Accelerate Diagnostics, Inc. (NASDAQ:AXDX) Q3 2022 Earnings Conference Call November 14, 2022 4:30 PM ET

Company Participants

Laura Pierson - IR Officer

Jack Phillips - CEO, President & Director

Steve Reichling - CFO

Conference Call Participants

Andrew Brackmann - William Blair & Company

Connor Stevenson - Craig-Hallum

Operator

Good afternoon, and welcome to the Accelerate Diagnostics Inc. Third Quarter 2022 Earnings Call. [Operator Instructions].

I would now like to turn the conference over to Mr. Jack Phillips, President and Chief Executive Officer. Please go ahead.

Laura Pierson

Before we begin, it is important to share that information presented during this call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Forward-looking statements include projections, statements about our future and those that are not historical facts. All forward-looking statements that are made during this conference call are subject to risks, uncertainties and other factors that could cause our actual results to differ materially. These are discussed in greater detail in our annual report on Form 10-K for the year ended December 31, 2021, and other reports we file with the SEC.

It is my pleasure to now introduce the company's President and CEO, Jack Phillips.

Jack Phillips

Thank you, Laura. Good afternoon, everyone, and welcome to our third quarter earnings call. On today's call, we will discuss progress with the Becton, Dickinson commercial partnership, the regulatory status of Arc and our third quarter results. Before providing additional detail on each of these areas, I'd like to hand it over to our Chief Financial Officer, Steve Reichling to review our third quarter financial results. Steve?

Steve Reichling

Thank you, Jack, and good afternoon, everyone. Net sales were $3 million for the quarter and $9.8 million year-to-date. This compares to $3.1 million and $8.4 million for the same periods in the prior year. This represents a slight decline quarter-over-quarter and 16% growth year-to-date. This decline is due to fluctuations in the timing of capital revenue.

Meanwhile, recurring revenues continue to grow sequentially quarter-over-quarter and over comparable periods from the prior year. Cost of goods sold were $2.2 million for the quarter and $7.1 million year-to-date, resulting in gross margins of 27% and 28%, respectively.

This compares to cost of goods sold of $2.1 million and $5.5 million and gross margins of 32% and 35%, respectively, during the same periods in the prior year. The decline in gross margins resulted from continued inflation on production costs and other factors.