OpGen, Inc. :OPGN-US: Earnings Analysis: Q1, 2016 By the Numbers : June 6, 2016

OpGen, Inc. reports financial results for the quarter ended March 31, 2016.

We analyze the earnings along side the following peers of OpGen, Inc. – Radius Health Inc and QLT Inc. (RDUS-US and QLTI-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 1.08 million, Net Earnings of USD -4.51 million.
  • Gross margins narrowed from 55.35% to 38.54% compared to the same period last year, operating (EBITDA) margins now -400.09% from -513.45%.
  • Year-on-year change in operating cash flow of -121.05% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings decline largely a result of non-operational activity, pretax margins improved from -549.59% to -418.54%.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2015-03-31 2015-06-30 2015-09-30 2015-12-31 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 0.47 0.38 0.98 1.33 1.08
Revenue Growth (%YOY) N/A N/A N/A N/A 128
Earnings (mil) -2.6 -5.36 -4.67 -4.73 -4.51
Earnings Growth (%YOY) N/A N/A N/A N/A -73.64
Net Margin (%) -549.59 -1428.4 -476.21 -355.58 -418.54
EPS -5.61 -0.84 -0.38 -0.38 -0.36
Return on Equity (%) N/A -914.61 -179.87 -194.6 -335.48
Return on Assets (%) -392.02 -296.77 -129.76 -122.96 -153.78

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Market Share Versus Profits

Revenues History
Earnings History

OPGN-US‘s change in revenue this period compared to the same period last year of 128.00% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that OPGN-US is holding onto its market share. Also, for comparison purposes, revenues changed by -19.02% and earnings by 4.69% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Earnings Growth Analysis

The company’s year-on-year earnings decline was driven by the drop in gross margins from 55.35% to 38.54%. This drop in earnings would have been worse were in not for operational cost control activities, which helped the operating margins (EBITDA margins) improve from -513.45% to -400.09%. For comparison purposes, gross margins were 57.83% and EBITDA margins were -345.07% in the previous period.

Gross Margin Versus EBITDA Margin

Cash Versus Earnings – Sustainable Performance?

OPGN-US‘s change in operating cash flow of -121.05% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Margins

The company’s earnings decline is largely a result of non-operational activity. As a matter of fact, the company showed increases in operating (EBIT) and pretax margins. EBIT margins improved from -535.93% to -415.73% and pretax margins widened from -549.59% to -418.54%.

EBIT Margin Versus PreTax Margin
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for OpGen, Inc.

Company Profile

OpGen, Inc. is a holding company that operates as a microbial genetics analysis firm. It specializes in the development and commercialization of products and services based on the Whole Genome Mapping technology for the high-precision microbial analysis market. The firm focuses on combating life-threatening, antibiotic-resistant infections using molecular diagnostics and bioinformatics technologies. It provides for genomic sequence assembly and finishing, microbial strain comparison, and species characterization. The firm also offers multi-parameter screening and surveillance panels to combat current and emerging human pathogens with diagnostic and epidemiologic solutions using real-time Polymerase Chain Reaction, Multilocus Sequence Typing, Sequencing, and Whole Genome Mapping Technology. The company was founded in January 2002 and is headquartered in Gaithersburg, MD.

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