HACKENSACK, N.J., Dec. 7, 2017 /PRNewswire/ -- Champions
Oncology, Inc. (Nasdaq: CSBR), engaged in the development of
advanced technology solutions and services to personalize the
development and use of oncology drugs, today announced its
financial results for the second fiscal quarter and six months
ended October 31, 2017.
Second Quarter and Recent Business Highlights:
- Record quarterly revenue of $5.2
million, an increase of 16.7% year-over-year
- Record Translational Oncology Services ("TOS") revenue of
$4.8 million, an increase of 21.8%
year-over-year
- Awarded a two-year, $2 million,
competitively-bid contract through the Small Business Innovation
Research (SBIR) program to build and study an ethnically diverse
cohort of metastatic prostate patient-derived xenograft (PDX)
models
- Clinical correlation between patient-derived xenograft (PDX)
model responses and patient responses to oncology therapies
highlighted in journal, Annals of Oncology; the report was
published by the European Society for Medical oncology (ESMO), the
leading European professional organization for medical oncology in
Europe.
- Reiterated expectations for fiscal year 2018 revenue growth of
at least 20% over fiscal year 2017
Ronnie Morris, CEO of Champions,
commented, "The continued execution of our strategic growth plan
and disciplined management of expenses resulted in quarterly
operating profitability and another quarter of record revenue,
reinforcing our confidence in achieving at least 20% revenue growth
for fiscal 2018 and the longer-term prospects for our business. As
expected, revenues reached a level that exceeded our expenses,
establishing a trajectory for long-term profitability. As we
continue to scale, we expect to further minimize the impact of
quarter-to-quarter fluctuations and generate consistent
profitability."
"Engagement with existing and potential new clients remains
solid, and we are encouraged by the level of interest being
expressed for our services and the future growth opportunities we
see before us," added Morris. "As we continue to expand our
presence and collaborate with pharmaceutical companies on new
projects, we are further increasing the value and importance of our
models in the pre-clinical and clinical drug development
process."
Financial Results
For the second quarter of fiscal 2018, revenue increased 16.7%
to $5.2 million, as compared to
$4.5 million for the second quarter
of fiscal 2017. Total operating expenses for the second quarter
fiscal 2018 and 2017 was $5.3 million
and $5 million, respectively, an
increase of $300,000 or 6.5%. Revenue
was $10.2 million and $8.1 million for the six months ended
October 31, 2017 and 2016,
respectively, an increase of $2.1
million or 26%. Total operating expenses for the six months
ended October 31, 2017 and 2016 was
$10.9 million and $11.1 million, respectively, a decrease of
$200,000 or (2%).
For the second quarter of fiscal 2018, Champions reported a loss
from operations of $70,000, including
$148,000 in stock-based compensation,
an improvement of $423,000 or 85.8%
compared to the loss from operations of $493,000, inclusive of $535,000 in stock-based compensation, in the
second quarter of fiscal 2017. Excluding stock based compensation
and depreciation, Champions recognized net income from operations
of $ 175,000 for the second quarter
2018.
Net cash generated was $229,000
for the three months ended October 31,
2017. Net cash used for the same period last year was
$134,000. The improvement in cash
flow is the result of revenue growth and expense management.
The Company ended the quarter with $660,000 of cash and cash equivalents and
reiterates its position that it does not currently intend to raise
capital in the equity market.
TOS revenue was $4.8 million for
the three months ended October 31,
2017 compared to $4 million
for the three months ended October 31,
2016, an increase of $800,000
or 21.8%.
TOS cost of sales was $2.4 million
for the three months ended October 31,
2017, an increase of $600,000,
or 30.9%, compared to $1.8 million
for the three months ended October 31,
2016. For the three months ended October 31, 2017 and 2016, gross margin for TOS
was 50.4% and 53.8%, respectively. The increase in TOS cost of
sales was due to an increase in the number and size of TOS
studies. The gross margin often fluctuates quarter to quarter,
resulting from timing differences between revenue and expense
recognition.
Personalized Oncology Services ("POS") revenue was $378,000 and $497,000 for the three months ended October 31, 2017 and 2016, respectively, a
decrease of $119,000 or (23.9%). The
decrease is due mainly to a decrease in implant and drug study
revenue.
POS cost of sales was $259,000 for
the three months ended October 31,
2017, a decrease of $115,000,
or (30.7%), compared to $374,000 for
the three months ended October 31,
2016. For the three months ended October 31, 2017 and 2016, gross margin for POS
was 31.5% and 24.8%, respectively. The improvement is attributed to
the increase in higher margin sequencing revenue.
Research and development expense was $1.1
million for the three months ended October 31, 2017, an increase of $100,000, or 10.6%, compared to $1 million for the three months ended
October 31, 2016. Sales and marketing
expense for the three months ended October
31, 2017 was $551,000, a
decrease of $166,000, or (23.2%),
compared to $717,000 for the three
months ended October 31, 2016. The
decrease is mainly due to a reduction of marketing resources for
the POS division. General and administrative expense was
$1 million for both the three months
ended October 31, 2017 and 2016.
Year-to-Date Financial Results
For the first six months of fiscal 2018, revenue increased 26.0%
to $10.2 million, as compared to
$8.1 million for the first six months
of fiscal 2017. Total operating expenses for the first six months
of fiscal 2018 were $10.9 million
compared to $11.1 million for the
first six months of fiscal 2017, a decrease of $200,000 or (1.9%).
For the first six months of fiscal 2018, Champions reported a
loss from operations of $689,000,
including $711,000 and $132,000 in stock-based compensation and
depreciation, respectively, an improvement of $2.3 million, or 77.2%, compared to the
loss from operations of $3 million,
inclusive of $1.7 million and
$87,000 in stock-based compensation
and depreciation, respectively, in the first six months of fiscal
2017. Excluding stock-based compensation and depreciation,
Champions recognized income from operations of $155,000 for the six months ended October 31, 2017 compared to net loss of
$1.3 million for the six months ended
October 31, 2016.
TOS revenue was $9.4 million for
the six months ended October 31, 2017
compared to $7.1 million for the six
months ended October 31, 2016, an
increase of $2.3 million or
32.3%.
TOS cost of sales was $4.6 million
for the six months ended October 31,
2017, an increase of $700,000,
or 19.8%, compared to $3.9 million
for the six months ended October 31,
2016. Gross margin for TOS was 50.7% for the first six
months of fiscal 2018 compared to 45.5% for the first six months of
fiscal 2017.
POS revenue was $818,000 for the
six months ended October 31, 2017
compared to $1.0 million for the six
months ended October 31, 2016, a
decrease of $182,000 or (18.8%).
POS cost of sales was $646,000 for
the six months ended October 31,
2017, a decrease of $201,000,
or (23.7%), compared to $847,000 for
the six months ended October 31,
2016. Gross margin for POS for the six months ended
October 31, 2017 was 21% compared to
15.9% for the six months ended October 31,
2016.
Research and development expense was $2.2
million for both the six months ended October 31, 2017 and 2016. Sales and marketing
expense for the six months ended October 31,
2017 was $1.2 million, a
decrease of $400,000, or (24.8%),
compared to $1.6 million for the six
months ended October 31, 2016.
General and administrative expense was $2.2
million for the six months ended October 31, 2017, a decrease of $400,000 or (15.3%), compared to $2.6 million for the six months ended
October 31, 2016.
Net cash used in operations was $1.7
million for the six months ended October 31, 2017 compared to $2.6 million for the six months ended 2016, a
decrease of $900,000 or 34.3%.
Conference Call Information:
The Company will host a conference call today at 4:30 p.m. EST (1:30:00
p.m. PST) to discuss its second quarter financial results.
To participate in the call, please call 888-567-1602 (domestic) or
404-267-0373 (international) 10 minutes ahead of the call and give
the verbal reference "Champions Oncology."
Full details of the Company's financial results will be
available Friday, December 15, 2017
in the Company's Form 10-Q at www.championsoncology.com.
* Non-GAAP Financial Information
See the attached Reconciliation of GAAP net loss to non-GAAP net
loss for an explanation of the amounts excluded to arrive at
non-GAAP net loss and related non-GAAP net loss per share amounts
for the three and six months ended October
31, 2017 and 2016. Non-GAAP financial measures provide
investors and management with supplemental measures of operating
performance and trends that facilitate comparisons between periods
before and after certain items that would not otherwise be apparent
on a GAAP basis. Certain unusual or non-recurring items that
management does not believe affect the Company's basic operations
do not meet the GAAP definition of unusual or non-recurring items.
Non-GAAP net loss and non-GAAP loss per share are not, and should
not be viewed as a substitute for similar GAAP items. Champions'
defines non-GAAP dilutive loss per share amounts as non-GAAP net
loss divided by the weighted average number of diluted shares
outstanding. Champions' definition of non-GAAP net loss and
non-GAAP diluted loss per share may differ from similarly named
measures used by others.
About Champions Oncology, Inc.
Champions Oncology, Inc. is engaged in the development of
advanced technology solutions and services to personalize the
development and use of oncology drugs. The Company's
TumorGraft technology platform is a novel approach to personalizing
cancer care based upon the implantation of primary human tumors in
immune deficient mice followed by propagation of the resulting
engraftments, or TumorGrafts, in a manner that preserves the
biological characteristics of the original human tumor in order to
determine the efficacy of a treatment regimen. The Company
uses this technology in conjunction with related services to offer
solutions for two customer groups: Personalized Oncology
Solutions, in which results help guide the development of
personalized treatment plans, and Translational Oncology Solutions,
in which pharmaceutical and biotechnology companies seeking
personalized approaches to drug development can lower the cost and
increase the speed of developing new drugs. TumorGrafts are
procured through agreements with a number of institutions in the
U.S. and overseas as well as through Champions' Personalized
Oncology Solutions business. For more information, please visit
www.championsoncology.com.
This press release may contain "forward-looking statements"
(within the meaning of the Private Securities Litigation Act of
1995) that inherently involve risk and uncertainties.
Champions Oncology generally uses words such as "believe," "may,"
"could," "will," "intend," "expect," "anticipate," "plan," and
similar expressions to identify forward-looking statements.
One should not place undue reliance on these forward-looking
statements. The Company's actual results could differ
materially from those anticipated in the forward-looking statements
for many unforeseen factors. See Champions Oncology's Form
10-K for the fiscal year ended April 30,
2017 for a discussion of such risks, uncertainties and other
factors. Although the Company believes the expectations
reflected in the forward-looking statements are reasonable, they
relate only to events as of the date on which the statements are
made, and Champions Oncology's future results, levels of activity,
performance or achievements may not meet these expectations.
The Company does not intend to update any of the forward-looking
statements after the date of this press release to conform these
statements to actual results or to changes in Champions Oncology's
expectations, except as required by law.
Champions
Oncology, Inc.
|
(Dollars in
thousands except per share amounts)
|
|
Reconciliation of
GAAP to Non-GAAP Net Gain (Loss) (Unaudited)
|
|
|
|
|
|
Three Months
Ended October 31,
|
|
Six Months
Ended
October 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net (loss) -
GAAP
|
$
|
(94)
|
|
|
$
|
(504)
|
|
|
$
|
(768)
|
|
|
$
|
(3,051)
|
|
Less:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
148
|
|
|
535
|
|
|
711
|
|
|
1,664
|
|
Net gain (loss) -
non-GAAP
|
$
|
54
|
|
|
$
|
31
|
|
|
$
|
(57)
|
|
|
$
|
(1,387)
|
|
Reconciliation of
GAAP EPS to Non-GAAP EPS (Unaudited)
|
|
|
|
|
|
Three Months
Ended
October 31,
|
|
Six Months
Ended
October 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
EPS – GAAP
|
$
|
(0.01)
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.32)
|
|
Less:
|
|
|
|
|
|
|
|
Effect of stock-based
compensation on EPS
|
0.01
|
|
|
0.05
|
|
|
0.07
|
|
|
0.17
|
|
EPS -
non-GAAP
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.15)
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
|
|
|
Three Months
Ended
October 31,
|
|
Six Months
Ended
October 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
TOS operating
revenue
|
4,825
|
|
|
3,960
|
|
|
9,418
|
|
|
7,119
|
|
POS operating
revenue
|
$
|
378
|
|
|
$
|
497
|
|
|
$
|
818
|
|
|
$
|
1,007
|
|
Total operating
revenue
|
$
|
5,203
|
|
|
$
|
4,457
|
|
|
$
|
10,236
|
|
|
$
|
8,126
|
|
Cost of
TOS
|
2,394
|
|
|
1,829
|
|
|
4,648
|
|
|
3,879
|
|
Cost of
POS
|
259
|
|
|
374
|
|
|
646
|
|
|
847
|
|
Research and
development
|
1,115
|
|
|
1,008
|
|
|
2,233
|
|
|
2,219
|
|
Sales and
marketing
|
551
|
|
|
717
|
|
|
1,235
|
|
|
1,643
|
|
General and
administrative
|
954
|
|
|
1,022
|
|
|
2,163
|
|
|
2,555
|
|
Loss from
Operations
|
$
|
(70)
|
|
|
$
|
(493)
|
|
|
$
|
(689)
|
|
|
$
|
(3,017)
|
|
Other
(Expense)
|
(13)
|
|
|
(16)
|
|
|
(64)
|
|
|
(25)
|
|
Net Loss before
provision for income taxes
|
$
|
(83)
|
|
|
$
|
(509)
|
|
|
$
|
(753)
|
|
|
$
|
(3,042)
|
|
Income
taxes
|
(11)
|
|
|
(5)
|
|
|
(15)
|
|
|
9
|
|
Net
Loss
|
$
|
(94)
|
|
|
$
|
(504)
|
|
|
$
|
(768)
|
|
|
$
|
(3,051)
|
|
Condensed
Consolidated Balance Sheets as of (Unaudited)
|
|
|
October 31,
2017
|
|
April
30,
2017
|
Cash and cash
equivalents
|
$
|
660
|
|
|
$
|
3,295
|
|
Accounts
receivable
|
2,578
|
|
|
2,274
|
|
Other current
assets
|
303
|
|
|
300
|
|
Total current
assets
|
3,541
|
|
|
5,869
|
|
|
|
|
|
Restricted
cash
|
150
|
|
|
150
|
|
Property and
equipment, net
|
2,025
|
|
|
1,216
|
|
Other long term
assets
|
107
|
|
|
107
|
|
Goodwill
|
669
|
|
|
669
|
|
Total
assets
|
$
|
6,492
|
|
|
$
|
8,011
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
1,939
|
|
|
$
|
2,537
|
|
Deferred
revenue
|
3,879
|
|
|
4,910
|
|
Total current
liabilities
|
5,818
|
|
|
7,447
|
|
|
|
|
|
Other Non-current
Liability
|
302
|
|
|
164
|
|
Stockholders'
equity
|
372
|
|
|
400
|
|
Total liabilities
and stockholders' equity
|
$
|
6,492
|
|
|
$
|
8,011
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
|
Six Months
Ended
October 31,
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
Net Loss
|
$
|
(768)
|
|
|
$
|
(3,051)
|
|
Adjustments to
reconcile net cash used in operations:
|
|
|
|
Stock-based
compensation expense
|
711
|
|
|
1,664
|
|
Issuance of common
stock for services
|
30
|
|
|
15
|
|
Depreciation and
amortization expense
|
132
|
|
|
87
|
|
Allowance for
doubtful accounts
|
(41)
|
|
|
(2)
|
|
Changes in operating
assets and liabilities
|
(1,745)
|
|
|
(1,268)
|
|
Net cash used in
operating activities
|
(1,681)
|
|
|
(2,555)
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(942)
|
|
|
(30)
|
|
Net cash used in
investing activities:
|
(942)
|
|
|
(30)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Public Offering June
2016, net of financing costs of $742,000
|
—
|
|
|
4,340
|
|
Capital lease
payments
|
(12)
|
|
|
(12)
|
|
Net cash (used in)
provided by financing activities:
|
(12)
|
|
|
4,328
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
(2,635)
|
|
|
1,743
|
|
Cash and cash
equivalents, beginning of period
|
3,295
|
|
|
2,585
|
|
Cash and cash
equivalents, end of period
|
$
|
660
|
|
|
$
|
4,328
|
|
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content:http://www.prnewswire.com/news-releases/champions-oncology-reports-record-quarterly-revenue-of-52-million-300568708.html
SOURCE Champions Oncology, Inc.