Standard BioTools(LAB) - 2020 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Fluidigm Corporation's Q3 2020 financial statements reflect increased assets, revenue growth, and a narrowed net loss, alongside improved cash flow Condensed Consolidated Balance Sheets Total assets increased by September 30, 2020, primarily due to cash growth, while total liabilities also rose Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $72,345 | $21,661 | | Total current assets | $122,663 | $96,096 | | Total assets | $322,977 | $264,812 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $42,791 | $32,821 | | Total liabilities | $171,004 | $111,200 | | Total stockholders' equity | $151,973 | $153,612 | | Total liabilities and stockholders' equity | $322,977 | $264,812 | Condensed Consolidated Statements of Operations Q3 2020 revenue increased by 50% to $39.9 million, leading to a significantly reduced net loss of $6.0 million Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $39,861 | $26,496 | $93,536 | $84,803 | | Loss from operations | $(5,464) | $(13,816) | $(34,132) | $(42,658) | | Net loss | $(5,999) | $(12,887) | $(34,994) | $(52,105) | | Net loss per share | $(0.08) | $(0.19) | $(0.49) | $(0.79) | Condensed Consolidated Statements of Cash Flows Net cash increased by $49.6 million for the nine months ended September 30, 2020, driven by investing and financing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(11,684) | $(29,691) | | Net cash provided by (used in) investing activities | $40,797 | $(38,750) | | Net cash provided by financing activities | $20,425 | $1,006 | | Net increase (decrease) in cash | $49,624 | $(67,440) | Notes to Condensed Consolidated Financial Statements Notes detail significant accounting policies and events, including the InstruNor AS acquisition, NIH RADx grant, and an at-the-market equity offering - On January 17, 2020, the company acquired InstruNor AS for a purchase price of $7.2 million, which included $5.2 million in cash and $2.0 million in common stock. The acquisition resulted in $2.2 million of goodwill[76][78][80] - The company executed a definitive contract with the NIH under the RADx program with a total value of up to $34.0 million to expand production capacity for COVID-19 testing. As of September 30, 2020, milestones valued at $18.6 million were considered reasonably assured, resulting in $18.2 million of deferred grant income[81][83] - In March 2020, the company entered into an OEM Supply and Development Agreement and recognized $3.2 million and $6.2 million of development revenue in the three and nine months ended September 30, 2020, respectively[160] - During the third quarter of 2020, the company sold 2.5 million shares of common stock through an "at-the-market" offering, generating net proceeds of approximately $20.1 million[122] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q3 2020 revenue growth driven by COVID-19 demand and new agreements, alongside improved liquidity from equity offerings and grants Results of Operations Q3 2020 total revenue increased 50% to $39.9 million, driven by product, development, and grant revenue, with improved product and service margins Revenue by Source (in thousands) | Revenue Source | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Instruments | $12,624 | $9,159 | 38% | | Consumables | $16,586 | $11,507 | 44% | | Service revenue | $6,131 | $5,630 | 9% | | Development revenue | $3,180 | $— | NA | | Grant revenue | $1,340 | $200 | 570% | | Total revenue | $39,861 | $26,496 | 50% | Revenue by Geography (in thousands) | Geographic Area | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Americas | $23,653 | $11,112 | 113% | | EMEA | $8,837 | $9,092 | (3)% | | Asia-Pacific | $7,371 | $6,292 | 17% | | Total revenue | $39,861 | $26,496 | 50% | - Product and service margin increased by 6.3 percentage points for Q3 2020 compared to Q3 2019, driven by higher revenue base, favorable impact from COVID-19-related consumable products, and lower inventory reserve charges[213] Liquidity and Capital Resources Liquidity improved significantly by September 30, 2020, with $72.3 million in cash, bolstered by financing and investing activities, including an ATM offering and NIH grant proceeds - Principal sources of liquidity as of September 30, 2020, consisted of $72.3 million of cash and cash equivalents and $15.0 million of availability under the Revolving Credit Facility[232] - Net cash from financing activities was $20.4 million for the nine months ended September 30, 2020, primarily due to $20.2 million in net proceeds from an at-the-market (ATM) equity offering[239] - Net cash from investing activities was $40.8 million for the nine months ended September 30, 2020, mainly from $11.2 million in proceeds from the NIH RADx grant and $31.8 million from maturities of investments[237] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company's primary market risks are foreign currency exchange rates and interest rates, though a 10% change is not expected to be material - The company's main market risk exposures are from foreign currency exchange rates, as expenses are denominated in various currencies while most revenue is in U.S. dollars, and from interest rate sensitivity on its cash and cash equivalents[258] - The company does not currently engage in hedging activities for foreign currency risk. Management believes a 10% change in foreign currency exchange rates or interest rates would not materially impact the financial statements[259][260] Item 4. Controls and Procedures Disclosure controls and procedures were deemed effective as of September 30, 2020, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that as of September 30, 2020, the company's disclosure controls and procedures were effective at the reasonable assurance level[264] - No changes in internal control over financial reporting occurred during the third quarter of 2020 that have materially affected, or are reasonably likely to materially affect, internal controls[265] PART II. OTHER INFORMATION Item 1. Legal Proceedings A class action complaint alleging federal securities law violations was filed against the company in September 2020, which the company intends to vigorously defend - A class action complaint was filed against the company in September 2020, alleging violations of federal securities laws. The company believes the claims are without merit and will defend itself vigorously[269] Item 1A. Risk Factors Key risks include the COVID-19 pandemic's impact, a history of losses, intense competition, supply chain reliance, and regulatory challenges for its COVID-19 test and NIH contract - The global COVID-19 pandemic has significantly affected business operations, with impacts including reduced demand for some products, supply chain disruptions, and increased stock price volatility[273] - The company has a history of significant losses, with an accumulated deficit of $658.7 million as of September 30, 2020, and may continue to incur losses for the foreseeable future[281] - The FDA's Emergency Use Authorization (EUA) for the Advanta Dx SARS-CoV-2 RT-PCR Assay is temporary and will be terminated after the public health emergency, requiring a traditional, more burdensome regulatory pathway to continue sales[329] - The company's contract with the NIH is subject to government contracting risks, including termination for convenience, milestone-based funding, and compliance with Federal Acquisition Regulations (FAR)[333][336] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - There were no unregistered sales of equity securities or use of proceeds to report for the period[407] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported for the period - There were no defaults upon senior securities to report for the period[408] Item 4. Mine Safety Disclosures This item is not applicable as the company has no mining operations - There were no mine safety disclosures to report for the period[409] Item 5. Other Information No other information required to be disclosed under this item was reported - There was no other information to report for the period[410] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including NIH contracts, license agreements, and CEO/CFO certifications