|By Business Wire||
|November 5, 2012 04:02 PM EST||
Affymetrix, Inc., (NASDAQ: AFFX) today reported its operating results for the third quarter of 2012. Total revenue for the quarter was $79.6 million, including approximately $17.6 million in revenue from eBioscience during the third quarter of 2012. This compares to total revenue of $64.0 million for the same period of 2011.
The Company reported a net loss of approximately $17.9 million, or $0.25 per diluted share, in the third quarter of 2012, which included the following one-time items: (1) acquisition-related and integration costs of $1.9 million and (2) impairment of the West Sacramento facility of $4.0 million. Excluding these one-time items and recurring amortization of acquired intangible assets of $5.0 million and release of step-up in inventory fair value of $4.5 million, the Company would have reported a net loss of $2.4 million, or $0.03 per diluted share. This compares to a net loss of $9.8 million, or $0.14 per diluted share, in the same period of 2011, which included one-time impairment charges on investments totaling $0.7 million and a reserve on a note receivable from a private biotechnology company of $2.2 million, and recurring amortization of acquired intangible assets of $1.5 million. Excluding these charges, net loss was $5.3 million, or $0.08 per diluted share, for the third quarter of 2011.
Revenue for the third quarter of 2012 was comprised of product revenue of $72.7 million and service and other revenue of $6.9 million. Product revenue included consumable revenue of $50.5 million excluding eBioscience, instrument revenue of $4.6 million and revenue from eBioscience of $17.6 million. This compares to total revenue of $64.0 million in the third quarter of 2011, comprised of product revenue of $57.0 million and service and other revenue of $7.0 million. Product revenue included consumable revenue of $52.9 million and instrument revenue of $4.1 million in the third quarter of 2011.
For the third quarter of 2012, cost of product sales, including eBioscience, was $34.0 million, as compared to $24.6 million in the same period of 2011. Product gross margin was 53%, as compared to 57% in the same period of 2011, the decrease is due primarily to the amortization of the step-up in inventory fair value of $4.5 million. Excluding the inventory step-up amortization, product gross margin for the third quarter of 2012 was 57%. Cost of services and other was $4.0 million compared to $3.0 million in the same period of 2011.
For the third quarter of 2012, operating expenses were $52.8 million, including acquisition- and integration-related non-recurring costs of $1.9 million, and recurring amortization of acquired intangible assets of $3.4 million and eBioscience operating expense of approximately $7.5 million. This compared to operating expenses of $42.2 million in the same period of 2011.
“For the third quarter of 2012 we’ve continued to make steady progress in stabilizing our business. On a constant currency basis, our revenue excluding eBioscience for the third quarter of 2012 was down by about 2% as compared to the same period in the previous year,” said Frank Witney, president and CEO. “In the third quarter of 2012, we generated revenue growth of more than 16% as compared to the third quarter of 2011 in our Genetic Analysis business, which was offset by continued headwinds in our Gene Expression unit. With the addition of eBioscience, we have further diversified our revenues and added important capabilities to provide customers in translational medicine and clinical diagnostics with a comprehensive set of tools to improve healthcare outcomes.”
Third quarter highlights:
- The Company signed a Powered by Affymetrix (PbA) agreement with PathGEN Dx Pte. Ltd., a spin-off molecular diagnostics company founded by researchers from the Genome Institute of Singapore. Under this PbA agreement, PathGEN Dx will develop an in-vitro diagnostic kit for comprehensive pathogen detection using their PathGEN® PathChip and is based on a patented, efficient, and accurate microarray-based protocol and analysis method. The kit will be comprised of PathGEN Dx’s proprietary reagents, an automated software package, and a contract manufactured GeneChip® microarray from Affymetrix. It will detect the presence of more than 70,000 viral and bacterial genomes from a wide variety of human samples, annotate the genomic information, and identify co-infecting pathogens.
- The Company announced the availability of SensationPlus™ FFPE Amplification and 3’ IVT Labeling Kit (SensationPlus™ FFPE Reagent Kit), consisting of RNA amplification and labeling modules, to enable gene expression profiling of formalin-fixed, paraffin-embedded (FFPE) samples on GeneChip 3’ IVT arrays and Almac Xcel™ Array for disease clinical research and retrospective studies. SensationPlusTM FFPE Reagent Kit is an advanced version of the Genisphere® technology Affymetrix licensed last year.
- The Company announced the expansion of its license agreement with Siemens Healthcare Diagnostics for the company’s branched DNA (bDNA) technology whereby Affymetrix is the exclusive licensee for in situ products, including in vitro diagnostics. This expanded license grants Affymetrix rights to develop and sell in situ QuantiGene® ViewRNA products, currently for research use only, in the in vitro diagnostic market. Additionally, this license includes exclusive rights to alkaline phosphatase conjugated oligonucleotides and their use in bDNA methods for in situ detection utilizing Fast Red substrates.
Affymetrix will host a conference call on November 5, 2012 at 2:00 p.m. PT to review its operating results for the third quarter of 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 November 5, 2012 until 8:00 p.m. PT on November 12, 2012 at the following numbers: domestic: (877) 660-6853, international: (201) 612-7415. The conference call passcode to access the replay is 401334. An archived webcast of the conference call will be available under the Investor Relations section of the Company's website.
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 1,200 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 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 in the second half of 2012 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 gross margins for the third quarter of 2012 excluding specified one-time items. Reconciliation of non-GAAP net loss to GAAP net loss 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 third quarter of 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.
|Affymetrix, the Affymetrix logo, GeneChip, and all other trademarks are the property of Affymetrix, Inc.|
CONDENSED CONSOLIDATED BALANCE SHEETS
|September 30,||December 31,|
|(Unaudited)||(See Note 1)|
|Cash and cash equivalents||$||29,026||$||201,937|
|Available-for-sale securities—short-term portion||2,575||7,937|
|Accounts receivable, net||52,534||44,021|
|Deferred tax assets—short-term portion||379||364|
|Property and equipment, net—held for sale||5,000||9,000|
|Prepaid expenses and other current assets||15,078||7,785|
|Total current assets||180,174||314,587|
|Available-for-sale securities—long-term portion||7,337||54,501|
|Property and equipment, net||30,988||30,583|
|Intangible assets, net||157,930||29,525|
|Deferred tax assets—long-term portion||3,445||450|
|Other long-term assets||16,224||8,369|
|LIABILITIES AND STOCKHOLDERS’ EQUITY:|
|Accounts payable and accrued liabilities||$||56,852||$||44,774|
|Convertible notes—short-term portion||3,855||-|
|Term loan—short-term portion||6,375||-|
|Deferred revenue—short-term portion||10,749||9,852|
|Total current liabilities||77,831||54,626|
|Deferred revenue—long-term portion||3,453||3,959|
|Convertible notes—long-term portion||105,000||95,469|
|Term loan—long-term portion||76,500||-|
|Other long-term liabilities||22,345||9,127|
|Additional paid-in capital||757,051||750,332|
|Accumulated other comprehensive income||4,420||2,492|
|Total stockholders’ equity||285,057||274,834|
|Total liabilities and stockholders’ equity||$||570,186||$||438,015|
Note 1: The condensed consolidated balance sheet at December 31,
2011 has been derived from the audited consolidated
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Services and other||6,939||6,986||21,593||19,762|
|COSTS AND EXPENSES:|
|Cost of product sales||33,979||24,647||81,907||70,913|
|Cost of services and other||3,959||3,001||11,057||9,627|
|Research and development||16,498||15,328||43,417||46,894|
|Selling, general and administrative||36,302||26,915||104,752||80,802|
|Total costs and expenses||90,738||69,891||241,133||208,236|
|Loss from operations||(11,114||)||(5,904||)||(29,859||)||(5,866||)|
|Interest income and other, net||(3,933||)||(2,154||)||(1,631||)||(3,549||)|
|Loss before income taxes||(18,040||)||(9,049||)||(35,681||)||(12,281||)|
|Income tax (benefit) provision||(181||)||740||(37,254||)||1,141|
|Net (loss) income||$||(17,859||)||$||(9,789||)||$||1,573||$||(13,422||)|
|Basic net (loss) income per common share||$||(0.25||)||$||(0.14||)||$||0.02||$||(0.19||)|
|Diluted net (loss) income per common share||$||(0.25||)||$||(0.14||)||$||0.02||$||(0.19||)|
|Shares used in computing basic net (loss) income per common share||70,403||69,719||70,181||70,790|
|Shares used in computing diluted net (loss) income per common share||70,403||69,719||70,610||70,790|
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET (LOSS) INCOME
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|GAAP net (loss) income - diluted||$||(17,859||)||$||(9,789||)||$||1,573||$||(13,422||)|
|Amortization of inventory fair value adjustment||4,536||-||4,855||-|
|Amortization of acquired intangible assets||5,016||1,544||7,919||4,632|
|Acquisition-related transaction costs||326||-||6,093||-|
|Acquisition-related integration costs||1,541||-||1,541||-|
|Share-based compensation charge related to acquisition||-||-||8,265||-|
|Provision (recovery) of notes receivable||-||2,215||(2,215||)||2,215|
|Impairment of non-marketable investments||-||743||-||1,900|
|Impairment of held-for-sale property||4,000||-||4,000||-|
|Income tax benefit related to acquisition||-||-||(37,462||)||-|
|Non-GAAP net loss - diluted||$||(2,440||)||$||(5,287||)||$||(5,431||)||$||(4,675||)|
|Basic net loss per common share||$||(0.03||)||$||(0.08||)||$||(0.08||)||$||(0.07||)|
|Diluted net loss per common share||$||(0.03||)||$||(0.08||)||$||(0.08||)||$||(0.07||)|
|Shares used in computing basic net loss per common share||70,403||69,719||70,181||70,790|
|Shares used in computing diluted net loss per common share||70,403||69,719||70,610||70,790|
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducted a live demonstration of how quickly application development can happen when the need to comply wit...
Jul. 31, 2015 08:45 AM EDT Reads: 301
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Architect for the Internet of Things and Intelligent Systems, described how to revolutionize your archit...
Jul. 30, 2015 07:30 PM EDT Reads: 1,395
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Jul. 30, 2015 03:45 PM EDT Reads: 448
MuleSoft has announced the findings of its 2015 Connectivity Benchmark Report on the adoption and business impact of APIs. The findings suggest traditional businesses are quickly evolving into "composable enterprises" built out of hundreds of connected software services, applications and devices. Most are embracing the Internet of Things (IoT) and microservices technologies like Docker. A majority are integrating wearables, like smart watches, and more than half plan to generate revenue with APIs within the next year.
Jul. 30, 2015 02:30 PM EDT
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Jul. 30, 2015 01:45 PM EDT Reads: 266
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Opening Keynote at 16th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, d...
Jul. 30, 2015 12:00 PM EDT Reads: 2,053
In his keynote at 16th Cloud Expo, Rodney Rogers, CEO of Virtustream, discussed the evolution of the company from inception to its recent acquisition by EMC – including personal insights, lessons learned (and some WTF moments) along the way. Learn how Virtustream’s unique approach of combining the economics and elasticity of the consumer cloud model with proper performance, application automation and security into a platform became a breakout success with enterprise customers and a natural fit for the EMC Federation.
Jul. 30, 2015 09:00 AM EDT Reads: 2,158
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists addressed this very serious issue of profound change in the industry.
Jul. 29, 2015 03:00 PM EDT Reads: 1,272
Discussions about cloud computing are evolving into discussions about enterprise IT in general. As enterprises increasingly migrate toward their own unique clouds, new issues such as the use of containers and microservices emerge to keep things interesting. In this Power Panel at 16th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the state of cloud computing today, and what enterprise IT professionals need to know about how the latest topics and trends affect their organization.
Jul. 29, 2015 02:00 PM EDT Reads: 1,184
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society-changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his session at @ThingsExpo, Jason Mondanaro, Director, Product Management at Metanga, discussed how you can plan to cooperate, partner, and form lasting all-star teams to change the world and it starts with business models and monetization strategies.
Jul. 28, 2015 04:30 PM EDT Reads: 1,763
Converging digital disruptions is creating a major sea change - Cisco calls this the Internet of Everything (IoE). IoE is the network connection of People, Process, Data and Things, fueled by Cloud, Mobile, Social, Analytics and Security, and it represents a $19Trillion value-at-stake over the next 10 years. In her keynote at @ThingsExpo, Manjula Talreja, VP of Cisco Consulting Services, discussed IoE and the enormous opportunities it provides to public and private firms alike. She will share what businesses must do to thrive in the IoE economy, citing examples from several industry sectors.
Jul. 28, 2015 11:00 AM EDT Reads: 2,040
There will be 150 billion connected devices by 2020. New digital businesses have already disrupted value chains across every industry. APIs are at the center of the digital business. You need to understand what assets you have that can be exposed digitally, what their digital value chain is, and how to create an effective business model around that value chain to compete in this economy. No enterprise can be complacent and not engage in the digital economy. Learn how to be the disruptor and not the disruptee.
Jul. 27, 2015 10:00 AM EDT Reads: 2,029
Akana has released Envision, an enhanced API analytics platform that helps enterprises mine critical insights across their digital eco-systems, understand their customers and partners and offer value-added personalized services. “In today’s digital economy, data-driven insights are proving to be a key differentiator for businesses. Understanding the data that is being tunneled through their APIs and how it can be used to optimize their business and operations is of paramount importance,” said Alistair Farquharson, CTO of Akana.
Jul. 27, 2015 09:00 AM EDT Reads: 323
Business as usual for IT is evolving into a "Make or Buy" decision on a service-by-service conversation with input from the LOBs. How does your organization move forward with cloud? In his general session at 16th Cloud Expo, Paul Maravei, Regional Sales Manager, Hybrid Cloud and Managed Services at Cisco, discusses how Cisco and its partners offer a market-leading portfolio and ecosystem of cloud infrastructure and application services that allow you to uniquely and securely combine cloud business applications and services across multiple cloud delivery models.
Jul. 27, 2015 08:00 AM EDT Reads: 1,901
The enterprise market will drive IoT device adoption over the next five years. In his session at @ThingsExpo, John Greenough, an analyst at BI Intelligence, division of Business Insider, analyzed how companies will adopt IoT products and the associated cost of adopting those products. John Greenough is the lead analyst covering the Internet of Things for BI Intelligence- Business Insider’s paid research service. Numerous IoT companies have cited his analysis of the IoT. Prior to joining BI Intelligence, he worked analyzing bank technology for Corporate Insight and The Clearing House Payment...
Jul. 26, 2015 09:00 PM EDT Reads: 1,573
"Optimal Design is a technology integration and product development firm that specializes in connecting devices to the cloud," stated Joe Wascow, Co-Founder & CMO of Optimal Design, in this SYS-CON.tv interview at @ThingsExpo, held June 9-11, 2015, at the Javits Center in New York City.
Jul. 25, 2015 02:00 PM EDT Reads: 388
SYS-CON Events announced today that CommVault has been named “Bronze Sponsor” of SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. A singular vision – a belief in a better way to address current and future data management needs – guides CommVault in the development of Singular Information Management® solutions for high-performance data protection, universal availability and simplified management of data on complex storage networks. CommVault's exclusive single-platform architecture gives companies unp...
Jul. 25, 2015 01:00 PM EDT Reads: 1,957
Electric Cloud and Arynga have announced a product integration partnership that will bring Continuous Delivery solutions to the automotive Internet-of-Things (IoT) market. The joint solution will help automotive manufacturers, OEMs and system integrators adopt DevOps automation and Continuous Delivery practices that reduce software build and release cycle times within the complex and specific parameters of embedded and IoT software systems.
Jul. 25, 2015 12:15 PM EDT Reads: 460
"ciqada is a combined platform of hardware modules and server products that lets people take their existing devices or new devices and lets them be accessible over the Internet for their users," noted Geoff Engelstein of ciqada, a division of Mars International, in this SYS-CON.tv interview at @ThingsExpo, held June 9-11, 2015, at the Javits Center in New York City.
Jul. 25, 2015 12:00 PM EDT Reads: 1,535
Internet of Things is moving from being a hype to a reality. Experts estimate that internet connected cars will grow to 152 million, while over 100 million internet connected wireless light bulbs and lamps will be operational by 2020. These and many other intriguing statistics highlight the importance of Internet powered devices and how market penetration is going to multiply many times over in the next few years.
Jul. 25, 2015 09:00 AM EDT Reads: 1,486