Affymetrix, Inc., (NASDAQ:AFFX) today reported its operating
results for the first quarter of 2015.
Results for the three months ended March 31,
2015:
- Reported revenue growth of 6.9% and
9.1% on a constant currency basis.
- Total revenue was $88.7 million,
compared to $83.0 million in first quarter of 2014.
- Product revenue was $79.4 million
compared to $73.7 million in the first quarter of 2014, an increase
of 7.7%.
- GAAP net income was $4.4 million, or
$0.06 per diluted share, as compared to a GAAP net loss of $10.5
million, or $0.14 per diluted share, in the first quarter of 2014,
an increase of $14.9 million or $0.20 per diluted share.
- Non-GAAP net income was $7.9 million,
or $0.10 per diluted share, compared to a non-GAAP net income of
$1.9 million, or $0.03 per diluted share, for the first quarter of
2014. Please refer to "Itemized Reconciliation Between GAAP and
Non-GAAP Net Income (Loss)" for a reconciliation of these GAAP and
non-GAAP financial measures.
- Net proceeds of $25.3 million raised
through an "at-the-market" offering.
- Total balance in cash and cash
equivalents was $104.0 million and senior debt was $22.0 million as
of March 31, 2015.
Product revenue for the first quarter of 2015 was $79.4 million
and service and other revenue was $9.4 million. This compares to
product revenue of $73.7 million and service and other revenue of
$9.3 million in the first quarter of 2014. Product revenue for the
first quarter of 2015 included consumable revenue of $76.5 million
and instrument revenue of $2.9 million. Product revenue for the
first quarter of 2014 included consumable revenue of $69.9 million
and instrument revenue of $3.8 million.
Total GAAP gross margin was 62%, as compared to 56% in the same
period of 2014. Excluding non-GAAP adjustments such as the
amortization of acquired intangible assets, non-GAAP gross margin
for the first quarter of 2015 was 63% compared to 61% in the same
period of 2014. 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 first quarter of 2015, operating expenses were $47.6
million on a GAAP basis as compared to $55.3 million in the same
period of 2014. Excluding non-GAAP adjustments, such as the
amortization of acquired intangible assets and non-recurring
charges, non-GAAP operating expenses for the first quarter of 2015
were $45.3 million, compared to an adjusted total of $47.2 million
in the same period of 2014. The decrease is primarily due to lower
amortization and depreciation, lower legal costs and the favorable
currency impact of our European operations. Please refer to the
"Itemized Reconciliation Between GAAP and Non-GAAP Operating
Expenses" for a reconciliation of these GAAP and non-GAAP financial
measures.
“Phase III of our strategic plan is off to a good start. Our
priorities are clear, primarily to grow revenues, achieve sustained
profitability and build cash to increase our strategic flexibility.
In the first quarter, we generated topline growth of 9% on a
constant currency basis driven by strong performance of our
genotyping and reproductive health businesses,” stated Frank
Witney, President and CEO. “We generated an adjusted EBITDA margin
of 19% and our earnings per share more than tripled over the prior
year.”
Recent developments:
- Affymetrix and MTI
Ltd. (TSE:9438), through its wholly-owned
subsidiary, EverGene Ltd., announced that the two companies
will collaborate in genetic research and personal genomics services
in Japan. MTI/EG, a personal genome services (PGS) provider
in Japan, plans to further expand their business in the
healthcare field through a collaborative project focused on
“quality of life”. More than 10,000 volunteers from the subscriber
base of MTI’s LunaLuna, a women’s healthcare service mobile app
in Japan, have applied to participate in this research
program. The outcome of the research is expected to produce results
that will enable MTI/EG to introduce new categories of PGS in
several fields for quality of life improvement.
- The Company announced two new
genotyping products at the 2015 Plant and Animal Genome
Conference for applications in breeding and routine analysis.
The newest arrays, Axiom® Porcine Genotyping Array and Axiom
Equine Genotyping Array, will be available to the agriculture
community under the Axiom Expert Design Program. These two
high-density arrays expand the Company’s product portfolio that
includes bovine, chicken, maize, salmon, and
wheat. Affymetrix recently launched arrays with the most
current content for genomic breeding in soybean and cotton, and
arrays for buffalo, rainbow trout, rose, and strawberry. Also new
are enhanced wheat arrays that have come out of the UK-based
Wheat Institute Strategic Programme (WISP), which began using Axiom
arrays early last year. Affymetrix now offers the largest
selection of catalog of arrays for research and applied agriculture
markets.
Affymetrix will host a conference call on Wednesday, April 29,
2015 at 2:00 p.m. PT to review its operating results for the first
quarter of 2015. 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
April 29, 2015 until 8:00 p.m. PT on May 6, 2015 at the following
numbers: domestic: (877) 660-6853, international: (201) 612-7415.
The conference call passcode to access the replay is
13605093. 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
94,500 peer-reviewed papers have been published using the
technology. Affymetrix is headquartered in Santa Clara, California,
and has manufacturing facilities in Cleveland, Ohio, San Diego,
California, Singapore and Vienna, Austria. 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 in
nature, are predicative in nature or that depend upon or refer to
future events or conditions are "forward-looking statements" within
the meaning of Section 21 of the Securities Exchange Act of 1934,
as amended, and the Private Securities Litigation Reform Act of
1995. These include statements regarding our strategic initiatives,
market expectations, integration of and synergies related to
eBioscience, anticipated product and revenue growth, financial
strength and regulatory environment, as well as all other
"expectations," "beliefs," "hopes," "intentions," "strategies" and
words of similar import and the negatives thereof. Such statements
are based on our current expectations and are subject to a number
of factors and uncertainties that could cause actual results to
differ materially from those described in the forward-looking
statements. We cannot assure you that actual results or business
conditions will not differ materially from those projected or
suggested in such forward-looking statements as a result of various
factors, including, but not limited to, those discussed in “Risk
Factors” contained in Part I, Item 1A of our Annual Report on Form
10-K for the year ended December 31, 2014. These
forward-looking statements speak only as of the date of this press
release. Unless required by law, we do not undertake to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in our 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 income
(loss) and net income (loss) per share as well as its total gross
margin and operating expenses for the first quarter of 2015 and
2014 excluding specified 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 first quarter of 2015 as compared 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.
- Financial Charts to Follow -
AFFYMETRIX, INC. UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
March 31, December 31, 2015 2014
ASSETS: (Note 1) Current assets: Cash and cash equivalents $
104,009 $ 79,923 Accounts receivable, net 48,526 46,896
Inventories, net—short-term portion 50,701 50,676 Deferred tax
assets—short-term portion 3,781 3,778 Prepaid expenses and other
current assets 11,969 9,197 Total current assets
218,986 190,470 Property and equipment, net 18,576 18,087
Inventories, net—long-term portion 4,809 5,956 Goodwill 151,789
156,178 Intangible assets, net 99,479 106,183 Deferred tax
assets—long-term portion 308 303 Other long-term assets 9,343
9,371 Total assets $ 503,290 $ 486,548
LIABILITIES AND STOCKHOLDERS’ EQUITY: Current
liabilities: $ 43,110 $ 53,063 Accounts payable and accrued
liabilities 4,000 4,000 Current portion of long-term debt 8,748
9,210 Deferred revenue—short-term portion 55,858
66,273
Total current liabilities
2,515 2,372 Deferred revenue—long-term portion 105,000 105,000
4.00% notes 17,950 18,950 Term loan—long-term portion 20,643
21,626 Other long-term liabilities 201,966 214,221
Total liabilities Stockholders’ equity: Common stock 773 743
Additional paid-in capital 812,438 781,747 Accumulated other
comprehensive income (6,722 ) (612 ) Accumulated deficit (505,165 )
(509,551 ) Total stockholders’ equity 301,324 272,327
Total liabilities and stockholders’ equity $ 503,290 $
486,548 Note 1: The condensed consolidated
balance sheet at December 31, 2014 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, 2014.
AFFYMETRIX, INC. UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN
THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months
Ended
March 31,
2015 2014 REVENUE: Product sales $
79,367 $ 73,695 Services and other 9,350 9,276 Total
revenue 88,717 82,971
COSTS AND EXPENSES: Cost
of product sales 27,583 29,512 Cost of services and other 6,296
6,904 Research and development 12,120 11,635 Selling, general and
administrative 35,433 38,562 Litigation settlement — 5,100
Total costs and expenses 81,432 91,713 Income
(loss) from operations 7,285 (8,742 ) Other (expense) income, net
(673 ) 293 Interest expense 1,483 1,753 Income (loss)
before income taxes 5,129 (10,202 ) Income tax provision 743
272 Net income (loss) $ 4,386 $ (10,474 )
Basic net income (loss) per common share $ 0.06 $ (0.14 )
Diluted net income (loss) per common share $ 0.06 $ (0.14 )
Shares used in computing basic net income (loss) per common
share 75,408 72,498 Shares used in computing diluted
net income (loss) per common share 78,754 72,498
AFFYMETRIX, INC. RESULTS OF OPERATIONS –
NON-GAAP (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED) ITEMIZED RECONCILIATION BETWEEN GAAP
AND NON-GAAP NET INCOME (LOSS) Three Months Ended
March 31, 2015 2014 GAAP net income
(loss) - basic and diluted $ 4,386 $ (10,474 )
Amortization of inventory fair value
adjustment
— 2,896 Amortization of acquired intangible assets 3,498 4,382
Litigation settlement — 5,100 Non-GAAP net income -
basic and diluted $ 7,884 $ 1,904 Non-GAAP
basic net income per common share $ 0.10 $ 0.03
Non-GAAP diluted net income per common share $ 0.10 $ 0.03
Shares used in computing Non-GAAP basic net income
per common share 75,408 72,498 Shares used in
computing Non-GAAP diluted net income per common share 78,754
72,498
ITEMIZED RECONCILIATION BETWEEN GAAP
AND NON-GAAP GROSS MARGIN
Three Months Ended March 31, 2015
2014 GAAP total gross margin $ 54,838 62 % $
46,555 56 % Amortization of inventory fair value
adjustment — — % 2,896 3 % Amortization of acquired intangible
assets 1,268 1 % 1,359 2 % Non-GAAP total gross
margin $ 56,106 63 % $ 50,810 61 %
ITEMIZED RECONCILIATION BETWEEN GAAP
AND NON-GAAP OPERATING EXPENSES
Three Months Ended March 31, 2015
2014 Total GAAP operating expenses $ 47,553 $ 55,297
Amortization of acquired intangible assets (2,230 ) (3,023 )
Litigation settlement — (5,100 ) Total Non-GAAP operating
expenses $ 45,323 $ 47,174
ITEMIZED RECONCILIATION BETWEEN GAAP
AND NON-GAAP ADJUSTED EBITDA AS PERCENTAGE OF REVENUE
Three Months Ended March 31, 2015
2014 GAAP net income (loss) $ 4,386 $ (10,474 )
Depreciation and amortization 5,515 8,718 Amortization of inventory
fair value adjustment — 2,896 Interest expense, net 1,501 1,723
Income tax provision 743 272 EBITDA 12,145 3,135
Adjustments to EBITDA: Share-based compensation 4,063 3,145
Loss on foreign currency 1,176 232 Litigation charges 268 6,897
(Gain) loss on sales of securities (59 ) 15 Other adjustments (461
) (508 ) Adjusted EBITDA $ 17,132 $ 12,916
Revenue $ 88,717 $ 82,971 Adjusted
EBITDA as percentage of revenue 19 % 16 %
Affymetrix, Inc.Doug Farrell, 408-731-5285Vice President of
Investor Relations
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