Affymetrix, Inc., (NASDAQ: AFFX) today reported its operating
results for the third quarter of 2011. Total revenue for the
quarter was $64.0 million, as compared to total revenue of $74.0
million in the third quarter of 2010.
The Company reported a net loss of $9.8 million, or $0.14 per
diluted share, in the third quarter of 2011. This loss included
impairment charges totaling $0.7 million, or $0.01 per diluted
share, on investments as well as a reserve of $2.2 million, or
$0.03 per diluted share, on a note receivable from a private
biotechnology company. This compares to net income of $1.0 million,
or $0.01 per diluted share, in the same period of 2010. Results for
the third quarter of 2010 included a gain of $4.1 million, or $0.06
per diluted share from the repurchase of convertible notes.
For the third quarter of 2011, product revenue was $57.0
million, which consisted of consumable revenue of $52.9 million and
instrument revenue of $4.1 million. Service revenue was $5.3
million, and royalties and other revenue was $1.7 million. This
compares to third quarter 2010 product revenue of $67.3 million,
which consisted of consumable revenue of $61.9 million and
instrument revenue of $5.4 million. Service revenue in the third
quarter of 2010 was $4.9 million, and royalties and other revenue
was $1.8 million.
For the third quarter of 2011, cost of product sales was $24.6
million compared to $29.8 million in the same period of 2010. Cost
of services and other was $3.0 million compared to $3.7 million in
the same period of 2010. Product gross margin was 57%, as compared
to 56% in the same period of 2010.
For the third quarter of 2011, operating expenses were $42.2
million as compared to operating expenses of $42.5 million in the
same period of 2010.
“During the third quarter we completed a number of initiatives
to position the company for top-line growth and profitability in
2012,” said Frank Witney, President and CEO. “This involved
restructuring the organization to better align our resources with
our key commercial opportunities. We reduced our headcount in
R&D and plan to reallocate some of those resources to sales and
marketing to help drive product adoption. During the quarter, our
cash-flow from operations was roughly $12 million and our net cash
position increased to approximately $170 million.”
During the third quarter, the Company
announced:
- The introduction of the CytoScan® HD
Solution, a research-use-only array for cytogenetic analysis. The
CytoScan HD Solution provides the broadest coverage, highest
performance, and most genotype–able single nucleotide polymorphisms
(SNPs) for detecting human chromosomal aberrations associated with
genes related to constitutional and cancer cytogenetics. This
single array includes more than 2.6 million copy number markers of
which 750,000 are genotype–able SNPs and 1.9 million are
non–polymorphic probes.
- The commercial launch of the Axiom®
Genome-Wide Pan-African Array, the first commercial product to
maximize genomic coverage of both common and rare alleles in
populations of African ancestry, including West African, East
African, and African American. The Axiom Solution is the only
microarray family of products to provide a complete set of
population-optimized arrays for all three HapMap populations:
Western European (CEU), East Asian (ASI), and Yoruba (YRI). Each
array is strategically designed to address the unique haplotype
structure of these populations to ensure high genomic coverage and
statistical power.
- The commercialization of 18 new array
designs for whole-transcriptome analysis of model and applied
research organisms that will allow scientists to obtain a more
complete gene expression view than traditional 3' biased arrays.
The new Affymetrix® Gene 1.1 ST Array Strips are created
exclusively for the GeneAtlas® System--the first personal bench-top
microarray system in which four samples can be processed
simultaneously. The GeneAtlas System and array strips offer an
affordable solution that combines excellent performance and a
simplified workflow with intuitive, easy-to-use software.
- The commercialization of a
next-generation human transcriptome array demonstrated by Stanford
University researchers to be superior to mRNA sequencing (RNA-Seq)
in gene expression profiling studies. In multiple experiments using
a clinically relevant transcriptome discovered by deep sequencing,
the research scientists compared the throughput and performance of
both profiling technologies and found the new GeneChip® Human
Transcriptome and Splice Junction Array outperformed RNA-Seq in
most all parameters when detecting exonic changes implicated in
human disease and genetic disorders. According to results of
Stanford's recently published study, the Human Transcriptome Array
detected the same number of genes and two times the number of
exons, had lower variance over a wide range of expression levels,
improved the percentage of true-positive detections in alternative
splicing analysis, and measured more non-coding RNA than RNA-Seq.
With 99 percent coverage of human genes and 95 percent coverage of
transcript isoforms, researchers determined that the high density
microarray is a better profiling technology than RNA-Seq for
clinical studies.
Affymetrix's management team will host a conference call on
November 2, 2011 at 2:00 p.m. PT to review its operating results
for the third 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
November 2, 2011 until 8:00 p.m. PT on November 9, 2011 at the
following numbers: domestic: (877) 660-6853, international: (201)
612-7415. The passcode for both replays is 380800. 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. Almost
2,200 systems have been shipped around the world and over 24,000
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. The
Company has more than 900 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' "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)
September 30, December 31,
2011 2010 ASSETS: (Note
1) Current assets: Cash and cash equivalents $ 32,391 $ 35,484
Restricted cash 294 287 Available-for-sale securities—short-term
portion 53,439 67,223 Accounts receivable, net 41,101 52,281
Inventories 47,872 49,373 Deferred tax assets—short-term portion
964 1,071 Prepaid expenses and other current assets 7,940
9,422 Total current assets 184,001 215,141
Available-for-sale securities—long-term portion 177,851 134,190
Property and equipment, net 45,124 54,177 Acquired technology
rights, net 29,468 38,858 Deferred tax assets—long-term portion
4,981 4,894 Other long-term assets 9,731
13,525 Total assets $ 451,156 $ 460,785
LIABILITIES AND STOCKHOLDERS’ EQUITY: Current liabilities:
Accounts payable and accrued liabilities $ 40,305 $ 44,259 Deferred
revenue—short-term portion 9,671 10,950
Total current liabilities 49,976 55,209 Deferred revenue—long-term
portion 4,125 4,601 Other long-term liabilities 13,769 11,748
Convertible notes 95,469 95,472 Stockholders’ equity: Common stock
705 706 Additional paid-in capital 748,156 742,206 Accumulated
other comprehensive income 2,911 1,376 Accumulated deficit
(463,955 ) (450,533 ) Total stockholders’ equity
287,817 293,755 Total liabilities and
stockholders’ equity $ 451,156 $ 460,785
Note 1: The condensed consolidated
balance sheet at December 31, 2010 has been derived from the
audited consolidatedfinancial statements at that date included in
the Company’s Annual Report on Form 10-K for the fiscal year
endedDecember 31, 2010.
AFFYMETRIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30, 2011
2010 2011
2010 REVENUE: Product sales $ 57,001 $
67,273 $ 182,608 $ 205,819 Services 5,262 4,929 15,029 14,134
Royalties and other revenue 1,724 1,770
4,733 5,884 Total revenue 63,987
73,972 202,370 225,837
COSTS AND EXPENSES: Cost of product sales 24,647
29,822 70,913 85,816 Cost of services and other 3,001 3,677 9,627
11,820 Research and development 15,328 16,175 46,894 52,469
Selling, general and administrative 26,915
26,309 80,802 86,116 Total costs
and expenses 69,891 75,983
208,236 236,221 Loss income from operations
(5,904 ) (2,011 ) (5,866 ) (10,384 ) Interest income and other, net
(2,154 ) 760 (3,549 ) (2,100 ) Interest expense 991 1,537 2,866
6,309 Gain from repurchase of convertible notes -
4,108 - 5,852 (Loss)
income before income taxes (9,049 ) 1,320 (12,281 ) (12,941 )
Income tax provision 740 352
1,141 1,252 Net (loss) income $ (9,789 ) $ 968
$ (13,422 ) $ (14,193 ) Basic net (loss) income per
common share $ (0.14 ) $ 0.01 $ (0.19 ) $ (0.21 )
Diluted net (loss) income per common share $ (0.14 ) $ 0.01
$ (0.19 ) $ (0.21 ) Shares used in computing basic net
(loss) income per common share 69,719 68,875
70,790 68,945 Shares used
in computing diluted net (loss) income per common share
69,719 69,223 70,790
68,945
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