Affymetrix Announces Preliminary Fourth Quarter Revenue of $84 Million & Implements Corporate Restructuring to Accelerate Pat...
January 08 2013 - 5:01PM
Business Wire
Affymetrix, Inc., (NASDAQ: AFFX) today announced that based on
preliminary financial data, the Company expects total revenue for
the fourth quarter of 2012 will be approximately $84 million,
including $18 million from its eBioscience business unit. Excluding
eBioscience, the Company’s revenue increased by 1% as compared to
the fourth quarter of 2011, and eBioscience’s revenue increased by
approximately 5% as compared to the fourth quarter of 2011. For
fiscal 2012, the Company expects total revenue of approximately
$295 million.
The company also announced that it prepaid $9.6 million of its
senior-secured debt and is implementing a corporate restructuring
to accelerate the Company’s path to profitability. The
restructuring is expected to result in annualized savings of
approximately $25 million based on 2013 run rates, of which $5
million is in cost-of-goods sold. As part of the restructuring,
Affymetrix expects that more than 100 employees will leave the
company, representing about 8% of its work force. The company
expects to record a charge of approximately $7 million, the
majority of which will be incurred during the first quarter of
2013.
“This restructuring will drive operational efficiency, and
together with the sharpened focus of our development and commercial
priorities, will accelerate our return to profitability,” said Dr.
Frank Witney, president and chief executive officer.
In conjunction with this announcement, the Company’s EVP and
general counsel John F. (Rick) Runkel will retire from Affymetrix
effective March 31, 2013. Mr. Runkel will be succeeded by Ms. Siang
Chin. Ms. Chin joined the company in 2007 as vice president, chief
corporate counsel. Ms. Chin has practiced law for over 15 years;
prior to joining the Company, she was associated with the law firms
of Shearman & Sterling and Slaughter and May. The Company
expects to retain Mr. Runkel in a consulting capacity to ensure a
smooth transition. In addition, the Company’s EVP and CFO Tim
Barabe will also retire from Affymetrix. Mr. Barabe will continue
in his current capacity while the Company conducts a search for a
successor.
“I would like to thank Tim and Rick for their years of service
and the contributions that they have made to Affymetrix, including
their efforts to ensure a smooth transition. I will personally miss
them as friends and colleagues,” Dr. Witney said.
“This restructuring will help to improve our free-cash flow in
2013 and beyond, as well as enable us to accelerate the repayment
of our senior debt,” stated Tim Barabe, EVP & CFO. “In December
we prepaid $9.6 million of our senior secured debt representing the
entire principal due in 2013. This payment was funded in part from
the sale of our manufacturing facility in Sacramento. We have
reduced our senior debt to $73 million and cash-on-hand at year-end
was approximately $35 million.”
Affymetrix’s management team will host a conference call on
Thursday January 31, 2013 at 2:00 p.m. PT. 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)
407-4812, international: (201) 689-8345.
A replay of this call will be available from 5:00pm PT on
Thursday January 31, 2013 until 8:00pm PT on February 7, 2013 at
the following numbers: 877-660-6853 (domestic), 201-612-7415
(international). The pass code to access the conference call is
406352. An archived webcast of the conference call will be
available under the investor relations section of the company's
website at www.affymetrix.com.
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
2,200 systems have been shipped around the world and almost 26,000
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.
eBioscience is headquartered in San Diego, California and has
manufacturing facilities in San Diego and Vienna, Austria.
Including eBioscience, the Company has about 1,000 employees
worldwide and maintains sales and distribution operations across
Europe, Asia and Latin America.
Forward-Looking Statements
Affymetrix has not filed the Form 10-k for fiscal 2012. As a
result, all financial results described in this press release
should be considered preliminary, and are subject to change to
reflect any necessary corrections or adjustments, or changes in
accounting estimates, that are identified prior to the time the
company is in a position to complete these filings.
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's "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: Affymetrix's ability to timely and successfully
integrate and realize the anticipated savings from this corporate
restructuring; strategic benefits and costs savings or other
synergies of the acquisition of eBioscience in a cost-effective
manner while minimizing the disruption to its business; risks that
eBioscience’s future performance may not be consistent with its
historical performance; risks relating to Affymetrix's ability to
make scheduled payments of the principal of, to pay interest on or
to refinance its indebtedness; risks relating to Affymetrix's
ability to successfully develop and commercialize new products,
including its ability to successfully develop and commercialize
novel molecular solutions based on eBioscience’s portfolio of
reagents; risks relating to past and future acquisitions, including
the ability of Affymetrix to successfully integrate such
acquisitions into its existing business; risks of Affymetrix's
ability to achieve and sustain higher levels of revenue, higher
gross margins and reduced operating expenses; risks relating to
Affymetrix’s ability to generate cash after interest and principal
payments; 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's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2012, 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's 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.
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