Le Lézard
Classified in: Health, Science and technology, Business
Subjects: EARNINGS, Conference Call, Webcast

Quanterix Corporation Releases Operating Results for Second Quarter 2022, Announces Business Re-Alignment Plan and Revises 2022 Guidance


Quanterix Corporation (NASDAQ: QTRX), a company expanding the limits of exploration with ultrasensitive biomarker detection, today announced operating results for the three months ended June 30, 2022.

Second Quarter 2022 Financial Highlights

For additional information on the pro-forma financial measures included in this press release, please see "Use of Pro-Forma Financial Measures" and "Reconciliation of GAAP to Pro-Forma" below.

Second quarter revenues were impacted by a reduction in consumable revenue as the Company addressed assay quality challenges and process improvement initiatives. While these challenges are a near-term headwind to revenue growth, the Company believes underlying market demand for the SIMOA® technology remains robust.

The reduction in GAAP gross margin reflects the reallocation of resources, principally headcount, to ongoing quality-related activities, resulting in an increase in cost of goods sold and a corresponding decrease in operating expense. Pro-forma gross margin is adjusted to include the portion of product-related freight and shipping costs that are not billed to the customer. These amounts are included in operating expenses on a GAAP basis. The Company expects to report pro-forma gross margin on a go forward basis. The increases to cost of goods sold described above have a corresponding reduction in operating expense, with no overall change to the Company's total expenses. The Company believes that including these expenses in cost of goods sold reflects the nature of these expenses and will provide better visibility into the Company's progress toward its quality process improvement initiatives. Gross margins were also impacted by a decrease in sales of higher-margin consumable products as well as a reduction in overall volume.

Strategic Business Re-Alignment Plan

Following a strategic review and top-down assessment of its operations, the Company announced a comprehensive plan that includes restructuring and business re-alignment in order to fully realize the potential of its SIMOA platforms and continue its leadership role in ultrasensitive translational biomarker detection. In connection with these changes, the Company has set in motion an assay redevelopment program with the ultimate objective of improving its ability to manufacture and deliver high-quality assays at scale. The company expects to make initial progress toward this initiative in 2022 and that the program will be completed in 2023. The plan also aligns the Company's investments to best serve the needs of customers, focus innovation efforts on key platforms and provide the foundation for the Company's entry into translational pharma and clinical markets, which it believes will be required to access new growth categories. The changes will improve the Company's cost structure by aligning our expenses with anticipated future revenues. These actions will result in a reduction in force affecting approximately 130 employees across the Company's world-wide operations. The Company also announced that it is reviewing alternatives with respect to additional facility space that it currently leases in Bedford, Massachusetts.

The Company expects to incur restructuring and related charges of approximately $7 million to $10 million in Q3 2022. The Company also expects to realize run-rate savings of approximately $25 million on an annualized basis. The Company is currently unable to estimate facility-related charges.

FY2022 Guidance and Long-Term Outlook

The Company announced that it now expects its total 2022 revenue to be flat compared to 2021. The Company expects to return to double digit revenue growth by 2024 as the benefits of its restructuring and re-alignment plan are fully realized, and to accelerate at a faster pace once new growth categories are unlocked.

"We are taking decisive action to focus and improve the quality and scalability of our products, support our customers and open the door to new growth opportunities," said Masoud Toloue, President and Chief Executive Officer of Quanterix. "By embarking on this next chapter, we will emerge a stronger company, innovating at a faster pace and well-timed to enable new disease modifying therapies expected to come to market in the coming years."

Conference Call

In conjunction with this announcement, Quanterix Corporation will host a conference call on August 8, 2022 at 4:30 p.m. EST. Individuals interested in listening to the conference call may do so by pre-registering here and obtaining a dial-in number and passcode.

A live webcast will also be available at: https://edge.media-server.com/mmc/p/3yj49myz. You may also access the live webcast by visiting the News & Events page within the Investors section of the Quanterix website at www.quanterix.com. The webcast will be available on the Company's website for one year following completion of the call.

Financial Highlights

Quanterix Income Statement
 
in '000 USD Q2 2022 Q2 2021 YTD 2022 YTD 2021
Product Revenue

14,785

 

18,676

 

35,441

 

36,924

 

Service and Other Revenue

8,548

 

5,648

 

17,358

 

12,057

 

Collaboration and License Revenue

92

 

105

 

178

 

366

 

Development Revenue

75

 

942

 

75

 

3,233

 

Total Revenue

23,500

 

25,371

 

53,052

 

52,580

 

 
Cost of Product Revenue

9,921

 

8,114

 

20,667

 

15,594

 

Cost of Services Revenue

4,868

 

3,383

 

9,115

 

6,763

 

Gross Profit

8,711

 

13,874

 

23,270

 

30,223

 

Gross Margin %

37.1

%

54.7

%

43.9

%

57.5

%

 
Research and Development

6,625

 

6,754

 

13,659

 

13,437

 

Selling, General and Administrative

27,045

 

20,788

 

52,757

 

40,243

 

Total Operating Expenses

33,670

 

27,542

 

66,416

 

53,680

 

 
Loss From Operations

-24,959

 

-13,668

 

-43,146

 

-23,457

 

Interest Income (Expense), net

552

 

-165

 

604

 

-328

 

Other Expense, net

-358

 

1,977

 

-575

 

1,783

 

Tax

-137

 

-41

 

62

 

1

 

Net Loss

-24,902

 

-11,897

 

-43,055

 

-22,001

 

Weighted average outstanding shares was 36.9 million for each of Q2 2022 and YTD 2022.

Quanterix Balance Sheet
 
in '000 USD At 6/30/22 At 12/31/21
Cash and Cash Equivalents

361,293

396,465

Accounts Receivable

19,683

23,786

Inventory

21,985

22,190

Prepaid Expenses and Other

10,237

6,514

Total Current Assets

413,198

448,955

Restricted Cash

2,594

2,577

Property and Equipment, Net

22,295

17,960

Intangible Assets, Net

8,527

10,534

Goodwill

8,675

9,632

Right-of-Use Assets

32,935

11,491

Other Non-Current Assets

377

378

Total Assets

488,601

501,527

 
Accounts Payable & Accrued Expenses

21,420

28,947

Deferred Revenue

12,157

6,361

Current Portion of Long Term Debt

0

0

Lease Liabilities

2,696

1,428

Other Current Liabilities

396

241

Total Current Liabilities

36,669

36,977

Deferred Revenue, Net of Current Portion

1,531

1,099

Lease Liabilities, Net of Current Portion

43,135

20,464

Other Non-Current Liabilities

1,810

2,035

Total Liabilities

83,145

60,575

 
Total Stockholders' Equity

405,456

440,952

 
Total Liabilities and Stockholders' Equity

488,601

501,527

 

Use of Pro-Forma Financial Measures

To supplement the Company's financial statements presented on a GAAP basis, the Company has provided certain pro-forma financial measures, including pro-forma gross profit, pro-forma gross margin percentage, pro-forma operating expenses and pro-forma loss from operations. Management uses these pro-forma measures to evaluate the Company's operating performance in a manner that allows for meaningful period-to-period comparison and analysis of trends in its business. Management believes that such measures are important in comparing current results with prior period results and are useful to investors and financial analysts in assessing the Company's operating performance. The pro-forma financial information presented here should be considered in conjunction with, and not as a substitute for, the financial information presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these pro-forma measures to their most directly comparable GAAP financial measures set forth below.

Reconciliation of GAAP to Pro Forma

Reconciliation of GAAP to Pro Forma
(In thousands)

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Three months ended Six months ended
June 30 June 30
Gross profit

$

8,711

 

$

13,874

 

$

23,270

 

$

30,223

 

Distribution Costs (Note 1)

$

(2,065

)

$

(1,827

)

$

(3,929

)

$

(3,562

)

Pro forma gross profit

$

6,646

 

$

12,047

 

$

19,341

 

$

26,661

 

GAAP gross margin %

 

37.1

%

 

54.7

%

 

43.9

%

 

57.5

%

Pro forma gross margin %

 

28.3

%

 

47.5

%

 

36.5

%

 

50.7

%

 
GAAP total operating expenses

$

33,670

 

$

27,542

 

$

66,416

 

$

53,680

 

Distribution Costs (Note 1)

$

(2,065

)

$

(1,827

)

$

(3,929

)

$

(3,562

)

Pro forma total operating expenses

$

31,605

 

$

25,715

 

$

62,487

 

$

50,118

 

 
GAAP loss from operations

$

(24,959

)

$

(13,668

)

$

(43,146

)

$

(23,457

)

Pro forma loss from operations

$

(24,959

)

$

(13,668

)

$

(43,146

)

$

(23,457

)

 
Note 1: Distribution costs, which include freight and and other activities costs associated with product shipments, net of charges passed on to the customer, are captured within operating expenses in our consolidated statements of operations. During the three and six months ended June 30, 2022, we incurred $2.1 million and $3.9 million, respectivley, of distribution costs recorded within operating expenses. During the three and six months ended June 30, 2021, we incurred $1.8 million and $3.6 million, respectivley, of distribution costs recorded within operating expenses.

About Quanterix

Quanterix is a company that's expanding the limits of exploration with ultrasensitive biomarker detection. The Company's digital health solution, Simoa, has the potential to change the way in which healthcare is provided today by giving researchers the ability to closely examine the continuum from health to disease. Quanterix' technology is designed to enable much earlier disease detection, better prognoses and enhanced treatment methods to improve the quality of life and longevity of the population for generations to come. The technology is currently being used for research applications in several therapeutic areas, including oncology, neurology, cardiology, inflammation and infectious disease. The Company was established in 2007 and is located in Billerica, Massachusetts. For additional information, please visit https://www.quanterix.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "expect," "plan," "anticipate," "estimate," "intend" and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements about Quanterix' financial performance, including anticipated benefits and costs associated with Quanterix' plan of restructuring and realignment, and are subject to a number of risks, uncertainties and assumptions. Forward-looking statements in this news release are based on Quanterix' expectations and assumptions as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties. Factors that may cause Quanterix' actual results to differ from those expressed or implied in the forward-looking statements in this press release include, but are not limited to, those described in Part II, Item 1A, "Risk Factors" and elsewhere in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, and in "Part I, Item 1A, "Risk Factors" in Quanterix' Annual Report on Form 10-K for the year ended December 31, 2021, or other filings that we make with the SEC, as well as the risk that Quanterix' plan of restructuring and realignment results in unexpected costs, the risk that Quanterix is unable to implement the plan of restructuring and realignment as intended and the risk that implementation of the plan of restructuring and realignment is delayed. Except as required by law, Quanterix assumes no obligation to update any forward-looking statements contained herein to reflect any change in expectations, even as new information becomes available.


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