Fulgent Genetics(FLGT) - 2021 Q1 - Quarterly Report

FORM 10-Q PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Presents unaudited condensed consolidated financial statements for Q1 2021, covering balance sheets, income, equity, cash flows, and detailed accounting notes Condensed Consolidated Balance Sheets | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :------------------------- | :---------------------------- | :------------------------------- | | Total Assets | $999,083 | $700,461 | | Total Current Assets | $659,140 | $523,616 | | Cash and Cash Equivalents | $151,461 | $87,426 | | Marketable Securities | $258,317 | $211,941 | | Trade Accounts Receivable | $216,509 | $183,857 | | Total Liabilities | $197,517 | $131,074 | | Total Current Liabilities | $196,530 | $130,115 | | Total Stockholders' Equity | $801,566 | $569,387 | Condensed Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Change (YoY) | | :-------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :----------- | | Revenue | $359,429 | $7,753 | +4536% | | Cost of Revenue | $74,075 | $4,057 | +1726% | | Gross Profit | $285,354 | $3,696 | +7621% | | Operating Expenses | $18,432 | $5,610 | +229% | | Operating Income (Loss) | $266,922 | $(1,914) | N/A | | Provision for Income Taxes | $66,513 | $34 | +195526% | | Net Income (Loss) | $200,691 | $(1,956) | N/A | | Basic Net Income (Loss) per Common Share| $6.96 | $(0.09) | N/A | | Diluted Net Income (Loss) per Common Share| $6.52 | $(0.09) | N/A | Condensed Consolidated Statements of Comprehensive Income (Loss) | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :-------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net Income (Loss) | $200,691 | $(1,956) | | Other Comprehensive Loss: | | | | Foreign currency translation loss | — | $(3) | | Net unrealized loss on marketable securities, net of tax | $(654) | $(336) | | Comprehensive Income (Loss) | $200,037 | $(2,295) | Condensed Consolidated Statements of Stockholders' Equity | Metric | December 31, 2020 (in thousands) | March 31, 2021 (in thousands) | | :-------------------------------------- | :------------------------------- | :---------------------------- | | Total Equity | $569,387 | $801,566 | | Common Stock Shares | 28,178 | 28,989 | | Additional Paid-In Capital | $418,065 | $450,855 | | Accumulated Other Comprehensive Income (Loss) | $438 | $(216) | | Retained Earnings | $150,881 | $350,924 | - Net income of $200,691 thousand significantly increased retained earnings from $150,881 thousand at December 31, 2020, to $350,924 thousand at March 31, 2021[19] Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :---------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by operating activities | $233,179 | $1,366 | | Net cash used in investing activities | $(216,491) | $(3,862) | | Net cash provided by (used in) financing activities | $47,347 | $(164) | | Net increase (decrease) in cash and cash equivalents | $64,035 | $(2,663) | | Cash and cash equivalents at end of period | $151,461 | $9,302 | Notes to the Condensed Consolidated Financial Statements Detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, financial instruments, debt, leases, equity compensation, and related party transactions Note 1. Overview and Basis of Presentation - Fulgent Genetics, Inc. is a technology company providing comprehensive genetic testing and large-scale COVID-19 testing services, utilizing a proprietary platform for NGS and RT-PCR-based tests[27] - The company launched its patient-initiated product, Picture Genetics, in 2019, and has received Emergency Use Authorization (EUA) from the FDA for its RT-PCR-based COVID-19 tests and at-home testing service[27] Note 2. Summary of Significant Accounting Policies - The Company adopted ASU 2016-13 (Financial Instruments-Credit Losses) on January 1, 2021, resulting in a cumulative effect adjustment of $887,000 to retained earnings and trade accounts receivable, net, and a cumulative tax effect of $239,000 to retained earnings and deferred tax assets[52][54] - ASU 2019-12 (Simplifying the Accounting for Income Taxes) was also adopted in Q1 2021 with no material impact[54] Revenue by Payor Type (in thousands) | Payor Type | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :------------ | :-------------------------------- | :-------------------------------- | | Insurance | $207,558 | $134 | | Institutional | $151,569 | $7,478 | | Patient | $302 | $141 | | Total Revenue | $359,429 | $7,753 | - One customer (County of Los Angeles) contributed 25% of total revenue in Q1 2021, compared to no single customer contributing 10% or more in Q1 2020[37] Note 3. Marketable Securities Marketable Securities (in thousands) | Category | March 31, 2021 (Aggregate Fair Value) | December 31, 2020 (Aggregate Fair Value) | | :------------------------------------- | :------------------------------------ | :--------------------------------------- | | Total Short-term Marketable Securities | $258,317 | $211,941 | | Total Long-term Marketable Securities | $287,626 | $132,502 | | Total Marketable Securities | $545,943 | $344,443 | | Gross Unrealized Losses | $1,264 | $298 | - The Company's marketable securities of $420.2 million are used as collateral for an outstanding margin account borrowing of $15.0 million as of March 31, 2021, used for real property purchase in 2020[57] Note 4. Fair Value Measurements Financial Assets Measured at Fair Value (in thousands) | Category | March 31, 2021 (Total) | March 31, 2021 (Level 1) | March 31, 2021 (Level 2) | December 31, 2020 (Total) | December 31, 2020 (Level 1) | December 31, 2020 (Level 2) | | :---------------------------------------- | :--------------------- | :----------------------- | :----------------------- | :------------------------ | :-------------------------- | :-------------------------- | | Total Marketable Securities and Cash Equivalents | $600,490 | $234,821 | $365,669 | $391,904 | $218,255 | $173,64