CombiMatrix Corp. (CBMX, Financial) filed Quarterly Report for the period ended 2012-03-31.
Combimatrix Cp has a market cap of $10.8 million; its shares were traded at around $1.01 with and P/S ratio of 2.4. Combimatrix Cp had an annual average earning growth of 12% over the past 5 years.
For the three months ended March 31, 2012, our operating activities included the recognition of $1.2 million in diagnostic test services revenues, which increased from the comparable period in 2011 due primarily to increased volumes of tests performed as well as an overall increase in our customer base as a result of increased sales and marketing efforts. Our net loss from continuing operations also increased over the comparable periods due to increased operating expenses, partially from increased costs of services due to increased volumes but also from increased sales and marketing expenses from expansion of our sales force as well as from increased general and administrative expenses due primarily to increased headcount and from increased litigation costs.
Services revenues are generated from providing DNA-based genomic testing services primarily in the areas of prenatal and postnatal development disorders in children and, to a lesser extent, in oncology. Services revenues increased primarily due to volume increases of our genomic tests. Billable test volumes were 1,377 and 958 for the three months ended March 31, 2012 and 2011, respectively. The increase in volumes was due primarily to expansion of our sales force and from increased focus on sales and marketing efforts during late 2011 and 2012 compared to the first quarter of 2011. Our average revenue per test decreased slightly from $953 in 2011 to $903 in 2012. This decrease was due primarily to a change in mix of tests performed for customers with governmental third-party insurance coverage including Medicare and various state Medicaid programs, which tend to have lower reimbursement per test than do commercial insurance or direct-bill customers, as well as from the introduction of additional cytogenetic tests, primarily FISH and chromosome analysis, that are priced and reimbursed at lower rates than our array-based test offerings. Services revenues also includes adjustments relating to our revenue recognition policy of periodically adjusting our estimate for contractual allowances for revenues from non-contracted payors as well as from receiving cash payments in excess of amounts previously recognized for services revenues. For the three months ended March 31, 2012 and 2011, net positive revenue adjustments were $221,000 and $31,000, respectively.
Cost of services include direct materials such as array and laboratory costs, direct laboratory labor (wages and benefits), allocation of overhead and stock-compensation expenses. These costs increased in 2012 as compared to 2011 due primarily to volume increases. Due primarily to favorable pricing obtained on certain of our direct materials used in providing our services, the percentage increase from 2011 to 2012 is not proportional to the increase in revenues during the same period. Cost of services also includes $3,000 and $16,000 of non-cash stock compensation expense for the three months ended March 31, 2012 and 2011, respectively. See Note 2 to our interim consolidated financial statements included elsewhere in this report for a detailed description of the amounts of non-cash stock compensation expense recognized for the periods presented.
Sales and Marketing. These expenses include salaries and wages associated with our sales force and marketing resources, sales commissions and other expenses associated with promotional and advertising efforts. The increase in sales and marketing expenses was due to greater emphasis during 2012 on our sales and marketing efforts, hiring of additional sales representatives and increased marketing costs in order to expand and increase market awareness and penetration of our suite of molecular diagnostic tests. Sales and marketing expenses also include $11,000 and $17,000 of non-cash stock compensation expense for the three months ended March 31, 2012 and 2011, respectively. See Note 2 to our consolidated interim financial statements included elsewhere in this report for a detailed description of the amounts of non-cash stock compensation expense recognized for the periods presented.
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Combimatrix Cp has a market cap of $10.8 million; its shares were traded at around $1.01 with and P/S ratio of 2.4. Combimatrix Cp had an annual average earning growth of 12% over the past 5 years.
Highlight of Business Operations:
In 2002, we entered into a settlement agreement with Nanogen, Inc. (Nanogen) to settle all pending litigation between the parties. Pursuant to the terms of the settlement agreement, we agreed to make quarterly payments to Nanogen equal to 12.5% of total sales of products developed by us and our affiliates based on the patents that had been in dispute in the litigation, up to an annual maximum amount of $1.5 million. The minimum quarterly payments under the settlement agreement are $25,000 per quarter until the patents expire in 2018. Royalty expenses recognized under the agreement were $25,000 and $25,000, for the three months ended March 31, 2012 and 2011, respectively, and are included in patent amortization and royalties in the accompanying consolidated statements of operations.For the three months ended March 31, 2012, our operating activities included the recognition of $1.2 million in diagnostic test services revenues, which increased from the comparable period in 2011 due primarily to increased volumes of tests performed as well as an overall increase in our customer base as a result of increased sales and marketing efforts. Our net loss from continuing operations also increased over the comparable periods due to increased operating expenses, partially from increased costs of services due to increased volumes but also from increased sales and marketing expenses from expansion of our sales force as well as from increased general and administrative expenses due primarily to increased headcount and from increased litigation costs.
Services revenues are generated from providing DNA-based genomic testing services primarily in the areas of prenatal and postnatal development disorders in children and, to a lesser extent, in oncology. Services revenues increased primarily due to volume increases of our genomic tests. Billable test volumes were 1,377 and 958 for the three months ended March 31, 2012 and 2011, respectively. The increase in volumes was due primarily to expansion of our sales force and from increased focus on sales and marketing efforts during late 2011 and 2012 compared to the first quarter of 2011. Our average revenue per test decreased slightly from $953 in 2011 to $903 in 2012. This decrease was due primarily to a change in mix of tests performed for customers with governmental third-party insurance coverage including Medicare and various state Medicaid programs, which tend to have lower reimbursement per test than do commercial insurance or direct-bill customers, as well as from the introduction of additional cytogenetic tests, primarily FISH and chromosome analysis, that are priced and reimbursed at lower rates than our array-based test offerings. Services revenues also includes adjustments relating to our revenue recognition policy of periodically adjusting our estimate for contractual allowances for revenues from non-contracted payors as well as from receiving cash payments in excess of amounts previously recognized for services revenues. For the three months ended March 31, 2012 and 2011, net positive revenue adjustments were $221,000 and $31,000, respectively.
Cost of services include direct materials such as array and laboratory costs, direct laboratory labor (wages and benefits), allocation of overhead and stock-compensation expenses. These costs increased in 2012 as compared to 2011 due primarily to volume increases. Due primarily to favorable pricing obtained on certain of our direct materials used in providing our services, the percentage increase from 2011 to 2012 is not proportional to the increase in revenues during the same period. Cost of services also includes $3,000 and $16,000 of non-cash stock compensation expense for the three months ended March 31, 2012 and 2011, respectively. See Note 2 to our interim consolidated financial statements included elsewhere in this report for a detailed description of the amounts of non-cash stock compensation expense recognized for the periods presented.
Sales and Marketing. These expenses include salaries and wages associated with our sales force and marketing resources, sales commissions and other expenses associated with promotional and advertising efforts. The increase in sales and marketing expenses was due to greater emphasis during 2012 on our sales and marketing efforts, hiring of additional sales representatives and increased marketing costs in order to expand and increase market awareness and penetration of our suite of molecular diagnostic tests. Sales and marketing expenses also include $11,000 and $17,000 of non-cash stock compensation expense for the three months ended March 31, 2012 and 2011, respectively. See Note 2 to our consolidated interim financial statements included elsewhere in this report for a detailed description of the amounts of non-cash stock compensation expense recognized for the periods presented.
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