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

Rhea-AI Summary

Co-Diagnostics, Inc. (NASDAQ: CODX) released its second quarter 2022 financial results, reporting a revenue decline to $5.0 million from $27.4 million year-over-year, primarily due to decreased demand for its Logix Smart™ COVID-19 Test. The company faced an operating loss of $4.1 million, contrasting with a prior year operating income of $11.8 million. Net loss registered at $2.7 million, or $0.08 per share. Despite these challenges, Co-Diagnostics continues to progress on the Co-Dx PCR Home platform and expand its product offerings, including tests for monkeypox.

Positive

• Continued development of Co-Dx PCR Home testing platform aimed at future demand.
• Initiatives to grow international distributor network.
• Clearance received for Hepatitis C viral load test in Indian market.
• Expansion of OEM agreement with Bio Molecular Systems for Co-Dx Box™.

Negative

• Revenue declined 81.8% from the same quarter last year.
• Operating loss of $4.1 million compared to previous year’s income.
• Net loss of $2.7 million contrasted with a net income of $9.8 million a year ago.

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

FAQ

What were Co-Diagnostics' Q2 2022 earnings results?

Co-Diagnostics reported Q2 2022 revenue of $5.0 million, a decline from $27.4 million year-over-year.

What is the reason for Co-Diagnostics' revenue decline in Q2 2022?

The revenue decline was mainly due to lower demand for the Logix Smart™ COVID-19 Test.

What is the anticipated impact of the Co-Dx PCR Home platform?

The Co-Dx PCR Home platform aims to meet the growing demand for reliable at-home COVID-19 testing.

What are the recent business developments for Co-Diagnostics?

Recent developments include receiving clearance for a Hepatitis C test and expanding an OEM agreement for the Co-Dx Box™.

What is the net loss reported by Co-Diagnostics for Q2 2022?

Co-Diagnostics reported a net loss of $2.7 million for the second quarter of 2022.