Affymetrix, Inc., (NASDAQ:AFFX) today reported its operating
results for the fourth quarter and fiscal year ended December 31,
2010. Total revenue for the fourth quarter was $84.9 million, as
compared to total revenue of $88.8 million in the fourth quarter of
2009. For the full year 2010, total revenue was $310.7 million as
compared to $327.1 million for 2009.
For the fourth quarter of 2010, product revenue was $71.9
million, which consisted of consumable revenue of $63.4 million and
instrument revenue of $8.5 million. Service revenue was $6.4
million, and royalties and other revenue was $6.6 million. This
compares to fourth quarter 2009 product revenue of $81.0 million,
which consisted of consumable revenue of $71.9 million and
instrument revenue of $9.1 million. Service revenue was $5.9
million, and royalties and other revenue was $1.9 million.
For the full year 2010, product revenue was $277.7 million,
which consisted of consumable revenue of $252.1 million and
instrument revenue of $25.6 million. Service revenue was $20.6
million, and royalties and other revenue was $12.4 million. This
compares to full year 2009 product revenue of $279.2 million, which
consisted of consumable revenue of $255.7 million and instrument
revenue of $23.5 million. Service revenue was $39.6 million, and
royalties and other revenue was $8.3 million.
The Company reported a net income of approximately $4.0 million,
or $0.06 per diluted share, in the fourth quarter of 2010. This
compares to net income of $2.8 million, or $0.04 per diluted share,
in the same period of 2009.
Fiscal year 2010 net loss was $10.2 million, or $0.15 per
diluted share, which included a $6.3 million gain from the
repurchase of convertible notes, or $0.09 per diluted share. This
is compared to net loss of $23.9 million, or $0.35 per diluted
share, for fiscal year 2009 which included a $17.4 million gain
from the repurchase of convertible notes, or $0.25 per diluted
share, and restructuring charges of $2.2 million, or $0.03 per
diluted share.
For the fourth quarter of 2010, cost of product sales was $31.6
million compared to $31.3 million in the same period of 2009. Cost
of services and other was $4.0 million compared to $3.7 million in
the same period of 2009. Product gross margin was 56.1%, as
compared to 61.3% in the same period of 2009.
For the full year 2010, cost of product sales was $117.4 million
as compared to $126.4 million in 2009. Cost of services and other
was $15.8 million compared to $23.9 million in 2009. Product gross
margin was 57.7% as compared to 54.7% in 2009.
For the fourth quarter of 2010, operating expenses were $44.1
million as compared to operating expenses of $51.3 million in the
same period of 2009, a reduction of 14%.
For the full year 2010, operating expenses were $182.7 million
as compared to operating expenses of $209.9 million, which included
restructuring charges of $2.2 million, in 2009.
“For the full-year, we generated a gross margin improvement of
300 basis points, a reduction in operating expenses of 13%, and
free cash-flow of more than $40 million. In addition, we reported
positive net income for the second half of the year,” stated Kevin
M. King, president and chief executive officer. “While we made
significant progress in diversifying our revenue base into new
markets, we fell short of expectations on total revenue. Looking to
the future, we’ve made revenue growth our number one priority.”
During the Fourth Quarter the
Company:
- Joined the 1,000 Genomes Project and
will contribute genotyping data for a large set of validated rare
and common genomic variants to the Project. This information was
generated by Affymetrix using the Axiom™ Genotyping Solution and
will allow scientists to create customized Axiom Genotyping Arrays
containing 50,000 to as many as 2.6 million markers. The entire
Axiom Genomic Database provides an extensive selection of
ready-to-use variants for custom array designs and enables an
unprecedented level of success in assay conversion.
- Announced that the U.S. District Court
for the Western District of Wisconsin granted the Company’s motion
for summary judgment that Affymetrix does not infringe U.S. Patent
Nos. 7,510,841 and 7,612,020 held by Illumina and dismissed
Illumina’s patent infringement lawsuits.
- Launched the Axiom™ Genome-Wide BOS 1
Array, which has 34% higher genetic coverage than the current
leading array because of its unique design. Developed in
conjunction with the Affymetrix Bovine Consortium of leading
breeders and researchers worldwide, the array comprehensively
covers genetic traits from the most commercially vital breeds of
dairy and beef cattle. The Axiom Genome-Wide BOS 1 Array's
high-performing markers greatly improve the reliability of genetic
profiling by giving breeders an accelerated path to higher quality
beef and dairy cattle and reducing the need for costly and
time-consuming phenotypic testing.
- Signed a distribution agreement with
Fisher Scientific, Inc., part of Thermo Fisher Scientific, to
distribute the GeneAtlas™ System and its related consumables
through the Fisher Scientific channel throughout the United States
and Canada. The GeneAtlas System is the first personal microarray
solution to meet the demand among life scientists for an easy to
use and affordable way to interrogate the whole genome. Fisher
Scientific has a leading position in the life sciences market and
provides an unparalleled reach and a proven record of customer
service and support.
Affymetrix' management team will host a conference call on
February 2, 2011 at 2:00 p.m. PT to review its operating results
for the fourth quarter and fiscal year 2010. A live webcast can be
accessed by visiting the Investor Relations section of the
Company’s website at www.affymetrix.com. In addition, investors and
other interested parties can listen by dialing domestic: (877)
407-8291, international: (201) 689-8345.
A replay of this call will be available from 5:00 p.m. PT on
February 2, 2011 until 8:00 p.m. PT on February 9, 2011 at the
following numbers: domestic: (877) 660-6853, international: (201)
612-7415. The passcode for both replays is 364850. An archived
webcast of the conference call will be available under the Investor
Relations section of the Company's website.
About Affymetrix
Affymetrix technology is used by the world's top pharmaceutical,
diagnostic, and biotechnology companies, as well as leading
academic, government, and nonprofit research institutes. More than
2,000 systems have been shipped around the world and almost 23,000
peer-reviewed papers have been published using the technology.
Affymetrix is headquartered in Santa Clara, Calif., and has
manufacturing facilities in Cleveland, Ohio, and Singapore. The
Company has more than 900 employees worldwide and maintains sales
and distribution operations across Europe and Asia. For more
information about Affymetrix, please visit the Company's
website.
All statements in this press release that are not historical are
"forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act as amended, including statements
regarding Affymetrix' "expectations," "beliefs," "hopes,"
"intentions," "strategies" or the like. Such statements are subject
to risks and uncertainties that could cause actual results to
differ materially for Affymetrix from those projected, including,
but not limited to: risk relating to the Company’s ability to
successfully commercialize new products, risk relating to past and
future acquisitions, including the ability of the Company to
successfully integrate such acquisitions into its existing
business; risks of the Company's ability to achieve and sustain
higher levels of revenue, higher gross margins and reduced
operating expenses; uncertainties relating to technological
approaches, risks associated with manufacturing and product
development; personnel retention; uncertainties relating to cost
and pricing of Affymetrix products; dependence on collaborative
partners; uncertainties relating to sole-source suppliers;
uncertainties relating to FDA and other regulatory approvals;
competition; risks relating to intellectual property of others and
the uncertainties of patent protection and litigation. These and
other risk factors are discussed in Affymetrix' Annual Report on
Form 10-K for the year ended December 31, 2009, and other SEC
reports, including its Quarterly Reports on Form 10-Q for
subsequent quarterly periods. Affymetrix expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in Affymetrix' expectations with regard thereto
or any change in events, conditions or circumstances on which any
such statements are based.
PLEASE NOTE:
Affymetrix, the Affymetrix logo, GeneChip, and all other
trademarks are the property of Affymetrix, Inc.
AFFYMETRIX, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(IN THOUSANDS)
(UNAUDITED)
December 31,2010 December
31,2009 ASSETS: (Note 1) Current assets: Cash and
cash equivalents $35,484 $65,642 Restricted cash—short-term portion
287 1,686 Available-for-sale securities—short-term portion 67,223
213,377 Accounts receivable, net 52,281 64,933 Inventories 49,373
54,490 Deferred tax assets—short-term portion 1,071 1,172 Prepaid
expenses and other current assets 9,422 15,903 Total current assets
215,141 417,203 Available-for-sale securities—long-term portion
134,190 64,760 Property and equipment, net 54,177 68,182 Acquired
technology rights, net 38,858 49,855 Deferred tax assets—long-term
portion 4,894 4,720 Restricted cash—long-term portion - 1,109 Other
long-term assets 13,525 25,121 Total assets $460,785 $630,950
LIABILITIES AND STOCKHOLDERS’ EQUITY: Current
liabilities: Accounts payable and accrued liabilities $44,259
$57,183 Deferred revenue—short-term portion 10,950 14,534 Total
current liabilities 55,209 71,717 Deferred revenue—long-term
portion 4,601 3,898 Other long-term liabilities 11,748 10,295
Convertible notes 95,472 247,201 Stockholders’ equity: Common stock
706 710 Additional paid-in capital 742,206 733,378 Accumulated
other comprehensive income 1,376 4,051 Accumulated deficit
(450,533) (440,300) Total stockholders’ equity 293,755 297,839
Total liabilities and stockholders’ equity $460,785 $630,950
_____________________________
Note 1: The condensed consolidated
balance sheet at December 31, 2009 has been derived from the
audited consolidated financial statements at that date included in
the Company’s Form 10-K for the fiscal year ended
December 31, 2009.
AFFYMETRIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
(UNAUDITED)
Three Months EndedDecember 31,
Twelve Months EndedDecember 31, 2010
2009 2010 2009 REVENUE: Product
sales $71,924 $80,988 $277,743 $279,186 Services 6,431 5,885 20,565
39,563 Royalties and other revenue 6,554 1,915 12,438 8,345 Total
revenue 84,909 88,788 310,746 327,094
COSTS AND EXPENSES:
Cost of product sales 31,568 31,330 117,384 126,377 Cost of
services and other 4,002 3,650 15,822 23,949 Research and
development 15,465 16,950 67,934 77,358 Selling, general and
administrative 28,657 34,562 114,773 130,838 Restructuring charges
- 283 - 2,180 Goodwill impairment credits - (450) - (450) Total
costs and expenses 79,692 86,325 315,913 360,252 Income (loss) from
operations 5,217 2,463 (5,167) (33,158) Interest income and other,
net 613 1,299 (1,487) 2,589 Interest expense 1,397 2,435 7,706
10,945 Gain from repurchase of convertible notes 445 - 6,297 17,447
Income (loss) before income taxes 4,878 1,327 (8,063) (24,067)
Income tax provision (benefit) 918 (1,468) 2,170 (158) Net income
(loss) $3,960 $2,795 $(10,233) $(23,909) Basic net income
(loss) per common share $0.06 $0.04 $(0.15) $(0.35) Diluted net
income (loss) per common share $0.06 $0.04 $(0.15) $(0.35)
Shares used in computing basic net income (loss) per common share
68,594 68,820 68,856 68,722 Shares used in computing diluted net
income (loss) per common share 69,004 69,374 68,856 68,722
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