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DexCom Inc. Reports Operating Results (10-Q)

August 06, 2012 | About:
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10qk

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DexCom Inc. (DXCM) filed Quarterly Report for the period ended 2012-06-30.

Dexcom, Inc. has a market cap of $802 million; its shares were traded at around $11.87 with and P/S ratio of 10.5.

Highlight of Business Operations:

Product revenues increased $6.3 million to $21.5 million for the three months ended June 30, 2012 compared to $15.2 million for the three months ended June 30, 2012 based primarily on increased sales volume of our durable systems and disposable sensors. Product cost of sales increased $2.5 million to $10.9 million for the three months ended June 30, 2012 compared to $8.4 million for the three months ended June 30, 2011. The product gross profit of $10.6 million for the three months ended June 30, 2012 increased $3.8 million compared to $6.8 million for the same period in 2011, primarily due to increased revenue and increased manufacturing absorption.

Development grant and other revenues decreased $4.3 million to $1.9 million for the three months ended June 30, 2012 compared to $6.2 million for the three months ended June 30, 2011. Development and other cost of sales increased $0.1 million to $1.3 million for the three months ended June 30, 2012 compared to $1.2 million for the three months ended June 30, 2011. The decrease in development grant and other revenues during the three months ended June 30, 2012 was primarily due to the $4.0 million milestone payment received from Animas for CE Mark Approval in June 2011 and by extended revenue recognition timelines related to longer than expected development and regulatory review timelines under our collaboration arrangement with Edwards, partially offset by additional services performed. The increase in costs associated with development was primarily due to additional development obligations during the period with respect to our collaboration arrangements.

Product revenue increased $11.8 million to $40.1 million for the six months ended June 30, 2012, compared to $28.3 million for the six months ended June 30, 2011 based primarily on increased sales volume. Product cost of sales increased $3.8 million to $20.5 million for the six months ended June 30, 2012, compared to $16.7 million for the six months ended June 30, 2011. The product gross profit of $19.7 million for the six months ended June 30, 2012 increased $8.1 million compared to $11.6 million for the same period in 2011, primarily due to increased revenue.

Development grant and other revenues decreased $3.9 million to $3.4 million for the six months ended June 30, 2012, compared to $7.3 million for the six months ended June 30, 2011. Development and other cost of sales increased $0.5 million to $2.4 million for the six months ended June 30, 2012, compared to $1.9 million for the six months ended June 30, 2011. The decrease in revenues associated with development was primarily due to the $4.0 million milestone payment received from Animas for CE Mark approval in June 2011 and by extended revenue recognition timelines related to longer than expected development and regulatory review timelines under our collaboration arrangements with Edwards. The increase in costs associated with development was primarily due to additional development obligations during the period with respect to our collaboration arrangements.

We shipped product directly to certain distributors customers and recognized $4.1 million and $7.6 million in revenue, which represents 18% of our total revenues for each of the three and six months ended June 30, 2012, respectively, compared to $3.4 million and $7.6 million in revenue, which represents 16% and 21% of our total revenues for same periods in 2011. With respect to other distributors which stock inventory of our product and fulfill orders from their inventory, we shipped product to these distributors and recognized $7.6 million and $14.5 million in revenue from these arrangements, which represents 32% and 33% of our total revenues for the three and six months ended June 30, 2012, respectively, compared to $4.1 million and $6.4 million in revenue from these arrangements, which represents 19% and 18% of our total revenues for each of the same periods in 2011. We monitor shipments to, and on-hand inventory levels of, these distributors, and at June 30, 2012 these distributors had limited amounts of our product in their inventory.

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