x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2013
|
|
|
|
OR
|
|
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
DELAWARE
|
|
77-0319159
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification Number)
|
|
|
|
3420 CENTRAL EXPRESSWAY
|
||
SANTA CLARA, CALIFORNIA 95051
|
||
(Address of principal executive offices and Zip Code)
|
Large accelerated filer o
|
|
Accelerated filer x
|
|
|
|
Non-accelerated filer o
|
|
Smaller reporting company o
|
(Do not check if a smaller reporting company)
|
|
|
|
|
Page No.
|
||
|
||||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(Unaudited)
|
(See Note 1)
|
|||||||
ASSETS:
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
37,496
|
$
|
25,671
|
||||
Restricted cash
|
690
|
699
|
||||||
Available-for-sale securities—short-term portion
|
-
|
9,366
|
||||||
Accounts receivable, net
|
52,111
|
53,893
|
||||||
Inventories—short-term portion
|
74,196
|
72,691
|
||||||
Deferred tax assets—short-term portion
|
317
|
359
|
||||||
Prepaid expenses and other current assets
|
10,076
|
10,126
|
||||||
Total current assets
|
174,886
|
172,805
|
||||||
Property and equipment, net
|
25,868
|
28,663
|
||||||
Inventories—long-term portion
|
8,876
|
11,772
|
||||||
Goodwill
|
158,338
|
159,736
|
||||||
Intangible assets, net
|
145,785
|
152,718
|
||||||
Deferred tax assets—long-term portion
|
1,916
|
3,394
|
||||||
Other long-term assets
|
13,707
|
15,206
|
||||||
Total assets
|
$
|
529,376
|
$
|
544,294
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
49,019
|
$
|
50,355
|
||||
Convertible notes—short-term portion
|
-
|
3,855
|
||||||
Term loan—short-term portion
|
12,750
|
12,713
|
||||||
Deferred revenue—short-term portion
|
18,911
|
8,498
|
||||||
Total current liabilities
|
80,680
|
75,421
|
||||||
Deferred revenue—long-term portion
|
4,041
|
3,450
|
||||||
Convertible notes
|
105,000
|
105,000
|
||||||
Term loan—long-term portion
|
57,338
|
60,563
|
||||||
Other long-term liabilities
|
21,010
|
22,689
|
||||||
Stockholders' equity:
|
||||||||
Common stock
|
711
|
710
|
||||||
Additional paid-in capital
|
761,435
|
759,549
|
||||||
Accumulated other comprehensive income
|
3,988
|
6,302
|
||||||
Accumulated deficit
|
(504,827
|
)
|
(489,390
|
)
|
||||
Total stockholders' equity
|
261,307
|
277,171
|
||||||
Total liabilities and stockholders' equity
|
$
|
529,376
|
$
|
544,294
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
REVENUE:
|
||||||||
Product sales
|
$
|
71,557
|
$
|
58,491
|
||||
Services and other
|
6,388
|
6,756
|
||||||
Total revenue
|
77,945
|
65,247
|
||||||
COSTS AND EXPENSES:
|
||||||||
Cost of product sales
|
34,433
|
23,565
|
||||||
Cost of services and other
|
3,507
|
3,779
|
||||||
Research and development
|
12,248
|
13,331
|
||||||
Selling, general and administrative
|
35,121
|
27,924
|
||||||
Restructuring charges
|
4,842
|
-
|
||||||
Total costs and expenses
|
90,151
|
68,599
|
||||||
Loss from operations
|
(12,206
|
)
|
(3,352
|
)
|
||||
Interest income and other, net
|
342
|
26
|
||||||
Interest expense
|
2,898
|
980
|
||||||
Loss before income taxes
|
(14,762
|
)
|
(4,306
|
)
|
||||
Income tax provision (benefit)
|
675
|
(89
|
)
|
|||||
Net loss
|
$
|
(15,437
|
)
|
$
|
(4,217
|
)
|
||
Basic and diluted net loss per common share
|
$
|
(0.22
|
)
|
$
|
(0.06
|
)
|
||
Shares used in computing basic and diluted net loss per common share
|
70,919
|
69,977
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Net loss
|
$
|
(15,437
|
)
|
$
|
(4,217
|
)
|
||
Other comprehensive (loss) income, net of tax:
|
||||||||
Foreign currency translation adjustment
|
(3,125
|
)
|
(155
|
)
|
||||
Unrealized change in available-for-sale and non-marketable securities
|
(275
|
)
|
605
|
|||||
Unrealized change in cash flow hedges
|
1,086
|
(516
|
)
|
|||||
Net change in other comprehensive (loss) income, net of tax
|
(2,314
|
)
|
(66
|
)
|
||||
Comprehensive loss
|
$
|
(17,751
|
)
|
$
|
(4,283
|
)
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(15,437
|
)
|
$
|
(4,217
|
)
|
||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Depreciation and amortization
|
10,316
|
7,162
|
||||||
Amortization of inventory step-up in fair value
|
4,589
|
-
|
||||||
Share-based compensation
|
1,835
|
2,392
|
||||||
Deferred tax assets
|
1,470
|
44
|
||||||
Other non-cash transactions
|
(490
|
)
|
(118
|
)
|
||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
1,164
|
(769
|
)
|
|||||
Inventories
|
(3,728
|
)
|
1,306
|
|||||
Prepaid expenses and other assets
|
1,027
|
1,944
|
||||||
Accounts payable and accrued liabilities
|
908
|
(9,170
|
)
|
|||||
Deferred revenue
|
11,035
|
(449
|
)
|
|||||
Other long-term liabilities
|
(1,320
|
)
|
575
|
|||||
Net cash provided by (used in) operating activities
|
11,369
|
(1,300
|
)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sales of available-for-sale securities
|
9,364
|
95
|
||||||
Proceeds from maturities of available-for-sale securities
|
-
|
388
|
||||||
Capital expenditures
|
(1,104
|
)
|
(1,388
|
)
|
||||
Purchase of non-marketable investment
|
(200
|
)
|
-
|
|||||
Purchase of technology rights
|
(335
|
)
|
(1,000
|
)
|
||||
Net cash provided by (used in) investing activities
|
7,725
|
(1,905
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Issuance of common stock, net
|
52
|
(154
|
)
|
|||||
Payments of term loan
|
(3,188
|
)
|
-
|
|||||
Repurchase of senior convertible notes
|
(3,855
|
)
|
(91,614
|
)
|
||||
Net cash used in financing activities
|
(6,991
|
)
|
(91,768
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(278
|
)
|
74
|
|||||
Net increase (decrease) in cash and cash equivalents
|
11,825
|
(94,899
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
25,671
|
201,937
|
||||||
Cash and cash equivalents at end of period
|
$
|
37,496
|
$
|
107,038
|
December 31,
|
Increase/
|
Reclassification
|
March 31,
|
|||||||||||||
2012
|
(Decrease)
|
Adjustments
|
2013
|
|||||||||||||
Foreign currency translation adjustments
|
$
|
5,374
|
$
|
(3,125
|
)
|
$
|
-
|
$
|
2,249
|
|||||||
Unrealized change in available-for-sale and non-marketable securities
|
896
|
(176
|
)
|
(99
|
)
|
(1) |
621
|
|||||||||
Unrealized change in cash flow hedges
|
32
|
2,069
|
(983
|
)
|
(2) |
1,118
|
||||||||||
Total accumulated other comprehensive income, net of tax
|
$
|
6,302
|
$
|
(1,232
|
)
|
$
|
(1,082
|
)
|
$
|
3,988
|
Quoted
|
Significant
|
|||||||||||
Prices
|
Other
|
|||||||||||
In Active
|
Observable
|
|||||||||||
Markets
|
Inputs
|
|||||||||||
(Level 1)
|
(Level 2)
|
Total
|
||||||||||
March 31, 2013:
|
||||||||||||
Assets:
|
||||||||||||
Derivative assets
|
$
|
-
|
$
|
1,321
|
$
|
1,321
|
||||||
Liabilities:
|
||||||||||||
Derivative liabilities
|
$
|
-
|
$
|
250
|
$
|
250
|
||||||
|
||||||||||||
December 31, 2012:
|
||||||||||||
Assets:
|
||||||||||||
U.S. government obligations and agency securities
|
$
|
-
|
$
|
6,829
|
$
|
6,829
|
||||||
U.S. corporate debt
|
-
|
664
|
664
|
|||||||||
Foreign corporate debt and equity securities
|
-
|
1,873
|
1,873
|
|||||||||
Total
|
$
|
-
|
$
|
9,366
|
$
|
9,366
|
||||||
Derivative assets
|
$
|
-
|
$
|
842
|
$
|
842
|
||||||
Liabilities:
|
||||||||||||
Derivative liabilities
|
$
|
-
|
$
|
829
|
$
|
829
|
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Fair Value
|
|||||||||||||
U.S. government obligations and agency securities
|
$
|
6,775
|
$
|
54
|
$
|
-
|
$
|
6,829
|
||||||||
U.S. corporate debt
|
651
|
13
|
-
|
664
|
||||||||||||
Foreign corporate debt and equity securities
|
1,837
|
36
|
-
|
1,873
|
||||||||||||
Total available-for-sale securities
|
$
|
9,263
|
$
|
103
|
$
|
-
|
$
|
9,366
|
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Euro
|
$
|
17,418
|
$
|
16,933
|
||||
Japanese yen
|
6,192
|
10,542
|
||||||
British pound
|
4,419
|
4,278
|
||||||
Interest rate swap
|
27,519
|
27,519
|
||||||
Total
|
$
|
55,548
|
$
|
59,272
|
March 31,
|
December 31,
|
Balance Sheet
|
|||||||
2013
|
2012
|
Classification
|
|||||||
Derivative assets:
|
|
||||||||
Foreign exchange contracts
|
$
|
1,321
|
$
|
842
|
Other current assets
|
||||
Derivative liabilities:
|
|
||||||||
Foreign exchange contracts
|
172
|
752
|
Accrued liabilities
|
||||||
Interest rate swap
|
78
|
77
|
Accrued liabilities
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Derivatives in cash flow hedging relationships:
|
||||||||
Net gain (loss) recognized in OCI, net of tax (1)
|
$
|
1,086
|
$
|
(516
|
)
|
|||
Net gain (loss) reclassified from accumulated OCI into Revenue, net of tax (2)
|
825
|
518
|
||||||
Net gain (loss) reclassified from accumulated OCI into Interest income and other, net, net of tax (3)
|
158
|
-
|
||||||
Net gain (loss) recognized in Interest income and other, net, net of tax (4)
|
15
|
25
|
||||||
Derivatives not designated as hedging relationships:
|
||||||||
Net gain (loss) recognized in Interest income and other, net, net of tax (5)
|
143
|
(148
|
)
|
(1)
|
Net change in the fair value of the effective portion classified in OCI
|
(2)
|
Effective portion classified as Revenue
|
(3)
|
Ineffective portion classified as Interest income and other, net
|
(4)
|
Amount excluded from effectiveness testing classified as Interest income and other, net
|
(5)
|
Classified in Interest and other, net
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Costs of product sales
|
$
|
167
|
$
|
372
|
||||
Research and development
|
329
|
367
|
||||||
Selling, general and administrative
|
1,339
|
1,653
|
||||||
Total share-based compensation expense
|
$
|
1,835
|
$
|
2,392
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Risk free interest rate
|
0.8
|
%
|
1.0
|
%
|
||||
Expected dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Expected volatility
|
68
|
%
|
67
|
%
|
||||
Expected option term (in years)
|
4.6
|
4.6
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Risk free interest rate
|
0.1
|
%
|
0.1
|
%
|
||||
Expected dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Expected volatility
|
52
|
%
|
67
|
%
|
||||
Expected term (in years)
|
0.6
|
0.8
|
March 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Raw materials
|
$
|
12,520
|
$
|
11,167
|
||||
Work-in-process
|
33,695
|
35,562
|
||||||
Finished goods
|
36,857
|
37,734
|
||||||
Total
|
$
|
83,072
|
$
|
84,463
|
||||
|
||||||||
Short-term portion
|
$
|
74,196
|
$
|
72,691
|
||||
Long-term portion
|
$
|
8,876
|
$
|
11,772
|
Carrying Value, Gross
|
Accumulated Amortization
|
Intangible Assets, Net
|
Weighted
|
||||||||||||||||||||||||||||||
December 31,
|
Increase/
|
March 31,
|
December 31,
|
(Increase)/
|
March 31,
|
December 31,
|
March 31,
|
Average
|
|||||||||||||||||||||||||
2012
|
(Decrease) (1)
|
2013
|
2012
|
Decrease (2)
|
2013
|
2012
|
2013
|
Useful Life
|
|||||||||||||||||||||||||
Customer relationships
|
$
|
76,874
|
$
|
(650
|
)
|
$
|
76,224
|
$
|
(14,346
|
)
|
$
|
(2,088
|
)
|
$
|
(16,434
|
)
|
$
|
62,528
|
$
|
59,790
|
12 years
|
||||||||||||
Developed technologies
|
76,814
|
(649
|
)
|
76,165
|
(18,489
|
)
|
(1,983
|
)
|
(20,472
|
)
|
58,325
|
55,693
|
12 years
|
||||||||||||||||||||
Trademarks and tradenames
|
17,818
|
(10
|
)
|
17,808
|
(3,009
|
)
|
(1,261
|
)
|
(4,270
|
)
|
14,809
|
13,538
|
5 years
|
||||||||||||||||||||
Other contractual agreements
|
3,055
|
(30
|
)
|
3,025
|
(785
|
)
|
(615
|
)
|
(1,400
|
)
|
2,270
|
1,625
|
2 years
|
||||||||||||||||||||
Licenses
|
81,156
|
376
|
81,532
|
(66,370
|
)
|
(23
|
)
|
(66,393
|
)
|
14,786
|
15,139
|
Variable
|
|||||||||||||||||||||
Total definite-lived intangible assets
|
$
|
255,717
|
$
|
(963
|
)
|
$
|
254,754
|
$
|
(102,999
|
)
|
$
|
(5,970
|
)
|
$
|
(108,969
|
)
|
$
|
152,718
|
$
|
145,785
|
(1)
|
Includes a decrease in carrying value of $1.3 million related to foreign currency translation
|
(2)
|
Includes a decrease in accumulated amortization of $0.1 million related to foreign currency translation
|
Amortization
|
||||
For the Year Ending December 31,
|
Expense
|
|||
2013, remainder thereof
|
$
|
17,470
|
||
2014
|
20,770
|
|||
2015
|
14,628
|
|||
2016
|
13,775
|
|||
2017
|
12,098
|
|||
Thereafter
|
67,044
|
|||
Total
|
$
|
145,785
|
Balance at December 31, 2012
|
$
|
159,736
|
||
Effects of foreign currency change
|
(1,398
|
)
|
||
Balance at March 31, 2013
|
$
|
158,338
|
Balance at December 31, 2012
|
$
|
802
|
||
Additions charged to cost of product sales
|
221
|
|||
Balance at March 31, 2013
|
$
|
1,023
|
2013, remainder thereof
|
$
|
-
|
||
2014
|
9,563
|
|||
2015
|
13,813
|
|||
2016
|
17,000
|
|||
2017
|
29,712
|
|||
Total
|
$
|
70,088
|
Three Months Ended March 31,
|
||||||||
2013
|
2012
|
|||||||
Employee stock compensation plans
|
5,994
|
6,020
|
||||||
Restricted stock subject to repurchase
|
3,861
|
2,469
|
||||||
Convertible notes
|
17,878
|
2,267
|
||||||
Total
|
27,733
|
10,756
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Revenue:
|
||||||||
Affymetrix Core
|
$
|
58,937
|
$
|
65,247
|
||||
eBioscience
|
19,008
|
-
|
||||||
Totals
|
$
|
77,945
|
$
|
65,247
|
||||
Loss from operations:
|
||||||||
Affymetrix Core
|
$
|
(7,841
|
)
|
$
|
(3,352
|
)
|
||
eBioscience
|
(4,365
|
)
|
-
|
|||||
Totals
|
$
|
(12,206
|
)
|
$
|
(3,352
|
)
|
·
|
Expression: This business unit markets the Company's GeneChip gene expression products and services, and the QuantiGene® line of low-to-mid-plex RNA measurement products.
|
·
|
Genetic Analysis and Clinical Applications: This business unit markets the Company's genotyping products, such as the Axiom® product line, and arrays with clinical research applications, such as the CytoScan® cytogenetics arrays.
|
·
|
Life Science Reagents: This business unit sells reagents, enzymes, purification kits and biochemicals used by life science researchers.
|
·
|
Corporate: This business unit is comprised primarily of incidental revenue from royalty arrangements and field revenue from services provided to customers of the Company.
|
·
|
eBioscience: This reportable segment specializes in the development, manufacturing, marketing and distribution of research tools in the areas of flow cytometry, immunoassays, microscopic imaging and other protein-based analyses.
|
·
|
Phase 1 (2011-2012) –Portfolio Realignment. During this phase, we reorganized ourselves into business units to sharpen our business focus based on target markets. We also launched CytoScan®, our growing cytogenetic microarray product line, grew our Axiom genotyping platform aggressively and acquired eBioscience. We believe these actions will lead to a stabilization of our core business and the realignment of our product portfolio will position us for growth.
|
·
|
Phase II (2013-2014) – Profitability, Strengthen Balance Sheet, Development of Newer Product Lines. In the beginning of 2013, we communicated a corporate restructuring with a goal of accelerating our path to profitability. The corporate restructuring is expected to result in annualized savings of approximately $25 million based on 2013 run rates, of which $5 million is expected to be in cost of goods sold. Our priorities for this phase will be to achieve profitability, repay our senior secured debt, successfully commercialize our newer product lines (CytoScan®, Axiom® and QuantiGene® lines, as well as our eBioscience products) and invest in new product offerings. In addition, we will train and refocus our global commercial organization to expand our reach to customers in the translational medicine, molecular diagnostics and applied markets.
|
·
|
Phase III (2015 -2016) – Strategic Flexibility, Expansion of Product Lines; Growth. Our goal is to have a strong balance sheet in this phase that will provide us with the flexibility to make strategic acquisitions. In addition, we aim to grow revenues with developed product lines and new product offerings in the translational medicine and molecular diagnostic markets.
|
Dollars in thousands
|
Three Months Ended
|
Dollar
|
Percentage
|
|||||||||||||
March 31,
|
change
|
change
|
||||||||||||||
2013
|
2012
|
from 2012
|
from 2012
|
|||||||||||||
Consumables
|
$
|
68,125
|
$
|
53,788
|
$
|
14,337
|
27
|
%
|
||||||||
Instruments
|
3,432
|
4,703
|
(1,271
|
)
|
(27
|
)
|
||||||||||
Product sales
|
71,557
|
58,491
|
13,066
|
22
|
||||||||||||
Services and other revenue
|
6,388
|
6,756
|
(368
|
)
|
(5
|
)
|
||||||||||
Total revenue
|
$
|
77,945
|
$
|
65,247
|
12,698
|
19
|
%
|
Dollars in thousands
|
Three Months Ended
|
Dollar
|
Percentage
|
|||||||||||||
March 31,
|
change
|
change
|
||||||||||||||
2013
|
2012
|
from 2012
|
from 2012
|
|||||||||||||
Expression
|
$
|
22,964
|
$
|
32,315
|
$
|
(9,351
|
)
|
(29
|
)%
|
|||||||
Genetic analysis and clinical applications
|
21,752
|
18,830
|
2,922
|
16
|
||||||||||||
Life science reagents
|
8,308
|
8,201
|
107
|
1
|
||||||||||||
Corporate
|
5,913
|
5,901
|
12
|
0
|
||||||||||||
eBioscience
|
19,008
|
-
|
19,008
|
100
|
||||||||||||
Total product sales
|
$
|
77,945
|
$
|
65,247
|
$
|
12,698
|
19
|
%
|
Percentage of revenue
|
Three Months Ended
|
|||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Expression
|
29
|
%
|
50
|
%
|
||||
Genetic analysis and clinical applications
|
28
|
29
|
||||||
Life science reagents
|
11
|
12
|
||||||
Corporate
|
8
|
9
|
||||||
eBioscience
|
24
|
-
|
||||||
Total product sales
|
100
|
%
|
100
|
%
|
Dollars in thousands
|
Three Months Ended
|
Dollar/Point
|
||||||||||
March 31,
|
change from
|
|||||||||||
2013
|
2012
|
2012
|
||||||||||
Total gross margin on product sales
|
$
|
37,124
|
$
|
34,926
|
$
|
2,198
|
||||||
Total gross margin on services and other revenue
|
2,881
|
2,977
|
(96
|
)
|
||||||||
|
||||||||||||
Product gross margin as a percentage of products sales
|
52
|
%
|
60
|
%
|
(8
|
)
|
||||||
|
||||||||||||
Service and other revenue gross margin as a percentage of services and other revenue
|
45
|
%
|
44
|
%
|
1
|
Dollars in thousands
|
Three Months Ended
|
Dollar
|
Percentage
|
|||||||||||||
March 31,
|
change
|
change
|
||||||||||||||
2013
|
2012
|
from 2012
|
from 2012
|
|||||||||||||
Research and development
|
$
|
12,248
|
$
|
13,331
|
$
|
(1,083
|
)
|
(8
|
)%
|
Dollars in thousands
|
Three Months Ended
|
Dollar
|
Percentage
|
|||||||||||||
March 31,
|
change
|
change
|
||||||||||||||
2013
|
2012
|
from 2012
|
from 2012
|
|||||||||||||
Selling, general and administrative
|
$
|
35,121
|
$
|
27,924
|
$
|
7,197
|
26
|
%
|
Dollars in thousands
|
Three Months Ended
|
Dollar
|
Percentage
|
|||||||||||||
March 31,
|
change
|
change
|
||||||||||||||
2013
|
2012
|
from 2012
|
from 2012
|
|||||||||||||
Interest income
|
$
|
(16
|
)
|
$
|
298
|
$
|
(314
|
)
|
(105
|
)%
|
||||||
Realized income (loss) on equity investments, net
|
67
|
44
|
23
|
(52
|
)
|
|||||||||||
Currency loss, net
|
(593
|
)
|
(318
|
)
|
(275
|
)
|
(86
|
)
|
||||||||
Other
|
884
|
2
|
882
|
44,100
|
||||||||||||
Total interest income and other, net
|
$
|
342
|
$
|
26
|
$
|
316
|
1,215
|
%
|
Dollars in thousands
|
Three Months Ended
|
Dollar
|
Percentage
|
|||||||||||||
March 31,
|
change
|
change
|
||||||||||||||
2013
|
2012
|
from 2012
|
from 2012
|
|||||||||||||
Interest expense
|
$
|
2,898
|
$
|
980
|
$
|
1,918
|
196
|
%
|
Dollars in thousands
|
Three Months Ended
|
Dollar
|
Percentage
|
|||||||||||||
March 31,
|
change
|
change
|
||||||||||||||
2013
|
2012
|
from 2012
|
from 2012
|
|||||||||||||
Income tax provision (benefit)
|
$
|
675
|
$
|
(89
|
)
|
$
|
764
|
(858
|
)%
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
Net cash provided by operating activities
|
$
|
11,369
|
$
|
(1,300
|
)
|
|||
Net cash provided by (used in) investing activities
|
7,725
|
(1,905
|
)
|
|||||
Net cash used in financing activities
|
(6,991
|
)
|
(91,768
|
)
|
||||
Effect of foreign currency translation on cash and cash equivalents
|
(278
|
)
|
74
|
|||||
Net increase (decrease) in cash and cash equivalents
|
$
|
11,825
|
$
|
(94,899
|
)
|
·
|
availability, quality and price as compared to competitive technologies, products and services;
|
·
|
the functionality of new and existing products and services, and whether they address market requirements;
|
·
|
the timing of introduction of our technologies, products and services as compared to competitive technologies, products and services;
|
·
|
the existence of product defects;
|
·
|
scientists' and customers' opinions of the utility of our products and services and our ability to incorporate their feedback into future products and services;
|
·
|
citation of our products in published research; and
|
·
|
general trends in life science and clinical diagnostics research and life science informatics software development.
|
·
|
our ability to retain key employees of the acquired company;
|
·
|
the performance of the acquired business, technology, product or service;
|
·
|
our ability to integrate operations, financial and other systems;
|
·
|
the ability of the combined company to achieve synergies among its constituent companies, such as increasing sales of the combined company's products and services, achieving expected cost savings and effectively combining technologies to develop new products and services;
|
·
|
any disruption in order fulfillment or loss of sales due to integration processes, including relationships with suppliers or distributors;
|
·
|
the presence or absence of adequate internal controls and/or significant fraud in the financial systems of acquired companies;
|
·
|
any decrease in customer and distributor loyalty and product orders caused by dissatisfaction with the combined companies' product lines and sales and marketing practices, including price increases; and
|
·
|
our assumption of known contingent liabilities that are realized, known liabilities that prove greater than anticipated, or unknown liabilities that come to light, to the extent that the realization of any of these liabilities increases our expenses or adversely affects our business or financial position.
|
· | incur additional debt, including guarantees by us or our subsidiaries; |
· | make investments, pay dividends on our capital stock, redeem or repurchase our capital stock, redeem or repurchase the notes or any subordinated obligations; |
· | create liens; |
· | make capital expenditures; |
· | dispose of assets; |
· | make acquisitions; |
· | create or permit restrictions on the ability of our subsidiaries to pay dividends or make other distributions to us; |
· | engage in transactions with affiliates; |
· | engage in sale and leaseback transactions; and |
· | consolidate or merge with or into other companies or sell all or substantially all of our assets. |
·
|
changes in government programs, including available funding, which support research and development expenditures by companies and research institutions;
|
·
|
weakness in the global economy and changing market conditions that affect our customers;
|
·
|
changes in the extent to which the pharmaceutical industry may use genetic information and genetic testing as a methodology for drug discovery and development;
|
·
|
changes in the regulatory environment affecting life science companies and life science research;
|
·
|
impact of consolidation within the pharmaceutical industry; and
|
·
|
cost reduction initiatives of customers.
|
·
|
our partners may develop technologies or components competitive with our products and services;
|
·
|
our existing collaborations may preclude us from entering into additional future arrangements or impact the integration of acquired businesses and technologies;
|
·
|
our partners may not obtain regulatory approvals necessary to continue the collaborations in a timely manner;
|
·
|
some of our agreements may terminate prematurely due to disagreements between us and our partners or licensors;
|
·
|
our partners may not devote sufficient resources to the development and sale of our products and services;
|
·
|
our partners may be unable to provide the resources required for us to progress in the collaboration on a timely basis;
|
·
|
our collaborations may be unsuccessful; or
|
·
|
some of our agreements have expired and we may not be able to negotiate future collaborative arrangements or renew current licenses on acceptable terms.
|
·
|
competition;
|
·
|
our inability to produce products in sufficient quantities and with appropriate quality;
|
·
|
the frequency of experiments conducted by our customers;
|
·
|
our customers' inventory of products;
|
·
|
the receipt of relatively large orders with short lead times; and
|
·
|
our customers' expectations as to how long it takes us to fill future orders.
|
Exhibit
Number |
|
Description of Document
|
|
|
|
10.47
|
|
Offer Letter from the Company to David Weber dated December 2, 2011.
|
10.48
|
|
Consulting Agreement between the Company and John F. Runkel, Jr. dated March 21, 2013.
|
10.49
|
|
Separation Agreement between the Company and John F. Runkel, Jr. dated March 29, 2013.
|
10.50
|
|
Third Amendment and Limited Waiver to Credit Agreement dated April 8, 2013.
|
31.1
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
32
|
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
EX-101.INS
|
|
XBRL Instance Document(2)
|
EX-101.SCH
|
|
XBRL Taxonomy Extension Schema Document(2)
|
EX-101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document(2)
|
EX-101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document(2)
|
EX-101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document(2)
|
EX-101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document(2)
|
|
By:
|
/s/ TIMOTHY C. BARABE
|
|
Name:
|
Timothy C. Barabe
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
|
|
May 1, 2013
|
|
|
|
|
|
|
|
Duly Authorized Officer and Principal Financial
|
|
|
And Accounting Officer
|
Date
September 30, 2012
December 31, 2012
March 31, 2013
June 30, 2013
September 30, 2013 December 31, 2013
March 31, 2014
June 30, 2014 and the
last day of each Fiscal
Quarter thereafter
|
Senior Maximum Leverage Ratio
2.00:1.00
1.80:1.00
1.80:1.00
1.80:1.00
1.75:1.00
1.75:1.00
1.60:1.00
1.50:1.00
|
1.
|
the potential Event of Default under Section 7.1(c) of the Credit Agreement arising from the failure of the Credit Parties to comply with the financial covenant set forth in Section 6.2 of the Credit Agreement for the measurement period ending on March 31, 2013; and
|
2.
|
the Event of Default under Section 7.1(c) of the Credit Agreement arising from the failure of the Credit Parties to comply with the financial covenant set forth in Section 6.3 of the Credit Agreement for the measurement period ending on March 31, 2013.
|
(a) | set forth on Exhibit A hereto is a correct calculation of Excess Cash Flow of the Credit Parties and their Subsidiaries for the year ended [December 31, 20__] and a correct calculation of the required prepayment of |
(b) | the calculation set forth on Exhibit A hereto is based on the audited financial statements which have been delivered to Agent in accordance with subsection 4.1(a) of the Credit Agreement. |
Excess Cash Flow is defined as follows
|
$___________
|
Less: Scheduled principal payments with respectto Indebtedness actually paid in cash
|
$___________
|
Net Interest Expense (per Exhibit 4.2(b) of the Credit Agreement) actually paid in cash
|
$___________
|
Increase in Working Capital (defined below)
|
$___________
|
All cash losses (less cash gains) in respect of Rate Contracts deducted in calculating net income (or loss) for such period
|
$___________
|
All non-cash losses or expenses (or plus non-cash income or gain) included or deducted in calculating net income (or loss) for such period including, without limitation, any non-cash loss or expense (or income or gain) due to the application of FASB ASC 815-10 regarding hedging activity, FASB ASC 350 regarding impairment of goodwill, FASB ASC 480-10 regarding accounting for financial instruments with debt and equity characteristics, non-cash foreign currency exchange losses (or plus gains) and non-cash expenses deducted as a result of any grant of Stock or Stock Equivalents to employees, officers or directors, but excluding any non-cash loss or expense (a) that is an accrual of a reserve for a cash expenditure or payment to be made, or anticipated to be made, in a future period or (b) relating to a write-down, write off or reserve with respect to Accounts and Inventory except to the extent such write-down, write off or reserve is related to a one-time GAAP-driven write-up of the inventory of Bender MedSystems, Inc. and the inventory of eBioscience Holding Company, Inc. and its Subsidiaries, in each case from cost-based to FMV-based as determined by an independent valuation analysis
|
$___________
|
Fees and expenses incurred in connection with the negotiation, execution and delivery on the Closing Date of the Loan Documents and Related Agreements and consummation on the Closing Date of the Related Transactions, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $12,500,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent
|
$___________
|
Fees, settlement costs and expenses incurred in connection with any litigation involving Borrower or any of its Subsidiaries, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $5,000,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent
|
$___________
|
Fees and expenses incurred in connection with Acquisitions (other than the Acquisitions on the Closing Date) and Dispositions (other than Dispositions permitted pursuant to Section 5.2(g) of the Credit Agreement) (in each case, whether or not successful), to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $5,000,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent
|
$___________
|
Fees and expenses incurred in connection with severance costs, relocation costs, integration and facilities opening and closing costs, signing costs, retention or completion bonuses, transition costs and restructuring charges or reserves (including restructuring costs related to acquisition after the date hereof and to closure and/or consolidation of facilities), to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $7,000,000 in the aggregate in any period of four consecutive Fiscal Quarters (provided, however, that such fees and expenses may be equal to an amount not greater than $11,000,000 for any date of measurement occurring on or after March 31, 2013 and on or prior to September 30, 2013 and (iii) disclosed to Agent
|
$___________
|
Plus: Decrease in Working Capital
|
$___________
|
Excess Cash Flow
|
[50%/25%/0%]*
|
Prepayment percent
|
$___________
|
Subtotal:
|
$___________
|
Minus: Voluntary prepayments of Term Loans
|
$___________
|
Prepayment amount
|
$___________
|
(i) | changed its legal name, identity, jurisdiction of incorporation, organization or formation or organizational structure or formed or acquired any Subsidiary except as follows: ____________________________________; |
(ii) | acquired the assets of, or merged or consolidated with or into, any Person, except as follows: _________________________________________________; or |
(iii) | changed its address or otherwise relocated, acquired fee simple title to any real property or entered into any real property leases, except as follows: ___________________________________________________. |
For purposes of Covenant 6.1, Capital Expenditures are defined as follows:
The aggregate of all expenditures and obligations, for the relevant test period set forth in Section 6.1 of the Credit Agreement, which should be capitalized under GAAP
|
$___________
|
Less: Net Proceeds from Dispositions and/or Events of Loss which a Credit Party is permitted to reinvest pursuant to subsection 1.8(c) and which are included above
|
$___________
|
To the extent included above, expenditures financed with cash proceeds from issuances of Stock or Stock Equivalents (other than Disqualified Stock)
|
$___________
|
To the extent included above, all insurance proceeds and condemnation awards received on account of any Event of Loss to the extent any such amounts are actually applied to repair or reconstruct the damaged Property or Property affected by the condemnation or taking in connection with such Event of Loss
|
$___________
|
To the extent included above, amounts paid as the purchase price for a Target in a Permitted Acquisition
|
$___________
|
Capital Expenditures
|
$___________
|
Permitted Capital Expenditures
|
$___________
|
In Compliance
|
Yes/No
|
Leverage Ratio is defined as follows:
|
|
Average of the sum of the aggregate balance of outstanding Revolving Loans and Swing Loans as of the last day of each month in the twelve month (or shorter period commencing on the Closing Date) period ended on the date of measurement
|
$_________ _
|
Plus: L/C Reimbursement Obligations as of date of measurement, whether or not then due and payable
|
$_________ _
|
Outstanding principal balance of the Term Loan as of date of measurement
|
$________ __
|
Principal portion of Capital Lease Obligations and Indebtedness secured by purchase money Liens as of date of measurement
|
$________ __
|
Indebtedness evidenced by Convertible Notes as of date of measurement
|
$________ __
|
Earnouts (valued in accordance with GAAP)
|
$__________
|
Without duplication, all other Funded Indebtedness of Holdings and its Subsidiaries as of date of measurement
|
$_________ _ |
Indebtedness
|
$________ __
|
Adjusted EBITDA for the twelve month period ending on the date of measurement (per Exhibit B)
|
$___________
|
Leverage Ratio (Indebtedness (from above) divided by Adjusted EBITDA)
|
____________
|
Maximum Leverage Ratio
|
____________
|
In Compliance
|
Yes/No
|
Senior Leverage Ratio is defined as follows:
|
|
Indebtedness (per Covenant 6.2)
|
$___________
|
Less: Without duplication, Subordinated Indebtedness, Convertible Notes and Permitted Convertible Note Refinancings
|
$___________
|
Senior Indebtedness
|
$___________
|
Adjusted EBITDA for the twelve month period ending on the date of measurement (per Exhibit B)
|
$___________
|
Senior Leverage Ratio (Senior Indebtedness (from above) divided by Adjusted EBITDA)
|
____________
|
Maximum Senior Leverage Ratio
|
____________
|
In Compliance
|
Yes/No
|
Fixed Charge Coverage is defined as follows:
|
|
Cash Flow (per Exhibit B)
|
$_____ ____
|
Fixed Charges:1
|
|
Net Interest Expense (per Exhibit B)
|
$_______ __
|
Plus: Scheduled principal payments of Indebtedness (other than the Convertible Notes) during such period
|
$________ _
|
Restricted Payments described in subsection 5.11(b) paid in cash during such period
|
$_______ __
|
Fixed Charges
|
$_______ __
|
Fixed Charge Coverage (Cash Flow divided by Fixed Charges)
|
______ __ _
|
Required Fixed Charge Coverage
|
_______ _ _
|
In Compliance
|
Yes/No
|
EBITDA is defined as follows:
|
|
Net income (or loss) for the applicable period of measurement of the Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP, but excluding: (a) the income (or loss) of any Person which is not a Subsidiary of the Borrower, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of its Subsidiaries in cash by such Person during such period and the payment of dividends or similar distributions by that Person is not at the time prohibited by operation of the terms of its charter or of any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Person; (b) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries or that Person's assets are acquired by the Borrower or any of its Subsidiaries; (c) the proceeds of any life insurance policy; (d) gains or losses from the sale, exchange, transfer or other disposition of Property or assets not in the Ordinary Course of Business of the Borrower and its Subsidiaries, and related tax effects in accordance with GAAP; and (e) any other extraordinary gains or losses of the Borrower or its Subsidiaries, and related tax effects in accordance with GAAP
|
$___________
|
Plus: All amounts deducted in calculating net income (or loss) for depreciation or amortization for such period
|
$___________
|
Interest expense (less interest income) deducted in calculating net income (or loss) for such period
|
$___________
|
All taxes on or measured by income to the extent deducted in calculating net income (or loss) for such period
|
$___ _____
|
All losses (less gains) in respect of Rate Contracts deducted in calculating net income (or loss) for such period
|
$__ _______
|
All non-cash losses or expenses (or minus non-cash income or gain) included or deducted in calculating net income (or loss) for such period including, without limitation, any non-cash loss or expense (or income or gain) due to the application of FASB ASC 815-10 regarding hedging activity, FASB ASC 350 regarding impairment of goodwill, FASB ASC 480-10 regarding accounting for financial instruments with debt and equity characteristics, non-cash foreign currency exchange losses (or minus gains) and non-cash expenses deducted as a result of any grant of Stock or Stock Equivalents to employees, officers or directors, but excluding any non-cash loss or expense (a) that is an accrual of a reserve for a cash expenditure or payment to be made, or anticipated to be made, in a future period or (b) relating to a write-down, write off or reserve with respect to Accounts and Inventory except to the extent such write-down, write off or reserve is related to a one-time GAAP-driven write-up of the inventory of Bender MedSystems, Inc. and the inventory of eBioscience Holding Company, Inc. and its Subsidiaries, in each case from cost-based to FMV-based as determined by an independent valuation analysis
|
$_______ _
|
Fees and expenses incurred in connection with the negotiation, execution and delivery on the Closing Date of the Loan Documents and Related Agreements and consummation on the Closing Date of the Related Transactions, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $12,500,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent
|
$_______ _
|
Fees, settlement costs and expenses incurred in connection with any litigation involving Borrower or any of its Subsidiaries, to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $5,000,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent
|
$_______ _
|
Fees and expenses incurred in connection with Acquisitions (other than the Acquisitions on the Closing Date) and Dispositions (other than Dispositions permitted pursuant to Section 5.2(g) of the Credit Agreement) (in each case, whether or not successful), to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $5,000,000 in the aggregate in any period of four consecutive Fiscal Quarters and (iii) disclosed to Agent
|
$______ ___
|
Fees and expenses incurred in connection with severance costs, relocation costs, integration and facilities opening and closing costs, signing costs, retention or completion bonuses, transition costs and restructuring charges or reserves (including restructuring costs related to acquisition after the date hereof and to closure and/or consolidation of facilities), to the extent (i) deducted in the calculation of net income (or loss) for such period, (ii) such fees and expenses do not exceed $7,000,000 in the aggregate in any period of four consecutive Fiscal Quarters (provided, however, that such fees and expenses may be equal to an amount not greater than $11,000,000 for any date of measurement occurring on or after March 31, 2013 and on or prior to September 30, 2013) and (iii) disclosed to Agent
|
$_____ ____
|
EBITDA2
|
$________
|
EBITDA for the applicable period of measurement
|
$______ ____
|
Plus: with respect to any Target owned, directly or indirectly, by the Credit Parties for which the total consideration paid or payable (including without limitation, all transaction costs, assumed Indebtedness and Liabilities incurred, assumed or reflected on a consolidated balance sheet of the Credit Parties and their Subsidiaries after giving effect to such Acquisition and the maximum amount of all deferred payments, including earnouts but excluding any Stock of the Borrower) was greater than or equal to $3,000,000 and for which the Agent has received financial statements pursuant to subsection 4.1(b) for less than twelve (12) months, Pro Forma EBITDA allocated to each month prior to the acquisition thereof included in the trailing twelve (12) month period for which Adjusted EBITDA is being calculated;
|
$_______ ___
|
Minus: with respect to any Material Disposition consummated within the period in question, positive EBITDA (if any) attributable to the Subsidiary, profit centers, or other asset which is the subject of such Material Disposition from the beginning of such period until the date of consummation of such Material Disposition
|
$________ __
|
Adjusted EBITDA
|
$__________
|
EBITDA for the applicable period of measurement
|
$___ _______
|
Less: Unfinanced Capital Expenditures (per Exhibit B)
|
$____ ______
|
Taxes on or measured by income paid or payable in cash during such period1
|
$_____ ____
|
Cash Flow (used in calculation of Excess Cash Flow and Fixed Charge Coverage)2
|
$_______ ___
|
Net Interest Expense1:
|
|
Gross interest expense for such period paid or required to be paid in cash (including all commissions, discounts, fees and other charges in connection with letters of credit and similar instruments and net amounts paid or payable and/or received or receivable under permitted Rate Contracts in respect of interest rates) for Holdings and its Subsidiaries on a consolidated basis
|
$___ ______
|
Less: Interest income for such period
|
$_____ ____
|
Net Interest Expense (used in calculation of Fixed Charge Coverage and Excess Cash Flow)
|
$_______ __
|
The aggregate of all expenditures and other obligations for the twelve month period ending on the last day of the month covered by such financial statements which should be capitalized under GAAP
|
$___________
|
Less: Net Proceeds from Dispositions and/or Events of Loss which a Credit Party is permitted to reinvest pursuant to subsection 1.8(c) and which are included above
|
$____ ______
|
To the extent included above, expenditures financed with cash proceeds from issuances of Stock or Stock Equivalents (other than Disqualified Stock)
|
$___________
|
To the extent included above, all insurance proceeds and condemnation awards received on account of any Event of Loss to the extent any such amounts are actually applied to repair or reconstruct the damaged Property or Property affected by the condemnation or taking in connection with such Event of Loss
|
$___________
|
To the extent included above, amounts paid as the purchase price for a Target in a Permitted Acquisition
|
$___________
|
Capital Expenditures
|
$___________
|
Less: Portion of Capital Expenditures financed under Capital Leases or other Indebtedness (Indebtedness, for this purpose, does not include drawings under the Revolving Loan Commitment)
|
$___________
|
Unfinanced Capital Expenditures (used in calculation of Cash Flow)
|
$___________
|
·
|
First, an option to purchase 90,000 shares of common stock of Affymetrix. These stock options will vest 25% per year over a four (4) year period beginning on the grant date, and will be granted (and, therefore priced) when approved by the Compensation Committee.
|
·
|
Second, a grant of restricted stock units (RSU's) representing 25,000 shares of common stock of Affymetrix. These RSU's will be granted when approved by the Compensation Committee. These shares will vest 25% per year over a four (4) year period beginning on the grant date, provided that you continue to be an employee of Affymetrix on such anniversary dates.
|
1.
|
Work Scope. Consultant shall provide consulting services based on Consultant's expertise and knowledge on an independent contractor basis, as described in Exhibit A.
|
2.
|
Ownership of Work Product. The work product ("Work Product") produced by Consultant under this Agreement and all proprietary rights therein shall be and are the property of Affymetrix. Consultant will assign and does hereby assign to Affymetrix all patents, copyrights, trademarks, and trade secrets conceived or first reduced to practice pursuant to this Agreement. Work Product includes (but is not limited to) inventions, discoveries, compounds, reports, memoranda, drawings, computer programs, devices, models, or other materials of any nature, or information relating to any of the foregoing, which are or were generated in connection with the work scope described in this Agreement, including the Exhibits attached hereto. Consultant will cooperate with Affymetrix in the enforcement and protection of Affymetrix's rights.
|
3.
|
Licenses. Work Product does not include (a) work performed exclusively on Consultant's own time, using exclusively his/her own resources, which does not utilize any knowledge or skill gained while performing the services required under this Agreement for Affymetrix, or (b) pre-existing technology owned by Consultant prior to the effective date of this Agreement. However, Consultant hereby grants a non-exclusive, worldwide, royalty free right to make, have made, use, sell, offer to sell, import, lease, distribute, reproduce, modify, display, perform and disclose such technology in association with the Work Product.
|
4.
|
Delivery and Acceptance. Items to be delivered (if any) to Affymetrix under this Agreement, (the "Deliverables") are described in the Exhibits attached hereto. Delivery will be deemed completed upon receipt and written acceptance of Deliverables by the designated employee of Affymetrix. Affymetrix shall have the right to inspect the Deliverables before it accepts them. This right of inspection shall extend for a period of thirty (30) days following Affymetrix's receipt of the Deliverables.
|
5.
|
Compensation.
|
a.
|
Affymetrix will pay Consultant for the performance of the services identified in Exhibit A, which is based on the fair market value of such services resulting from arms-length negotiations between the parties. Consultant shall invoice Affymetrix monthly on a time and material basis. The invoices will be paid thirty (30) days upon Affymetrix's receipt of accurate invoice. The total amount of charges for the work hereunder shall not exceed $12,000 without the prior written permission of Affymetrix. Consultant will maintain true and complete records in connection with the services and all transactions related thereto, and shall permit Affymetrix to make an audit of all such records.
|
b.
|
Affymetrix will reimburse the Consultant for all reasonable and necessary out-of-pocket business expenses incurred by Consultant in performing the services during the term of this Agreement; provided that (i) Consultant obtains advance written approval from Affymetrix, (ii) Consultant submits original receipts for such expenses, and (iii) such expenses comply with Affymetrix's Policy on Interactions with Healthcare Professionals and other Affymetrix travel and expense policies, as they may be amended from time to time at Affymetrix's reasonable discretion.
|
c.
|
Consultant will be responsible for Consultant's own income tax reporting and payments and Affymetrix will have no obligation to withhold income taxes or FICA taxes from the compensation paid to the Consultant, or to pay any employer payroll taxes for the benefit of Consultant or Consultant's employees associated with the compensation paid to Consultant.
|
6.
|
Consultant's Contact. Consultant will work with and will receive instructions from Affymetrix through Siang Chin.
|
7.
|
Confidentiality.
|
a.
|
Obligation to Hold Proprietary Information in Confidence. Both parties understand that certain information Consultant may receive from Affymetrix, or that Consultant may develop under this Agreement, will be Proprietary Information to Affymetrix. Such information includes but is not limited to (i) the fact that Affymetrix is conducting research in any particular area or intends to develop or market any product, (ii) the terms of this Agreement or any agreement Affymetrix may have (or may be negotiating) with any third party, (iii) non-public information concerning the business or finances of Affymetrix, and (iv) any other information the disclosure of which might harm or destroy a competitive advantage of Affymetrix (all of (i) through (iv) shall be referred to as "Proprietary Information". Consultant shall not, either during or subsequent to the term of this Agreement, directly or indirectly, disclose any Proprietary Information of Affymetrix, nor shall Consultant copy or use any Proprietary Information, except for the purpose of carrying out this Agreement. Consultant shall not, either during or subsequent to the term of this Agreement, directly or indirectly publish any such information without prior written authorization from Affymetrix. Consultant shall not perform services for direct competitors of Affymetrix during the term or for six (6) months following the termination of this Agreement. Consultant understands and agrees that his/her obligation to hold the Proprietary Information of Affymetrix confidence survives the termination of this Agreement.
|
b.
|
Consultant's Employees. Consultant shall have a written agreement with each of its employees who will be exposed to the Proprietary Information requiring them to comply with Consultant's obligations with respect to Proprietary Information.
|
c.
|
Release of Burden to Hold Information Confidential. This Agreement shall impose no obligation upon Consultant with respect to any information which (i) the Consultant is authorized by Affymetrix in writing to disclose; (ii) becomes publicly available through no fault or omission on Consultant's part; (iii) is subsequently rightfully furnished to the Consultant by a third party without restriction on disclosure; or (iv) is rightfully known by Consultant as shown by written records in existence at the time of receiving such information.
|
8.
|
Consultant's Representations and Warranties.
|
a.
|
Consultant represents that the Work Product and Deliverables produced under this Agreement are the sole product of Consultant's own efforts; that Consultant is the owner and proprietor of all applicable rights in said Work Product and Deliverables; and that the use and disclosure of the Work Product and Deliverables will not infringe upon or violate any patent, copyright trade secret, or other property right of any third party. Consultant hereby assigns Consultant's rights in any Work Product and Deliverables to Affymetrix. Consultant represents that Consultant possesses the right to enter into and to perform this Agreement and that there are no liens or encumbrances against any of the Work Product or Deliverables which would be inconsistent with the rights granted to Affymetrix hereunder. Consultant represents and warrants that the execution, delivery and performance of and compliance with this Agreement will not conflict with (i) the policies of Consultant's employer and any institution Consultant is affiliated with and (ii) the provisions of any contract Consultant is a party to.
|
9.
|
Independent Contractor. Consultant acknowledges that he/she is being retained by Affymetrix only for the limited services set forth in this Agreement. Consultant shall at all times operate as and have the status of an independent contractor and shall not act as or be an agent or employee of Affymetrix. As such, Consultant acknowledges the terms and conditions of his/her independent contractor relationship with Affymetrix will include the following:
|
a.
|
Consultant understands that Consultant is not authorized to incur any expenses on behalf of Affymetrix. Consultant is solely responsible for all expenses incurred for the services he/she will provide pursuant to this Agreement.
|
b.
|
Consultant shall not subcontract or assign this Agreement or any part hereof without Affymetrix's prior written consent. Any such subcontract or assignment without such consent shall be void.
|
c.
|
Consultant shall maintain appropriate worker's compensation and/or liability insurance and shall provide evidence of such insurance upon request.
|
d.
|
Consultant shall be responsible for payment of all applicable taxes in respect of the compensation paid hereunder and shall provide evidence of such payment upon request. Consultant understands that Affymetrix will not deduct or withhold from his/her compensation for applicable taxes.
|
e.
|
Consultant shall be present and available for consultation at Affymetrix's Santa Clara facility during regular business hours as requested, unless otherwise specified in an attachment to this agreement.
|
f.
|
Consultant understands and agrees that he/she is responsible for exercising care in selecting employees and ensuring that such employees comply with all applicable federal and state laws.
|
g.
|
Consultant understands and agrees that no unauthorized aliens as defined in the Immigration Reform and Control Act of 1986 shall perform work for Affymetrix pursuant to this Agreement.
|
h.
|
Consultant will abide by all Affymetrix safety rules. If Affymetrix determines that safety training is required, Affymetrix may require the Consultant to attend a safety course prior to working with the medical technology product, at Affymetrix's cost. Consultant will read and understand all relevant Affymetrix safety procedure manuals.
|
10.
|
Noninterference with Business. During and for a period of two years immediately following the termination or expiration of this Agreement, Consultant agrees not to interfere with the business of Affymetrix in any manner, including, without limitation, soliciting or inducing any employee or independent contractor to terminate or breach an employment, contractual or other relationship with Affymetrix.
|
11.
|
Termination. The initial term of this Agreement shall be for three (3) months, from April 1, 2013 to June 30, 2013, which may be extended upon written agreement of the parties. Either party may terminate this agreement at any time upon thirty (30) days written notice of termination. Upon termination of this Agreement for any reason, Consultant shall immediately deliver to Affymetrix all written documentation, including all copies, concerning Proprietary Information, shall make no further use of such information, and shall make reasonable efforts to assure no further use of such information by Consultant's employees, agents or contractors. In the event any of the Consultant's, employees, agents or contractors are terminated, Consultant shall recover any such materials and information and make reasonable efforts to assure no further use of such information by such person.
|
12.
|
Compliance with Laws.
|
a.
|
General: Consultant shall comply fully with all applicable federal, state and local laws in the performance of this Agreement. Consultant represents and warrants that neither Consultant nor any employee or contractor of Consultant providing services is excluded from participation in any Federal health care programs (as defined in 42 U.S.C. Section 1320a-7b(f)) or debarred from federal procurement or nonprocurement programs. Consultant further represents and warrants that Consultant and any employee or contractor of Consultant providing services pursuant to this Agreement has a current license to practice his/her/its profession in good standing and has obtained all necessary permissions from third parties relating to the services, and that Consultant's performance of the services will not violate any of Consultant's agreements with or obligations to any third party. Consultant should also be required to notify Affymetrix immediately in the event that Consultant or any employee or contractor of Consultant providing services pursuant to this Agreement is excluded from any Federal health care programs, or is under investigation that could lead to such exclusion.
|
b.
|
Equal Employment Opportunity, Affirmative Action & Notice of Employee Rights: Any provision which is required to be a part of this order by virtue of any such law, regulation, rule or order is incorporated herein by reference: including but not limited to Executive Order 11246, as amended; Section 503 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 793); Section 402 of the Vietnam Era Veterans Readjustment Assistance Act of 1974, as amended (38 U.S.C. 4212), and their respective implementing regulations at 41 CFR Chapter 60; Executive Order 13496 (Notification of Employee Rights Under Federal Labor Laws) 29 CFR Part 471, Appendix A to Subpart A."
|
c.
|
Small Business Plan Requirements: Affymetrix is a government contractor and is subject to the requirements of FAR section 52.219. Pursuant to FAR 52.219.9, If Consultant (i) is not considered a Small Business (as the term is defined in section 3 of the Small Business Act) and (ii) is providing goods or services under this Agreement in an amount greater than or equal to $500,000, and (iii) is subcontracting a portion of the goods or services from a third party, Consultant agrees to submit to Affymetrix a Small Business Plan or letter stating that Consultant does not have a Small Business Plan and listing the approximate dollar amount to be subcontracted.
|
d.
|
Export Control: Consultant agrees that it will comply with all applicable export control laws.
|
13.
|
Miscellaneous.
|
a.
|
The parties expressly agree that the services contracted for do not exceed those which are reasonably necessary to accomplish the commercially reasonable business purpose of the parties and that the parties agree that no remuneration for referring business will be paid under the contract, nor shall the contract be construed as an offer to induce the referral of patients or the purchase, lease, order or recommendation of any item or service.
|
b.
|
This Agreement, together with all exhibits hereto, constitutes the entire agreement of the parties and supersedes any prior or contemporaneous oral or written agreements or understandings between the parties. Consultant represents that in entering into this Agreement Consultant has not relied on any previous oral or implied representations, inducements or understandings of any kind or nature.
|
c.
|
The following sections shall survive the termination of this Agreement: Sections 2, 3, 7, 8, and 10.
|
d.
|
The validity, construction and performance of this Agreement shall be governed by the substantive law of the State of California, and the United States of America, excluding that body of law related to choice of law. Any action or proceeding brought to enforce the terms of this Agreement shall be brought in the County of Santa Clara, State of California (if under State law) or the Northern District of California (if under Federal law). Consultant consents to personal jurisdiction before such courts. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, the remaining provisions shall remain in full force and effect. Consultant understands and agrees that the disclosure or improper use of Affymetrix proprietary information will cause irreparable harm for which there is no adequate remedy at law.
|
e.
|
The parties agree that any and all disputes, claims or controversies arising out of or relating to these Terms and Conditions that are not resolved by mutual agreement shall be submitted to final and binding arbitration before JAMS, or its successor, pursuant to the United States Arbitration Act, 9 U.S.C. Sec. 1 et seq. The arbitration shall take place in Santa Clara, California, unless the parties otherwise agree in writing. Within fourteen (14) days thereafter, the arbitrator shall arrive at a final decision, which shall be reduced to writing, signed by the arbitrator, and mailed to each of the parties and their legal counsel. All decisions of the arbitrator shall be final, binding and conclusive on the parties and shall constitute the only method of resolving disputes or matters subject to arbitration pursuant to this Agreement; provided, however, nothing shall prohibit the parties from seeking injunctive relief and/or other equitable remedies in a court of competent jurisdiction. The arbitrator or a court of appropriate jurisdiction may issue a writ of execution to enforce the arbitrator's judgment. Judgment may be entered upon such a decision in accordance with applicable law in any court having jurisdiction thereof.
|
f.
|
No waiver, amendment or modification of any provisions of this Agreement shall be effective unless in writing and signed by the party against whom such waiver, amendment or modification is sought to be enforced. No failure or delay by either party is exercising any right, power or remedy under this Agreement shall operate as a waiver of any such right, power or remedy.
|
g.
|
The headings contained herein are for the convenience of reference only and are not intended to define, limit, expand, or describe the scope of intent of any Section or other provision in this Agreement.
|
h.
|
Each party has had an opportunity to review this Agreement. Therefore the normal rule of construction that any ambiguity or uncertainty in any writing shall be interpreted against the party drafting the writing shall not apply to any action on this Agreement.
|
i.
|
Consultant understands and acknowledges that discrimination and harassment based upon such factors as race, ethnicity, national origin, gender, sexual orientation, age, or religion is unlawful. Consultant has read and understands and agrees to abide by Affymetrix' EEO/Harassment policy, including the reporting provisions. Consultant further represents that to the extent any of its agents, employees or principals undertakes any assignment with Affymetrix, such agent, employee or principal will similarly agree to abide by Affymetrix' EEO/Harassment policy
|
1. | I have reviewed this Quarterly Report on Form 10-Q of Affymetrix, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and |
(d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
May 1, 2013
|
/s/ FRANK WITNEY
|
|
|
Name:
|
Frank Witney
|
|
Title:
|
Director, President and Chief Executive Officer
|
1. | I have reviewed this Quarterly Report on Form 10-Q of Affymetrix, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and |
(d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
May 1, 2013
|
/s/ TIMOTHY C. BARABE
|
|
|
Name:
|
Timothy C. Barabe
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
1. | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Affymetrix, Inc. |
May 1, 2013
|
/s/ FRANK WITNEY
|
|
|
Name:
|
Frank Witney
|
|
Title:
|
Director, President and Chief Executive Officer
|
|
|
|
|
|
|
|
/S/ TIMOTHY C. BARABE
|
|
|
Name:
|
Timothy C. Barabe
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
STOCKHOLDERS' EQUITY AND SHARE-BASED COMPENSATION EXPENSE, Stock Options (Details) (USD $)
|
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Fair value of options estimated at the date of grant with weighted average assumptions [Abstract] | ||
Risk free interest rate (in hundredths) | 0.80% | 1.00% |
Expected dividend yield (in hundredths) | 0.00% | 0.00% |
Expected volatility (in hundredths) | 68.00% | 67.00% |
Expected option term (in years) | 4 years 7 months 6 days | 4 years 7 months 6 days |
Term of historical trend | 10 years | |
Weighted average grant date fair value of options granted (in dollars per share) | $ 2.09 | $ 2.38 |
RESTRUCTURING (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
|
RESTRUCTURING [Abstract] | ||
Restructuring and Related Cost, Number of Positions Eliminated | 100 | |
Restructuring and Related Cost, Expected Cost | $ 6,657 | |
Restructuring and Related Cost, Incurred Cost | 4,842 | 1,809 |
Restructuring and Related Cost, Unpaid Balance | $ 1,457 |
LONG-TERM DEBT OBLIGATIONS, Term Loan (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Jun. 25, 2012
|
|
LONG-TERM DEBT OBLIGATIONS [Abstract] | ||
Original aggregate principal amount of term loan | $ 85,000 | |
Original revolving credit facility | 15,000 | |
Maturity period | 5 years | |
Amount of term loan borrowed as of balance sheet date | 85,000 | |
Debt Instrument, Applicable Interest Rate (in hundredths) | 6.50% | |
Debt issuance cost related to term loan | 4,500 | |
Outstanding principal balance of term loan as of balance sheet date | 70,088 | |
Interest expense incurred | $ 1,702 |
FAIR VALUE MEASUREMENTS (Details) (USD $)
In Thousands, unless otherwise specified |
Apr. 25, 2013
|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
---|---|---|---|---|
Assets: | ||||
Total | $ 9,366 | |||
Derivative assets | 1,321 | 842 | ||
Liabilities: | ||||
Derivative liabilities | 250 | 829 | ||
Fair Value, Inputs, Level 3 | 0 | 0 | ||
Debt Instrument, 4.00% Interest Rate, Stated Percentage | 4.00% | |||
4.00% Convertible Debt, Fair Value Disclosures | 93,300 | 109,200 | ||
Term Loan, Fair Value Disclosure | 70,088 | |||
Quoted Prices In Active Markets (Level 1) [Member]
|
||||
Assets: | ||||
Total | 0 | |||
Derivative assets | 0 | 0 | ||
Liabilities: | ||||
Derivative liabilities | 0 | 0 | ||
Significant Other Observable Inputs (Level 2) [Member]
|
||||
Assets: | ||||
Total | 9,366 | |||
Derivative assets | 1,321 | 842 | ||
Liabilities: | ||||
Derivative liabilities | 250 | 829 | ||
U.S. government obligations and agency securities [Member]
|
||||
Assets: | ||||
Total | 6,829 | |||
U.S. government obligations and agency securities [Member] | Quoted Prices In Active Markets (Level 1) [Member]
|
||||
Assets: | ||||
Total | 0 | |||
U.S. government obligations and agency securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
|
||||
Assets: | ||||
Total | 6,829 | |||
U.S. corporate debt [Member]
|
||||
Assets: | ||||
Total | 664 | |||
U.S. corporate debt [Member] | Quoted Prices In Active Markets (Level 1) [Member]
|
||||
Assets: | ||||
Total | 0 | |||
U.S. corporate debt [Member] | Significant Other Observable Inputs (Level 2) [Member]
|
||||
Assets: | ||||
Total | 664 | |||
Foreign corporate debt and equity securities [Member]
|
||||
Assets: | ||||
Total | 1,873 | |||
Foreign corporate debt and equity securities [Member] | Quoted Prices In Active Markets (Level 1) [Member]
|
||||
Assets: | ||||
Total | 0 | |||
Foreign corporate debt and equity securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
|
||||
Assets: | ||||
Total | $ 1,873 |
INVENTORIES (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | At March 31, 2013 and December 31, 2012, inventories consisted of the following (in thousands):
|
LEGAL PROCEEDINGS (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
LEGAL PROCEEDINGS [Abstract] | |
Significant costs incurred in connection with administrative proceedings | $ 0 |
INVENTORIES (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Inventories [Abstract] | ||
Raw materials | $ 12,520 | $ 11,167 |
Work-in-process | 33,695 | 35,562 |
Finished goods | 36,857 | 37,734 |
Total | 83,072 | 84,463 |
Inventory, Net-Short-Term Portion | 74,196 | 72,691 |
Inventory, Net-Long-Term Portion | $ 8,876 | $ 11,772 |
FINANCIAL INSTRUMENTS, Gain (Loss) by Hedging Relationship (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Effect of derivative instruments on statements of operations [Abstract] | ||
Net gain (loss) recognized in OCI, net of tax (1) | $ 1,086 | $ (516) |
Net gain reclassified from accumulated OCI into income, net of tax (2) | 825 | 518 |
Gain on Cash Flow Hedge Ineffectiveness | 158 | 0 |
Derivative Instruments, Gain (Loss) Recognized in Income, Amount Excluded from Effectiveness Testing, Net | 15 | 25 |
Net income (loss) recognized in other income and expense (4) | $ 143 | $ (148) |
SEGMENT AND GEOGRAPHIC INFORMATION, Revenue and Loss From Operations (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Segment Reporting Information [Line Items] | ||
Segment Reporting Information, Revenue for Reportable Segment | $ 77,945 | $ 65,247 |
Segment Reporting Information, Loss from Operations for Reportable Segment | (12,206) | (3,352) |
Affymetrix Core [Member]
|
||
Segment Reporting Information [Line Items] | ||
Segment Reporting Information, Revenue for Reportable Segment | 58,937 | 65,247 |
Segment Reporting Information, Loss from Operations for Reportable Segment | (7,841) | (3,352) |
eBioscience [Member]
|
||
Segment Reporting Information [Line Items] | ||
Segment Reporting Information, Revenue for Reportable Segment | 19,008 | 0 |
Segment Reporting Information, Loss from Operations for Reportable Segment | $ (4,365) | $ 0 |
LONG-TERM DEBT OBLIGATIONS, Term Loan Maturities (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
---|---|
Long-term Debt, Fiscal Year Maturity Term Loan [Abstract] | |
2013, remainder thereof | $ 0 |
2014 | 9,563 |
2015 | 13,813 |
2016 | 17,000 |
2017 | 29,712 |
Total | $ 70,088 |
FINANCIAL INSTRUMENTS
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS | NOTE 4—FINANCIAL INSTRUMENTS Investments in Debt and Equity Securities The fair values of the Company's available-for-sale securities are based on quoted market prices and are included in cash and cash equivalents, available-for-sale securities—short-term and available-for-sale securities—long-term on the accompanying Condensed Consolidated Balance Sheets based on each respective security's maturity. During the three months ended March 31, 2013, the Company liquidated its entire portfolio of available-for-sale securities. The available-for-sale securities were sold for total cash consideration of $9.4 million and the resulting net gain on sale of $0.1 million was recognized in Interest income and other, net in the accompanying Condensed Consolidated Statements of Operations. The following is a summary of available-for-sale securities as of December 31, 2012 (in thousands):
Non-Marketable Securities As of March 31, 2013 and December 31, 2012, the carrying amounts of the Company's non-marketable securities, totaling $4.4 million for both years, equaled their estimated fair values. They consist primarily of an investment in a limited partnership investment fund who invests in companies in the life science industry and are located in the United States. The investments are initially valued at the purchase price and subsequently on the basis of inputs that market participants would use in pricing such investments. The portfolio of investments includes Level 1 publicly-traded equity securities and Level 3 equity securities and notes. There was no other-than-temporary impairment recognized during the three months ended March 31, 2013 and 2012. Net investment results are included in Interest income and other, net in the accompanying Condensed Consolidated Statements of Operations. Depending on market conditions, the Company may incur additional charges on this investment portfolio in the future. Derivative Financial Instruments The Company derives a portion of its revenues in foreign currencies, predominantly in Europe and Japan, as part of its ongoing business operations. In addition, a portion of its assets is held in the nonfunctional currencies of its subsidiaries. The Company enters into foreign currency forward contracts to manage a portion of the volatility related to transactions that are denominated in foreign currencies. The Company's foreign currency forward contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions that are independent of those exposures. The Company's accounting policies for these instruments are based on whether the instruments are classified as designated or non-designated hedging instruments. The Company recognizes derivatives on its accompanying Condensed Consolidated Balance Sheets at fair value. The effective portions of designated cash flow hedges are recorded in other comprehensive income ("OCI") until the hedged item is recognized in earnings. As of March 31, 2013, the Company's existing foreign currency forward exchange contracts mature within 12 months. The deferred amount related to the Company's derivatives currently recorded in OCI and expected to be recognized into earnings over the next 12 months is a net gain of $1.1 million. Derivatives that are not designated as hedging instruments and the ineffective portions of cash flow hedges are adjusted to fair value through earnings. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Deferred gains and losses in OCI associated with such derivative instruments are reclassified immediately into operations through Interest income and other, net. Any subsequent changes in fair value of such derivative instruments are reflected in Interest income and other, net unless they are re-designated as hedges of other transactions. During the three months ended March 31, 2013, the Company recognized $0.2 million in net gains in Interest income and other, net, related to the loss of hedge designation on a portion of cash flow hedges related to the Japanese yen that were deemed ineffective due to lower-than-forecasted revenue from Japan. No additional hedges are deemed ineffective as of March 31, 2013. No cash flow hedges were de-designated during the three months ended March 31, 2012. Under the Credit Agreement as defined in Note 9. "Long-Term Obligations", the Company is required to maintain derivative contracts to protect against fluctuations in interest rates with respect to at least 35% of the aggregate principal amount of the Term Loan, as defined in Note 9. "Long-Term Obligations," then outstanding, with such derivative contracts being required to have at least a three-year term. Accordingly, the Company has entered into an interest rate swap (the "Interest Rate Swap") for which the notional amount was originally set at $27.5 million, with quarterly reduction to the notional amount consistent with the mandatory amortization schedule of the Term Loan. The Interest Rate Swap calls for quarterly fixed rate payments of 1.70% of the notional amount in exchange for a variable rate quarterly receipts equal to a 3-month LIBOR rate with a floor of 1.50%. The Interest Rate Swap terminates on June 25, 2015. The Company did not designate the Interest Rate Swap as a hedging instrument and will recognize adjustments to fair value through Interest and other income on the accompanying Condensed Consolidated Statements of Operations at each reporting date. As of March 31, 2013, the fair value of the Interest Rate Swap was $0.1 million. As of March 31, 2013 and December 31, 2012, the total notional values of the Company's derivative assets and liabilities were as follows (in thousands):
Other than the Interest Rate Swap, the Company did not have any derivative assets or liabilities that were not designated or qualifying as hedges at either March 31, 2013 or December 31, 2012. As a result of the use of derivative instruments, the Company is exposed to the risk that the counterparties may be unable to meet the terms of the underlying agreements. To mitigate this risk, only contracts with carefully selected highly-rated major financial institutions are entered into. In the event of non-performance by these counterparties, the asset position carrying values of the financial instruments represent the maximum amount of loss that can be incurred; however, no losses as a result of counterparty defaults are expected. The Company does not require and is not required to pledge collateral for these financial instruments. The Company does not enter into derivative contracts for trading or speculative purposes and is not party to any leveraged derivative instruments. The following table shows the Company's derivative assets and liabilities measured at fair value as reflected on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012 (in thousands):
The following table shows the effect, net of tax, of the Company's derivative instruments on the accompanying Condensed Consolidated Statements of Operations and OCI for the three months ended March 31, 2013 and 2012 (in thousands):
|
`$`,\2E@;PZWE@#6`-X#?H@9LP!B?";6&7[/_T:)^0FRQY[7,U9#5D,Y14
M4GYGQO)L 8HRO'0A+_\7>GXU6>O*MY'%).1#
MVYK7S8B>2V:J7)+(S]&02$M8QZ^2FI#X6W9F-R-"KI3S0?]+;#O_PV'/#FJ#
MUIA#+-04PB,\3I%?6=;]158-:_H5%U-VRWR*YG8S2=FOS/8<\&U#T)U-N)BF
M9U3#K[`L'1/-)\/GSZ!.%\DWKI=`1U!S5-&OMYB
MV+2!/%,:-G!?S!?4<3`1N7M?&@7BO*::G7'4
M<@)QDMAD(S!7EC,3N*PPC<%8-WR"\\(_,;B6J("QC$PP#>93X$M`5]1G0G#P
M'<>*VM,Q)QI_IC@"8PXBP'UWKC%S.@UL1_<\?>Y!TZ;A`EG.S#3@%_TY[$2<
MQ\U<,&(H0KI'TZA;
;N)=)6)(J6@#0"\)?1'_9_/I7W-3[^1=T^_G5
M=]/[U\UO7S=N'CO-)<';F\IC81X=9.[!O-ZPW3X8\_ZJSW0;[UGFW&;_%%Q<
M2BJI7N;^>O^/#6SK-8>+2\M;X-I:8=O,M6:CN[0B5\
0C7'LC(@L<2-4WA0W(DDF#H[B6?,X[J@6K$$[UU9H>QN?>[G\
M$A76N'<\>2-Z(VJY^,MGPFL6,M'0W3AJ)FYEN^6TDUQ.&Q1JG6LE74/`"FX(
MF[04I)=ZZ%H\LZ='T!DL8"=E]5$"E7OL27+3MRQ3MU*'MG7!PO2869PRY):]/-9XXS^]F:Z$?Z]L/MN-/ZPF;?TS8:R/;2KVVSYRKR=
M*WB]@OTH,`ZZZ:TT8/OO+PT0<>[NO)U<5?[A<>)RSC[#CQ./W8`BC2HPWJ4=
M%FSORE`V:IFRME>'Q0G@YOSDVHKH9]TU)EB>Y`!N1>&SI<0U(:ZM4Q17=&1.
M05*5C)0J(X>(U2K7FA5YO]WOU>1^^ZOI?6-C])%,E`3P]AGB8.V]L5>76H<_
MJ6A<#BI0PNW87,2X_J`D\D@ELGE916GB>DED:4&^M5E#;K[/N($G1-"#.>+V
MB,U-;FVQT58:6UN-;;Q!C542J22R7A)Y^ON0:`UY<2S=Q^NBN5H_3D!;>VH+
MH@2R5@+9?W,"^89V(/*^V>?NE)V;-IMSW?7>J97D!!2W6UUO3NM2M]W6
M>L,M0F'JIG5*NFHM75VMVZM?HNH!=Q#KKD!K8^@_FK;I3?B(/3O.:'\[KX('
M2B*R%BK>TP;=*MRV>DA1/:A0LER.+/>U?GN+"/RCD.5J`V$*7<-4((P*A#GN
M0)A!6VOT#W&8?ABIK`<52C>.0S
\*&-6VZDY)96I_K`%R-&?UR%UJRKH1W*(
0*N@>]/&4T`ALNS%]%T0"5>W/<,U9V1N
MHB,-L"T.2$C\*]-=5Y^+!O\WT&W?Q'$S&"8\!7/!*?S0AUWFZX7O7$S-T<7,
MXM\C2L2P\O,J[[`=?SX+M=H(&Q*T)L=KS'WG673N+="4/2?I[L4(1?<6/A_Z
MDZYX/J1/DQ]$`*9H2F/<_L^<3IQ`B\RQ'"'[9LKY`<_0F/`I4NY%MGJA%X\C
MUAQW([LJI66!3N`HPGVZ)K8"_P`UH$=HL-W0'\+S7]>9ZY8_)S[98D4`ZI"6
ML