Affymetrix, Inc., (NASDAQ: AFFX) today reported its operating
results for the fourth quarter and fiscal year ended December 31,
2009. Total revenue for the fourth quarter was $88.8 million, as
compared to total revenue of $78.6 million in the fourth quarter of
2008. In constant currency terms, revenue for the fourth quarter
2009 was positively impacted by $2.6 million as compared to 2008.
For the full year 2009, total revenue was $327.1 million as
compared to $410.2 million, which included a one-time intellectual
property payment of $90 million, for 2008.
For the fourth quarter of 2009, product revenue was $81.0
million, which consisted of consumable revenue of $71.9 million and
instrument revenue of $9.1 million. Service revenue was $5.9
million, and royalties and other revenue were $1.9 million. This
compares to fourth quarter 2008 product revenue of $66.6 million,
service revenue of $8.5 million, and royalties and other revenue of
$3.5 million.
For the full year 2009, product revenue was $279.2 million,
which consisted of consumable revenue of $255.7 million and
instrument revenue of $23.5 million. Service revenue was $39.6
million, and royalties and other revenue were $8.3 million. This
compares to full year 2008 product revenue of $270.4 million,
service revenue of $32.1 million, and royalties and other revenue
of $107.7 million, which included an intellectual property payment
of $90 million.
Affymetrix shipped 42 systems in the fourth quarter of 2009,
bringing its cumulative systems shipped to approximately 1,930.
The Company reported a net income of approximately $2.8 million,
or $0.04 per diluted share, in the fourth quarter of 2009. This
compares to net loss of $318.7 million, or $4.65 per diluted share,
in the same period of 2008 which included a pretax goodwill
impairment charge of $239.1 million, or $3.49 per diluted share,
and a pretax restructuring charge of $14.3 million, or $0.21 per
diluted share.
Fiscal year 2009 net loss was $23.9 million, or $0.35 per
diluted share, which included a $17.4 million gain from the
repurchase of convertible notes, or $0.25 per diluted share, and
restructuring charges of $2.2 million, or $0.03 per diluted share.
This is compared to net loss of $307.9 million, or $4.49 per
diluted share, for fiscal year 2008 which included a pretax
goodwill impairment charge of $239.1 million, or $3.49 per diluted
share, and a pretax restructuring charge of $43.7 million, or $0.64
per diluted share.
For the fourth quarter of 2009, cost of product sales was $31.3
million compared to $36.3 million in the same period of 2008. Cost
of services and other was $3.7 million compared to $7.0 million in
the same period of 2008. Product gross margin was 61.3 percent, as
compared to 45.5 percent in the same period of 2008, including the
impact of impairment charges of $4.1 million and
acquisition-related charges of $0.7 million.
For the full year 2009, cost of product sales was $126.4 million
as compared to $126.9 million in 2008. Cost of services and other
was $23.9 million compared to $25.2 million in 2008. Product gross
margin was 54.7 percent as compared to 53.1 percent in 2008.
For the fourth quarter of 2009, operating expenses were $51.3
million as compared to operating expenses of $313.5 million, which
included $239.1 million and $3.6 million of goodwill and other
asset impairment charges, respectively, and restructuring charges
of $14.3 million, in the fourth quarter of 2008.
For the full year 2009, operating expenses were $209.9 million
which included restructuring charges of $2.2 million, as compared
to operating expenses of $500.6 million, which included goodwill
impairment charges of $239.1 million and restructuring charges of
$43.7 million, in 2008.
“In 2009, we successfully executed against the business
priorities that we described at the outset of the year,
specifically reengineering our technology platform, entering new
markets and increasing our operating leverage,” stated President
and CEO, Kevin King. “Revenue for the fourth quarter increased 13%
over the prior year, driven by an 8% increase in our RNA business
and a 30% increase in sales of our genotyping products. In 2010, we
expect to generate improved revenue growth and to be profitable for
the year.”
Quarterly
Highlights
Genotyping
In October, Kaiser Permanente and the University of California,
San Francisco (UCSF) entered into an agreement with Affymetrix to
conduct genome-wide analyses of DNA samples from 100,000 Kaiser
Permanente members for a large-scale research program designed to
create a new resource for studying disease, health, and aging.
Scientists from the program will use the just-launched Axiom
Genotyping Solution™, which delivers high-throughput, automated
technology enabling researchers to find novel and common genetic
variations associated with complex disease.
Additionally, the Company announced that the Institute for
Pharmacogenomics and Individualized Therapy (IPIT) at the
University of North Carolina in Chapel Hill is using Affymetrix’s
DMET™ Plus biomarker panel to expand the Pharmacogenetics for Every
Nation Initiative (PGENI). The PGENI’s mission is to help
developing countries use genetic information to improve their drug
dosing decision-making process.
Affymetrix' management team will host a conference call on
February 3, 2010 at 2:00 p.m. PT to review its operating results
for the fourth quarter and fiscal year 2009. 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: (866)
500-AFFX, international: (706) 643-2771.
A replay of this call will be available from 5:00 p.m. PT on
February 3, 2010 until 8:00 p.m. PT on February 10, 2010 at the
following numbers: domestic: (800) 642-1687, international: (706)
645-9291. The passcode for both replays is 50159245. An archived
webcast of the conference call will be available under the Investor
Relations section of the Company's website at
www.affymetrix.com.
About Affymetrix
GeneChip® microarray technology is the industry-standard tool
for analyzing complex genetic information. After inventing the
technology in the late 1980s, Affymetrix scientists have been
dedicated to developing innovative products that provide
researchers with a more complete view of the genome. These products
accelerate genetic research that will allow physicians to develop
diagnostics and tailor treatments for individual patients by
identifying and measuring the genetic information associated with
complex diseases. Today, Affymetrix technology is used by the
world's top pharmaceutical, diagnostic, and biotechnology
companies, as well as by leading academic, government, and
non-profit organizations. Affymetrix has installed almost 1,950
systems around the world and more than 21,000 peer-reviewed papers
have been published using its microarray technology. Affymetrix is
headquartered in Santa Clara, California. For more information
about Affymetrix, please visit the company's website at
www.affymetrix.com.
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' Form 10-K for the
year ended December 31, 2008, and other SEC reports, including its
Quarterly Reports on Form 10-Q for subsequent quarterly periods.
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)
December 31, December 31,
2009 2008 ASSETS: (Note
1) Current assets: Cash and cash equivalents $ 65,642 $ 113,292
Restricted cash—short-term portion
1,686
4,402 Available-for-sale securities—short-term portion 213,377
250,970 Accounts receivable, net 64,933 62,726 Inventories 54,490
51,333 Deferred tax assets—current portion 1,172 1,077 Prepaid
expenses and other current assets 15,903
15,725 Total current assets 417,203 499,525
Available-for-sale securities—long-term portion 64,760 26,900
Property and equipment, net 68,182 89,345 Acquired technology
rights, net 49,855 62,569 Deferred tax assets—long-term portion
4,720 4,764 Restricted cash—long-term portion 1,109 2,175 Other
assets 25,121 28,032 Total assets $
630,950 $ 713,310
LIABILITIES AND
STOCKHOLDERS’ EQUITY: Current liabilities: Accounts payable and
accrued liabilities $ 57,183 $ 62,559 Deferred revenue—current
portion 14,534 16,198 Total current
liabilities 71,717 78,757 Deferred revenue—long-term portion 3,898
3,583 Other long-term liabilities 10,295 10,972 Convertible notes
247,201 316,341 Stockholders’ equity: Common stock 710 703
Additional paid-in capital 733,378 721,641 Accumulated other
comprehensive income (loss) 4,051 (2,296 ) Accumulated deficit
(440,300 ) (416,391 ) Total stockholders’ equity
297,839 303,657 Total liabilities and
stockholders’ equity $ 630,950 $ 713,310
Note 1: The condensed
consolidated balance sheet at December 31, 2008 has been
derived from the audited consolidated financial statements at that
date included in the Company’s Form 10-K for the fiscal year
ended December 31, 2008.
AFFYMETRIX, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
(UNAUDITED)
Three Months Ended Twelve
Months Ended December 31, December 31,
2009 2008 2009
2008 REVENUE: Product sales $
80,988 $ 66,612 $ 279,186 $ 270,392 Services 5,885 8,539 39,563
32,096 Royalties and other revenue 1,915 3,423
8,345 107,761 Total revenue
88,788 78,574 327,094
410,249
COSTS AND EXPENSES: Cost of product
sales 31,330 36,328 126,377 126,909 Cost of services and other
3,650 6,990 23,949 25,231 Research and development 16,950 25,384
77,358 84,482 Selling, general and administrative 34,562 34,379
130,838 127,161 Acquired in-process technology - 300 - 6,200
Restructuring charges 283 14,328 2,180 43,707 Goodwill impairment
(credits) charges
(450
) 239,098 (450 ) 239,098 Total
costs and expenses 86,325 356,807
360,252 652,788 Income (loss) from
operations 2,463 (278,233 ) (33,158 ) (242,539 ) Interest income
and other, net 1,299 3,799 2,589 14,629 Interest expense 2,435
3,457 10,945 14,091 Gain from repurchase of convertible notes
- - 17,447 -
Income (loss) before income taxes 1,327 (277,891 ) (24,067 )
(242,001 ) Income tax (benefit) provision (1,468 )
40,825 (158 ) 65,918 Net income (loss)
$ 2,795 $ (318,716 ) $ (23,909 ) $ (307,919 ) Basic
and diluted net income (loss) per common share $ 0.04 $
(4.65 ) $ (0.35 ) $ (4.49 ) Shares used in computing basic
net income (loss) per common share 68,820
68,598 68,722 68,556 Shares used
in computing diluted net income (loss) per common share
69,374 68,598 68,722
68,556
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