UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 15, 2021
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||||||||||||||
(800 ) 298-6470
Registrant's telephone number, including area code
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Item 2.02 Results of Operations and Financial Condition.
On November 15, 2021, Sema4 Holdings Corp. (“Sema4 Holdings” or the “Company”) issued a press release (the “Press Release”) and will hold a conference call announcing the Company's financial results for the three and nine months ended September 30, 2021. Copies of the Press Release and Earnings Presentation are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K.
The information furnished with this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statement and Exhibits.
(d) Exhibits.
Exhibit Number | Description | ||||
99.1 | |||||
99.2 | |||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Sema4 Holdings Corp. | |||||||||||
| Date: | November 15, 2021 | By: | /s/ Eric Schadt | ||||||||
| Name: | Eric Schadt | ||||||||||
| Title: | Chief Executive Officer | ||||||||||
Exhibit 99.1
Sema4 Reports Third Quarter 2021 Financial Results and Business Highlights
36% increase in test volume (excluding COVID-19 tests) compared to the same period last year
17% growth in revenue (excluding COVID-19 tests) compared to the same period last year
Full year 2021 total revenue guidance range of $201 million to $204 million
Sema4 to host conference call today at 4:30 p.m. ET
STAMFORD, CT — November 15, 2021 — Sema4 Holdings Corp. (Nasdaq: SMFR) (“Sema4”), an AI-driven genomic and clinical data intelligence platform company, today reported the financial results for the third quarter ended September 30, 2021 and provided an update on key strategic and operational initiatives.
“We continued to make significant progress this quarter expanding our infrastructure while also building our platform of algorithms. These activities will allow us to better accommodate volume growth while increasing the resolution of data that each sample provides,” said Eric Schadt, PhD, Founder and Chief Executive Officer of Sema4. “The access to capital from our public markets transition has allowed us to scale investments in technology, infrastructure, and people, all with the aim to better serve our current and future health system partners to enhance patient care. It is early days in the journey and we exited the quarter seeing accelerating growth and a broadening scope of opportunity in front of us.”
Third Quarter & Recent Highlights
•Diagnostic test volumes were up 36% compared to the same period of 2020, with 69,895 tests resulted during the third quarter of 2021 (excluding COVID-19 tests). This includes 166% growth in Oncology and 33% growth in Women’s Health.
•Revenue in the third quarter increased 17% (excluding COVID-19 tests) compared to the same period of 2020, resulting in total revenue of $43.2 million compared to $38.6 million.
•Lab capacity and informatics infrastructure continued to be built out, enabling significantly higher volumes in support of deeper penetration of existing health systems and onboarding of additional health systems.
•Announced a fourth health system partnership, Avera Health, and the launch of a broad precision medicine initiative to leverage Sema4’s health intelligence platform to curate data and create predictive system-wide modeling.
•Centrellis now contains over 11.9 million de-identified individual clinical records, including over 500,000 with matching clinical genomic profiles, making it one of the largest known data set of this kind in the world.
•Launched Sema4 Elements™, our portfolio of data science-driven products and services to support reproductive and generational health.
•Published two papers in collaboration with the Icahn School of Medicine at Mount Sinai focused on the prediction of Postpartum Hemorrhage using Sema4 machine learning algorithms, derived from large-scale, comprehensive real-world data, to predict clinical outcomes and drive meaningful changes in the standard of care.
•Strengthened executive team by adding a world-renowned expert in computational biology, Gustavo Stolovitzky, as Chief Science Officer in September.
Third Quarter Financial Results
Total revenue for the third quarter of 2021 was $43.2 million, compared to $38.6 million in the third quarter of 2020. Revenue growth was driven primarily by an increase of volume from Women’s Health and Oncology testing.
Cost of services was $58.8 million in the third quarter of 2021, compared to $36.5 million in the same period of 2020. The increase was a result of expansion at our Stamford clinical laboratory, increased headcount, investments in systems and higher logistical and supply costs due to increased volumes in our non-COVID business. We anticipate these new investments will enable us to support continued volume growth with significantly higher cost efficiencies over time.
Adjusted cost of service, which excludes stock-based compensation expense was $55.1 million in the third quarter of 2021, compared to $33.0 million in the same period of 2020.
Operating expenses for the third quarter of 2021 were $74.0 million, compared to operating expenses of $58.1 million in the third quarter of 2020. The increase in operating expenses was due in part to higher personnel-related costs as we build out our laboratory operations and investment in our health intelligence platform, as well as incremental public company expenses.
Adjusted operating expenses, which excludes stock-based compensation and non-recurring transaction costs associated with our go public process, for the third quarter of 2021 were $59.3 million, compared to $32.1 million in the same period of 2020.
Net income for the third quarter of 2021 was $31.4 million compared to a net loss of ($56.6) million for the same period in 2020. Net income included other income of $122.2 million related to the change in fair market value of warrant and earn-out contingent liabilities recorded in connection with the merger with CM Life Sciences, Inc.
Total cash, including cash equivalents, was $461.3 million as of September 30, 2021. As of November 8, 2021, Sema4 had 241,261,362 outstanding shares of Class A common stock.
“We are in growth mode and made a number of investments in the quarter to capitalize on the current and future opportunities for growth at Sema4,” said Isaac Ro, Chief Financial Officer of Sema4. “We expect those investments to drive improved financial performance in subsequent quarters with higher reimbursement in our oncology portfolio, enhanced sales force productivity, and greater efficiency in our lab operations.”
Full Year and Fourth Quarter 2021 Guidance
Sema4 expects full year 2021 total revenue to be in the range of $201 million to $204 million. Fourth quarter resulted volume is expected to be in the range of 73,000 to 79,000 tests (excluding COVID-19 tests). This range implies 20% to 30% resulted volume growth (excluding COVID-19 tests) compared to the fourth quarter of 2020 and 9% growth (excluding COVID-19) at the midpoint compared to the third quarter of 2021.
These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Webcast and Conference Call Details
Sema4 will host a conference call today, November 15, 2021, at 4:30 p.m. Eastern Time. Interested parties may access the live teleconference by dialing (844) 631-4065 for domestic callers or (929) 517-0920 for international callers, followed by conference ID: 4636627. A live and archived webcast of the event will also be available on the “Events” section of the Sema4 investor relations website at https://ir.sema4.com/.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our future performance and our market opportunity, including our long-term goal for 2023 revenue, and our expectations for our growth and future investment in our business. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) the ability to implement business plans, goals and forecasts, and identify and realize additional opportunities, (ii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry, and (iii) the
size and growth of the market in which we operate. In particular, our ability to achieve our long-term goal for 2023 revenue is highly dependent on a number of variables, including our ability to increase the number of billable tests and achieve reimbursement for our tests from third-party payers, our ability to successfully execute our technology and business development plans and growth strategy, our ability to compete in rapidly developing markets, our ability to demonstrate the clinical utility of and continue to commercialize our platforms including Centrellis and Traversa, and the continuation of favorable regulations affecting the markets in which we operate. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Registration Statement on Form S-1 filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 4, 2021 and other documents filed by us from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations. Furthermore, our long-term goal for 2023 revenue should not be looked upon as “guidance” of any sort.
About Sema4
Sema4 is a patient-centered health intelligence company dedicated to advancing healthcare through data-driven insights. Sema4 is transforming healthcare by applying AI and machine learning to multidimensional, longitudinal clinical and genomic data to build dynamic models of human health and defining optimal, individualized health trajectories. Centrellis®, our innovative health intelligence platform, is enabling us to generate a more complete understanding of disease and wellness and to provide science-driven solutions to the most pressing medical needs. Sema4 believes that patients should be treated as partners, and that data should be shared for the benefit of all.
For more information, please visit sema4.com and connect with Sema4 on Twitter, LinkedIn, Facebook and YouTube.
Investor Relations Contact:
Joel Kaufman
investors@sema4.com
Media Contact:
Radley Moss
radley.moss@sema4.com
Sema4 Holdings Corp.
Condensed Balance Sheets
(In thousands, except per share amounts)
| September 30, 2021 (unaudited) | December 31, 2020 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 461,276 | $ | 108,132 | ||||||||||
| Accounts receivable | 21,257 | 32,044 | ||||||||||||
| Due from related parties | 413 | 289 | ||||||||||||
| Inventory | 31,174 | 24,962 | ||||||||||||
| Prepaid expenses | 20,205 | 4,557 | ||||||||||||
| Other current assets | 4,186 | 4,124 | ||||||||||||
| Total current assets | $ | 538,511 | $ | 174,108 | ||||||||||
| Property and equipment, net | 60,333 | 63,110 | ||||||||||||
| Restricted cash | 900 | 10,828 | ||||||||||||
| Other assets | 3,613 | 3,596 | ||||||||||||
| Total assets | $ | 603,357 | $ | 251,642 | ||||||||||
| Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable and accrued expenses | $ | 43,079 | $ | 38,591 | ||||||||||
| Due to related parties | 1,425 | 1,425 | ||||||||||||
| Current contract liabilities | 493 | 1,783 | ||||||||||||
| Other current liabilities | 26,369 | 31,643 | ||||||||||||
| Total current liabilities | $ | 71,366 | $ | 73,442 | ||||||||||
| Long-term debt, net of current portion | 11,000 | 18,971 | ||||||||||||
| Stock-based compensation liabilities | — | 131,989 | ||||||||||||
| Other liabilities | 21,699 | 22,852 | ||||||||||||
| Warrant liability | 46,629 | — | ||||||||||||
| Earn-out contingent liability | 61,400 | — | ||||||||||||
| Total liabilities | $ | 212,094 | $ | 247,254 | ||||||||||
| Commitments and contingencies (Note 9) | ||||||||||||||
| Redeemable convertible preferred stock: | ||||||||||||||
Series A-1 redeemable convertible preferred stock, $0.00001 par value: 0 and 55,399,943 shares authorized, issued and outstanding at September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $0 and $55,000 at September 30, 2021 and December 31, 2020, respectively | — | 51,811 | ||||||||||||
Series A-2 redeemable convertible preferred stock, $0.00001 par value: 0 and 64,718,940 shares authorized at September 30, 2021 and December 31, 2020, respectively; 0 and 49,700,364 shares authorized, issued and outstanding at September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $0 and $49,342 at September 30, 2021 and December 31, 2020, respectively | — | 46,480 | ||||||||||||
Series B redeemable convertible preferred stock, $0.00001 par value: 0 and 41,937,960 shares authorized, issued and outstanding at September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $0 and $204,302 at September 30, 2021and December 31, 2020, respectively | — | 118,824 | ||||||||||||
Series C redeemable convertible preferred stock, $0.00001 par value: 0 and 24,497,317 shares authorized at September 30, 2021 and December 31, 2020, respectively; 0 and 24,496,946 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $0 and $121,397 at September 30, 2021 and December 31, 2020, respectively | — | 117,324 | ||||||||||||
Redeemable convertible preferred stock | — | 334,439 | ||||||||||||
Stockholders’ equity (deficit): | ||||||||||||||
Preferred Stock, $0.0001 par value: 1,000,000 and 0 shares authorized at September 30, 2021 and December 31, 2020, respectively; 0 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | — | — | ||||||||||||
Class A common stock: $0.0001 par value, 380,000,000 shares authorized, 240,190,402 shares issued and outstanding at September 30, 2021 and $0.00001 par value: 309,584,750 shares authorized, 124 shares issued and outstanding at December 31, 2020 | 24 | — | ||||||||||||
Class B convertible common stock, $0.00001 par value: 0 and 18,575,085 shares authorized at September 30, 2021 and December 31, 2020, respectively; 0 and 130,557 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | — | — | ||||||||||||
Additional paid-in capital | 926,253 | $ | — | |||||||||||
| Accumulated deficit | (535,014) | (330,051) | ||||||||||||
| Total stockholders’ equity (deficit) | 391,263 | (330,051) | ||||||||||||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ | 603,357 | $ | 251,642 | ||||||||||
Sema4 Holdings Corp.
Condensed Statements of Operations and Comprehensive Loss
(In thousands, except share amounts)
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
Diagnostic test revenue (including related party revenue of $20 and $86 for the three months ended September 30, 2021 and 2020, respectively and $90 and $186 for the nine months ended September 30, 2021 and 2020, respectively) | $ | 41,410 | $ | 37,893 | $ | 148,973 | $ | 113,759 | ||||||||||||||||||
| Other revenue (including related party revenue of $65 and $0 for the three months ended September 30, 2021 and 2020, respectively and $153 and $0 for the nine months ended September 30, 2021 and 2020, respectively) | 1,768 | 715 | 5,421 | 1,606 | ||||||||||||||||||||||
| Total revenue | 43,178 | 38,608 | 154,394 | 115,365 | ||||||||||||||||||||||
Cost of services (including related party expenses of $656 and $452 for the three months ended September 30, 2021 and 2020, respectively and $1,942 and $1,485 for the nine months ended, September 30, 2021 and 2020 respectively) | 58,752 | 36,530 | 180,195 | 111,754 | ||||||||||||||||||||||
| Gross (loss) profit | (15,574) | 2,078 | (25,801) | 3,611 | ||||||||||||||||||||||
| Research and development | 17,831 | 19,083 | 82,916 | 41,540 | ||||||||||||||||||||||
| Selling and marketing | 22,121 | 12,735 | 69,937 | 33,154 | ||||||||||||||||||||||
| General and administrative | 33,230 | 24,342 | 147,941 | 39,627 | ||||||||||||||||||||||
| Related party expenses | 847 | 1,933 | 3,532 | 6,239 | ||||||||||||||||||||||
| Loss from operations | (89,603) | (56,015) | (330,127) | (116,949) | ||||||||||||||||||||||
| Other income (expense), net: | ||||||||||||||||||||||||||
| Change in fair market value of warrant and earn-out contingent liabilities | 122,171 | — | 122,171 | — | ||||||||||||||||||||||
| Interest income | 27 | 63 | 57 | 473 | ||||||||||||||||||||||
| Interest expense | (683) | (637) | (2,128) | (1,826) | ||||||||||||||||||||||
| Other income (expense), net | (520) | (26) | 5,064 | 2,645 | ||||||||||||||||||||||
| Total other income (expense), net | 120,995 | (600) | 125,164 | 1,292 | ||||||||||||||||||||||
| Income (loss) before income taxes | $ | 31,392 | $ | (56,615) | $ | (204,963) | $ | (115,657) | ||||||||||||||||||
| Income tax provision | — | — | — | — | ||||||||||||||||||||||
| Net income (loss) and comprehensive income (loss) | $ | 31,392 | $ | (56,615) | $ | (204,963) | $ | (115,657) | ||||||||||||||||||
| Weighted average shares outstanding of Class A common stock for basic earnings | 185,680,394 | 124 | 63,121,738 | 124 | ||||||||||||||||||||||
| Weighted average shares outstanding of Class A common stock for diluted earnings | 210,330,946 | 124 | 63,121,738 | 124 | ||||||||||||||||||||||
| Basic net income (loss) per share, Class A common stock | $ | 0.17 | $ | (456,573) | $ | (3.25) | $ | (932,718) | ||||||||||||||||||
| Diluted net income (loss) per share, Class A common stock | $ | 0.15 | $ | (456,573) | $ | (3.25) | $ | (932,718) | ||||||||||||||||||
Sema4 Holdings Corp.
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
| Nine months ended September 30, | ||||||||||||||
| 2021 | 2020 | |||||||||||||
| Operating activities | ||||||||||||||
| Net loss | $ | (204,963) | $ | (115,657) | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
| Depreciation and amortization expense | 16,012 | 8,147 | ||||||||||||
| Stock-based compensation expense | 182,454 | 30,073 | ||||||||||||
| Change in fair value of warrant and contingent liabilities | (122,171) | — | ||||||||||||
| Provision for excess and obsolete inventory | 1,122 | — | ||||||||||||
| Non-cash lease expense | 1,174 | 2,203 | ||||||||||||
| Loss on extinguishment of debt | 301 | — | ||||||||||||
| Change in operating assets and liabilities: | ||||||||||||||
| Accounts receivable | 10,787 | (3,159) | ||||||||||||
| Inventory | (7,334) | (8,105) | ||||||||||||
| Prepaid expenses and other current assets | (15,710) | 516 | ||||||||||||
| Due to/from related parties | (124) | 617 | ||||||||||||
| Other assets | (17) | 1,174 | ||||||||||||
| Accounts payable and accrued expenses. | 4,685 | (537) | ||||||||||||
| Contract liabilities | (1,290) | (135) | ||||||||||||
| Other current liabilities | (3,375) | 10,068 | ||||||||||||
| Net cash used in operating activities | (138,449) | (74,795) | ||||||||||||
| Investing activities | ||||||||||||||
| Purchases of property and equipment | (4,344) | (17,310) | ||||||||||||
| Development of internal-use software assets | (8,749) | (3,165) | ||||||||||||
| Net cash used in investing activities. | (13,093) | (20,475) | ||||||||||||
| Financing activities | ||||||||||||||
| Proceeds from issuance of Series C redeemable convertible preferred stock, net of issuance costs | — | 117,326 | ||||||||||||
| Proceeds from PIPE issuance | 350,000 | — | ||||||||||||
| Proceeds from equity infusion from the merger, net of redemptions | 442,684 | — | ||||||||||||
| Legacy Sema4 Shareholder payout | (230,665) | — | ||||||||||||
| Payment of transaction costs | (51,760) | — | ||||||||||||
| Stock Appreciation Rights payout | (3,795) | — | ||||||||||||
| Repayment of long-term debt | (8,741) | — | ||||||||||||
| Capital lease principal payments | (2,960) | (3,384) | ||||||||||||
| Long-term debt principal payments | (1,000) | — | ||||||||||||
| Proceeds from long-term debt | — | 6,000 | ||||||||||||
| Exercise of stock options | 995 | — | ||||||||||||
| Net cash provided by financing activities | 494,758 | 119,942 | ||||||||||||
| Net increase in cash, cash equivalents and restricted cash | 343,216 | 24,672 | ||||||||||||
| Cash, cash equivalents and restricted cash, at beginning of period | 118,960 | 115,006 | ||||||||||||
| Cash, cash equivalents and restricted cash, at end of period | $ | 462,176 | $ | 139,678 | ||||||||||
| Supplemental disclosures of cash flow information | ||||||||||||||
| Cash paid for interest | $ | 2,128 | $ | 1,826 | ||||||||||
| Cash paid for taxes | $ | 50 | $ | — | ||||||||||
Purchases of property and equipment in accounts payable and accrued expenses | $ | 193 | $ | 268 | ||||||||||
| Software development costs in accounts payable and accrued expenses | $ | 1,228 | $ | 1,629 | ||||||||||
| Assets acquired under capital leases obligations | $ | 641 | $ | 5,637 | ||||||||||
Sema4 Holdings Corp.
Reconciliation of Revenue to our Adjusted Gross Profit & Adjusted EBITDA (In thousands)
The following is a reconciliation of revenue to our Adjusted Gross Profit and Adjusted Gross Margin for the three months ended September 30, 2021 and 2020:
| Three months ended September 30, | ||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Revenue | $ | 43,178 | $ | 38,608 | ||||||||||||||||
| Cost of services | 58,752 | 36,530 | ||||||||||||||||||
Gross (Loss) Profit | (15,574) | 2,078 | ||||||||||||||||||
| Gross Margin | (36) | % | 5 | % | ||||||||||||||||
| Add: | ||||||||||||||||||||
| Stock-based compensation expense | 3,699 | 3,506 | ||||||||||||||||||
Adjusted Gross (Loss) Profit | $ | (11,875) | $ | 5,584 | ||||||||||||||||
Adjusted Gross Margin | (28) | % | 14 | % | ||||||||||||||||
The following is a reconciliation of our net loss to Adjusted EBITDA for the three months ended September 30, 2021 and 2020:
| Three months ended September 30, | ||||||||||||||
| 2021 | 2020 | |||||||||||||
| (in thousands) | ||||||||||||||
| Net Income (loss) | $ | 31,392 | $ | (56,615) | ||||||||||
Interest expense, net (1) | 656 | 574 | ||||||||||||
| Depreciation and amortization | 5,491 | 3,067 | ||||||||||||
| Stock-based compensation expense | 18,011 | 29,453 | ||||||||||||
Transaction costs (2) | 391 | — | ||||||||||||
Change in fair market value of warrant and earn-out contingent liabilities (3) | (122,171) | — | ||||||||||||
Other (income) expense, net (4) | 343 | 26 | ||||||||||||
Adjusted EBITDA | $ | (65,887) | $ | (23,495) | ||||||||||
__________________
(1)Represents the total of Interest Expense related to our capital leases and interest-bearing loans and Interest Income on money market funds.
(2)Represents professional service costs incurred in connection with pursuing the Business Combination transaction that did not meet the requirement for capitalization.
(3)For the three months ended September 30, 2021, represents the change in fair market value of the liabilities associated with our public warrants and private placement warrants and the earn-out shares issuable under the terms of the Merger Agreement.
(4)For the three months ended September 30, 2021, consists primarily of penalties related to early extinguishment of debt.
1 Third Quarter 2021 Earnings Presentation Exhibit 99.2
2 Disclaimer This presentation contains forward-looking statements under the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not relate to historical facts and events and such statements and opinions pertaining to the future that, for example, contain wording such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. Forward- looking statements contained in this presentation include, but are not limited to, statements about: our addressable market, market growth, future revenue, key performance indicators, expenses, capital requirements and our needs for additional financing, our commercial launch plans, our strategic plans for our business and products, market acceptance of our products, our competitive position and developments and projections relating to our competitors, domestic and foreign regulatory approvals, third-party manufacturers and suppliers, our intellectual property, the potential effects of government regulation and local, regional and national and international economic conditions and events affecting our business. We cannot assure that the forward-looking statements in this presentation will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking statements and opinions contained in this presentation are based on our management’s beliefs and assumptions and are based upon information currently available to our management as of the date of this presentation and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. Actual results, performance or events may differ materially from those in such statements due to, without limitation, risks generally associated with product development, including delays or challenges that may arise in the development, launch or scaling of our new products, programs or services, challenges in the commercialization of our products and services, the risk that we may not maintain our existing relationships with suppliers or enter into new ones, or that we will not realize the intended benefits from such relationships, any inability to protect our intellectual property effectively, changes in general economic conditions, in particular economic conditions in the markets on which we operate, changes affecting interest rate levels, changes affecting currency exchange rates, changes in competition levels and changes in laws and regulations. The information, opinions and forward-looking statements contained in this announcement speak only as of its date, and are subject to change without notice. Use of Non-GAAP Financial Measures This presentation includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted Gross Profit and Adjusted Gross Margin. Adjusted EBITDA is defined as net loss adjusted for interest (income) expense, net, other (income) expense, net, provision for (benefit from) income taxes, gain on extinguishment of debt, depreciation and amortization and stock-based compensation expenses, and COVID-19 costs. Management believes that these non-GAAP measures of financial results are useful in evaluating the Sema4's operating performance compared to that of other companies in its industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. Please refer to the Appendix for Non-GAAP to GAAP Reconciliation. This presentation contains estimates, projections and other information concerning our industry, our business, and the markets for our products and services. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. While we believe our internal company research as to such matters is reliable and the market definitions are appropriate, neither such research nor these definitions have been verified by any independent source. We discuss these and other risks and uncertainties in greater detail in the sections entitled “Risk Factors” and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our periodic reports on filings we make with the SEC from time to time. Given these uncertainties, you should not place undue reliance on the forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations. We file reports, proxy statements, and other information with the SEC. Such reports, proxy statements, and other information concerning us is available at http://www.sec.gov. Requests for copies of such documents should be directed to our Investor Relations department at Sema4 Holdings Corp. 333 Ludlow Street, North Tower, 8th Floor, Stamford, CT 06902. Our telephone number is 800-298-6470
3 ~1,150 Employees 160+ PhD’s1 Guiding to $201- 204mn in total revenue for 2021 Generating and managing 39+ petabytes of data per month Database contains 12 million de-identified clinical records, >500,000 with genomic profiles Accessioning > 250,0002 Next Generation Sequencing tests annually Corporate Snapshot 1 Headcount as of September 30, 2021 2 Annualized Run Rate as of September 30, 2021
4 Business Highlights 3Q211 YoY revenue growth of 17%, excluding COVID-19 tests 3Q YoY increase of 36% in diagnostics tests resulted2 Launched Sema4 Elements™, our portfolio of data science-driven products and services to support reproductive and generational health Further strengthened C-suite bench, adding a world-renowned expert in computational biology, Gustavo Stolovitzky, as Chief Science Officer Provided full year 2021 revenue guidance to be in the range of $201 million to $204 million 1 3 months ended 9/30/21, 2 Excluding COVID-19 tests
5 Third Quarter GAAP Financial Highlights 3Q 2020 3Q 2021 Total Revenue $38.6 $43.2 GAAP Net Profit ($56.6) $31.42 Gross Profit $2.1 ($15.6) Gross Margin 5% (36%) 1 3 months ended 9/30/21 2 Net profit of $31.4 million included $122.2 million of other income recorded from change in fair market value of warrant and earn-out contingent liabilities during the three months ended September 30, 2021. 3Q 20211 – Financial Highlights USD Millions 3Q 2021 – Segment Mix % Revenue 86% 10% 4% Diagnostic Test COVID Other
6 Third Quarter Non-GAAP Financial Highlights 3Q 2020 3Q 2021 Total Adjusted EBITDA2 ($23.5) ($65.9) Adjusted Gross Profit3 $5.6 ($11.9) Adjusted Gross Margin4 14% (28%) 3Q 20211 – Financial Highlights USD Millions 3Q 2021 – Segment Mix % Revenue 1 3 months ended 9/30/21 2 Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for interest expense, net, depreciation and amortization, stock-based compensation expenses, transaction costs, other (income) expense, net and COVID-19 costs. Refer to Appendix for non-GAAP Reconciliation 3 Adjusted Gross Profit is a non-GAAP measure within cost of goods sold. Refer to Appendix for non-GAAP Reconciliation 4 Adjusted Gross Margin is a non-GAAP measure within cost of goods sold. Refer to Appendix for non-GAAP Reconciliation 86% 10% 4% Diagnostic Test COVID Other
7 NorthShore: The first six months
8 Accessioned volume growth has accelerated since early September 1 Represents accessioned volume excluding COVID-19 Accessioned volume1 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 1/ 7/ 21 1/ 21 / 21 2/ 4/ 21 2/ 18 / 21 3/ 4/ 21 3/ 18 / 21 4/ 1/ 21 4/ 15 / 21 4/ 29 / 21 5/ 13 / 21 5/ 27 / 21 6 / 10 / 21 6 / 24 / 21 7/ 8 / 21 7/ 22 / 21 8 / 5/ 21 8 / 19 / 21 9 / 2/ 21 9/ 16 / 21 9 / 30 / 21 10 / 14 / 21 10 / 28 / 21 Rolling 4-Week Average
9 Appendix
10 Historical Revenue Mix % of Total Revenue1 1Q20 2Q20 3Q20 FY20 1Q21 2Q21 3Q21 Diagnostic Test 99% 93% 84% 79% 73% 87% 86% COVID 0% 6% 14% 18% 25% 8% 10% Other 1% 1% 2% 2% 2% 4% 4% 1 Certain periods do not add to 100% due to rounding
11 Non-GAAP Gross Margin Reconciliation USD Millions
12 Non-GAAP EBITDA Reconciliation USD Millions