Fulgent Reports Second Quarter 2023 Financial Results
- Fulgent Genetics reports strong financial results with total revenue of $68 million and record core revenue of $67 million, representing a 48% YoY growth. The company raises its full-year 2023 core revenue guidance to $260 million, indicating positive growth prospects. Fulgent Genetics also generated a significant amount of cash flow from operations, amounting to $9.7 million, and has a substantial cash position of $846.8 million as of June 30, 2023.
- None.
-
Total Revenue of
$68 million -
Record Core Revenue of
, growth of$67 million 48% year-over-year -
Raises Full Year 2023 Core Revenue Guidance to
and Narrows Expected Loss$260 million
Second Quarter 2023 Results:
-
Total Revenue of
$68 million -
Core Revenue1 grew
48% year-over-year to$67 million -
GAAP loss of
, or$11.2 million per share$0.38 -
Non-GAAP loss of
, or$2.4 million per share$0.08 -
Adjusted EBITDA loss of
$2.7 million -
Generated cash flow from operations of
$9.7 million -
Cash, cash equivalents, and investments in marketable securities of
as of June 30, 2023, with the decrease from last quarter primarily related to non-operating activities including the full repayment of a margin loan and purchase of real estate$846.8 million
Note:
1) Core Revenue excludes revenue from COVID-19 testing products and services including COVID-19 NGS testing revenue.
Non-GAAP income (loss), non-GAAP income (loss) per share, and adjusted EBITDA income (loss) are described below under “Note Regarding Non-GAAP Financial Measures” and are reconciled to the most directly comparable GAAP financial measure, GAAP income (loss), in the accompanying tables.
Commenting on the results, Ming Hsieh, Chairman of the Board and Chief Executive Officer, said, “We are pleased with our results so far in the first half of the year, with record revenue for our core genetics business showing continued momentum in our three main areas -- precision diagnostics, anatomic pathology, and pharma services. In our therapeutics development business, we are pleased with the medical community’s response to Phase 1b data for our lead drug candidate, FID-007, in various cancers, as presented at the American Society of Clinical Oncology annual meeting, and look forward to furthering this clinical program as we prepare for initiation of Phase 2 studies by the end of 2023.”
Paul Kim, Chief Financial Officer, added, “We are again raising our core guidance for the year due to our outperformance in the second quarter. Looking ahead, we believe our gross margins and operating margins will continue to improve as we implement efficiencies through our integration efforts. Our current cash position enables us to continue investing in our business.”
Outlook:
For the third quarter of 2023, Fulgent expects:
-
Core Revenue of approximately
$65 million
For the full year 2023, Fulgent now expects:
-
Core Revenue of approximately
$260 million -
GAAP loss of approximately
per share$2.15 -
Non-GAAP loss of approximately
per share$0.95
Conference Call Information
Fulgent will host a conference call for the investment community today at 8:30 AM ET (5:30 AM PT) to discuss its second quarter 2023 results. The call may be accessed through a live audio webcast on the Investor Relations section of the Company’s website, http://ir.fulgentgenetics.com. An audio replay will be available at the same location.
Note Regarding Non-GAAP Financial Measures
Certain information set forth in this press release, including non-GAAP income (loss), non-GAAP income (loss) per share, and adjusted EBITDA income (loss) are non-GAAP financial measures. Fulgent believes this information is useful to investors because it provides a basis for measuring the performance of the Company’s business, excluding certain income or expense items that management believes are not directly attributable to the Company’s operating results. Fulgent defines non-GAAP income (loss) as net income (loss) calculated in accordance with accounting principles generally accepted in
About Fulgent
Fulgent is a technology-based company with a well-established clinical diagnostic business and a therapeutic development business. Fulgent’s clinical diagnostic business offers molecular diagnostic testing services, comprehensive genetic testing, and high-quality anatomic pathology laboratory services designed to provide physicians and patients with clinically actionable diagnostic information to improve the quality of patient care. Fulgent’s therapeutic development business is focused on developing drug candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform designed to improve the therapeutic window and pharmacokinetic profile of new and existing cancer drugs. The Company aims to transform from a genomic diagnostic business into a fully integrated precision medicine company.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements in this press release include statements about, among other things: future performance; guidance regarding expected quarterly and annual financial results, core revenues, GAAP loss, and non-GAAP loss; evaluations and judgments regarding the stability of certain revenue sources, the Company’s cash position and sufficiency of its resources, momentum, vision, future opportunities and future growth the Company’s testing services and technologies and expansion; the Company’s research and development efforts, including any implications that the results of earlier clinical trials will be representative or consistent with later clinical trials and the expected availability of data or results of these trials; the Company’s identification and evaluation of opportunities and its ability to capitalize on opportunities, capture market share, or expand its presence in certain markets; and the Company’s ability to continue to grow its business.
Forward-looking statements are statements other than historical facts and relate to future events or circumstances or the Company’s future performance, and they are based on management’s current assumptions, expectations, and beliefs concerning future developments and their potential effect on the Company’s business. These forward-looking statements are subject to a number of risks and uncertainties, which may cause the forward-looking events and circumstances described in this press release to not occur, and actual results to differ materially and adversely from those described in or implied by the forward-looking statements. These risks and uncertainties include, among others: the market potential for, and the rate and degree of market adoption of, the Company’s tests, including its Beacon787 panel; its ability to maintain turnaround times and otherwise keep pace with rapidly changing technology; the Company’s ability to maintain the low internal costs of its business model; the Company’s ability to maintain an acceptable margin; risks related to volatility in the Company’s results, which can fluctuate significantly from period to period; risks associated with the composition of the Company’s customer base, which can fluctuate from period to period and can be comprised of a small number of customers that account for a significant portion of the Company’s revenue; the Company’s level of success in obtaining coverage and adequate reimbursement and collectability levels from third-party payors for its tests and testing services; the Company’s level of success in establishing and obtaining the intended benefits from partnerships, strategic investments, joint ventures, acquisitions, or other relationships; the success of the Company’s development efforts, including the Company’s ability to progress its candidates through clinical trials on the timelines expected; the Company’s compliance with the various evolving and complex laws and regulations applicable to its business and its industry; and the Company’s ability to protect its proprietary technology and intellectual property. As a result of these risks and uncertainties, forward-looking statements should not be relied on or viewed as predictions of future events.
The forward-looking statements made in this press release speak only as of the date of this press release, and the Company assumes no obligation to update publicly any such forward-looking statements to reflect actual results or to changes in expectations, except as otherwise required by law.
The Company’s reports filed with the
FULGENT GENETICS, INC. |
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Condensed Consolidated Balance Sheet Data |
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June 30, 2023 and December 31, 2022 |
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(in thousands) |
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June 30, |
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December 31, |
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2023 |
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2022 |
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ASSETS: |
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Cash and cash equivalents |
$ |
58,348 |
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$ |
79,506 |
|
Investments in marketable securities |
|
788,466 |
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|
773,377 |
|
Accounts receivable, net |
|
34,809 |
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52,749 |
|
Property, plant, and equipment, net |
|
87,556 |
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|
81,353 |
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Other assets |
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385,398 |
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|
399,068 |
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Total assets |
$ |
1,354,577 |
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$ |
1,386,053 |
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LIABILITIES & EQUITY: |
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Accounts payable, accrued liabilities and other liabilities |
$ |
91,251 |
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$ |
116,178 |
|
Total stockholders’ equity |
|
1,263,326 |
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|
1,269,875 |
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Total liabilities & equity |
$ |
1,354,577 |
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$ |
1,386,053 |
|
FULGENT GENETICS, INC. |
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Condensed Consolidated Statement of Operations Data |
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Three and Six Months Ended June 30, 2023 and 2022 |
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(in thousands, except per share data) |
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(unaudited) |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenue |
$ |
67,853 |
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|
$ |
125,341 |
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$ |
134,021 |
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|
$ |
445,609 |
|
Cost of revenue (1) |
|
47,281 |
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|
60,065 |
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|
94,638 |
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|
137,790 |
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Gross profit |
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20,572 |
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|
65,276 |
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|
39,383 |
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|
307,819 |
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Operating expenses: |
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Research and development (1) |
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9,692 |
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6,905 |
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19,474 |
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12,894 |
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Selling and marketing (1) |
|
10,723 |
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|
10,866 |
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|
20,806 |
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|
18,806 |
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General and administrative (1) |
|
17,993 |
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30,240 |
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|
39,795 |
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|
56,015 |
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Amortization of intangible assets |
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1,962 |
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|
1,575 |
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|
3,930 |
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|
|
2,481 |
|
Restructuring costs |
|
— |
|
|
|
2,896 |
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|
— |
|
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|
2,896 |
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Total operating expenses |
|
40,370 |
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|
52,482 |
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|
84,005 |
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|
93,092 |
|
Operating (loss) income |
|
(19,798 |
) |
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|
12,794 |
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|
(44,622 |
) |
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|
214,727 |
|
Interest and other income, net |
|
5,098 |
|
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|
958 |
|
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|
8,873 |
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|
1,003 |
|
(Loss) income before income taxes |
|
(14,700 |
) |
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|
13,752 |
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(35,749 |
) |
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|
215,730 |
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(Benefit from) provision for income taxes |
|
(3,110 |
) |
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|
2,653 |
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|
(8,310 |
) |
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|
51,074 |
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Net (loss) income from consolidated operations |
|
(11,590 |
) |
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|
11,099 |
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(27,439 |
) |
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164,656 |
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Net loss attributable to noncontrolling interests |
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361 |
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|
438 |
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|
870 |
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|
860 |
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Net (loss) income attributable to Fulgent |
$ |
(11,229 |
) |
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$ |
11,537 |
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$ |
(26,569 |
) |
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$ |
165,516 |
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Net (loss) income per common share attributable to Fulgent: |
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Basic |
$ |
(0.38 |
) |
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$ |
0.38 |
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$ |
(0.90 |
) |
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$ |
5.46 |
|
Diluted |
$ |
(0.38 |
) |
|
$ |
0.37 |
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|
$ |
(0.90 |
) |
|
$ |
5.30 |
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Weighted average common shares: |
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Basic |
|
29,813 |
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30,362 |
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29,675 |
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30,298 |
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Diluted |
|
29,813 |
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31,189 |
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29,675 |
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31,225 |
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(1) Equity-based compensation expense was allocated as follows: |
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Cost of revenue |
$ |
2,359 |
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$ |
2,243 |
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$ |
4,753 |
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$ |
3,708 |
|
Research and development |
|
3,670 |
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|
|
2,502 |
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|
7,118 |
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|
4,423 |
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Selling and marketing |
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1,094 |
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1,080 |
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|
2,455 |
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|
1,905 |
|
General and administrative |
|
3,200 |
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|
2,205 |
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|
6,262 |
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|
3,610 |
|
Total equity-based compensation expense |
$ |
10,323 |
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$ |
8,030 |
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$ |
20,588 |
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$ |
13,646 |
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FULGENT GENETICS, INC. |
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Non-GAAP Income (Loss) Reconciliation |
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Three and Six Months Ended June 30, 2023 and 2022 |
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(in thousands, except per share data) |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Net (loss) income attributable to Fulgent |
$ |
(11,229 |
) |
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$ |
11,537 |
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$ |
(26,569 |
) |
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$ |
165,516 |
|
Amortization of intangible assets |
|
1,962 |
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|
|
1,575 |
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|
3,930 |
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|
|
2,481 |
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Restructuring costs |
|
— |
|
|
|
2,896 |
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|
|
— |
|
|
|
2,896 |
|
Acquisition-related costs |
|
— |
|
|
|
5,158 |
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|
|
— |
|
|
|
6,409 |
|
Equity-based compensation expense |
|
10,323 |
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|
8,030 |
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|
20,588 |
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|
13,646 |
|
Non-GAAP tax effect (1) |
|
(3,440 |
) |
|
|
(4,945 |
) |
|
|
(6,865 |
) |
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|
(7,121 |
) |
Non-GAAP (loss) income attributable to Fulgent |
$ |
(2,384 |
) |
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$ |
24,251 |
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$ |
(8,916 |
) |
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$ |
183,827 |
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Net (loss) income per common share attributable to Fulgent: |
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Basic |
$ |
(0.38 |
) |
|
$ |
0.38 |
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|
$ |
(0.90 |
) |
|
$ |
5.46 |
|
Diluted |
$ |
(0.38 |
) |
|
$ |
0.37 |
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|
$ |
(0.90 |
) |
|
$ |
5.30 |
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Non-GAAP (loss) income per common share attributable to Fulgent: |
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Basic |
$ |
(0.08 |
) |
|
$ |
0.80 |
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|
$ |
(0.30 |
) |
|
$ |
6.07 |
|
Diluted |
$ |
(0.08 |
) |
|
$ |
0.78 |
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$ |
(0.30 |
) |
|
$ |
5.89 |
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Weighted average common shares: |
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Basic |
|
29,813 |
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|
|
30,362 |
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|
|
29,675 |
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|
|
30,298 |
|
Diluted |
|
29,813 |
|
|
|
31,189 |
|
|
|
29,675 |
|
|
|
31,225 |
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(1) Tax rates as follows: |
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Corporate tax rate of |
FULGENT GENETICS, INC. |
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Non-GAAP Adjusted EBITDA Reconciliation |
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Three and Six Months Ended June 30, 2023 and 2022 |
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(in thousands) |
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|
Three Months Ended June 30, |
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Six Months Ended June 30, |
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||||||||||
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
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Net (loss) income attributable to Fulgent |
$ |
(11,229 |
) |
|
$ |
11,537 |
|
|
$ |
(26,569 |
) |
|
$ |
165,516 |
|
Interest income, net |
|
(5,003 |
) |
|
|
(874 |
) |
|
|
(8,775 |
) |
|
|
(135 |
) |
(Benefit from) provision for income taxes |
|
(3,110 |
) |
|
|
2,653 |
|
|
|
(8,310 |
) |
|
|
51,074 |
|
Restructuring costs |
|
— |
|
|
|
2,896 |
|
|
|
— |
|
|
|
2,896 |
|
Acquisition-related costs |
|
— |
|
|
|
5,158 |
|
|
|
— |
|
|
|
6,409 |
|
Equity-based compensation expense |
|
10,323 |
|
|
|
8,030 |
|
|
|
20,588 |
|
|
|
13,646 |
|
Depreciation and amortization |
|
6,312 |
|
|
|
8,345 |
|
|
|
13,191 |
|
|
|
13,040 |
|
Adjusted EBITDA |
$ |
(2,707 |
) |
|
$ |
37,745 |
|
|
$ |
(9,875 |
) |
|
$ |
252,446 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230804852418/en/
Investor Relations Contact:
The Blueshirt Group
Melanie Solomon, melanie@blueshirtgroup.com
Source: Fulgent Genetics, Inc.
FAQ
What are the financial results for Fulgent Genetics in the second quarter of 2023?
What is Fulgent Genetics' full-year 2023 core revenue guidance?
How much cash flow from operations did Fulgent Genetics generate in the second quarter of 2023?