Standard BioTools (LAB) Provides Preliminary Fourth Quarter 2022 Revenue and Business Update

Standard BioTools Inc. (Nasdaq: LAB), driven by a bold purpose – Unleashing tools to accelerate breakthroughs in human health – today announced preliminary fourth quarter and full year 2022 revenue and provided a business update.

“Standard BioTools was launched with a clear and specific mission: To deliver operational rigor and commercial execution and consolidate and scale emerging life science tools companies. Consistent with what we communicated upon the close of a $250 million strategic capital infusion in April 2022, our new leadership team of seasoned operators has been highly focused on driving towards profitability and returning our core business platform to growth,” said Michael Egholm, PhD, President and Chief Executive Officer of Standard BioTools™. “Three quarters into this effort, we are putting strategy into action. Our phased restructuring program and streamlined operations have driven sustainable improvements resulting in expected reduced cash burn by over $30 million in 2023.

“Meanwhile, we continue to see encouraging signals across our core Proteomics and Genomics business with our second straight quarter of sequential growth,” Egholm continued. “While we must remain patient as we work through legacy commercial decisions and operating structures, we confidently can see the other side. Each day the results of improved and disciplined execution are visible and are on track to deliver a stable and cash-flow-positive business by the end of next year. Experience has taught us that this is the necessary and critical element to building a scaled and inquisitive life science tools business.”

Business Update

Phased Restructuring

In the fourth quarter, the company executed the next phase of its restructuring plan resulting in a total of more than $30 million in expected operating expense reductions and improving operating margins by an approximately 3,200 basis points. GAAP operating expense reductions of $36 million - $44 million, or approximately 3,900 basis points.

Among other actions, the company:

• Reduced overall headcount by 15%
• Reduced our real estate footprint in South San Francisco by 25%
• Right-sized the Genomics (microfluidics) business

These restructuring actions, and ones planned in 2023, are expected to allow the company to deliver on its stated goal of achieving positive free cash in the fourth quarter of 2024.

Proteomics (Mass Cytometry)

The company is making progress on its roadmap and has accelerated the development of its next-generation imaging system, the Hyperion XTi. The system provides a five-fold increase in the number of slides that can be processed per day over the legacy Hyperion™ Imaging System. Two early access units were shipped in December, commercial launch is planned for the American Association for Cancer Research (AACR) conference in April and shipments are to begin midyear.

Genomics (Microfluidics)

During the fourth quarter the company right-sized the Genomics business, simplifying the product line to one instrument, the X9™ Real-Time PCR System, launched in October. Additionally, in the last six months, the company reduced total R&D expenses by over 20%, the vast majority coming from the genomics business, and reduced direct sales headcount to focus on OEM and key account manager opportunities. The company expects 2023 to be impacted by a typical initial launch build in 2022, driven by contractual obligations with a major new customer application in our Genomics segment, and a run-rate normalization in 2023. Based on its firm commitments, this is expected to be a one-time $5 million headwind to our 2023 outlook. The company continues to believe in the strong partnership and the long-term growth trajectory of this new customer application.

Corporate Highlights

On January 3 the company announced it strengthened its leadership team with the appointment of Danaher alumna Betsy Jensen as Chief Human Resources Officer.

Preliminary Unaudited Fourth Quarter and Full Year 2022 Revenues

For the fourth quarter, core product and service revenues (Genomics and Proteomics excluding discontinued and COVID-19 related products) are expected to be in the range of $26 million–$27 million, representing approximately 4%–9% sequential quarterly growth. For the full year, core product and service revenues are expected to be in the range of approximately $94 million–$95 million.

The company expects lower non-GAAP operating expenses by more than $30 million in 2023 compared to 2022 and is reiterating its stated goal of non-GAAP gross margin improvement to 65%–68% by year end 2023 and positive free cash flow by the end of 2024 driven by top-line growth, pricing and lean conversion. GAAP operating expenses are expected to be lower by $36 million to $44 million and GAAP gross margins are expected to be in the range of 50% - 53%.

The Company's actual results for the three months ended December 31, 2022, have not been audited and may differ materially from the preliminary estimates above, which are not a comprehensive statement of the Company's financial results and are not necessarily indicative of the results to be expected for fiscal 2022 or any future period. The Company expects to report its fourth quarter 2022 results in mid-February, at which time the Company will discuss its 2022 financial results in more detail and provide its outlook for 2023.

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