EX-99.1 2 ex99-1.htm EX-99.1 ex99-1.htm
Contact:
Doug Farrell
Vice President of Investor Relations
408-731-5285

AFFYMETRIX REPORTS FOURTH QUARTER
AND FISCAL YEAR 2009 RESULTS

– Company reports total revenue of $88.8 million and net income of $2.8 million for Q4 –

Santa Clara, Calif.—February 3, 2010—Affymetrix, Inc., (NASDAQ: AFFX) today reported its operating results for the fourth quarter and fiscal year ended December 31, 2009. Total revenue for the fourth quarter was $88.8 million, as compared to total revenue of $78.6 million in the fourth quarter of 2008. In constant currency terms, revenue for the fourth quarter of 2009 was positively impacted by $2.6 million as compared to 2008. For the full year 2009, total revenue was $327.1 million as compared to $410.2 million, which included a one-time intellectual property payment of $90 million, for 2008.

For the fourth quarter of 2009, product revenue was $81.0 million, which consisted of consumable revenue of $71.9 million and instrument revenue of $9.1 million.  Service revenue was $5.9 million, and royalties and other revenue were $1.9 million. This compares to fourth quarter 2008 product revenue of $66.6 million, service revenue of $8.5 million, and royalties and other revenue of $3.5 million.

For the full year 2009, product revenue was $279.2 million, which consisted of consumable revenue of $255.7 million and instrument revenue of $23.5 million. Service revenue was $39.6 million, and royalties and other revenue were $8.3 million. This compares to full year 2008 product revenue of $270.4 million, service revenue of $32.1 million, and royalties and other revenue of $107.7 million, which included an intellectual property payment of $90 million.

Affymetrix shipped 42 systems in the fourth quarter of 2009, bringing its cumulative systems shipped to approximately 1,930.

The Company reported a net income of approximately $2.8 million, or $0.04 per diluted share, in the fourth quarter of 2009.  This compares to net loss of $318.7 million, or $4.65 per diluted share, in the same period of 2008 which included a pretax goodwill impairment charge of $239.1 million, or $3.49 per diluted share, and a pretax restructuring charge of $14.3 million, or $0.21 per diluted share.
 
Fiscal year 2009 net loss was $23.9 million, or $0.35 per diluted share, which included a $17.4 million gain from the repurchase of convertible notes, or $0.25 per diluted share, and restructuring charges of $2.2 million, or $0.03 per diluted share. This is compared to net loss of $307.9 million, or $4.49 per diluted share, for fiscal year 2008 which included a pretax goodwill impairment charge of $239.1 million, or $3.49 per diluted share, and a pretax restructuring charge of $43.7 million, or $0.64 per diluted share.

For the fourth quarter of 2009, cost of product sales was $31.3 million compared to $36.3 million in the same period of 2008. Cost of services and other was $3.7 million compared to $7.0 million in the same period of 2008. Product gross margin was 61.3 percent, as compared to 45.5 percent in the same period of 2008, including the impact of impairment charges of $4.1 million and acquisition-related charges of $0.7 million.

For the full year 2009, cost of product sales was $126.4 million as compared to $126.9 million in 2008. Cost of services and other was $23.9 million compared to $25.2 million in 2008. Product gross margin was 54.7 percent as compared to 53.1 percent in 2008.

For the fourth quarter of 2009, operating expenses were $51.3 million as compared to operating expenses of $313.5 million, which included $239.1 million and $3.6 million of goodwill and other asset impairment charges, respectively, and restructuring charges of $14.3 million, in the fourth quarter of 2008.

For the full year 2009, operating expenses were $209.9 million which included restructuring charges of $2.2 million, as compared to operating expenses of $500.6 million, which included goodwill impairment charges of $239.1 million and restructuring charges of $43.7 million, in 2008.

“In 2009, we successfully executed against the business priorities that we described at the outset of the year, specifically reengineering our technology platform,  entering new markets and increasing our operating leverage,” stated President and CEO, Kevin King. “Revenue for the fourth quarter increased 13% over the prior year, driven by an 8% increase in our RNA business and a 30% increase in sales of our genotyping products. In 2010, we expect to generate improved revenue growth and to be profitable for the year.”

Quarterly Highlights

Genotyping

In October, Kaiser Permanente and the University of California, San Francisco (UCSF) entered into an agreement with Affymetrix to conduct genome-wide analyses of DNA samples from 100,000 Kaiser Permanente members for a large-scale research program designed to create a new resource for studying disease, health, and aging. Scientists from the program will use the just-launched Axiom Genotyping Solution™, which delivers high-throughput, automated technology enabling researchers to find novel and common genetic variations associated with complex disease.

Additionally, the Company announced that the Institute for Pharmacogenomics and Individualized Therapy (IPIT) at the University of North Carolina in Chapel Hill is using Affymetrix’s DMET™ Plus biomarker panel to expand the Pharmacogenetics for Every Nation Initiative (PGENI). The PGENI’s mission is to help developing countries use genetic information to improve their drug dosing decision-making process.

Affymetrix' management team will host a conference call on February 3, 2010 at 2:00 p.m. PT to review its operating results for the fourth quarter and fiscal year 2009. 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 February 3, 2010 until 8:00 p.m. PT on February 10, 2010 at the following numbers: domestic: (800) 642-1687, international: (706) 645-9291. The passcode for both replays is 50159245.  An archived webcast of the conference call will be available under the Investor Relations section of the Company's website at www.affymetrix.com.

About Affymetrix
GeneChip® microarray technology is the industry-standard tool for analyzing complex genetic information. After inventing the technology in the late 1980s, Affymetrix scientists have been dedicated to developing innovative products that provide researchers with a more complete view of the genome. These products accelerate genetic research that will allow physicians to develop diagnostics and tailor treatments for individual patients by identifying and measuring the genetic information associated with complex diseases. Today, Affymetrix technology is used by the world's top pharmaceutical, diagnostic, and biotechnology companies, as well as by leading academic, government, and non-profit organizations. Affymetrix has installed almost 1,950 systems around the world and more than 21,000 peer-reviewed papers have been published using its microarray technology. Affymetrix is headquartered in Santa Clara, California. For more information about Affymetrix, please visit the company's website 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: risk relating to the company’s ability to successfully commercialize new products, risk relating to past and future acquisitions, including the ability of the company to successfully integrate such acquisitions into its existing business; risks of the company's ability to achieve and sustain higher levels of revenue, higher gross margins and reduced operating expenses; uncertainties relating to technological approaches, risks associated with manufacturing and product development; personnel retention; uncertainties relating 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, 2008, 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.

PLEASE NOTE:
Affymetrix, the Affymetrix logo, GeneChip, and all other trademarks are the property of Affymetrix, Inc.

- Financial Charts to Follow -

 
 
 

AFFYMETRIX, INC.
(IN THOUSANDS)
(UNAUDITED)
 
   
December 31,
    
December 31,
  
   
2009
    
2008
  
ASSETS:
        
(Note 1)
  
Current assets:
            
Cash and cash equivalents
   $ 65,642     $ 113,292  
Restricted cash—short-term portion
     1,686       4,402  
Available-for-sale securities—short-term portion
     213,377       250,970  
Accounts receivable, net
     64,933       62,726  
Inventories
     54,490       51,333  
Deferred tax assets—current portion
     1,172       1,077  
Prepaid expenses and other current assets
     15,903       15,725  
Total current assets
     417,203       499,525  
Available-for-sale securities—long-term portion
     64,760       26,900  
Property and equipment, net
     68,182       89,345  
Acquired technology rights, net
     49,855       62,569  
Deferred tax assets—long-term portion
     4,720       4,764  
Restricted cash—long-term portion
     1,109       2,175  
Other assets
     25,121       28,032  
Total assets
   $ 630,950     $ 713,310  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY:
                
Current liabilities:
                
Accounts payable and accrued liabilities
   $ 57,183     $ 62,559  
Deferred revenue—current portion
     14,534       16,198  
Total current liabilities
     71,717       78,757  
Deferred revenue—long-term portion
     3,898       3,583  
Other long-term liabilities
     10,295       10,972  
Convertible notes
     247,201       316,341  
Stockholders’ equity:
                
Common stock
     710       703  
Additional paid-in capital
     733,378       721,641  
Accumulated other comprehensive income (loss)
     4,051       (2,296 )
Accumulated deficit
     (440,300 )     (416,391 )
Total stockholders’ equity
     297,839       303,657  
Total liabilities and stockholders’ equity
   $ 630,950     $ 713,310  
 
Note 1:
The condensed consolidated balance sheet at December 31, 2008 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, 2008.


 
 
 

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
 
   
Three Months Ended
    
Twelve Months Ended
  
   
December 31,
    
December 31,
  
   
2009
    
2008
    
2009
    
2008
  
REVENUE:
                        
Product sales
   $ 80,988     $ 66,612     $ 279,186     $ 270,392  
Services
     5,885       8,539       39,563       32,096  
Royalties and other revenue
     1,915       3,423       8,345       107,761  
Total revenue
     88,788       78,574       327,094       410,249  
COSTS AND EXPENSES:
                                
Cost of product sales
     31,330       36,328       126,377       126,909  
Cost of services and other
     3,650       6,990       23,949       25,231  
Research and development
     16,950       25,384       77,358       84,482  
Selling, general and administrative
     34,562       34,379       130,838       127,161  
Acquired in-process technology
     -       300       -       6,200  
Restructuring charges
     283       14,328       2,180       43,707  
Goodwill impairment (credits) charges
     (450 )     239,098       (450 )     239,098  
Total costs and expenses
     86,325       356,807       360,252       652,788  
Income (loss) from operations
     2,463       (278,233 )     (33,158 )     (242,539 )
Interest income and other, net
     1,299       3,799       2,589       14,629  
Interest expense
     2,435       3,457       10,945       14,091  
Gain from repurchase of convertible notes
     -       -       17,447       -  
Income (loss) before income taxes
     1,327       (277,891 )     (24,067 )     (242,001 )
Income tax (benefit) provision
     (1,468 )     40,825       (158 )     65,918  
Net income (loss)
   $ 2,795     $ (318,716 )   $ (23,909 )   $ (307,919 )
                                 
Basic and diluted net income (loss) per common share
   $ 0.04     $ (4.65 )   $ (0.35 )   $ (4.49 )
                                 
Shares used in computing basic net income (loss) per common share
     68,820       68,598       68,722       68,556  
Shares used in computing diluted net income (loss) per common share
     69,374       68,598       68,722       68,556