Affymetrix Reports Third Quarter 2007 Results
Wednesday October 24, 4:00 pm ET
SANTA CLARA, Calif.--(BUSINESS WIRE)--Affymetrix Inc., (Nasdaq:AFFX - News) today reported its financial results for the third quarter of 2007. The Company reported total revenue for the third quarter of $95.0 million, as compared to total revenue of $84.7 million in the third quarter of 2006. Product and product related revenue was $85.1 million, product sales to Perlegen Sciences, Inc. were $0.4 million and royalties and other revenue were $9.5 million for the third quarter of 2007.
Net income was approximately $2.6 million or $0.04 per diluted share in the third quarter of 2007, which includes a pretax restructuring charge of $5.7 million or $0.08 per diluted share, as compared to a net loss of $14.2 million or $0.21 per diluted share in the third quarter of 2006, which includes a pretax restructuring charge of $10.0 million or $0.15 per diluted share.
“During the third quarter we made significant improvements across the entire organization,” said Kevin M. King, president of Affymetrix. “We generated 12% top-line revenue growth over the prior year, and decreased our operating expenses by 18%, of which six percentage points were related to a decrease in restructuring charges. In addition, our cash and marketable securities increased by $12 million over the prior quarter.”
Third quarter sales included GeneChip® consumable revenue of $65.4 million, consisting of array revenue of $42.9 million, reagent revenue of $15.8 million, genotyping services revenue of $6.3 million and $0.4 million of Perlegen revenue. Additionally, the Company reported instrument revenue of $10.7 million in the third quarter of 2007. Affymetrix shipped 48 GeneChip systems in the quarter, bringing its cumulative systems shipped to around 1678 at the end of the third quarter.
Cost of product sales and product related revenue were $35.4 million in the third quarter of 2007 compared to $32.5 million in the same period of 2006. Product and product related gross margin was 58.4 percent in the third quarter of 2007 compared to 56.2 percent in the third quarter of 2006.
Operating expenses were $55.5 million for the third quarter of 2007, which includes restructuring charges of $5.7 million, as compared to $67.5 million in the third quarter of 2006, which includes restructuring charges of $10.0 million.
Financial Outlook for 2007
For fiscal 2007, the Company expects total revenue to be in the range of $365 million to $375 million. For the fourth quarter and full year the Company expects a gross margin of around 60 percent, dependent upon revenue mix. The Company expects total operating expenses of $225 million to $230 million including restructuring charges of $15 million for the full-year.
Quarterly Highlights
DNA Analysis
* A team of scientists from the Broad Institute of Harvard and MIT, Children’s Hospital Boston, the University of Oxford and Peninsula Medical School of Exeter discovered a common genetic variant associated with adult and childhood height in the general population using Affymetrix 500K Arrays to analyze approximately 5,000 individuals. The results of the project were published in the October 2007 issue of Nature Genetics. Researchers were able to determine that a variation in the HMGA2 gene has a strong correlation with a person’s height.
* The Autism Consortium completed the first genome scan for Autism Spectrum Disorders and released the reference data set to a public database for researchers worldwide. The scan was performed using Affymetrix 500K Arrays on more than 3,000 samples.
RNA Analysis
* The Company announced the full commercial launch of the GeneChip Mouse and Rat Gene 1.0 ST Arrays. The Mouse and Rat Gene 1.0 ST Arrays use the Whole Transcript (WT) Sense Target Labeling Assay to deliver a more complete and accurate view of a gene's total transcriptional activity. These arrays complement the more comprehensive GeneChip Exon 1.0 ST Arrays, which offer both gene-level expression profiling and alternative splicing analysis in a single experiment.
* A team from Affymetrix Laboratories was awarded a $10.2 million scale-up grant over the next four years from the National Human Genome Research Institute (NHGRI), as part of the expanded ENCyclopedia Of DNA Elements (ENCODE) project. During the pilot phase of ENCODE, the results of which were published in the June 14, 2007 issue of Nature and the June 2007 issue of Genome Research, Affymetrix’ Dr. Tom Gingeras and collaborators used the company's high-density technology to yield new observations of the structure and organization of the human genome.
Molecular Diagnostics
* Affymetrix and IPSOGEN, a leading molecular diagnostic company based in France and Connecticut, signed a Powered by Affymetrix™ (PbA) agreement. With the agreement, IPSOGEN gains non-exclusive access to Affymetrix microarray technology to develop and market in-vitro diagnostic (IVD) tests, initially for breast cancer, on a worldwide basis.
Management
* The Company announced the promotion of Kevin M. King to president of the company, reporting to Stephen P.A. Fodor, Ph.D., chairman and CEO. King previously served as president of the life sciences business and executive vice president. In his new position, Kevin will also assume responsibility for the Molecular Diagnostics business unit.
Licensing
* Affymetrix announced that Empire Genomics, LLC, has obtained a non-exclusive, worldwide license to a number of Affymetrix patents covering the manufacturing, use and sales of nucleic acid microarrays and related products and services for comparative genomic hybridization (CGH). The arrays and services may be used for research or diagnostic purposes.
Affymetrix' management team will host a conference call on October 24, 2007 at 2:00 p.m. PT to review its operating results for the third quarter of 2007. 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 October 24, 2007 until 8:00 p.m. PT on October 31, 2007 at the following numbers: domestic: (800) 642-1687, international: (706) 645-9291. The passcode for both replays is 19331218. An archived webcast of the conference call will be available under the Investor Relations section of the Company's website at www.affymetrix.com. |
