San Diego, California
July 22, 2009
Illumina, Inc. (NASDAQ:ILMN) today announced its financial
results for the second quarter of 2009.
For the second quarter of 2009, Illumina reported revenue of
$161.6 million, a 15% increase over the $140.2 million reported
in the second quarter of 2008. The Company reported net income
for the quarter of $24.7 million, or $0.18 per diluted share,
compared to $12.7 million, or $0.09 per diluted share in the
comparable period of 2008. Net income for the second quarter of
2009 included non-cash charges of $14.9 million in stock
compensation expense associated with SFAS No. 123R, $4.8 million
in non-cash interest expense associated with the adoption of FSP
APB 14-1 and other items listed in the table entitled “Itemized
Reconciliation Between GAAP and Non-GAAP Net Income Per Share.”
Excluding the impact of these items, and net of pro forma tax
expense, Illumina’s net income on a non-GAAP basis for the
second quarter of 2009 was $39.4 million, or $0.30 per diluted
share, compared to $27.5 million, or $0.22 per diluted share,
for the second quarter of 2008.
Gross margin in the second quarter of 2009 was 68.8% compared to
59.2% in the comparable period of 2008. Excluding the effect of
non-cash charges associated with stock compensation, the
amortization of intangibles, and the impairment of manufacturing
equipment in the second quarter of 2008, non-GAAP gross margin
was 70.6% for the second quarter of 2009 compared to 65.0% in
the prior year period.
Research and development (R&D) expenses for the second quarter
of 2009 were $33.1 million compared to $23.5 million in the
second quarter of 2008. Second quarter 2009 R&D expenses
included $5.0 million of non-cash stock compensation expense and
$0.9 million of accrued contingent compensation associated with
the Avantome acquisition. The comparable period in 2008 included
$3.4 million of non-cash stock compensation expense. Excluding
these charges, R&D expenses as a percentage of revenues were
16.8% compared to 14.3% in the prior year period.
Selling, general, and administrative (SG&A) expenses for the
quarter were $41.9 million compared to $35.6 million for the
second quarter of 2008. SG&A expenses include $8.6 million and
$7.4 million of non-cash stock compensation expense in the
second quarter of 2009 and 2008, respectively. Excluding these
charges, SG&A expenses as a percentage of revenues were 20.6%
compared to 20.1% in the prior year period.
The Company generated $39.4 million in cash flow from operations
during the second quarter of 2009 compared to $37.2 million in
the prior year period. Depreciation and amortization expenses
were $7.9 million and capital expenditures were $14.0 million
during the quarter. The Company ended the second quarter with
$790 million in cash and investments compared to $728 million as
of March 29, 2009.
Highlights since our last earnings release:
- Launched the
HumanOmni1-Quad BeadChip, a four sample microarray with over
1 million data points per sample that includes up-to-date
content for all major classes of genetic variation,
including over 100,000 variants from the 1,000 Genomes
Projects.
- Launched Multi-Sample
Indexing for the GoldenGate assay enabling researchers to
screen up to 16 times as many samples per reaction while
decreasing total reagent consumption, ideal for screening in
the livestock and agriculture market as well as for
whole-genome association target validation and quality
control applications.
- Announced software
advancements for the Genome AnalyzerIIx which enable
real-time analysis and provide a significant reduction in
computing infrastructure requirements. These improvements
enable researchers to increase their sequencing output up to
65%.
- Launched the Personal
Genome Sequencing Service offering whole human genome
sequencing to consumers with a physician’s prescription for
$48,000.
- Received CLIA
certification of Illumina’s services laboratory for high
complexity testing.
- Surpassed 300 scientific
publications where the Genome Analyzer has been used for
data generation, analysis or novel method development.
Financial Outlook and Guidance
The non-GAAP financial guidance discussed below excludes
tax-adjusted non-cash charges resulting from stock compensation
expense, the incremental interest expense and gain on debt
extinguishment associated with the adoption of FSP APB 14-1
“Accounting for convertible debt instruments that may be settled
in cash upon conversion (including partial cash settlement)” on
December 29, 2008, acquired research and development,
amortization expense related to intangible assets, the accrual
of contingent compensation related to the Avantome acquisition,
and the double dilution associated with the accounting treatment
of the Company’s convertible debt outstanding and the
corresponding call option overlay (see table which reconciles
these non-GAAP financial measures to the related GAAP measures).
We expect 2009 revenues to fall within the range of $690 to $720
million, representing year-over-year growth between 20% and 26%.
We expect our gross margin percentage to be in the upper 60s. We
expect non-GAAP earnings per fully diluted pro forma share
between $1.13 and $1.23. We expect the full-year pro forma tax
rate to be approximately 33% and stock compensation expense of
approximately $62 million or a tax-adjusted amount of $0.31 per
fully diluted pro forma share. The Company expects full-year
weighted-average diluted shares outstanding for the measurement
of pro forma amounts to be approximately 133 million.
For the third quarter of 2009, we expect revenues between $162
and $172 million. We expect earnings per fully diluted share of
$0.26 to $0.30 assuming approximately 135 million shares. We
expect stock compensation expense during the third quarter of
approximately $16 million or a tax adjusted amount of $0.08 per
fully diluted pro forma share.
Illumina is a leading developer, manufacturer, and marketer
of next-generation life science tools and integrated systems for
the large scale analysis of genetic variation and biological
function. We provide a comprehensive line of proprietary
products and services that currently serve the sequencing,
genotyping, and gene expression markets, and we expect to enter
the market for molecular diagnostics. Our customers include
leading genomic research centers, academic institutions,
agriculture and livestock companies, pharmaceutical companies,
clinical research organizations and biotechnology companies. Our
tools provide researchers around the world with the performance,
throughput, cost effectiveness and flexibility necessary to
perform the billions of genetic tests needed to extract valuable
medical information from advances in genomics and proteomics. We
believe this information will enable researchers to correlate
genetic variation and biological function, which will enhance
drug discovery and clinical research, allow diseases to be
detected earlier and permit better choices of drugs for
individual patients.
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