maybe i got out too soon? they keep moving forward...the patent dispute may put a dent in the stock for a bit which may yield an opportunity, tough call at these levels.
Illumina Reports Financial Results for Third Quarter 2006
Tuesday October 17, 4:01 pm ET
Demand for Genotyping Products Drives 174% Quarterly Revenue Growth;
Company Raises Financial Guidance
SAN DIEGO--(BUSINESS WIRE)--Illumina, Inc. (NASDAQ:ILMN - News) announced today its financial results for the third quarter of 2006.
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For the quarter ended October 1, 2006, Illumina reported total revenue of $53.5 million, a 174% increase over the $19.5 million reported in the third quarter of 2005 and a 29% increase over the $41.6 million reported in the second quarter of 2006. This represents the Company's 21st consecutive quarter of revenue growth.
On a GAAP basis, the Company reported net income of $16.2 million, or $0.35 per basic and $0.32 per diluted share for the third quarter of 2006, compared to a net loss of $1.4 million, or $0.03 per basic and diluted share, in the third quarter of 2005.
Net income for the third quarter ended October 1, 2006 includes total non-cash stock compensation expense of $3.8 million associated with the Company's adoption of SFAS No. 123R. Excluding the impact of non-cash stock compensation expense, Illumina's net income on a non-GAAP basis would have been $19.9 million, or $0.39 per diluted share for the third quarter.
The combined gross margin for product and services was 69.3% in the third quarter of 2006, compared to 65.3% in the third quarter of 2005. For the third quarter of 2006, excluding the effect of non-cash stock compensation expense, the combined gross margin of product and services would have been 70.1%. Research and development expenses (R&D) in the third quarter of 2006 were $7.7 million, compared to $7.1 million in the third quarter of 2005. R&D expense for the third quarter of 2006 includes approximately $1.0 million in non-cash stock compensation expense. Selling, general and administrative expenses (SG&A) for the quarter were $14.1 million, compared to $7.4 million in the third quarter of 2005. SG&A expense for the third quarter of 2006 includes approximately $2.4 million in non-cash stock compensation expense.
The Company generated $13.0 million in cash from operations during the third quarter, compared to cash used of $3.9 million for operations in the comparable quarter of 2005. Overall, the Company generated $13.2 million in positive net cash flow during the third quarter. As a result, the Company ended the third quarter with $169.9 million in cash and short-term investments.
Highlights since our last earnings release:
Shipped 30 BeadArray(TM) readers during the quarter, increasing the cumulative shipments of BeadArray readers to 211.
Introduced the world's first multi-sample whole genome genotyping BeadChip products, the HumanHap300-Duo and HumanHap300-Duo+. These are the seventh and eighth products introduced this year based on the Company's Infinium® assay. The products enable researchers to analyze two samples simultaneously with over 634,000 total tag SNPs on a single BeadChip, or 317,000 tag SNPs per sample. The HumanHap300-Duo+ additionally enables researchers to add custom content up to an additional 60,000 SNPs.
Introduced the RatRef-12 Whole-Genome Expression BeadChip. This product enables the analysis of 12 rat samples in parallel on one BeadChip. Based on the NCBI RefSeq database (release 16), the product is designed to analyze more than 22,000 rat transcripts at a cost per sample of $100.
Signed a commercial agreement to develop a new multi-sample Bovine BeadChip using the iSelect(TM) product to initially genotype over 10,000 cattle. Developed in close collaboration with the United States Department of Agriculture - Agricultural Research Service, the University of Missouri - Columbia and the University of Alberta, the product will be used to map quantitative trait loci and to selectively breed cattle.
Announced that Duke University's Center for Human Genetics will use the HumanHap550 BeadChip for an autism study with 1,800 individuals and their families.
Announced that Massachusetts General Hospital and Harvard Medical School will use the HumanHap300 BeadChip to perform a whole genome association study across more than 2,200 samples in order to study Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig's disease), a rapidly progressing, fatal disorder that attacks motor neurons of the brain and spinal cord.
Announced an expanded relationship with GlaxoSmithKline to include Infinium Genotyping with the HumanHap550. The first project under this expanded relationship involves genotyping a collection of 2,000 samples using Illumina's FastTrack Services lab.
Announced a molecular diagnostic collaboration with ReaMetrix, Inc., a company based in India that is focused on developing research and diagnostic assays.
Expanded our portfolio of patents, bringing our total to 47 issued or allowed and 95 pending.
Updated Financial Outlook
The non-GAAP financial guidance discussed below excludes the effect of non-cash stock compensation expense (see table which reconciles these non-GAAP financial measures to the related GAAP measure). The Company is updating its financial guidance for fiscal 2006 as follows:
Guidance for Fiscal 2006:
Based on the continued strong demand for the Company's products and services, total revenue for fiscal 2006 is now expected to be between $178 and $182 million. This represents an increase of $8 to $12 million over the guidance provided last quarter.
Research and development expenses are expected to be between $29 and $30 million.
Selling, general and administrative expenses are expected to be between $45 and $47 million.
We expect non-GAAP net income to be at least $49 million, or $1.00 per diluted share, assuming fully diluted weighted-average shares of 49 million.
We expect non-cash stock compensation expense related to SFAS No. 123R to be between $14 and $15 million, or $0.29 and $0.31 per diluted share.
Guidance for Q4 2006:
The Company expects fourth quarter total revenue to grow by a minimum of 135% over the fourth quarter of 2005 and is expected to be between $54 and $58 million. Management expects non-GAAP net income to be at least $16 million, or $0.31 per diluted share, assuming quarterly fully diluted weighted-average shares of 52 million.
Conference Call Information
A conference call has been scheduled for 2:00 p.m. Pacific Time today to discuss Illumina's third quarter 2006 results and updated 2006 guidance. Interested parties may listen to the call by dialing 800-638-4930 (passcode: 76507779) or if outside North America, by dialing +1 617-614-3944 (passcode: 76507779). Individuals may access 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 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, permitting better choices of drugs for individual patients. |
