Affymetrix, Inc. (NASDAQ: AFFX) today reported its operating
results for the second quarter of 2011. Total revenue for the
quarter was $64.7 million, as compared to total revenue of $71.7
million in the second quarter of 2010.
The Company reported a loss of $3.7 million, or $0.05 per
diluted share, in the second quarter of 2011. This compares to net
loss of $5.5 million, or $0.08 per diluted share, in the same
period of 2010.
For the second quarter of 2011, product revenue was $58.1
million, which consisted of consumable revenue of $54.3 million and
instrument revenue of $3.8 million. Service revenue was $5.3
million, and royalties and other revenue was $1.3 million. This
compares to second quarter 2010 product revenue of $65.1 million,
which consisted of consumable revenue of $60.6 million and
instrument revenue of $4.5 million. Service revenue was $4.7
million, and royalties and other revenue was $1.8 million.
For the second quarter of 2011, cost of product sales was $22.4
million compared to $27.5 million in the same period of 2010. Cost
of services and other was $3.4 million compared to $3.6 million in
the same period of 2010.
Product gross margin was 62%, as compared to 58% in the same
period of 2010.
For the second quarter of 2011, operating expenses were $42.0
million as compared to operating expenses of $46.2 million in the
same period of 2010, a reduction of 9%.
“During the second quarter we generated a 400 basis point
improvement in gross margin and a 9% reduction in operating expense
over the prior year,” stated Tim Barabe, EVP and CFO. “Our
cash-flow from operations was approximately $14 million and our net
cash position increased to $160 million.”
“I am very excited to be back at Affymetrix,” said Frank Witney,
President and CEO. “In the last quarter we continued to generate
operational efficiencies, and this month we launched our new
CytoScan HD product, a research-use-only tool that enables high
resolution cytogenetic analysis that exceeds the industry
standards. My number one priority is to put the company back on the
path to growth. We have a lot of work ahead of us, but I am
optimistic about the company’s future.”
During the Second Quarter, the
Company:
- Appointed Dr. Frank Witney as president
and chief executive officer, effective July 1, 2011. Dr. Witney
joins Affymetrix with 30 years of experience in the life science
research products and diagnostic and analytical instrument
industry, having served in senior leadership positions at Dionex,
Panomics, Affymetrix and Bio-Rad.
- Launched new Axiom™ myDesign™ Targeted
Genotyping Arrays for the targeted genotyping market, enabling
researchers to study mutations in disease pathways and characterize
gene-gene interactions. This latest advancement allows researchers
to design custom arrays to genotype 1,500 to 2.6 million markers
per sample and rapidly transition from genome-wide scans to
specific disease analyses with different experimental approaches on
the same platform. In addition to Axiom myDesign TG Arrays,
Affymetrix released a new version of the Axiom Genomic Database™
containing 11 million variants, making it the industry's largest
supply of validated genomic markers.
- Announced the commercial availability
of the new Gene Profiling Array cGMP U133 P2, a version of the
widely cited Human Genome U133 Plus 2.0 Array, as another component
to its GeneChip® Instrument System, which is used by Affymetrix
partners for assay development. To accelerate test development
cycles, the new tools are manufactured and quality controlled under
current good manufacturing practices (cGMP) and ISO 13485
standards. Additionally, with an instrument platform and reagents
that are FDA-cleared for in vitro diagnostic (IVD) use and
CE-marked as IVD medical devices for sale in the European Union,
the Affymetrix clinical toolkit eases the regulatory burden.
Affymetrix' management team will host a conference call on July
27, 2011 at 2:00 p.m. PT to review its operating results for the
second quarter of 2011. 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
July 27, 2011 until 8:00 p.m. PT on August 4, 2011 at the following
numbers: domestic: (877) 660-6853, international: (201) 612-7415.
The passcode for both replays is 375254. 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
2,100 systems have been shipped around the world and over 23,500
peer-reviewed papers have been published using the technology.
Affymetrix is headquartered in Santa Clara, California, 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, Asia and Latin America.
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, 2010, and other SEC
reports. 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)
June 30, December 31, 2011 2010
ASSETS: (Note 1) Current assets: Cash and cash equivalents $
27,396 $ 35,484 Restricted cash 312 287 Available-for-sale
securities—short-term portion 45,021 67,223 Accounts receivable,
net 44,606 52,281 Inventories 47,899 49,373 Deferred tax
assets—short-term portion 1,002 1,071 Prepaid expenses and other
current assets 6,524 9,422 Total
current assets 172,760 215,141 Available-for-sale
securities—long-term portion 182,916 134,190 Property and
equipment, net 48,829 54,177 Acquired technology rights, net 32,738
38,858 Deferred tax assets—long-term portion 4,961 4,894 Other
long-term assets 11,987 13,525 Total
assets $ 454,191 $ 460,785
LIABILITIES AND
STOCKHOLDERS’ EQUITY: Current liabilities: Accounts payable and
accrued liabilities $ 37,718 $ 44,259 Deferred revenue—short-term
portion 9,901 10,950 Total current
liabilities 47,619 55,209 Deferred revenue—long-term portion 4,222
4,601 Other long-term liabilities 11,687 11,748 Convertible notes
95,469 95,472 Stockholders’ equity: Common stock 704 706 Additional
paid-in capital 745,950 742,206 Accumulated other comprehensive
income 2,706 1,376 Accumulated deficit (454,166 )
(450,533 ) Total stockholders’ equity 295,194
293,755 Total liabilities and stockholders’ equity $ 454,191
$ 460,785 Note 1:
The condensed consolidated balance sheet
at December 31, 2010 has been derived fromthe audited consolidated
financial statements at that date included in the Company’sAnnual
Report on Form 10-K for the fiscal year ended December 31,
2010.
AFFYMETRIX, INC. CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED) Three Months Ended
Six Months Ended June 30, June 30,
2011 2010
2011 2010 REVENUE:
Product sales $ 58,144 $ 65,103 $ 125,607 $ 138,546 Services 5,259
4,742 9,767 9,205 Royalties and other revenue 1,256
1,833 3,009 4,114 Total
revenue 64,659 71,678 138,383
151,865
COSTS AND EXPENSES: Cost of
product sales 22,367 27,535 46,266 55,994 Cost of services and
other 3,426 3,554 6,626 8,143 Research and development 15,298
17,815 31,566 36,294 Selling, general and administrative
26,675 28,428 53,887
59,807 Total costs and expenses 67,766
77,332 138,345 160,238 (Loss)
income from operations (3,107 ) (5,654 ) 38 (8,373 ) Interest
income and other, net 499 738 (1,395 ) (2,860 ) Interest expense
937 2,340 1,875 4,772 Gain from repurchase of convertible notes
- 1,744 - 1,744
Loss before income taxes (3,545 ) (5,512 ) (3,232 ) (14,261
) Income tax provision 127 29
401 900 Net loss $ (3,672 ) $ (5,541 ) $
(3,633 ) $ (15,161 ) Basic and diluted net loss per common
share $ (0.05 ) $ (0.08 ) $ (0.05 ) $ (0.22 ) Shares used in
computing basic and diluted net loss per common share 69,504
69,030 70,700 68,981
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