Welcome!

News Feed Item

Response Biomedical Corp. Announces First Quarter 2014 Financial Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/12/14 -- Response Biomedical Corp. ("Response" or "the Company") (TSX:RBM)(OTCBB:RPBIF) today reported financial results for the first quarter ended March 31, 2014 including gross margin that was essentially unchanged in spite of seasonally lower flu sales and a transition to completely new distribution channels in China, the Company's largest market.

Response's Chief Executive Officer, Jeff Purvin, commented on Response's Q1 2014 performance, saying "Our transition away from our two former distributors to our two new distributors in China, which started late last year, is continuing. Our new distributors purchased approximately $1.5 million in Q1, up 17% from the fourth quarter of 2013 but approximately $600 thousand less than what our previous distributors purchased from us in the comparable quarter in 2013. Our new distributors are now fully trained and are selling to both new and existing customers. As with any new distributors, we believe they will need some time to get accustomed to selling our product. Yet, we are encouraged that they are already demonstrating the ability to find and sell to our previous distributors' hospital customers as well as establishing a base of new customers from which to grow. We expect to add an additional source of increased distribution in China that will target a different tier of hospital than our two new Chinese distributors, further increasing our growth potential in China."

Mr. Purvin added, "Sales in the US were relatively unchanged from the previous year with the exception of Infectious disease sales which decreased by 85%, or $386 thousand, primarily due to a seasonal increase in the demand for Influenza tests during the first quarter of 2013 based on the severity of the 2012 - 2013 Influenza season. Sales in the rest of the world excluding China and the US increased 22% to $824 thousand in the quarter as we continue to strengthen our overseas distribution networks."

"Importantly, we were able to minimize the reduction in our gross margin percentage during the quarter in spite of the reduction in sales. The efficiencies we've achieved in manufacturing and purchasing over the past year have helped to lessen the impact of spreading our overhead over the lower number of units we produced in Q1. More importantly, we anticipate that these efficiencies will benefit the company in the future as our unit sales volumes increase. In addition, we secured a US$2.5 million term loan from Silicon Valley Bank during the quarter to support the investment and working capital necessary to implement our new plans in both China and the United States. All of the changes we are making now will require time to take full effect. But, because of the quality and quantity of the changes we've made, I feel confident that this plan will allow Response Biomedical to accelerate revenue growth and speed our progress toward profitability," concluded Mr. Purvin.

Financial results for the quarter ended March 31, 2014


--  Product sales decreased 39% to $2.56 million for the quarter ended March
    31, 2014 compared to $3.56 million for the previous quarter ended March
    31, 2013: 
    
    --  Cardiovascular sales decreased 14%, or $0.41 million, primarily due
        to reduced sales in China as a result of the transition to new
        distribution partners which began in the fourth quarter of 2013; and
        
    --  Infectious Disease, West Nile Virus and Biodefense sales have
        decreased 83%, or $0.59 million compared to 2013, primarily due to
        the seasonal increase in demand for Influenza sales in the first
        quarter of 2013 and the timing of orders by distributors. 
        
--  Gross margin decreased to 43.7% for the quarter ended March 31, 2014,
    compared to a gross margin of 44.8% in the same quarter of 2013. This
    slight decrease is primarily due to the following: 
    
    --  A decrease in the sales of Infectious Disease, West Nile Virus, and
        Biodefense, which are higher margin products; and 
        
    --  Numerous manufacturing efficiencies implemented during 2013 along
        with reduced component material costs by purchasing from more
        economical suppliers offsetting the impact of spreading our overhead
        over a smaller number of units and a net increase in inventory
        provisions during the quarter. 
        
--  Operating expenses increased by 22% to $2.27 million for the quarter
    ended March 31, 2014 compared to $1.86 million in the same period in
    2013. The increase is primarily due to investments in research and
    development for increased clinical and regulatory work in 2014 and an
    increase in sales and marketing expenses primarily related to expanded
    staffing.  
    
--  As a result of the changes described above, Adjusted EBITDA for the
    quarter ended March 31, 2014 was negative $0.80 million compared to
    positive $0.15 million in the same quarter of 2013. Adjusted EBITDA
    excludes, for the applicable periods, interest expense, interest income,
    income tax, depreciation and amortization, stock-based compensation
    expense, and the non-cash unrealized loss on the revaluation of the
    warrant liability. We believe that this non-GAAP measure may be useful
    to investors to analyze the results of our business as we use this non-
    GAAP measure internally to evaluate our financial results. A
    reconciliation between net loss and comprehensive loss and Adjusted
    EBITDA is included below. 
    
--  GAAP Net loss for the quarter ended March 31, 2014 totaled $1.52
    million, or $0.19 per basic and diluted share, compared to a $9.96
    million GAAP Net loss, or $1.53 per basic and diluted share, in the
    comparative 2013 period. The decrease in the loss was primarily due to a
    $9.32 million decrease in the unrealized loss on revaluation of the
    warrant liability offset by the decrease in product sales and increase
    in operating expenses mentioned above. 
    
--  Adjusted Net loss increased by $0.97 million to $1.36 million from the
    $0.40 million Adjusted Net loss in the comparable quarter in 2013. We
    also believe that this non-GAAP measure, along with Adjusted EBITDA, may
    be useful to investors to analyze the results of our business because it
    excludes the often volatile, non-cash unrealized change in the valuation
    of the Company's warrant liability. A reconciliation between Net loss
    and comprehensive loss and Adjusted Net loss is included below.  
    
--  Cash and cash equivalents as of March 31, 2014 were $4.05 million
    compared to $2.96 million as of December 31, 2013. During the quarter,
    the Company received US $1.5 million of the total US $2.5 million term
    loan from Silicon Valley Bank that it had secured during the quarter.  

For a further discussion of the Company's financial results for the quarter ended March 31, 2014, please refer to the Company's consolidated financial statements and related Management Discussion and Analysis, which can be found at www.responsebio.com, SEDAR (Canada) www.sedar.com or EDGAR (U.S.) www.sec.gov/edgar/searchedgar/webusers.htm. Information at these sites is typically available within 24 hours of the distribution of the news release.

Non-GAAP Financial Measures

Management has presented its operating results in accordance with United States Generally Accepted Accounting Principles (GAAP) and on an "adjusted" (or non-GAAP) basis for the quarter ended March 31, 2014 and 2013. We believe that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP. Further, our reconciliation of GAAP Net loss and comprehensive loss to Adjusted EBITDA and Adjusted Net loss are included in the tables below to facilitate a reader's understanding of the impact of these adjustments to our GAAP financial results and are not intended to place any undue prominence on our Adjusted EBITDA and/or our Adjusted Net loss.

About Response Biomedical Corp.

Response develops, manufactures and markets rapid on-site diagnostic tests for use with its RAMP® Platform for clinical, biodefense and environmental applications. RAMP® represents a unique paradigm in diagnostics that provides reliable, quality results in minutes. The RAMP® Platform consists of a reader and single-use disposable test cartridges and has the potential to be adapted to any other medical and non-medical immunoassay based test currently performed in laboratories. Response clinical tests are commercially available for the aid in early detection of heart attack, congestive heart failure, influenza A and B and RSV. In the non-clinical market, RAMP® tests are currently available for the environmental detection of West Nile Virus and for Biodefense applications including the rapid on-site detection of anthrax, smallpox, ricin and botulinum toxin.

Response is a publicly traded company listed on the TSX under the trading symbol "RBM" and quoted on the OTC Bulletin Board under the symbol "RPBIF". For further information, please visit the Company's website at www.responsebio.com.

Forward-Looking Statements

This press release may contain forward-looking statements. These statements relate to future events and are subject to risks, uncertainties and assumptions about Response Biomedical Corp. Examples of forward-looking statements in this press release include statements regarding our belief that our new distributors in China will need some time to get accustomed to selling our products and that their demonstrated ability to find and sell to our previous distributors' hospital customers as well as establishing new customers will create a base of from which to grow, our expectation that we will add an additional source of increased distribution in China that will target a different tier of hospital than our two new Chinese distributors, further increasing our growth potential in China, our belief that the efficiencies we have achieved in manufacturing and purchasing over the past year will benefit the Company in the future as our unit sales volumes increase, our expectation that the US$2.5 million term loan from Silicon Valley Bank secured during the quarter will support the investment and working capital necessary to implement our new plans in both China and the United States, our expectation that all of the changes we are making now will require time to take full effect and our belief that the quality and quantity of the changes we've made will allow us to accelerate revenue growth and speed our progress toward profitability. These statements are only predictions based on our current expectations and projections about future events. Although we believe the expectations reflected in such forward-looking statements, and the assumptions upon which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct and if such expectations are not met, our business may suffer.

Readers should not place undue reliance on these statements. Actual events or results may differ materially. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Many factors may cause the Company's actual results to differ materially from any forward-looking statement, including the factors detailed in our filings with the Securities and Exchange Commission and Canadian securities regulatory authorities, including but not limited to our annual report on Form 10-K, our quarterly reports on Form 10-Q, our Current Reports on Form 8-K, our Annual Information Form and other filings with the Securities and Exchange Commission and Canadian securities regulatory authorities.

The forward-looking statements contained in this news release are current as of the date hereof and are qualified in their entirety by this cautionary statement. Except as expressly required by applicable securities laws, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Selected Financial Data (in thousands of Canadian dollars except per share data):


                                                    Unaudited               
For the quarter ended March 31,                     2014                2013
----------------------------------------------------------------------------
Product sales                        $             2,559 $             3,561
Cost of sales                                      1,440               1,965
                                    ----------------------------------------
Gross profit                         $             1,119 $             1,596
Gross margin on product sales                      43.7%               44.8%
Operating expenses                                 2,268               1,864
Other expenses                                       374               9,696
                                    ----------------------------------------
Net loss and comprehensive loss      $           (1,523) $           (9,964)
                                    ----------------------------------------
                                    ----------------------------------------
Loss per share - basic and diluted   $            (0.19) $            (1.53)

Reconciliation of GAAP Net Loss to Adjusted EBITDA (in thousands of Canadian dollars):


                                                    Unaudited               
For the quarter ended March 31,                     2014                2013
----------------------------------------------------------------------------
Adjusted EBITDA                      $             (802) $               151
Interest expense and amortization of                                        
 deferred financing costs and debt                                          
 discount                                            197                 177
Interest income                                      (5)                 (4)
Income tax expense                                    17                   -
Depreciation and amortization                        200                 232
Stock-based compensation                             151                 135
Unrealized loss on revaluation of                                           
 warrant liability                                   161               9,575
                                    ----------------------------------------
Net loss and comprehensive loss      $           (1,523) $           (9,964)
                                    ----------------------------------------
                                    ----------------------------------------

Reconciliation of Adjusted Net Loss to GAAP Net Loss (in thousands of Canadian dollars):


                                                    Unaudited               
For the quarter ended March 31,                     2014                2013
----------------------------------------------------------------------------
Adjusted net loss                    $           (1,362) $             (389)
Unrealized loss on revaluation of                                           
 warrant liability                                   161               9,575
                                    ----------------------------------------
Net loss and comprehensive loss      $           (1,523) $           (9,964)
                                    ----------------------------------------
                                    ----------------------------------------

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Phil Hombledal, Solution Architect at CollabNet, discussed how customers are able to achieve a level of transparency that e...
WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web communications world. The 6th WebRTC Summit continues our tradition of delivering the latest and greatest presentations within the world of WebRTC. Topics include voice calling, video chat, P2P file sharing, and use cases that have already leveraged the power and convenience of WebRTC.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Rapid innovation, changing business landscapes, and new IT demands force businesses to make changes quickly. In the eyes of many, containers are at the brink of becoming a pervasive technology in enterprise IT to accelerate application delivery. In this presentation, attendees learned about the: The transformation of IT to a DevOps, microservices, and container-based architecture What are containers and how DevOps practices can operate in a container-based environment A demonstration of how ...
Cloud Expo, Inc. has announced today that Andi Mann returns to 'DevOps at Cloud Expo 2017' as Conference Chair The @DevOpsSummit at Cloud Expo will take place on June 6-8, 2017, at the Javits Center in New York City, NY. "DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great t...
"At ROHA we develop an app called Catcha. It was developed after we spent a year meeting with, talking to, interacting with senior citizens watching them use their smartphones and talking to them about how they use their smartphones so we could get to know their smartphone behavior," explained Dave Woods, Chief Innovation Officer at ROHA, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
If you haven’t heard yet, CollabNet just put out some very big news for managing and gaining value from DevOps. We introduced CollabNet DevOps Lifecycle Manager (DLM) — a platform designed exclusively for providing a single pane of glass, dashboard, and traceability views across your DevOps toolchain and processes from planning to operations and that can be traced back to planning and development.
"Venafi has a platform that allows you to manage, centralize and automate the complete life cycle of keys and certificates within the organization," explained Gina Osmond, Sr. Field Marketing Manager at Venafi, in this SYS-CON.tv interview at DevOps at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
SYS-CON Events announced today that Fusion, a leading provider of cloud services, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Fusion, a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry’s single source for the cloud. Fusion’s advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including cloud...
Video experiences should be unique and exciting! But that doesn’t mean you need to patch all the pieces yourself. Users demand rich and engaging experiences and new ways to connect with you. But creating robust video applications at scale can be complicated, time-consuming and expensive. In his session at @ThingsExpo, Zohar Babin, Vice President of Platform, Ecosystem and Community at Kaltura, discussed how VPaaS enables you to move fast, creating scalable video experiences that reach your aud...
Regulatory requirements exist to promote the controlled sharing of information, while protecting the privacy and/or security of the information. Regulations for each type of information have their own set of rules, policies, and guidelines. Cloud Service Providers (CSP) are faced with increasing demand for services at decreasing prices. Demonstrating and maintaining compliance with regulations is a nontrivial task and doing so against numerous sets of regulatory requirements can be daunting task...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...