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)
                                    ----------------------------------------
                                    ----------------------------------------

Contacts:
Response Biomedical Corp.
W.J. (Bill) Adams
604-456-6010
Chief Financial Officer
[email protected]

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
Sanjeev Sharma Joins November 11-13, 2018 @DevOpsSummit at @CloudEXPO New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
When building large, cloud-based applications that operate at a high scale, it's important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. "Fly two mistakes high" is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Le...
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by ...
JETRO showcased Japan Digital Transformation Pavilion at SYS-CON's 21st International Cloud Expo® at the Santa Clara Convention Center in Santa Clara, CA. The Japan External Trade Organization (JETRO) is a non-profit organization that provides business support services to companies expanding to Japan. With the support of JETRO's dedicated staff, clients can incorporate their business; receive visa, immigration, and HR support; find dedicated office space; identify local government subsidies; get...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
Containers and Kubernetes allow for code portability across on-premise VMs, bare metal, or multiple cloud provider environments. Yet, despite this portability promise, developers may include configuration and application definitions that constrain or even eliminate application portability. In this session we'll describe best practices for "configuration as code" in a Kubernetes environment. We will demonstrate how a properly constructed containerized app can be deployed to both Amazon and Azure ...
This is going to be a live demo on a production ready CICD pipeline which automate the deployment of application onto AWS ECS and Fargate. The same pipeline will automate deployment into various environment such as Test, UAT, and Prod. The pipeline will go through various stages such as source, build, test, approval, UAT stage, Prod stage. The demo will utilize only AWS services including AWS CodeCommit, Codebuild, code pipeline, Elastic container service (ECS), ECR, and Fargate.
Behera Rasananda is a technologist, a leader, a key note speaker has more than 20 years experience in across Government, Financial, Heath Care and Insurance Verticals. Mr. Behera has vast experience in Enterprise Cloud and Big Data solutions and Enterprise Architecture. Currently he works closely for Government Solutions on Enterprise Cloud for Federal Government Agency. Scientist Behera managed and partner with clients to make complete end to end solution and Migration to cloud both private sec...
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
As Enterprise business moves from Monoliths to Microservices, adoption and successful implementations of Microservices become more evident. The goal of Microservices is to improve software delivery speed and increase system safety as scale increases. Documenting hurdles and problems for the use of Microservices will help consultants, architects and specialists to avoid repeating the same mistakes and learn how and when to use (or not use) Microservices at the enterprise level. The circumstance w...
Today, we have more data to manage than ever. We also have better algorithms that help us access our data faster. Cloud is the driving force behind many of the data warehouse advancements we have enjoyed in recent years. But what are the best practices for storing data in the cloud for machine learning and data science applications?
"Avere Systems deals with data performance optimization in the cloud or on-premise. Even to this day many organizations struggle with what we call the problem of data gravity - 'Where should I put the data?' - because the data dictates ultimately where the jobs are going to run," explained Scott Jeschonek, Director Cloud Solutions at Avere Systems, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
If a machine can invent, does this mean the end of the patent system as we know it? The patent system, both in the US and Europe, allows companies to protect their inventions and helps foster innovation. However, Artificial Intelligence (AI) could be set to disrupt the patent system as we know it. This talk will examine how AI may change the patent landscape in the years to come. Furthermore, ways in which companies can best protect their AI related inventions will be examined from both a US and...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...