Off Wall Street better have covered, this beats estimates by four cents. Trickle might try to buy tommorow . . .
>>SANTA CLARA, Calif., Jan. 30 /PRNewswire-FirstCall/ -- Affymetrix, Inc., (Nasdaq: AFFX - news) today reported record results for its fourth quarter and fiscal year 2001. Product revenue increased to $55.2 million for the fourth quarter up from $51.3 million for the comparable period of 2000. For the fiscal year ended December 31, 2001, product revenue was $194.9 million, an increase of 12% over the comparable period in 2000. The increases in product revenue for the quarter and the year were primarily the result of strong demand related to the Company's GeneChip® business. The Company's GeneChip business demonstrated 15% and 23% revenue growth over the corresponding fourth quarter and twelve month periods of 2000, respectively.
Affymetrix' core GeneChip business showed strength as the Company's revenue included shipments of more than 70,000 GeneChip arrays in the quarter and over 280,000 for the year. Overall, chip unit volume grew 19% over the comparable quarter in 2000 and over 40% for the year. The figures reflect increasing acceptance of GeneChip arrays as the standard for doing gene expression research. In addition, Affymetrix shipped over four GeneChip systems per week on average, bringing the total number of installed systems to nearly 600.
Other revenues, which include licensing fees, royalties and research revenue, were $4.3 million for the fourth quarter of 2001 compared to $8.1 million in the comparable quarter of 2000. For the year ended December 31, 2001 other revenues were $18.4 million compared to $27.3 million in the comparable period of 2000. The decline in other revenues was the result of the Company signing more licensees in the comparable periods of 2000.
Revenues received from the sale of wafers at cost to Perlegen Sciences, Inc. for the quarter and year ended December 31, 2001 were $5.6 and $11.5 million, respectively, and are not included as part of product revenue. The Company did not have wafer sales to Perlegen in 2000.
Total revenue for the fourth quarter was $65.1 million, of which $5.6 million was related to the sale of wafers to Perlegen at cost, compared to total revenue of $59.4 million in the fourth quarter of 2000. For the year ended December 31, 2001 total revenue, excluding sales to Perlegen, grew 6% over the comparable period in 2000 to $213.4 million.
Total costs and expenses for the quarter were $73.5 million compared to $103.4 million in the fourth quarter of 2000. This decline of 29% was primarily the result of the Company incurring a $15.0 million charge for in- process R&D associated with the acquisition of Neomorphic, Inc. and a one-time charge associated with the settlement of litigation in fiscal year 2000. For 2001, total costs and expenses were $266.4 million compared to $262.2 million in 2000.
Product gross margins were 63.5% in the fourth quarter of 2001 and 62.8% for the year compared to 57.6% and 59.2% in 2000, respectively. These figures represent improvements of approximately 6 and 3 margin points for the quarter and year, respectively. The improvement in gross margin was the result of increased production efficiencies in Affymetrix' chip manufacturing operation.
The Company reported a net loss of $8.4 million or $0.15 per diluted share in the fourth quarter of 2001 compared to a net loss of $41.9 million or $0.75 per diluted share in the fourth quarter of 2000. For the year ended December 31, 2001 the Company reported a net loss of $33.1 million or $0.58 per diluted share compared to a net loss of $54.0 million or $0.98 per diluted share for the year ended December 31, 2000.
Affymetrix reported a pro forma profit of $0.7 million, or $0.01 per diluted share for the quarter ended December 31, 2001. This pro forma profit excludes amortization of acquired intangible assets, deferred stock compensation associated with the acquisition of Neomorphic and a charge of $4.5 million incurred in the fourth quarter of 2001 related to the settlement of litigation. For the year ended December 31, 2001, Affymetrix reported a pro forma net loss of $11.4 million, or $0.20 per diluted share.
Affymetrix Sets the Standard
Affymetrix launched the Human Genome U133 Set, the first commercial expression array product to use the assembled draft of the human genome. The U133 set contains more than one million unique probes interrogating over 39,000 transcripts from over 33,000 genes. This high information density was made possible by ongoing advances in probe design and by leveraging the Company's powerful, high-resolution photolithographic manufacturing process.
The Company expects to see a continued drive toward the standardization of gene expression profiling technology. Customers continue to move from cDNA- based arrays to oligonucleotide-based arrays to realize the advantages of superior specificity, accuracy and reproducibility. The Company has also seen a shift from do-it-yourself arrays to prefabricated arrays as customers push for standardization to support comparison of microarray data across different experiments and laboratories. Affymetrix expects that these trends will continue to have a positive impact on its GeneChip business.
In the fourth quarter of 2001, Affymetrix expanded its share of the growing microarray market by entering into an EasyAccess(TM) Tiered Silver supply agreement with Abbott Laboratories. This is in addition to other significant new Tiered Silver customers added in 2001, which included Chiron Corporation, Bristol-Myers Squibb Company, GlaxoSmithKline plc, and Millennium Pharmaceuticals, Inc. Affymetrix believes that these customers, known for their large in-house arraying efforts, demonstrate the continued market trend to pre-synthesized oligonucleotide arrays.
The Company maintained its momentum in the biotechnology industry by signing five new BiotechAccess(TM) agreements including Curis, Inc., CV Therapeutics, Inc., Ligand Pharmaceuticals Incorporated, FibroGen, Inc., and TolerRx, Inc., bringing the total number of BiotechAccess agreements to over 30. Affymetrix also has hundreds of AcademicAccess(TM) customers worldwide using the GeneChip platform.
Over the last year, the Company settled three lawsuits and expanded the breadth and depth of its intellectual property portfolio. At year-end 2001, the Company had over 160 issued and over 370 pending U.S. patents, as well as numerous foreign patents.
Financial Outlook for 2002
The Company expects to see product revenue growth of approximately 25% in 2002, resulting in total product revenue of approximately $245 million. The Company expects that product revenue for the first quarter of 2002 will be approximately $56 million. Gross margins are expected to increase by 25-50 basis points per quarter in 2002. The Company expects to generate on a pro forma basis, which excludes acquisition-related charges, a profit of $3-5 million for the fiscal year 2002.
Investors may listen to Affymetrix' management discuss this announcement, its financial implications and provide future guidance by dialing domestic: 800-219-6110, international: 303-262-2194 on January 30 at 2:00 p.m. PT. A replay of this call will be available until 5:00 p.m. PT on February 6 at the following numbers: domestic: 800-405-2236, international: 303-590-3000, passcode: 434506#. To access a Webcast of the conference call, please visit www.affymetrix.com.
About Affymetrix:
Affymetrix is a market leader in creating breakthrough tools that are driving the genomic revolution. By applying the principles of semiconductor technology to the life sciences, Affymetrix develops and commercializes systems that help scientists alleviate human suffering and improve the quality of life. The Company's customers include pharmaceutical, biotechnology, agrochemical, diagnostics and consumer products companies as well as academic, government and other non-profit research institutes. Affymetrix offers an expanding portfolio of integrated products and services, including its integrated GeneChip platform, to address growing markets focused on understanding the relationship between genes and human health. Additional information on Affymetrix can be found 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 risks of the Company's ability to achieve and sustain higher levels of revenue, higher gross margins, reduced operating expenses, uncertainties relating to technological approaches, product development, manufacturing, market acceptance, personnel retention, uncertainties related 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, 2000 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. Note: Affymetrix, GeneChip and the Affymetrix logo are registered trademarks used by Affymetrix, Inc.
AFFYMETRIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
Revenue:
Product $55,193 $51,319 $194,936 $173,546
Revenue from
Perlegen 5,563 -- 11,491 --
Research 963 1,051 4,728 5,780
License fees
and royalties 3,354 7,049 13,719 21,504
Total revenue 65,073 59,419 224,874 200,830
Costs and expenses:
Cost of product
revenue 20,144 21,767 72,522 70,884
Cost of Perlegen
revenue 5,563 -- 11,491 --
Research and
development 15,810 18,494 68,197 57,384
Selling, general
and administrative 27,327 45,095 95,293 113,429
Merger related costs -- -- -- 2,395
Amortization of
deferred stock
Compensation 3,155 2,118 12,663 2,118
Amortization of purchased
Intangibles 1,535 997 6,223 997
Charge for acquired
in-process technology -- 14,989 -- 14,989
Total costs
and expenses 73,534 103,460 266,389 262,196
Loss from operations (8,461) (44,041) (41,515) (61,366)
Interest income, net 115 2,717 6,995 7,976
Net loss before
income taxes (8,346) (41,324) (34,520) (53,390)
Income tax provision (100) (600) (300) (600)
Net loss before
extraordinary item (8,446) (41,924) (34,820) (53,990)
Extraordinary gain from
repurchase of
convertible notes -- -- 1,699 --
Net loss $(8,446) $(41,924) $(33,121) $(53,990)
Basic / diluted loss
per common share
before extraordinary
item $(0.15) $(0.75) $(0.61) $(0.98)
Extraordinary gain
per common share
from repurchase of
convertible notes -- -- 0.03 --
Basic / diluted loss per
common share $(0.15) $(0.75) $(0.58) $(0.98)
Shares used to calculate
basic / diluted loss
per common share 57,683 56,167 57,382 55,035
Basic / diluted loss
per common share
after extraordinary
item $(0.15) $(0.75) $(0.58) $(0.98)
Shares used to calculate
diluted loss per
common share after
extraordinary item 57,683 56,167 57,382 55,035
AFFYMETRIX, INC.
CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
EXCLUDING ACQUISITION-RELATED CHARGES, LITIGATION SETTLEMENTS AND
EXTRAORDINARY ITEM*
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
Revenue:
Product $55,193 51,319 $194,936 173,546
Revenue from Perlegen 5,563 -- 11,491 --
Research 963 1,051 4,728 5,780
License fees and royalties 3,354 7,049 13,719 21,504
Total revenue 65,073 59,419 224,874 200,830
Costs and expenses:
Cost of product revenue 20,144 21,767 72,522 70,884
Cost of Perlegen revenue 5,563 -- 11,491 --
Research and development 15,810 18,494 68,197 57,384
Selling, general and
administrative 22,827 26,508 90,793 94,842
Total costs and expenses 64,344 66,769 243,003 223,110
Income/(loss) from operations 729 (7,350) (18,129) (22,280)
Interest income, net 115 2,717 6,995 7,976
Net income (loss) before income
taxes 844 (4,633) (11,134) (14,304)
Income tax provision (100) (600) (300) (600)
Net income (loss) $744 $(5,233) $(11,434) $(14,904)
Basic earnings (loss) per common
share $0.01 $(0.09) $(0.20) $(0.27)
Shares used to calculate basic
earnings (loss) per common share 57,683 56,167 57,382 55,035
Diluted earnings (loss) per common
share $0.01 $(0.09) $(0.20) $(0.27)
Shares used to calculate diluted
earnings (loss) per common share 60,621 56,167 57,382 55,035
The above Condensed Consolidated Pro Forma Statements of Operations are presented for illustrative purposes only and are not prepared in accordance with generally accepted accounting principles. These Pro Forma Statements of Operations are intended to illustrate the Company's operating results excluding the amortization of deferred stock compensation, amortization of purchased intangibles and charges for acquired in-process technology associated with the acquisition of Neomorphic, Inc. in 2000. These Pro Forma Statements of Operations also exclude merger-related costs associated with the acquisition of Genetic MicroSystems, Inc., an extraordinary gain recorded in connection with the sale of the Company's convertible notes, and the settlement costs associated with the Company's litigation. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from Pro Forma measures used by other companies. <Pre> AFFYMETRIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, December 31,
2001 2000
(Note)
ASSETS
Current assets:
Cash and cash equivalents $58,795 $7,263
Available-for-sale securities 310,028 428,767
Accounts receivable 44,812 53,104
Inventories 28,812 17,234
Other current assets 3,276 2,524
Total current assets 445,723 508,892
Net property and equipment 72,728 56,245
Acquired technology rights 17,636 10,014
Intangible assets 20,663 26,788
Notes receivable from employees 1,404 2,113
Other assets 21,861 16,728
$580,015 $620,780
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $53,428 $71,024
Deferred revenue 19,577 19,544
Current portion of capital lease obligation -- 22
Total current liabilities 73,005 90,590
Noncurrent portion of capital lease
obligation -- 60
Obligation to Beckman Coulter, Inc. 5,000 5,000
Convertible subordinated notes 370,000 375,000
Common stock purchase rights 3,000 3,000
Stockholders' equity 129,010 147,130
$580,015 $620,780
Note: The balance sheet at December 31, 2000 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, 2000.<<
Cheers, Tuck |
