Illumina Reports Financial Results for First Quarter 2006
Tuesday April 18, 4:01 pm ET
Strong Demand Drives 92% Quarterly Revenue Growth
Company Raises Financial Guidance for Fiscal 2006
SAN DIEGO--(BUSINESS WIRE)--April 18, 2006--Illumina, Inc. (NASDAQ: ILMN - News) announced today its financial results for the first quarter ended April 2, 2006.
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For the first quarter of 2006, Illumina reported total revenue of $29.1 million, a 92.1% increase over the $15.1 million reported in the first quarter of 2005. This represents the Company's 19th consecutive quarter of revenue growth. Revenue grew more than 26% compared to the fourth quarter of 2005.
The Company reported a net loss on a GAAP basis of $104,000, or $0.00 per basic and diluted share for the first quarter of 2006, compared to a net loss of $1.2 million, or $0.03 per basic and diluted share, in the first quarter of 2005. The net loss for the first quarter includes total non-cash stock compensation expense of $3.1 million associated with the Company's adoption of Statement of Financial Accounting Standards No. 123R. Excluding the impact of non-cash stock compensation expense, the Company reported net income on a non-GAAP basis of $3.0 million, or $0.07 per basic and diluted share.
Product and services gross margin was 67.4% in the first quarter of 2006, compared to 69.0% in the comparable period of 2005. Research and development expenses were $8.2 million, compared to $5.9 million in the first quarter of 2005. Selling, general and administrative expenses for the quarter were $12.1 million, compared to $6.0 million in the first quarter of 2005. Excluding the effect of non-cash stock compensation expense, the non-GAAP results for product and services gross margin, research and development expense and selling, general and administrative expense were 68.3%, $7.3 million and $10.2 million, respectively, for the first quarter of 2006.
Cash and investments totaled approximately $49.0 million at the end of the first quarter. The Company generated approximately $2.4 million in cash from operations during the first quarter of 2006.
Highlights since our last quarterly conference call include:
Shipped 24 BeadStations during the quarter, bringing our total number of BeadLabs and BeadStations shipped to 150.
Introduced the Sentrix® HumanHap550 BeadChip. The HumanHap550 BeadChip contains over 550,000 SNPs (single nucleotide polymorphisms) on a single microarray and provides the most comprehensive genomic coverage of any product currently available.
Commenced commercial shipments of Sentrix® HumanHap240s BeadChips for genome-wide disease association studies. This product is a companion to the Company's Sentrix® HumanHap300 BeadChip and enables researchers to interrogate an additional 240,000 SNPs utilizing the Company's Infinium(TM) assay.
Completed a manufacturing expansion program that tripled our manufacturing capacity for BeadChips over our level at the end of second quarter of 2005.
Announced the second multi-million dollar agreement with Cancer Research UK. Under this services agreement, valued at nearly $7 million, the Company will genotype at least 4,000 samples using the Sentrix® HumanHap550 BeadChip with the goal of developing a greater understanding of the genetics behind prostate cancer. A second phase will involve development of a custom, 12-sample BeadChip that will enable analysis of 24,000 SNPs per sample and be used to genotype at least 8,000 samples.
Expanded our patent portfolio, bringing our total to 45 issued or allowed and 90 pending.
These highlights underscore Illumina's strategy of building a comprehensive offering of scalable, multi-application systems. At the foundation of our systems are the Sentrix® Array Matrix, the Sentrix® BeadChip, the BeadArray(TM) Reader and our Oligator® DNA synthesis capability. Illumina systems can be scaled in multiple dimensions, providing customers the flexibility to perform SNP genotyping or gene expression experiments on the same platform, with content ranging from whole genomes to focused sets, at various levels of throughput and automation. Illumina has also developed a portfolio of powerful assay technologies to enable customers to leverage BeadArray(TM) technology and generate industry-leading data quality and array performance.
Updated Financial Outlook
The Company is updating its financial guidance for fiscal 2006 as follows:
Based on the strong demand for the Company's products and the financial performance in the first quarter, the Company now believes total revenue for fiscal 2006 will be between $130 and $140 million. This represents a minimum of 77% of revenue growth over fiscal 2005.
Excluding the effect of non-cash stock compensation expense, product and services gross margin is expected to be between 67% and 70% depending on the mix of product and services revenue for the year and in any given quarter.
Excluding the effect of non-cash stock compensation expense, research and development expenses are expected to decline as a percentage of total revenue and are expected to be between from $30 and $35 million.
Excluding the effect of non-cash stock compensation expense, selling, general and administrative expenses are expected to be between $40 and $46 million.
Excluding the effect of non-cash stock compensation expense, we expect non-GAAP net income to be between $11 and $18 million, or $0.26 and $0.43 per basic share assuming 42 million basic shares outstanding. On a fully diluted basis, non-GAAP net income is expected to be between $0.23 and $0.38 per diluted share, assuming 47 million fully diluted shares outstanding. Additionally, excluding the effect of non-cash stock compensation expense, we expect to be profitable in each quarter of 2006 (see note below regarding non-GAAP financial measures).
For the year, we now expect to be at least cash flow breakeven. Working capital requirements and spending on capacity expansion will be the key drivers of cash flow in 2006.
For the second quarter of 2006, the Company expects total revenue to be between $31 and $33 million. Excluding the impact of non-cash stock compensation expense, management expects net income per diluted share to be between $0.07 and $0.09.
On January 2, 2006, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 123R, which requires non-cash stock compensation expense to be recorded when stock options and other stock-related awards vest. Illumina expects the 2006 impact of non-cash stock compensation expense related to SFAS No. 123R to be between $12 and $15 million, or $0.29 and $0.36 per basic share, assuming 42 million basic shares outstanding, and $0.26 and $0.32 per diluted share, assuming 47 million fully diluted shares outstanding. To aid investors in understanding the underlying components of our business, the updated financial outlook discussed above excludes the effect of non-cash stock compensation expense. Please review the table below that reconciles our guidance to the related GAAP financial measures.
Conference Call Information
Management will host a conference call at 2:00 p.m. Pacific Time today to discuss Illumina's first quarter results and to update the Company's financial guidance for fiscal 2006. Individuals may listen to the call by dialing 800-289-0507 (international callers should dial +1 913 981-5540) or by accessing the live webcast under the "Investors" tab of Illumina's website at: www.illumina.com.
About Illumina
Illumina (www.illumina.com) is developing next-generation tools for the large-scale analysis of genetic variation and function. The Company's proprietary BeadArray(TM) technology -- now used in leading genomics centers around the world -- provides the throughput, cost effectiveness and flexibility necessary to enable researchers in the life sciences and pharmaceutical industries to perform the billions of tests necessary to extract medically valuable information from advances in genomics and proteomics. This information will help pave the way to personalized medicine by correlating genetic variation and gene function with particular disease states, enhancing drug discovery, allowing diseases to be detected earlier and more specifically, and permitting better choices of drugs for individual patients. |
