UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q Delaware 81-2621304 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 4399 Santa Anita Avenue El Monte, CA 91731 (Address of principal executive offices) (Zip Code) (626) 350-0537 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: | --- | --- | --- | |-------------------------------------------|-------------------|---- ...

Call Start: 16:30 January 1, 0000 5:18 PM ET Fulgent Genetics, Inc. (NASDAQ:FLGT) Q4 2022 Earnings Conference Call February 28, 2023 16:30 ET Company Participants Melanie Solomon - Investor Relations Ming Hsieh - Chief Executive Officer Brandon Perthuis - Chief Commercial Officer Paul Kim - Chief Financial Officer Conference Call Participants Tyler Anderson - Piper Sandler Operator Hello and welcome to the Fulgent Genetics Q4 and Fiscal Year 2022 Earnings Conference Call and Webcast. [Operator Instructions] ...

Expansion and Acquisitions - The company opened a new CLIA-certified oncology laboratory in El Monte, California, expanding capabilities in somatic molecular diagnostics and cancer testing[476] - The acquisition of Inform Diagnostics extended the company's in-network relationships with managed care organizations to over 300 million covered lives[477] - The company's geographic footprint expanded with the addition of CLIA, CAP, and NY State certified laboratories in California, New York, Arizona, Massachusetts, and Texas[477] - The company completed the acquisition of Inform Diagnostics for approximately $170 million, expanding its genomic testing footprint into multiple pathology areas[536] - The company acquired businesses for $172.7 million in 2022, significantly higher than $61.9 million in 2021[494] - The company completed the acquisition of Inform Diagnostics and Fulgent Pharma in 2022 and is currently integrating them into operations[616] Financial Performance and Revenue - The company's revenue is impacted by the mix of tests delivered and customer concentration, with a small number of customers accounting for a significant portion of revenue in prior periods[481] - Revenue for the year ended December 31, 2022, was $659.4 million, a decrease from $1.14 billion in 2021[542] - Revenue for Q4 2022 was $67.704 million, a decrease from $105.655 million in Q3 2022 and $125.341 million in Q2 2022[563] - Gross profit for Q4 2022 was $12.987 million, significantly lower than $46.095 million in Q3 2022 and $65.276 million in Q2 2022[563] - Operating loss for Q4 2022 was $36.552 million, compared to an operating income of $201.933 million in Q1 2022[563] - Revenue from the Inform Diagnostics acquisition since the acquisition date was $83.6 million, with an operating loss of $17.0 million[553] - Revenue is primarily generated from testing services, with payments received from insurance, institutional customers, and direct patient payments[574] Profitability and Net Income - The company reported a net income of $507.36 million in 2021, contributing to a total equity of $1.27 billion at the end of 2022[490] - Net income from consolidated operations in 2022 was $141.9 million, a significant decrease from $506.2 million in 2021 and $214.3 million in 2020[494] - Net income attributable to Fulgent for 2022 was $140.3 million, compared to $493.3 million in 2021[542] Cash Flow and Investments - Net cash provided by operating activities in 2022 was $253.5 million, compared to $538.6 million in 2021 and $140.6 million in 2020[494] - Cash and cash equivalents at the end of 2022 were $79.5 million, down from $164.9 million at the end of 2021 and $87.4 million at the end of 2020[494] - The company invested $417.9 million in marketable securities in 2022, compared to $710.5 million in 2021 and $324.4 million in 2020[494] - Cash used in investing activities in 2022 was $261.3 million, primarily due to $418.0 million in purchases of marketable securities and $172.7 million related to business acquisitions[568] - Cash used in financing activities in 2022 was $77.1 million, mainly due to $74.3 million used in the repurchase of common stock[569] - Cash provided by operating activities in 2021 was $538.6 million, with adjustments including $15.9 million in equity-based compensation expenses and $11.0 million in depreciation and amortization[567] - Cash used in investing activities in 2021 was $546.5 million, including $710.5 million in purchases of marketable securities and $61.9 million related to business acquisitions[580] - Cash provided by financing activities in 2021 was $85.4 million, primarily from $89.5 million proceeds from an equity distribution agreement[581] Equity and Compensation - The company's equity-based compensation and stock issuances contributed significantly to its equity growth, with $32.64 million in equity-based compensation in 2021[490] - Equity-based compensation increased to $32.6 million in 2022 from $15.9 million in 2021 and $8.2 million in 2020[494] - The company's RSU (Restricted Stock Units) balance increased from 1,619 thousand shares in 2021 to 2,631 thousand shares in 2022, with a weighted-average grant date fair value of $47.76[520] - The company's option awards balance decreased from 216 thousand shares in 2021 to 212 thousand shares in 2022, with a weighted-average exercise price of $4.21[518] Tax and Financial Reporting - The company's effective tax rate decreased from 25.76% in 2021 to 22.70% in 2022, influenced by state taxes, uncertain tax positions, and stock-based compensation[525] - The company's deferred tax assets increased significantly from $21,920 thousand in 2021 to $56,587 thousand in 2022, primarily due to provisions for credit losses and net operating losses[526] - The company has $9.7 million of gross unrecognized tax benefits as of December 31, 2022, with $2.3 million potentially affecting the effective tax rate if recognized[529] - Management concluded that internal control over financial reporting was effective as of December 31, 2022[617] - The company's internal control over financial reporting was audited by Deloitte & Touche LLP, which expressed an unqualified opinion[618] Goodwill and Intangible Assets - The company's goodwill is subject to annual impairment tests, with impairment recognized if the fair value of the reporting unit is less than its carrying value[514] - The company's total goodwill as of December 31, 2022, was $143.0 million, up from $50.9 million in 2021[547] - Total intangible assets, net, increased to $150.643 million in 2022 from $35.914 million in 2021, driven by goodwill and customer relationships[560] - The company's intangible assets are amortized over periods ranging from five to fourteen years, with in-process research and development costs considered indefinite-lived until completion or abandonment[512] Stock Repurchase and Financing - The company repurchased $74.3 million of common stock in 2022, a new activity not present in previous years[494] - The company repurchased 1.8 million shares of its common stock at an aggregate cost of $74.3 million under the stock repurchase program in 2022, with $175.7 million remaining available for future repurchases[559][570] - A $250.0 million stock repurchase program was authorized in March 2022, with no expiration date[582] Risk Management and Liabilities - The company's allowance for credit losses increased from $11,217 thousand at the beginning of the year to $41,205 thousand at the end of the year, with a current period provision of $32,596 thousand[508] - The company holds a redeemable preferred stock investment valued at $12.4 million as of December 31, 2022, with unrealized losses of $9.6 million reported in other comprehensive income for the year[509] - A hypothetical 100 basis point increase in interest rates would result in a $7.3 million decline in the fair market value of the investment portfolio[591] - An adverse 10% foreign currency exchange rate change would decrease income before taxes by approximately $844,000 as of December 31, 2022[592] - As of December 31, 2022, the company had an outstanding balance of $15.0 million under its margin account and $5.2 million in notes payable due in March 2023[583] Therapeutic Development and Precision Medicine - The company's therapeutic development business focuses on improving the therapeutic window and pharmacokinetic profile of cancer drugs using a novel nanoencapsulation and targeted therapy platform[475] - The company's therapeutic development business is focused on developing drug candidates for treating a broad range of cancers using a novel nanoencapsulation and targeted therapy platform[498] - The company aims to transform from a genomic diagnostic business into a fully integrated precision medicine company[498] - Fulgent Pharma's acquisition included $64.6 million in IPR&D, with a lead drug candidate, FID-007, showing promise in preliminary human clinical trials[543] Operational Costs and Expenses - The company incurred $1.2 million in costs related to COVID-19 antigen rapid test kits and licensing services in 2022[535] - The company's fixed assets are recorded at cost, net of accumulated depreciation, with major replacements and improvements capitalized and general repairs expensed as incurred[511] - The company has non-cancelable operating leases, finance leases, and purchase obligations for medical lab equipment, reagents, and other supplies as of December 31, 2022[572] Marketable Securities and Investments - The company uses the Black-Scholes option-pricing model to measure the fair value of option awards, requiring significant judgment in assumptions such as expected term[521] - The company's cash and cash equivalents are held in accounts at financial institutions, with amounts potentially exceeding federally insured limits, but management believes the credit risk is not significant[565] - Cash and cash equivalents as of December 31, 2022 include $5.0 million restricted cash related to a share transfer agreement[502]

ifulgent Investor Presentation November 7, 2022 Founded in 2011 | Located in Los Angeles, CA | NASDAQ:FLGT Disclaimer 2 Forward-Looking Statements and Market Data This presentation contains forward-looking statements, which are statements other than those of historical facts and which represent the estimates and expectations of Fulgent Genetics, Inc. (the "Company") about future events based on current views and assumptions. Examples of forward-looking statements made in this presentation include, among oth ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37894 FULGENT GENETICS, INC. (exact name of registrant as specified in its charter) Delaware 81-2621304 (State or other juris ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37894 FULGENT GENETICS, INC. (exact name of registrant as specified in its charter) Delaware 81-2621304 (State or other jurisdicti ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37894 FULGENT GENETICS, INC. (exact name of registrant as specified in its charter) Delaware 81-2621304 (State or other jurisdict ...

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