Fulgent Genetics(US:FLGT)2022-08-03 16:00Financial Performance - In the six months ended June 30, 2022, the company delivered approximately 4.6 million billable tests, a decrease from over 5.3 million in the same period of 2021[122] - Revenue for the three months ended June 30, 2022, was $125.3 million, down from $153.6 million in the same period of 2021, representing a decline of approximately 18.4%[122] - Net income for the three months ended June 30, 2022, was $11.5 million, significantly lower than $79.8 million in the same period of 2021, indicating a decrease of approximately 85.6%[122] - The company recorded revenue of $445.6 million and net income of $165.5 million for the six months ended June 30, 2022, compared to $513.0 million and $280.5 million, respectively, in the same period of 2021, reflecting a revenue decline of approximately 13.1% and a net income decline of approximately 41.0%[122] - Revenue decreased by $28.3 million, or 18%, from $153.6 million in Q2 2021 to $125.3 million in Q2 2022, and decreased by $67.4 million, or 13%, from $513.0 million in the first half of 2021 to $445.6 million in the first half of 2022, primarily due to a decrease in the number of billable tests delivered related to COVID-19 tests[133] - The number of billable tests delivered decreased by 224,000, from 1.6 million in Q2 2021 to 1.3 million in Q2 2022, and decreased by 774,000, from 5.3 million in the first half of 2021 to 4.6 million in the first half of 2022[136] - Net income attributable to Fulgent decreased by $68.3 million, or 86%, from $79.8 million in Q2 2021 to $11.5 million in Q2 2022[137] Cost and Expenses - Cost of revenue increased by $24.2 million, or 68%, from $35.9 million in Q2 2021 to $60.1 million in Q2 2022, primarily due to increases in personnel costs and depreciation expenses[138] - Gross profit decreased by $52.5 million, from $117.8 million in Q2 2021 to $65.3 million in Q2 2022, with gross margin decreasing from 76.7% to 52.1%[142] - Research and development expenses increased by $1.6 million, or 30%, from $5.3 million in Q2 2021 to $6.9 million in Q2 2022, primarily due to increased personnel costs[143] - Selling and marketing expenses increased by $5.6 million, or 108%, from $5.2 million in Q2 2021 to $10.9 million in Q2 2022, driven by increased personnel costs and software expenses[145] - General and administrative expenses increased by $21.9 million, or 263%, from $8.3 million in Q2 2021 to $30.2 million in Q2 2022, primarily due to increased personnel costs and acquisition-related costs[147] - For the six months ended June 30, 2022, general and administrative expenses rose by $39.7 million, or 243%, from $16.3 million in 2021 to $56.0 million, driven by a $15.5 million increase in provision for credit losses[148] Cash Flow and Liquidity - Cash provided by operating activities in the six months ended June 30, 2022, was $199.5 million, a decrease from $309.3 million in the same period of 2021[164] - Cash used in investing activities for the six months ended June 30, 2022, was $213.0 million, primarily for the purchase of marketable securities and acquisition payments[166] - Cash used in financing activities for the six months ended June 30, 2022, was $12.1 million, mainly due to stock repurchases[169] - The company authorized a $250.0 million stock repurchase program in March 2022, with approximately $239.4 million remaining available for future repurchases as of June 30, 2022[170][171] - As of June 30, 2022, the company had $931.0 million in cash, cash equivalents, and marketable securities, slightly down from $935.5 million at the end of 2021[157] - The company anticipates that existing cash and cash from operations will be sufficient to meet its cash requirements for at least the next 12 months[159] Operational Highlights - The average price per billable test was approximately $98, while the average cost to the company was about $30 for the six months ended June 30, 2022[122] - The company has delivered over 19.0 million billable tests to approximately 3,000 customers since launching its first commercial genetic tests in 2013[122] - The company achieved compound quarterly growth of 4% in the number of billable tests delivered over the last eight completed fiscal quarters[122] - The COVID-19 pandemic has not negatively impacted the company's liquidity position as of June 30, 2022, nor its consolidated operating results during the first half of 2022[125] Tax and Interest - Net interest income for Q2 2022 was $874,000, up from $566,000 in Q2 2021, and for the six months ended June 30, 2022, it was $824,000 compared to $796,000 in 2021[152] - Provision for income taxes for Q2 2022 was $2.7 million, down from $23.6 million in Q2 2021, with an effective tax rate decrease from 24% in 2021 to 19% in 2022[154] Pricing Trends - Cost per billable test delivered increased by $22, or 96%, from $23 in Q2 2021 to $45 in Q2 2022, primarily due to the mix of tests delivered and the cost structure of the recently acquired entity[140] - Average price per billable test delivered decreased from $99 in Q2 2021 to $94 in Q2 2022, but increased from $96 in the first half of 2021 to $98 in the first half of 2022[134]