VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/13/13 -- Response Biomedical Corp. ("Response") (TSX: RBM)(OTCBB: RPBIF) today reported financial results for the quarter ended March 31, 2013.
"We are pleased to report our financial results for the first quarter of 2013, which show continued revenue growth at 19% year over year, an improvement in our gross margin by 2.2 percentage points over the comparative period last year, along with positive Adjusted EBITDA of $151 thousand," said Jeff Purvin, Chief Executive Officer. "Factors contributing to these results this quarter include:
-- Continued expansion of our distribution in the United States by increasing sales to our new U.S. based distributors, Laboratory Supply Company, Inc. and Fisher HealthCare. Our first quarter product sales reflect a significant seasonal increase in sales of our infectious disease products to Fisher HealthCare as a result of a severe U.S. influenza season;-- Continued growth from our distributors in China supported by our new Representative Office in Shanghai which was opened during the quarter. This expanded presence in China will allow our personnel to better support our current distributors and be able to expand our distribution network in other regions of China. In addition, we expect to own our own product registrations in China by the fourth quarter of this year which will increase our operating costs in the short term but should provide long term benefits by our ability to rapidly enable new distributors to sell our products in China, and;-- Improvement in our operating efficiency by increasing our daily manufacturing volumes with a minimum of cash and human resources investment and improving our supply chain management.
While we believe that our first quarter results demonstrate positive progress in our goal of improving our overall operating performance, we expect short term fluctuations in our results as we continue focusing on additional opportunities for improvement. For example, we benefitted from seasonally high influenza test sales in the first quarter that will not reoccur in the second quarter. However, we are presently working on many growth oriented, commercially driven initiatives which we expect will lead to sales growth in the last half of the year. We continue to believe that these initiatives, coupled with improved operating efficiencies, will contribute to our goal of ultimately achieving sustained Adjusted EBITDA positive growth," added Mr. Purvin.
Financial results for the quarter ended March 31, 2013
-- Product sales increased 19% to $3.6 million for the quarter ended March 31, 2013 compared to $3.0 million for the same period in 2012 primarily due to a $408 thousand increase in Influenza A+B and RSV test sales in the U.S. The increase in infectious disease sales is largely due to the severity of the recent annual Influenza season, which increased the seasonal demand for our Influenza tests.-- Gross margin increased to 44.8% for the quarter ended March 31, 2013, compared to a gross margin of 42.6% for the same period in 2012 due to a $0.2 million decrease in total manufacturing costs incurred as a result of improved efficiencies, the spreading of fixed manufacturing costs over a higher volume of sales and an increase in sales of higher margin products.-- Operating expenses increased by 3% to $1.9 million for the quarter ended March 31, 2013, compared to $1.8 million in 2012. This increase is primarily due to: -- A $230,000 increase in sales and marketing expenses in both North America and China as a result of additional personnel and marketing expenditures. This increase was offset by a $135,000 decrease in research and development costs due to a decrease in personnel costs as a result of government funding received supporting those salaries.-- Adjusted EBITDA for the quarter ended March 31, 2013 was positive $0.2 million compared to negative $0.3 million in 2012. Adjusted EBITDA excludes interest expense, interest income, depreciation and amortization, stock-based compensation expense, and the unrealized loss on the revaluation of the warrant liability. We believe that this non- GAAP measure may be useful to investors to analyze the results of our business as we use this non-GAAP measure internally to evaluate our financial results. A reconciliation between Adjusted EBITDA and net loss and comprehensive loss is included below.-- GAAP Net loss for the quarter ended March 31, 2013 totaled $10.0 million compared to a $5.7 million net loss in the comparative 2012 period. The loss is primarily due to a $9.6 million unrealized loss on the revaluation of our non-cash warrant liability versus a $5.0 million unrealized loss in the first quarter of 2012. The increase in the unrealized loss is due to the significant increase in our share price during the quarter. Share price is an input into the pricing model used for the determination of the value of the warrant liability.-- Adjusted net loss for the quarter ended March 31, 2013 totaled $389,000 compared to a $703,000 adjusted net loss in the comparative 2012 period. Adjusted net loss excludes the revaluation charge of the non-cash warrant liability. A reconciliation between Adjusted net loss and net loss and comprehensive loss is included below.-- Cash and cash equivalents as of March 31, 2013 were $2.1 million compared to $2.1 million as of December 31, 2012.