[July 29, 2015] |
|
Affymetrix Reports Second Quarter 2015 Operating Results
Affymetrix, Inc., (NASDAQ:AFFX) today reported its operating results for
the second quarter of 2015.
Results for the three months ended June 30, 2015:
-
Reported revenue growth of 4.1% and 7.9% on a constant currency basis.
-
Total revenue was $89.0 million, compared to $85.4 million in second
quarter of 2014.
-
GAAP net income was $7.0 million, or $0.08 per diluted share, as
compared to a GAAP net loss of $0.9 million, or $0.01 per diluted
share, in the second quarter of 2014, an increase of $7.9 million or
$0.09 per diluted share.
-
Non-GAAP net income was $10.5 million, or $0.12 per diluted share,
compared to a non-GAAP net income of $5.2 million, or $0.07 per
diluted share, for the second 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.
-
The Company announced the acquisition of Eureka Genomics for $15
million in an all cash transaction.
-
Net proceeds of $19.4 million were raised through an "at-the-market"
offering.
-
Total balance in cash and cash equivalents was $119.6 million and
senior debt was $21.0 million as of June 30, 2015.
Product revenue for the second quarter of 2015 was $79.9 million and
service and other revenue was $9.1 million. This compares to product
revenue of $75.9 million and service and other revenue of $9.6 million
in the second quarter of 2014. Product revenue for the second quarter of
2015 included consumable revenue of $76.1 million and instrument revenue
of $3.8 million. Product revenue for the second quarter of 2014 included
consumable revenue of $72.6 million and instrument revenue of $3.3
million.
Total GAAP gross margin was 64%, as compared to 57% in the same period
of 2014. Excluding non-GAAP adjustments such as the amortization of
acquired intangible assets, non-GAAP gross margin for the second quarter
of 2015 was 65% compared to 61% in the same period of 2014. This
improvement was driven by higher utilization rates in our manufacturing
plants as well as favorable product mix in the quarter. 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 second quarter of 2015, operating expenses were $48.6 million on
a GAAP basis as compared to $49.1 million in the same period of 2014.
Excluding non-GAAP adjustments, such as the amortization of acquired
intangible assets, non-GAAP operating expenses for the second quarter of
2015 were $46.4 million, compared to an adjusted total of $46.2 million
in the same period of 2014. Operating expenses remained flat as targeted
investments in the business were offset by lower amortization and
depreciation and reduced legal expenses. 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 generated topline growth of 8% on a constant currency basis in the
second quarter driven by continued momentum in our clinical business and
solid performance in our eBioscience business," stated Frank Witney,
President and CEO. "We reiterate our guidance for full year revenue
growth in the mid-single digit range on a constant currency basis and we
are raising our adjusted EBITDA guidance from a range of 16-18% to
17-19% for 2015."
Recent developments:
-
The Company announced the acquisition of Eureka Genomics for $15
million in an all cash transaction. Eureka Genomics has developed
proprietary, low-to mid-plex, high throughput genotyping assays that
use next-generation sequencing (NGS) platforms for signal readout.
These assays enable the cost-effective detection of hundreds to
thousands of genetic markers which are increasingly in demand for
routine agrigenomic testing of both crops and animals.
-
Affymetrix, BioRealm LLC, and RUCDR Infinite (News - Alert) Biologics announced a
broad strategic alliance. This alliance will leverage BioRealm's
SmokeScreen® platform to genotype the National Institute on Drug
Abuse (NIDA) biorepository of more than 50,000 samples, collected from
human subjects studied in NIDA-funded research. NIDA preserves these
samples in a biorepository at RUCDR Infinite Biologics, on the campus
of Rutgers University. The biorepository is maintained by RUCDR
Infinite Biologics and in part through collaboration with
the BioProcessing Solutions Alliance which was created by RUDCR
Infinite Biologics and BioStorage Technologies, the global leader in
comprehensive sample management.
-
Riccardo Pigliucci has been appointed to the company's board of
directors effective May 13, 2015. Mr. Pigliucci will serve as a member
of the Compensation Committee. Mr. Pigliucci has served as the
Managing Partner of Aldwych Associates, LLP, a management and
technology consulting partnership since 2006. Prior to joining Aldwych
Associates, Mr. Pigliucci was Chairman and Chief Executive Officer of
Discovery Partners International (DPI), a supplier of equipment and
services to the drug discovery market.
Affymetrix will host a conference call on Wednesday, July 29, 2015 at
2:00 p.m. PT to review its operating results for the second 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 July 29,
2015 until 8:00 p.m. PT on August 5, 2015 at the following numbers:
domestic: (877) 660-6853, international: (201) 612-7415. The conference
call passcode to access the replay is 13613606. 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 1,200 employees worldwide and
maintains sales and distribution operations across Europe, Asia and
Latin America.
All statements in this press release that are not historical 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 the 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 second 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 second 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)
|
|
|
|
|
|
December 31,
|
|
|
June 30, 2015
|
|
2014
|
ASSETS:
|
|
|
|
(Note 1)
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
119,597
|
|
|
$
|
79,923
|
|
Accounts receivable, net
|
|
|
52,769
|
|
|
|
46,896
|
|
Inventories, net-short-term portion
|
|
|
54,030
|
|
|
|
50,676
|
|
Deferred tax assets-short-term portion
|
|
|
3,731
|
|
|
|
3,778
|
|
Prepaid expenses and other current assets
|
|
|
9,065
|
|
|
|
9,197
|
|
Total current assets
|
|
|
239,192
|
|
|
|
190,470
|
|
Property and equipment, net
|
|
|
20,861
|
|
|
|
18,087
|
|
Inventories, net-long-term portion
|
|
|
4,849
|
|
|
|
5,956
|
|
Goodwill
|
|
|
156,834
|
|
|
|
156,178
|
|
Intangible assets, net
|
|
|
107,920
|
|
|
|
106,183
|
|
Deferred tax assets-long-term portion
|
|
|
297
|
|
|
|
303
|
|
Other long-term assets
|
|
|
8,417
|
|
|
|
9,371
|
|
Total assets
|
|
$
|
538,370
|
|
|
$
|
486,548
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
45,882
|
|
|
$
|
53,063
|
|
Current portion of long-term debt
|
|
|
4,000
|
|
|
|
4,000
|
|
Deferred revenue-short-term portion
|
|
|
8,128
|
|
|
|
9,210
|
|
Total current liabilities
|
|
|
58,010
|
|
|
|
66,273
|
|
Deferred revenue-long-term portion
|
|
|
2,348
|
|
|
|
2,372
|
|
4.00% notes
|
|
|
105,000
|
|
|
|
105,000
|
|
Term loan-long-term portion
|
|
|
16,950
|
|
|
|
18,950
|
|
Other long-term liabilities
|
|
|
20,601
|
|
|
|
21,626
|
|
Total liabilities
|
|
|
202,909
|
|
|
|
214,221
|
|
Stockholders' equity:
|
|
|
|
|
Common stock
|
|
|
798
|
|
|
|
743
|
|
Additional paid-in capital
|
|
|
840,400
|
|
|
|
781,747
|
|
Accumulated other comprehensive income
|
|
|
(7,578
|
)
|
|
|
(612
|
)
|
Accumulated deficit
|
|
|
(498,159
|
)
|
|
|
(509,551
|
)
|
Total stockholders' equity
|
|
|
335,461
|
|
|
|
272,327
|
|
Total liabilities and stockholders' equity
|
|
$
|
538,370
|
|
|
$
|
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
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
REVENUE:
|
|
|
|
|
|
|
|
|
Product sales
|
|
$
|
79,897
|
|
$
|
75,880
|
|
|
$
|
159,265
|
|
|
$
|
149,576
|
|
Services and other
|
|
|
9,069
|
|
|
9,552
|
|
|
|
18,419
|
|
|
|
18,827
|
|
Total revenue
|
|
|
88,966
|
|
|
85,432
|
|
|
|
177,684
|
|
|
|
168,403
|
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
Cost of product sales
|
|
|
27,156
|
|
|
30,560
|
|
|
|
54,741
|
|
|
|
60,071
|
|
Cost of services and other
|
|
|
4,731
|
|
|
6,028
|
|
|
|
11,027
|
|
|
|
12,932
|
|
Research and development
|
|
|
12,911
|
|
|
12,882
|
|
|
|
25,032
|
|
|
|
24,517
|
|
Selling, general and administrative
|
|
|
35,642
|
|
|
36,266
|
|
|
|
71,074
|
|
|
|
74,828
|
|
Litigation settlement
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
5,100
|
|
Total costs and expenses
|
|
|
80,440
|
|
|
85,736
|
|
|
|
161,874
|
|
|
|
177,448
|
|
Income (loss) from operations
|
|
|
8,526
|
|
|
(304
|
)
|
|
|
15,810
|
|
|
|
(9,045
|
)
|
Other income (expense), net
|
|
|
275
|
|
|
1,418
|
|
|
|
(398
|
)
|
|
|
1,711
|
|
Interest expense
|
|
|
1,471
|
|
|
1,623
|
|
|
|
2,953
|
|
|
|
3,377
|
|
Income (loss) before income taxes
|
|
|
7,330
|
|
|
(509
|
)
|
|
|
12,459
|
|
|
|
(10,711
|
)
|
Income tax provision
|
|
|
324
|
|
|
402
|
|
|
|
1,067
|
|
|
|
674
|
|
Net income (loss)
|
|
$
|
7,006
|
|
$
|
(911
|
)
|
|
$
|
11,392
|
|
|
$
|
(11,385
|
)
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per common share
|
|
$
|
0.09
|
|
$
|
(0.01
|
)
|
|
$
|
0.15
|
|
|
$
|
(0.16
|
)
|
Diluted net income (loss) per common share
|
|
$
|
0.08
|
|
$
|
(0.01
|
)
|
|
$
|
0.14
|
|
|
$
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
Shares used in computing basic net income (loss) per common share
|
|
|
78,476
|
|
|
72,944
|
|
|
|
76,951
|
|
|
|
72,722
|
|
Shares used in computing diluted net income (loss) per common share
|
|
|
99,462
|
|
|
72,944
|
|
|
|
98,019
|
|
|
|
72,722
|
|
|
|
|
|
|
|
|
|
|
|
AFFYMETRIX, INC.
|
RESULTS OF OPERATIONS - NON-GAAP
|
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
|
(UNAUDITED)
|
|
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET (News - Alert) INCOME
(LOSS)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
GAAP net income (loss) - basic and diluted
|
|
$
|
7,006
|
|
$
|
(911
|
)
|
|
$
|
11,392
|
|
$
|
(11,385
|
)
|
Amortization of inventory fair value adjustment
|
|
|
-
|
|
|
1,770
|
|
|
|
-
|
|
|
4,666
|
|
Amortization of acquired intangible assets
|
|
|
3,448
|
|
|
4,298
|
|
|
|
6,946
|
|
|
8,680
|
|
Litigation settlement
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
5,100
|
|
Non-GAAP net income - basic and diluted
|
|
$
|
10,454
|
|
$
|
5,157
|
|
|
$
|
18,338
|
|
$
|
7,061
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net income per common share
|
|
$
|
0.13
|
|
$
|
0.07
|
|
|
$
|
0.24
|
|
$
|
0.10
|
|
Non-GAAP diluted net income per common share (Note 1)
|
|
$
|
0.12
|
|
$
|
0.07
|
|
|
$
|
0.21
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing Non-GAAP basic net income per common share
|
|
|
78,476
|
|
|
72,944
|
|
|
|
76,951
|
|
|
72,722
|
|
Shares used in computing Non-GAAP diluted net income per common
share (Note 2)
|
|
|
99,462
|
|
|
72,944
|
|
|
|
98,019
|
|
|
72,722
|
|
Note 1 - For non-GAAP diluted net income per common share
calculations, exclude $1.2 million and $2.4 million, respectively,
of interest expense for the three and six months ended June 30,
2015, related to the interest rate on the Company's 4.00%
convertible senior notes, since these securities were dilutive.
|
|
Note 2 - Weighted average shares outstanding includes the dilutive
effect, if any, of employee stock options, employee stock purchase
plan, restricted stock awards, and convertible senior notes.
|
|
|
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP GROSS MARGIN
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
GAAP total gross margin
|
|
$
|
57,079
|
|
64
|
%
|
|
$
|
48,844
|
|
57
|
%
|
|
$
|
111,916
|
|
63
|
%
|
|
$
|
95,400
|
|
57
|
%
|
Amortization of inventory fair value adjustment
|
|
|
-
|
|
-
|
%
|
|
|
1,770
|
|
2
|
%
|
|
|
-
|
|
-
|
%
|
|
|
4,666
|
|
3
|
%
|
Amortization of acquired intangible assets
|
|
|
1,247
|
|
1
|
%
|
|
|
1,362
|
|
2
|
%
|
|
|
2,515
|
|
1
|
%
|
|
|
2,722
|
|
1
|
%
|
Non-GAAP total gross margin
|
|
$
|
58,326
|
|
65
|
%
|
|
$
|
51,976
|
|
61
|
%
|
|
$
|
114,431
|
|
64
|
%
|
|
$
|
102,788
|
|
61
|
%
|
|
|
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP OPERATING
EXPENSES
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Total GAAP operating expenses
|
|
$
|
48,553
|
|
|
$
|
49,148
|
|
|
$
|
96,106
|
|
|
$
|
104,445
|
|
Amortization of acquired intangible assets
|
|
|
(2,201
|
)
|
|
|
(2,936
|
)
|
|
|
(4,431
|
)
|
|
|
(5,958
|
)
|
Litigation settlement
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,100
|
)
|
Total Non-GAAP operating expenses
|
|
$
|
46,352
|
|
|
$
|
46,212
|
|
|
$
|
91,675
|
|
|
$
|
93,387
|
|
|
|
|
|
|
|
|
|
|
|
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP ADJUSTED
EBITDA AS PERCENTAGE OF REVENUE
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
GAAP net income (loss)
|
|
$
|
7,006
|
|
|
$
|
(911
|
)
|
|
$
|
11,392
|
|
|
$
|
(11,385
|
)
|
Depreciation and amortization
|
|
|
5,340
|
|
|
|
7,808
|
|
|
|
10,855
|
|
|
|
16,527
|
|
Amortization of inventory fair value adjustment
|
|
|
-
|
|
|
|
1,770
|
|
|
|
-
|
|
|
|
4,666
|
|
Interest expense, net
|
|
|
1,468
|
|
|
|
1,607
|
|
|
|
2,969
|
|
|
|
3,331
|
|
Income tax provision
|
|
|
324
|
|
|
|
402
|
|
|
|
1,067
|
|
|
|
674
|
|
EBITDA
|
|
|
14,138
|
|
|
|
10,676
|
|
|
|
26,283
|
|
|
|
13,813
|
|
|
|
|
|
|
|
|
|
|
Adjustments to EBITDA:
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
3,224
|
|
|
|
3,128
|
|
|
|
7,287
|
|
|
|
6,272
|
|
(Gain) loss on foreign currency
|
|
|
(245
|
)
|
|
|
103
|
|
|
|
931
|
|
|
|
335
|
|
Litigation charges
|
|
|
44
|
|
|
|
1,462
|
|
|
|
312
|
|
|
|
8,359
|
|
(Gain) loss on sales of securities
|
|
|
5
|
|
|
|
(1,255
|
)
|
|
|
(54
|
)
|
|
|
(1,240
|
)
|
Other adjustments
|
|
|
(32
|
)
|
|
|
(250
|
)
|
|
|
(494
|
)
|
|
|
(759
|
)
|
Adjusted EBITDA
|
|
$
|
17,134
|
|
|
$
|
13,864
|
|
|
$
|
34,265
|
|
|
$
|
26,780
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
88,966
|
|
|
$
|
85,432
|
|
|
$
|
177,684
|
|
|
$
|
168,403
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as percentage of revenue
|
|
|
19
|
%
|
|
|
16
|
%
|
|
|
19
|
%
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150729005538/en/
[ Back To TMCnet.com's Homepage ]
|