Affymetrix, Inc., (NASDAQ: AFFX) today reported its operating
results for the three and twelve months ended December 31,
2012.
Results for the three months ended December 31, 2012:
- Total revenue was $84.4 million, which
excluding eBioscience of $18.1 million, represented a 2% increase
from the fourth quarter of 2011.
- GAAP net loss was $12.3 million, or
$0.17 per diluted share, as compared to a net loss of $14.7
million, or $0.21 per diluted share, in the fourth quarter of
2011.
- Non-GAAP net loss was $1.3 million, or
$0.02 per diluted share, as compared to a net loss of $8.3 million,
or $0.12 per diluted share, for the fourth quarter of 2011. Please
refer to the “Itemized Reconciliation Between GAAP and Non-GAAP Net
Loss” for a reconciliation of these GAAP and non-GAAP financial
measures.
- Positive cash flow from operations of
$2.0 million and a total balance in cash, cash equivalents and
available-for-sale securities of $35.7 million at the end of
December 31, 2012, after debt payments of $9.6 million during the
quarter.
Product revenue for the fourth quarter of 2012 was $76.4 million
and service and other revenue was $8.0 million. This compares to
product revenue of $58.7 million and service and other revenue of
$6.4 million in the fourth quarter of 2011. Product revenue for the
fourth quarter of 2012 included Affymetrix core consumable revenue
of $53.1 million, instrument revenue of $5.2 million and revenue
from eBioscience of $18.1 million. Product revenue for the fourth
quarter of 2011 included Affymetrix core consumable revenue of
$54.9 million and instrument revenue of $3.8 million.
Total gross margin was 54%, as compared to 53% in the same
period of 2011. Excluding non-GAAP adjustments such as the
amortization of step-up in inventory fair value, total margin was
61% in 2012, as compared to 54% in 2011. Please refer to the
“Itemized Reconciliation Between GAAP and Non-GAAP Gross Margin”
for a reconciliation of these GAAP and non-GAAP financial
measures.
For the fourth quarter of 2012, operating expenses were $54.4
million on a GAAP basis as compared to $45.5 million in 2011.
Excluding non-GAAP adjustments such as the amortization of acquired
intangible assets and non-recurring charges, operating expenses
were $48.5 million, compared to an adjusted total of $41.5 million
in 2011. The increase reflects the acquisition of eBioscience in
June 2012. Please refer to the “Itemized Reconciliation Between
GAAP and Non-GAAP Operating Expenses” for a reconciliation of these
GAAP and non-GAAP financial measures.
Results for the year ended December 31, 2012:
- Total revenue was $295.6 million, which
excluding eBioscience of $37.0 million, represented a 3% decrease
from 2011.
- GAAP net loss was $10.7 million, or
$0.15 per diluted share, as compared to a net loss of $28.2
million, or $0.40 per diluted share, in 2011.
- Non-GAAP net loss was $6.8 million, or
$0.10 per diluted share, as compared to a net loss of $13.0
million, or $0.18 per diluted share, for 2011. Please refer to the
“Itemized Reconciliation Between GAAP and Non-GAAP Net Loss” for a
reconciliation of these GAAP and non-GAAP financial measures.
- Positive cash flow from operations of
$4.0 million. $11.7 million of debt payments were made during the
year.
Product revenue for the year ended December 31, 2012 was $266.1
million and service and other revenue was $29.5 million. This
compares to product revenue of $241.3 million and service and other
revenue of $26.2 million in 2011. Product revenue for 2012 included
Affymetrix core consumable revenue of $210.7 million, instrument
revenue of $18.4 million and revenue from eBioscience of $37.0
million. Product revenue for 2011 included Affymetrix core
consumable revenue of $225.0 million and instrument revenue of
$16.3 million.
Total gross margin was 55%, as compared to 58% in the same
period of 2011. Excluding non-GAAP adjustments such as the
amortization of step-up in inventory fair value and acquired
intangible assets, total margin was 60% in 2012, as compared to 59%
in 2011. Please refer to the “Itemized Reconciliation Between GAAP
and Non-GAAP Gross Margin” for a reconciliation of these GAAP and
non-GAAP financial measures.
For the year ended December 31, 2012, operating expenses were
$202.6 million on a GAAP basis as compared to $173.2 million in
2011. Excluding non-GAAP adjustments such as the amortization of
acquired intangible assets and non-recurring charges, operating
expenses were $175.4 million, compared to an adjusted total of
$166.2 million in 2011, with the increase reflecting the
eBioscience acquisition in 2012. Please refer to the “Itemized
Reconciliation Between GAAP and Non-GAAP Operating Expenses” for a
reconciliation of these GAAP and non-GAAP financial measures.
“We had a good finish to 2012, achieving modest growth in our
core business during the fourth quarter, which was a very
challenging environment for academic spending. Revenue for
eBioscience increased by 5% as compared to the fourth quarter of
2011,” said Dr. Frank Witney, president & CEO. “Over the last
year we have diversified our portfolio, achieved our strategic and
revenue goals for our CytoScan product line and demonstrated
renewed strength in genotyping with our Axiom platform. We plan to
return to growth and profitability in fiscal 2013.”
Recent announcements:
- In December of 2012, the Company
prepaid $9.6 million of its senior-secured debt representing the
entire principal due in 2013.
- Additionally, the Company implemented a
corporate restructuring to accelerate its 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. The Company expects to record a
total charge of approximately $7 million, the majority of which
will be incurred during the first quarter of 2013 except for $1.8
million which was recognized in 2012.
Affymetrix will host a conference call on January 31, 2013 at
2:00 p.m. PT to review its operating results for the fourth quarter
of and the year ended 2012. 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
January 31, 2013 until 8:00 p.m. PT on February 8, 2013 at the
following numbers: domestic: (877) 660-6853, international: (201)
612-7415. The conference call passcode to access the replay is
406352. 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
2,300 systems have been shipped around the world and more than
48,000 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 1,100 employees
worldwide and maintains sales and distribution operations across
Europe, Asia and Latin America.
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
related to our plans to return to growth and profitability in 2013
and our estimated annualized cost savings as well as other
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 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 Annual Report on Form 10-K for the year ended December
31, 2011, 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.
In addition to providing financial measures based on generally
accepted accounting principles in the United States (GAAP),
Affymetrix has disclosed in this press release its net loss and net
loss per share as well as its total gross margin and operating
expenses for the fourth quarter of and fiscal year ended 2012
excluding specified certain items. Reconciliation of GAAP to
non-GAAP measures can be found in the tables included in this press
release. Affymetrix has determined to disclose this financial
information to investors because it believes it will be useful, as
a supplement to GAAP measures, in comparing Affymetrix’s operating
performance in the fourth quarter of and year ended 2012 to the
prior-year period. These non-GAAP financial measures should not be
considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP.
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)
December 31, December 31, 2012
2011 (Unaudited) (See Note 1)
ASSETS: Current assets: Cash and cash equivalents $ 25,671 $
201,937 Restricted cash 699 692 Available-for-sale
securities—short-term portion 9,366 7,937 Accounts receivable, net
53,893 44,021 Inventories—short-term portion 72,691 42,851 Deferred
tax assets—short-term portion 359 364 Property and equipment,
net—held for sale - 9,000 Prepaid expenses and other current assets
10,126 7,785 Total current assets
172,805 314,587 Available-for-sale securities—long-term portion -
54,501 Property and equipment, net 28,663 30,583
Inventories—long-term portion 11,772 - Goodwill 159,736 -
Intangible assets, net 152,718 29,525 Deferred tax assets—long-term
portion 3,394 450 Other long-term assets 15,206
8,369 Total assets $ 544,294 $ 438,015
LIABILITIES AND STOCKHOLDERS’ EQUITY: Current
liabilities: Accounts payable and accrued liabilities $ 50,355 $
44,774 Convertible notes—short-term portion 3,855 - Term
loan—short-term portion 12,713 - Deferred revenue—short-term
portion 8,498 9,852 Total current
liabilities 75,421 54,626 Deferred revenue—long-term portion 3,450
3,959 Convertible notes 105,000 95,469 Term loan—long-term portion
60,563 - Other long-term liabilities 22,689 9,127 Stockholders’
equity: Common stock 710 704 Additional paid-in capital 759,549
750,332 Accumulated other comprehensive income 6,302 2,492
Accumulated deficit (489,390 ) (478,694 ) Total
stockholders’ equity 277,171 274,834
Total liabilities and stockholders’ equity $ 544,294 $
438,015 Note 1: The condensed consolidated balance sheet at
December 31, 2011 has been derived from the audited consolidated
financial statements at that date included in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2011.
AFFYMETRIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
(UNAUDITED)
Three Months Ended Twelve Months Ended
December 31, December 31, 2012
2011 2012
2011 REVENUE: Product sales $ 76,382 $
58,665 $ 266,063 $ 241,273 Services and other 7,967
6,439 29,560 26,201 Total
revenue 84,349 65,104 295,623
267,474
COSTS AND EXPENSES: Cost of
product sales 34,354 26,902 116,261 97,815 Cost of services and
other 4,817 3,510 15,874 13,137 Research and development 14,464
16,697 57,881 63,591 Selling, general and administrative 38,102
28,770 142,853 109,572 Restructuring charges 1,845
- 1,845 - Total costs and
expenses 93,582 75,879 334,714
284,115 Loss from operations (9,233 ) (10,775
) (39,091 ) (16,641 ) Interest income and other, net 1,367 (2,753 )
(265 ) (6,302 ) Interest expense 3,002 947
7,193 3,813 Loss before income
taxes (10,868 ) (14,475 ) (46,549 ) (26,756 ) Income tax provision
(benefit) 1,401 264 (35,853 )
1,405 Net loss $ (12,269 ) $ (14,739 ) $ (10,696 ) $
(28,161 ) Basic and diluted net loss per common share $
(0.17 ) $ (0.21 ) $ (0.15 ) $ (0.40 ) Shares used in
computing basic and diluted net loss per common share 70,657
69,889 70,300 70,877
AFFYMETRIX, INC.
RESULTS OF OPERATIONS –
NON-GAAP
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
(UNAUDITED)
ITEMIZED RECONCILIATION BETWEEN GAAP
AND NON-GAAP NET LOSS
Three Months Ended Twelve Months Ended
December 31, December 31, 2012
2011 2012
2011 GAAP net loss - basic and
diluted $ (12,269 ) $ (14,739 ) $ (10,696 ) $ (28,161
) Amortization of inventory fair value adjustment 4,589 - 9,444 -
Amortization of acquired intangible assets 4,929 1,544 12,848 6,176
Acquisition-related transaction costs 53 2,936 6,146 2,936
Acquisition-related integration costs 543 - 2,084 - Share-based
compensation charge related to acquisition - - 8,265 - Income tax
benefit related to acquisition - - (37,462 ) - Gain on sale of
product line (514 ) - (514 ) - (Recovery) impairment of
held-for-sale property, net (508 ) 1,710 3,492 1,710 Restructuring
charges 1,845 - 1,845 - (Recovery) provision of note receivable - -
(2,215 ) 2,215 Impairment of financial instruments -
223 - 2,123
Non-GAAP net loss - basic and diluted $ (1,332 ) $
(8,326 ) $ (6,763 ) $ (13,001 ) Basic and
diluted net loss per common share $ (0.02 ) $ (0.12 )
$ (0.10 ) $ (0.18 ) Shares used in computing basic
and diluted net loss per common share 70,657
69,889 70,300
70,877
ITEMIZED RECONCILIATION BETWEEN GAAP
AND NON-GAAP GROSS MARGIN
Three Months Ended Twelve Months Ended
December 31, December 31, 2012
2011 2012 2011
GAAP total gross margin $ 45,178 54 % $ 34,692 53 % $
163,488 55 % $ 156,522 58 % Amortization of inventory
fair value adjustment 4,589 5 % - 0 % 9,444 3 % - 0 % Amortization
of acquired intangible assets 1,500 2 % 533
1 % 4,031 2 % 2,132 1 % Non-GAAP
total gross margin $ 51,267 61 % $ 35,225 54 % $
176,963 60 % $ 158,654 59 %
ITEMIZED RECONCILIATION BETWEEN GAAP
AND NON-GAAP OPERATING EXPENSES
Three Months Ended Twelve Months Ended
December 31, December 31, 2012
2011 2012
2011 Total GAAP operating
expenses $ 54,411 $ 45,467 $ 202,579 $ 173,163
Amortization of acquired intangible assets (3,429 ) (1,011 ) (8,817
) (4,044 ) Acquisition-related transaction costs (53 ) (2,936 )
(6,146 ) (2,936 ) Acquisition-related integration costs (543 ) -
(2,084 ) - Share-based compensation charge related to acquisition -
- (8,265 ) - Restructuring charges (1,845 ) -
(1,845 ) - Total non-GAAP
operating expenses $ 48,541 $ 41,520 $
175,422 $ 166,183
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