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 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 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 %
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version on businesswire.com: http://www.businesswire.com/news/home/20150729005538/en/
Affymetrix, Inc.Doug Farrell, 408-731-5285Vice President of
Investor Relations
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