Illumina Reports Financial Results for First Quarter 2008.First Quarter Revenue Increases 69% Over Prior Year and 8% Sequentially SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- Illumina, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ILMN) today announced its financial results for the first quarter of 2008. For the first quarter of 2008, Illumina reported revenue of $121.9 million, a 69% increase over the $72.2 million reported in the first quarter of 2007 and an 8% increase over revenue of $112.6 million in the fourth quarter of 2007. This represents the Company's 27th consecutive quarter of revenue growth. The Company reported GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income for the first quarter of $13.4 million, or $0.21 per diluted share, compared to a net loss of $298.1 million, or $5.58 per basic and diluted share in the comparable period of 2007. The GAAP net loss in the prior year quarter was primarily attributable to a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $303.4 million related to in-process research and development associated with the Company's acquisition of Solexa, Inc. GAAP net income for the first quarter of 2008 also included non-cash charges of $2.4 million associated with the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and $10.9 million in non-cash stock compensation expense associated with SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123R. These GAAP expenses were partially offset by a net tax benefit of approximately $4.2 million primarily associated with non-cash stock compensation expense. Excluding the impact of these specified items, Illumina's net income on a non-GAAP basis for the first quarter of 2008 was $22.5 million, or $0.37 per diluted share, compared to $12.7 million, or $0.22 per diluted share, for the first quarter of 2007. Gross margin in the first quarter of 2008 was 62.2%, compared to 65.2% in the comparable period of 2007. Excluding the effect of the non-cash charges associated with stock compensation mentioned above, non-GAAP gross margin was 63.3% for the first quarter of 2008, compared to 67.4% in the prior year period. Non-GAAP gross margin for the prior year period excludes the effect of non-cash charges associated with stock compensation as well as the amortization of inventory revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. costs associated with the acquisition of Solexa, Inc. The year-over-year decrease in gross margin was primarily attributable to a change in product mix. Research and development (R&D) expenses for the first quarter of 2008 were $20.6 million, compared to $16.0 million in the first quarter of 2007. R&D expenses include $3.3 million and $1.9 million of non-cash stock compensation expense in the first quarter of 2008 and 2007, respectively. Excluding these non-cash charges, R&D expenses as a percentage of revenues were 14.2%, compared to 19.2% in the prior year period. Selling, general and administrative (SG&A) expenses for the quarter were $33.8 million, compared to $23.6 million for the first quarter of 2007. SG&A expenses include $6.1 million and $4.8 million of non-cash stock compensation expense in the first quarter of 2008 and 2007, respectively. Excluding these non-cash charges, SG&A expenses as a percentage of revenues were 22.7%, compared to 26.1% in the prior year period. On a GAAP basis, the Company used $62.8 million in cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses during the first quarter of 2008. Excluding one-time litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement payments totaling $90.5 million, the Company generated $27.8 million in non-GAAP cash flow from operations during the first quarter of 2008, compared to $14.6 million in the comparable quarter of 2007. Depreciation and amortization expenses were $6.2 million and capital expenditures were $7.0 million during the quarter. The Company ended the quarter with $328.8 million in cash and investments, compared to $386.1 million as of December 30, 2007. Highlights since our last earnings release: * Launched and shipped the iScan System, a next generation BeadChip scanner for genotyping Genotyping refers to the process of determining the genotype of an individual with a biological assay. Current methods of doing this include PCR, DNA sequencing, and hybridization to DNA microarrays or beads. and gene expression. Combined with Illumina's automation systems, iScan enables customers to complete studies on the Company's Infinium HD BeadChips up to six times faster than on Illumina's BeadStation. * Shipped the Human610-Quad DNA Analysis DNA analysis Any technique used to analyze genes and DNA. See Chromosome walking, DNA fingerprinting, Footprinting, In situ hybridization, Jeffries' probe, Jumping libraries, PCR, RFLP analysis, Southern blot hybridization. BeadChip based on our new Infinium HD format. The Human610-Quad contains nearly 2.5 million genetic variants and enables researchers to interrogate (1) To search, sum or count records in a file. See query. (2) To test the condition or status of a terminal or computer system. more than 620,000 variants simultaneously across four samples. * Commenced shipment of the Genome Analyzer II (GAII) DNA Sequencing DNA sequencing The determination of the sequence of nucleotides in a sample of DNA. platform. The GAII significantly improves the overall throughput and robustness of the Genome Analyzer and enables researchers to achieve industry-leading accuracy and daily throughput at the lowest operating cost. * Added three key positions to the Illumina management team: Joel McComb as Senior Vice President and General Manager of the Life Sciences Business Unit; Greg Heath as Senior Vice President and General Manager of the Diagnostics Business Unit; Mike Bouchard Michael "Mike" Bouchard (born April 12, 1956 in Flint, Michigan) is an American politician, currently the Sheriff of Oakland County, Michigan. He was the candidate for the Republican ticket for the 2006 Michigan U.S. as Vice President of Finance. * Sold 11 Genome Analyzers to the Beijing Genome Institute (BGI BGI Barclays Global Investors BGI Bainbridge Graduate Institute BGI Bureau Gravimétrique International BGI Borland Graphic Interface (File Name Extension) BGI Bridgetown, Barbados - Grantley Adams International ). This purchase brings BGI's total installed base of Illumina Genome Analyzers to 17 and makes it the fourth customer site to expand its install base into double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. . * Launched the HumanHT-12 Gene Expression BeadChip which enables researchers to perform whole genome gene expression on 12 samples in parallel for less than $100 per sample. * Sequenced the first African Human Genome The human genome is the genome of Homo sapiens, which is composed of 24 distinct pairs of chromosomes (22 autosomal + X + Y) with a total of approximately 3 billion DNA base pairs containing an estimated 20,000–25,000 genes. . The Company used the Genome Analyzer to generate more than 75 Gb of DNA sequence DNA sequence Genetics The precise order of bases–A,T,G,C–in a segment of DNA, gene, chromosome, or an entire genome. See Base pair, Base sequence analysis, Chromosome, Gene, Genome. , or 25x coverage, in 27 runs over a matter of weeks. Financial Outlook and Guidance The non-GAAP financial guidance discussed below excludes the effect of non-cash stock compensation expense and amortization expense related to intangible assets (see table which reconciles these non-GAAP financial measures to the related GAAP measures). We expect revenue for 2008 between $515 and $535 million, representing year-over-year growth of 40% - 46%, exceeding the high end of our long term operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. and an increase from the midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. of our previous guidance by $12.5 million. We expect our gross margin percentage to be in the mid 60s. We expect earnings per fully diluted share of $1.55 to $1.68, which represents an increase of $0.09 per share from the midpoint of our previous guidance. For the second quarter of 2008, we expect revenues between $127 and $132 million. We expect earnings per fully diluted share of $0.37 to $0.40. We expect the full year pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma tax rate to be approximately 36%, higher in the first half of the year and lower in the second half of the year. The Company expects full year weighted average diluted shares outstanding for the measurement of pro forma amounts to be approximately 62 million. Quarterly Conference Call Information The conference call will begin at 2:00pm Pacific Time (5:00pm Eastern Time) on Tuesday, April 22, 2008. Interested parties may listen to the call by dialing 866-314-4483 (passcode: 63705438), or if outside North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , by dialing +617-213-8049 (passcode: 63705438). Individuals may access the live teleconference under the "Corporate/Investor Information" tab of Illumina's web site at www.illumina.com. A replay of the conference call will be available from 4:00pm Pacific Time (7:00pm Eastern Time) on April 22, 2008 through April 29, 2008 by dialing 888-286-8010, or if outside North America, by dialing +617-801-6888 (passcode: 24200930). About Illumina 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. Using our proprietary technologies, we provide a comprehensive line of 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, pharmaceutical companies, academic institutions, clinical research organizations and biotechnology companies Top 100 Biotechnology Companies The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical 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. Statement Regarding Use of Non-GAAP Financial Measures The Company has reported non-GAAP results for diluted net income per share, net income, gross margins, cash flow from operating activities and free cash flow in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company's financial results under GAAP include substantial non-cash charges related to stock compensation expense, its acquisition of Solexa, Inc. in January 2007, and the settlement of its litigation with Affymetrix, Inc. in January 2008. Management believes that presentation of operating results that exclude these non-cash charges provides useful supplemental information to investors that facilitates analysis of the Company's core operating results and comparison of operating results across reporting periods. Management believes that this supplemental non-GAAP information is therefore useful to investors in analyzing and assessing the Company's past and future operating performance. The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: this release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are Illumina's ability (i) to integrate effectively our acquisition of Solexa, Inc., (ii) to develop and commercialize further our BeadArray[TM], VeraCode[R], and Solexa[R] technologies and to deploy new sequencing, gene expression, and genotyping products and applications for our technology platforms, (iii) to manufacture robust microarrays and Oligator[R] oligonucleotides, (iv) to integrate and scale our VeraCode technology, together with other factors detailed in our filings with the Securities and Exchange Commission including our recent filings on Forms 10-K and 10-Q or in information disclosed in public conference calls, the date and time of which are released beforehand. We disclaim any intent or obligation to update these forward-looking statements beyond the date of this release. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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