|By Marketwired .||
|May 12, 2014 05:00 PM EDT||
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.
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) ---------------------------------------- ----------------------------------------
Response Biomedical Corp.
W.J. (Bill) Adams
Chief Financial Officer
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
Dec. 10, 2016 03:15 AM EST Reads: 406
Get deep visibility into the performance of your databases and expert advice for performance optimization and tuning. You can't get application performance without database performance. Give everyone on the team a comprehensive view of how every aspect of the system affects performance across SQL database operations, host server and OS, virtualization resources and storage I/O. Quickly find bottlenecks and troubleshoot complex problems.
Dec. 10, 2016 02:45 AM EST Reads: 2,266
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
Dec. 10, 2016 02:15 AM EST Reads: 786
Between 2005 and 2020, data volumes will grow by a factor of 300 – enough data to stack CDs from the earth to the moon 162 times. This has come to be known as the ‘big data’ phenomenon. Unfortunately, traditional approaches to handling, storing and analyzing data aren’t adequate at this scale: they’re too costly, slow and physically cumbersome to keep up. Fortunately, in response a new breed of technology has emerged that is cheaper, faster and more scalable. Yet, in meeting these new needs they...
Dec. 10, 2016 02:00 AM EST Reads: 1,986
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Dec. 10, 2016 02:00 AM EST Reads: 584
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busin...
Dec. 10, 2016 01:30 AM EST Reads: 3,998
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, discussed recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model for s...
Dec. 10, 2016 01:30 AM EST Reads: 761
"We are the public cloud providers. We are currently providing 50% of the resources they need for doing e-commerce business in China and we are hosting about 60% of mobile gaming in China," explained Yi Zheng, CPO and VP of Engineering at CDS Global Cloud, 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.
Dec. 10, 2016 01:15 AM EST Reads: 1,220
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
Dec. 10, 2016 01:00 AM EST Reads: 1,263
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
Dec. 10, 2016 12:45 AM EST Reads: 471
"We are a custom software development, engineering firm. We specialize in cloud applications from helping customers that have on-premise applications migrating to the cloud, to helping customers design brand new apps in the cloud. And we specialize in mobile apps," explained Peter Di Stefano, Vice President of Marketing at Impiger Technologies, 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.
Dec. 10, 2016 12:30 AM EST Reads: 613
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 9, 2016 11:30 PM EST Reads: 1,155
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
Dec. 9, 2016 10:45 PM EST Reads: 550
In IT, we sometimes coin terms for things before we know exactly what they are and how they’ll be used. The resulting terms may capture a common set of aspirations and goals – as “cloud” did broadly for on-demand, self-service, and flexible computing. But such a term can also lump together diverse and even competing practices, technologies, and priorities to the point where important distinctions are glossed over and lost.
Dec. 9, 2016 10:30 PM EST Reads: 1,732
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...
Dec. 9, 2016 10:00 PM EST Reads: 328