating loss of $4.1 million compared to operating income of $11.8 million a year ago, due to lower sales volumes and continued investments into research and development
  • Net loss of $2.7 million, compared to a net income of $9.8 million in the prior-year second quarter, representing a loss of $0.08 per fully diluted share
  • Adjusted EBITDA loss of $2.3 million
  • Cash, cash equivalents, and marketable securities of $96.0 million as of June 30, 2022
  • Cash flow from operations of $1.7 million for the second quarter ended June 30, 2022

Dwight Egan, Co-Diagnostics' Chief Executive Officer, remarked "Our second quarter results reflect lower volumes for our Logix Smart™ COVID-19 Test, which we believe is primarily the result of a reduction in mandated testing in travel and public venues and in government funding for testing programs. The Company has initiatives underway intended to actively address these pressures, such as growing our international distributor network, expanding our infectious disease testing menu including monkeypox, and most importantly, our upcoming at-home/point-of-care testing platform. We anticipate these initiatives will potentially be bolstered by recurring COVID surges as we have previously experienced."

Mr. Egan further stated that "progress continues in the development and optimization of the Co-Dx™ PCR Home testing platform* and its manufacturing capacity to meet the anticipated demand for gold-standard PCR in at-home and point-of-care settings. We believe that the need for accurate and reliable COVID-19 testing will persist as new variants emerge, and we continue to invest time and resources to meet the evolving demand for COVID-19 and other infectious diseases globally. We remain confident in our business strategy and in our unique portfolio of innovative testing products that extend far beyond COVID-19."

Second Quarter 2022 and Recent Business Highlights:
  • Indian JV CoSara received clearance from Indian regulators for Hepatitis C viral load test
  • Completed principal design for monkeypox virus test and shipped testing reagents to international distributor
  • Announced expansion of its OEM agreement with Bio Molecular Systems ("BMS") for the Co-Dx Box™ magnetic induction PCR cycler, to encompass 193 countries worldwide
  • Continued optimization of the Co-Dx PCR Home device, which has been showcased at several tradeshows and conferences
  • Initiated previously announced repurchase of shares to return value to Company shareholders
Conference Call and Webcast

Co-Diagnostics will host a conference call and webcast at 4:30 p.m. EDT today to discuss its financial results with analysts and institutional investors. The conference call and webcast will be available via:

Webcast: ir.codiagnostics.com on the Events & Webcasts page

Conference Call: 877-317-6789 (domestic) or 412-317-6789 (international)

The call will be recorded and later made available on the Company's website: https://codiagnostics.com.

*The Co-Dx PCR Home platform is subject to FDA review and is not currently for sale.

About Co-Diagnostics, Inc.:

Co-Diagnostics, Inc., a Utah corporation, is a molecular diagnostics company that develops, manufactures and markets new, state-of-the-art diagnostics technologies. The Company's technology is utilized for tests that are designed using the detection and/or analysis of nucleic acid molecules (DNA or RNA). The Company also uses its proprietary technology to design specific tests to locate genetic markers for use in industries other than infectious disease and license the use of those tests to specific customers.

Non-GAAP Financial Measures:

This press release contains adjusted EBITDA, which is a non-GAAP measure defined as net income excluding depreciation, amortization, income tax (benefit) expense, net interest (income) expense, stock-based compensation, and one-time transaction related costs. The Company believes that adjusted EBITDA provides useful information to management and investors relating to its results of operations. The Company's management uses this non-GAAP measure to compare the Company's performance to that of prior periods for trend analyses, and for budgeting and planning purposes. The Company believes that the use of adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making.

Management does not consider the non-GAAP measure in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of the non-GAAP financial measure is that it excludes significant expenses that are required by GAAP to be recorded in the Company's financial statements. In order to compensate for these limitations, management presents the non-GAAP financial measure together with GAAP results. Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. A reconciliation tables of the net income, the most comparable GAAP financial measure to adjusted EBITDA, is included at the end of this release. The Company urges investors to review the reconciliation and not to rely on any single financial measure to evaluate the company's business.

Forward-Looking Statements:

This press release contains forward-looking statements. Forward-looking statements can be identified by words such as "believes," "expects," "estimates," "intends," "may," "plans," "will" and similar expressions, or the negative of these words. Such forward-looking statements are based on facts and conditions as they exist at the time such statements are made and predictions as to future facts and conditions. Forward-looking statements in this release include statements regarding (i) completion of development and FDA submission for approval of the new Co-Dx at-home/point-of-care PCR testing device, (ii) that there will be recurring COVID surges, and (iii) our confidence that the need for accurate and reliable COVID-19 testing will persist as new variants emerge. Forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances. Actual results may differ materially from those contemplated or anticipated by such forward-looking statements. Readers of this press release are cautioned not to place undue reliance on any forward-looking statements. There can be no assurance that any of the anticipated results will occur on a timely basis or at all due to certain risks and uncertainties, a discussion of which can be found in our Risk Factors disclosure in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on March 24, 2022, and in our other filings with the SEC. The Company does not undertake any obligation to update any forward-looking statement relating to matters discussed in this press release, except as may be required by applicable securities laws.

CO-DIAGNOSTICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
   

June 30, 2022

   

December 31, 2021

 

Assets

               

Current assets

               

Cash and cash equivalents

 

$

86,045,405

   

$

88,607,234

 

Marketable investment securities

   

9,951,550

     

1,255,266

 

Accounts receivable, net

   

12,260,009

     

20,839,182

 

Inventory

   

4,705,921

     

2,004,169

 

Prepaid expenses and other current assets

   

1,569,374

     

2,338,444

 

Note receivable

   

35,200

     

75,000

 

Total current assets

   

114,567,459

     

115,119,295

 

Property and equipment, net

   

2,421,349

     

1,933,216

 

Operating lease right-of-use asset

   

530,033

     

-

 

Goodwill

   

15,388,546

     

14,706,818

 

Intangible assets, net

   

26,981,667

     

27,195,000

 

Investment in joint venture

   

877,089

     

1,004,953

 

Note receivable

   

75,000

     

75,000

 

Total assets

 

$

160,841,143

   

$

160,034,282

 

Liabilities and stockholders' equity

               

Current liabilities

               

Accounts payable

 

$

848,379

   

$

607,506

 

Accrued expenses, current

   

1,818,773

     

3,859,652

 

Operating lease liability, current

   

287,900

     

-

 

Contingent consideration liabilities, current

   

3,761,084

     

5,767,304

 

Income taxes payable

   

-

     

2,213,088

 

Deferred revenue

   

-

     

150,000

 

Total current liabilities

   

6,716,136

     

12,597,550

 

Long-term liabilities

               

Income taxes payable

   

1,464,024

     

1,067,853

 

Deferred tax liability

   

5,310,573

     

7,228,444

 

Operating lease liability

   

201,266

     

-

 

Contingent consideration liabilities

   

2,678,204

     

4,665,337

 

Total long-term liabilities

   

9,654,067

     

12,961,634

 

Total liabilities

   

16,370,203

     

25,559,184

 

Commitments and contingencies (Note 12)

               

Stockholders' equity

               

Convertible preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

   

-

     

-

 

Common stock, $0.001 par value; 100,000,000 shares authorized; 34,313,432 shares issued and 33,780,992 shares outstanding as of June 30, 2022 and 33,819,862 shares issued and outstanding as of December 31, 2021

   

34,313

     

33,820

 

Treasury stock, at cost; 532,440 and 0 shares held as of June 30, 2022 and December 31, 2021, respectively

   

(2,599,478)

     

-

 

Additional paid-in capital

   

83,838,533

     

80,271,999

 

Accumulated earnings

   

63,197,572

     

54,169,279

 

Total stockholders' equity

   

144,470,940

     

134,475,098

 

Total liabilities and stockholders' equity

 

$

160,841,143

   

$

160,034,282

 

 

CO-DIAGNOSTICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
   

Three Months Ended June 30,

   

Six Months Ended June 30,

 
   

2022

   

2021

   

2022

   

2021

 

Revenue

 

$

5,023,226

   

$

27,358,140

   

$

27,722,270

   

$

47,382,909

 

Cost of revenue

   

915,432

     

2,504,355

     

4,197,383

     

5,776,920

 

Gross profit

   

4,107,794

     

24,853,785

     

23,524,887

     

41,605,989

 

Operating expenses

                               

Sales and marketing

   

1,472,225

     

5,853,313

     

4,124,373

     

7,050,859

 

General and administrative

   

2,468,421

     

2,468,433

     

5,390,616

     

5,404,122

 

Research and development

   

3,889,844

     

4,669,160

     

7,661,171

     

6,886,223

 

Depreciation and amortization

   

424,342

     

71,714

     

671,606

     

138,719

 

Total operating expenses

   

8,254,832

     

13,062,620

     

17,847,766

     

19,479,923

 

Income from operations

   

(4,147,038)

     

11,791,165

     

5,677,121

     

22,126,066

 

Other income (expense)

                               

Interest income

   

61,671

     

10,529

     

73,064

     

25,186

 

(Loss) on disposition of assets

   

(48,740)

     

-

     

(142,161)

     

-

 

Gain on remeasurement of acquisition contingencies

   

812,822

     

-

     

4,192,712

     

-

 

Gain (loss) on equity method investment in joint venture

   

(106,525)

     

128,595

     

(127,864)

     

(336,348)

 

Total other income (expense)

   

719,228

     

139,124

     

3,995,751

     

(311,162)

 

Income (loss) before income taxes

   

(3,427,810)

     

11,930,289

     

9,672,872

     

21,814,904

 

Income tax provision

   

(741,507)

     

2,145,076

     

644,580

     

4,130,716

 

Net income (loss)

 

$

(2,686,303)

   

$

9,785,213

   

$

9,028,292

   

$

17,684,188

 

Earnings per common share:

                               

Basic

 

$

(0.08)

   

$

0.34

   

$

0.27

   

$

0.62

 

Diluted

 

$

(0.08)

   

$

0.33

   

$

0.26

   

$

0.59

 

Weighted average shares outstanding:

                               

Basic

   

33,472,251

     

28,794,047

     

32,509,664

     

28,728,828

 

Diluted

   

33,472,251

     

29,741,265

     

33,253,612

     

29,833,955

 

 

CO-DIAGNOSTICS, INC. AND SUBSIDIARIES

GAAP AND NON-GAAP MEASURES

(Unaudited)

 

Reconciliation of net income to adjusted EBITDA:

 
   

Three Months Ended June 30,

   

Six Months Ended June 30,

 
   

2022

   

2021

   

2022

   

2021

 

Net income

 

$

(2,686,303)

   

$

9,785,213

   

$

9,028,292

   

$

17,684,188

 

Interest income

   

(61,671)

     

(10,529)

     

(73,064)

     

(25,186)

 

Depreciation and amortization

   

424,342

     

71,714

     

671,606

     

138,719

 

Transaction costs

   

47,943

     

-

     

126,171

     

-

 

Change in fair value of contingent consideration

   

(812,822)

     

-

     

(4,192,712)

     

-

 

Stock-based compensation expense

   

1,533,286

     

927,338

     

2,908,381

     

2,440,347

 

Income tax provision

   

(741,507)

     

2,145,076

     

644,580

     

4,130,716

 

Adjusted EBITDA

 

$

(2,296,732)

   

$

12,918,812

   

$

9,113,254

   

$

24,368,784

 

 

 

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SOURCE Co-Diagnostics

 
 
Company Codes: NASDAQ-SMALL:CODX
 
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