Oxford Immunotec Reports Third Quarter 2018 Financial Results

  •  Closed transformative deal to sell U.S. laboratory services business to Quest Diagnostics
  • T-SPOT®.TB tests sold in the third quarter exceeded one million tests for the first time
  • Significant improvement in GAAP net loss; first quarter of positive non-GAAP adjusted EBITDA

OXFORD, United Kingdom and MARLBOROUGH, Mass., November 9, 2018 (GLOBE NEWSWIRE) –Oxford Immunotec Global PLC (Nasdaq: OXFD), a global, high-growth diagnostics company, today announced third quarter 2018 financial results.

“We are very pleased with the continued strong growth in our TB business, as well as the Company’s continued progress on profitability metrics,” said Dr. Peter Wrighton-Smith, Chief Executive Officer of Oxford Immunotec. “The Quest transaction is a transformative event for the Company that well positions us for greater commercial and financial success”.

By revenue type, total revenues were, in millions:

    Three Months Ended September 30,  
      2018       2017   Percent Change
Product $     15.1 $     13.4        12%
Service        1.0        1.6 -40%
Total Revenue   $    16.1   $    15.0   7%  

 

By geography, total revenues were, in millions:

Three Months Ended September 30,
        Percent Change
2018 2017 As Reported Constant Currency (1)
United States $2.9 $   3.4 -15% -15%
Europe & ROW 2.3            2.2 3% 4%
Asia            10.9            9.4 16% 18%
Total revenue $ 16.1 $ 15.0 7% 8%

(a) Changes in revenue include the impact of changes in foreign currency exchange rates. We use the non-GAAP financial measure “constant currency basis” in our filings to show changes in our revenue without giving effect to period-to-period currency fluctuations. We consider the use of a period over period revenue comparison on a constant currency basis to be helpful to investors, as it provides a revenue growth measure free of positive or negative volatility due to currency fluctuations.

Third Quarter 2018 Financial Results

Revenue for the third quarter of 2018 was $16.1 million, representing a 7% increase from third quarter 2017 revenue of $15.0 million. On a constant currency basis, revenue growth was 8% versus the prior year period.

2018 third quarter product revenue was $15.1 million, representing a 12% increase from product revenue of $13.4 million in the third quarter of 2017. Service revenue for the third quarter of 2018 was $1.0 million, down 40% from 2017 third quarter service revenue of $1.6 million. The decrease in service revenue was driven by an expected decline in blood donor screening revenue.

United States revenue was $2.9 million in the third quarter of 2018, representing a 15% decline from revenue of $3.4 million in the prior year period. Growth in our core tuberculosis business was offset by an expected decline in blood donor screening revenue.

Europe & ROW revenue was $2.3 million in the third quarter of 2018, representing a 3% increase compared to the third quarter of 2017. On a constant currency basis, Europe & ROW revenue increased 4% versus the third quarter of 2017.

Asia revenue was $10.9 million in the third quarter of 2018, representing an increase of 16% compared to 2017 third quarter revenue of $9.4 million. On a constant currency basis, Asia revenue increased 18% versus the third quarter of 2017.

Gross profit for the third quarter of 2018 was $11.5 million, an increase of approximately $1.7 million from gross profit of $9.8 million in the same period of 2017. Gross margin was 71.5%, an increase of 650 basis points from gross margin of 65.0% in the third quarter of 2017.

Operating expenses were $16.5 million in the third quarter of 2018, a decrease of approximately $11.1 million compared to $27.6 million in the third quarter of 2017. Excluding one-time items, operating expenses for the third quarter of 2018 decreased approximately $900k compared to the third quarter of 2017.

Net loss for the third quarter of 2018 was $3.5 million, or $0.13 per share, compared to $16.8 million, or $0.70 per share, in the third quarter of 2017. Net loss per share was based on 26,033,550 and 24,123,574 weighted average ordinary shares outstanding for the third quarters of 2018 and 2017, respectively.

EBITDA for the third quarter of 2018 was $(1.2) million compared to $(14.7) million in the third quarter of 2017. Adjusted EBITDA was $2.3 million for the third quarter of 2018 compared to $(2.5) million in the same period in 2017. Both EBITDA and Adjusted EBITDA are non-GAAP measures.

Quest Diagnostics Completes Acquisition of Our U.S. Laboratory Services Business

On November 6, 2018, Quest Diagnostics completed its previously announced acquisition of our U.S. laboratory services business. The T-SPOT.TB tuberculosis and the Accutix tick-borne disease testing services are now part of Quest Diagnostics’ portfolio of innovative infectious disease testing services. As part of the transaction, we will sell T-SPOT.TB test kits and related accessories to Quest Diagnostics under the terms of a long-term supply agreement. In addition, the parties have entered into a strategic collaboration agreement to drive continued growth of T-SPOT.TB testing in the U.S.

The transaction represents a strategic business shift having a major effect on our operations and financial results. Accordingly, the assets and liabilities of this business have been classified as held for sale and the related operations reported in discontinued operations in our condensed consolidated financial statements for all periods presented.

Supplemental Financial Information

To assist investors in understanding third quarter results excluding the disposition of the U.S. laboratory services business, Oxford Immunotec has provided Unaudited Non-GAAP Pro Forma Condensed Combined Statement of Operations for the quarterly period ended September 30, 2018 as Exhibit 99.2 to our Current Report on Form 8-K furnished on November 9, 2018.

Conference Call

Oxford Immunotec will host a conference call on Friday, November 9, 2018 at 8:00 a.m. Eastern Time to discuss its third quarter 2018 financial results. The call will be concurrently webcast. To listen to the conference call on your telephone, please dial (855) 363-5047 for United States callers and +1 (484) 365-2897 for international callers and reference confirmation code 7673307 approximately ten minutes prior to start time. To access the live audio webcast or subsequent archived recording, visit the Investor Relations section of Oxford Immunotec’s website at www.oxfordimmunotec.com. The replay will be available on the Company’s website for approximately 60 days.

About Oxford Immunotec

Oxford Immunotec Global PLC is a global, high-growth diagnostics company focused on developing and commercializing proprietary tests for the management of underserved immune-regulated conditions. The Company’s T-SPOT.TB test has been approved for sale in over 50 countries, including the United States, where it has received pre-market approval from the Food and Drug Administration, Europe, where it has obtained a CE mark, as well as Japan and China. The Company is headquartered near Oxford, U.K. and in Marlborough, MA. Additional information can be found at www.oxfordimmunotec.com.

T-SPOT and the Oxford Immunotec logo are trademarks of Oxford Immunotec Ltd.

Forward-Looking Statements

This release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this release are forward-looking statements. This includes statements about Oxford Immunotec’s anticipated plans, objectives, intentions, the anticipated benefits of the transaction, the effects of the transaction, including effects on future financial and operating results, prospects for sales of its products and other statements that are not historical facts. Actual events or results may differ materially from those described in this release due to a number of risks and uncertainties. Risks and uncertainties include, among others: the potential disruption of management time from ongoing business operations due to the transaction; the risk that Oxford Immunotec may fail to realize the expected benefits from the transaction; the risk that the announcement of the completion of the transaction could have adverse effects on the market price of Oxford Immunotec’s ordinary shares; decisions by regulatory authorities, hospitals and other health care institutions, laboratories, physicians, patients and third party payers that could affect Oxford Immunotec’s business and prospects; Oxford Immunotec’s exposure to potential litigation and contingent liabilities pursuant to the transaction; as well as Oxford Immunotec’s ability to expeditiously and successfully expand its sales and distribution networks. The risks included above are not exhaustive. Other factors that could adversely affect Oxford Immunotec’s business and prospects are described under the “Risk Factors” section in its filings with the Securities and Exchange Commission (“SEC”). Oxford Immunotec’s SEC filings are available for free by visiting the investor section of its website, www.oxfordimmunotec.com, or the SEC’s website, www.sec.gov.

Investors should give careful consideration to these risks and uncertainties. Forward-looking statements contained herein are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements contained herein, which speak only as of the date of this release. Oxford Immunotec does not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law.

For detailed financial information please click here.

CONTACTS:

For Media and Investor Inquiries:
Karen Koski
VP, Strategy and Investor Relations
Oxford Immunotec
Tel: +1 (508) 556-1377
kkoski@oxfordimmunotec.com