Illumina Reports Financial Results for Fourth Quarter 2006.Revenue Increase of 163% Drives Record Profitability Forbes Ranks Illumina as the Fastest Growing U.S. Technology Company 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) announced today its financial results for the fourth quarter and fiscal year ended December 31, 2006. For the fourth quarter of 2006, Illumina reported revenue of $60.4 million, a 163% increase over the $23.0 million reported in the fourth quarter of 2005. This represents the Company's 22nd consecutive quarter of revenue growth. On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, the Company reported net income of $17.1 million, or $0.34 per diluted share, for the fourth quarter of 2006, compared to net income of $0.3 million, or $0.01 per diluted share, in the comparable period of 2005. Net income for the fourth quarter of 2006 includes total non-cash stock compensation expense of $4.1 million associated with the Company's adoption of 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. Excluding the impact of non-cash stock compensation expense, Illumina's net income on a non-GAAP basis would have been $21.2 million, or $0.42 per diluted share, for the fourth quarter of 2006. The Company generated $8.4 million in cash from operations during the fourth quarter of 2006, compared to $2.1 million in the comparable quarter of 2005. The Company ended the year with $130.8 million in cash and short-term investments. Combined gross margin for products and services in the fourth quarter of 2006 was 66.6%, compared to 67.6% in the comparable period of 2005. For the fourth quarter of 2006, excluding the effect of non-cash stock compensation expense, the combined gross margin of product and services would have been 67.4%. Research and development (R&D) expenses for the fourth quarter of 2006 were $8.8 million, compared to $7.5 million in the fourth quarter of 2005. R&D expense for the fourth quarter of 2006 includes approximately $1.1 million of non-cash stock compensation expense. Selling, general and administrative (SG&A) expenses for the quarter were $14.9 million, compared to $8.2 million for the fourth quarter of 2005. SG&A expense for the fourth quarter of 2006 includes approximately $2.5 million of non-cash stock compensation expense. For the fiscal year 2006, total revenue was $184.6 million, a 151% increase over the $73.5 million reported for the prior fiscal year. On a GAAP basis, the Company reported net income of $40.0 million, or $0.82 per diluted share, compared to a net loss of $20.9 million, or $0.52 per diluted share, for the prior year. Net income for the fiscal year 2006 includes total non-cash stock compensation expense of $14.3 million associated with the Company's adoption of SFAS No. 123R. Excluding the impact of non-cash stock compensation expense, Illumina's net income on a non-GAAP basis would have been $54.3 million, or $1.11 per diluted share, for 2006. The Company's net loss for the fiscal year 2005 included 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 $15.8 million of acquired in-process research and development in connection with the Company's acquisition of CyVera Corporation in April 2005. Excluding this charge and non-cash stock compensation expense, the net loss on a non-GAAP basis for the fiscal year 2005 was $4.8 million, or $0.12 per basic and diluted share. For the fiscal year 2006, combined gross margin for product and services was 67.6%, compared to 67.7% for the comparable period in 2005. For the fiscal year 2006, excluding the effect of non-cash stock compensation expense, the combined gross margin of product and services would have been 68.5%. For the fiscal year 2006, R&D expenses were $33.4 million, compared to $27.8 million in 2005. R&D expense for the fiscal year 2006 includes approximately $3.9 million of non-cash stock compensation expense. SG&A expenses for the fiscal year 2006 were $54.1 million, compared to $28.2 million in 2005. SG&A expense for the fiscal year 2006 includes approximately $8.9 million of non-cash stock compensation expense. Highlights since our last earnings release: * In the February 12, 2007 issue of Forbes magazine, Illumina was named the fastest growing technology company out of 2,200 public U.S. technology stocks based on five-year sales growth. * Completed the acquisition of Solexa, Inc. The combined company creates the only company with genome-scale technology for genotyping, gene expression, and sequencing, the three cornerstones of modern genetic analysis. * Announced that Amgen will use the Infinium HumanHap300 BeadChip in collaborations with the Brigham & Women's Hospital Women's Hospital of Greensboro (part of Moses Cone Health System) As the state's first free-standing hospital dedicated to women, the Women's Hospital of Greensboro is a 134-bed hospital is dedicated to providing state-of-the-art, compassionate and personalized care to women to analyze approximately 28,000 samples as part of the Women's Genome Health Study. The study will examine genetic variation in American women that may underlie a range of serious illnesses such as heart disease, stroke, diabetes, breast cancer and osteoporosis. * Erasmus MC The Erasmus MC (medical center) is the university hospital of the city of Rotterdam. It is affiliated with the Erasmus University. Special units include:
genotype Genetic makeup of an organism. The genotype determines the hereditary potentials and limitations of an individual. more than 10,000 samples. Using the Infinium HumanHap550 BeadChip, researchers will prospectively monitor a population of individuals for the development of several late-age diseases including neurological, cardiovascular, endocrine, locomotor lo·co·mo·tor or lo·co·mo·tive adj. Of or relating to movement from one place to another. locomotor of or pertaining to locomotion. and ophthalmological oph·thal·mol·o·gy n. The branch of medicine that deals with the anatomy, functions, pathology, and treatment of the eye. oph·thal conditions. This project is the largest cohort study A cohort study is a form of longitudinal study used in medicine and social science. It is one type of study design. In medicine, it is usually undertaken to obtain evidence to try to refute the existence of a suspected association between cause and disease; failure to refute undertaken in Europe to date. * The Johns Hopkins University School of Medicine The Johns Hopkins University School of Medicine, located in Baltimore, Maryland, USA, is a highly regarded medical school and biomedical research institute in the United States. will conduct the largest and most extensive genome-wide scan of individuals of African and African American African American Multiculture A person having origins in any of the black racial groups of Africa. See Race. descent to date. In collaboration with researchers at the National 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. Center (NHGC NHGC National Human Genome Center ) at Howard University Howard University, at Washington, D.C.; coeducational; with federal support. It was founded in 1867 by Gen. Oliver O. Howard of the Freedmen's Bureau, to provide education for newly emancipated slaves. A normal and preparatory department was opened the same year. , researchers will utilize the Infinium HumanHap650Y BeadChip for an asthma study of over 2,000 individuals and their families. The study is supported by a recent grant from the National Heart, Lung, and Blood Institute National Heart, Lung, and Blood Institute, n.pr established in 1948, this division of the National Institutes of Health is responsible for research and education on cardiovascular, pulmonary, systemic diseases, and sleep disorders. (NHLBI NHLBI, n.pr See National Heart, Lung, and Blood Institute. ) at the National Institutes of Health (NIH "Not invented here." See digispeak. NIH - The United States National Institutes of Health. ). * The Genome Institute of Singapore (GIS), a flagship facility in Singapore, in partnership with a top-ten pharmaceutical company will analyze up to 3,000 samples using Illumina's HumanRef-8 BeadChip for gene expression profiling Microarray technology is often used for gene expression profiling. It makes use of the sequence resources created by the genome sequencing projects and other sequencing efforts to answer the question, . * GlaxoSmithKline (GSK GSK GlaxoSmithKline plc (pharmaceutical company) GSK Glycogen Synthase Kinase GSK Gruppentraining Sozialer Kompetenzen (Germany) GSK Greenland Shark (FAO fish species code) ) expanded its genotyping services contract, and purchased the Infinium HumanHap550 BeadChip for use in large-scale whole-genome association studies. * Shipped 35 BeadArray[TM] readers during the quarter, increasing the cumulative shipments of BeadArray readers to 246. * Introduced a new methylation methylation, n a phase-II detoxification pathway in the liver; methyl groups combine with toxins to rid the body of various substances. methylation (meth´ technology enabling investigators to survey up to 1,536 methylation sites across 96 samples simultaneously. The GoldenGate[R] Methylation Cancer Panel I, the first standard panel, covers 1,505 methylation sites over 800 cancer genes. Custom-content methylation panels will soon be available to meet individual research needs. * Announced the Human 1M and the Human 450S BeadChips, the next BeadChips in its Infinium[R] product family. The Human 1M will profile over one million diverse genetic variants. The new Human 1M BeadChip combines an unprecedented level of content for both whole-genome (WG) and copy number variation (CNV CNV Choroidal Neovascularization (eye disorder) CNV Christelijk Nationaal Vakverbond CNV Copy Number Variation CNV Conveyor CNV Chief of Navy CNV Continuous Normal Voltage CNV Crypto Net Variable CNV Could Not Verify ) analysis, along with additional unique, high-value genomic regions of interest - all on a single microarray chip. Illumina also announced that it plans to introduce the Human 450S BeadChip, which will enable customers using Illumina's HumanHap550 BeadChip, to further extend their genetic studies to include the one million content level. * Completed the Early Access commercialization phase of the Illumina[R] Genome Analyzer. In 2006, prior to the completion of the acquisition, Solexa shipped 13 systems to ten customers in five countries. * The Illumina Genome Analyzer achieved the 1G performance milestone. Prior to the completion of the acquisition, Solexa had performed multiple runs on multiple instruments that yielded more than 1 gigabase (one billion bases) of high-quality 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. data per flow cell after filtering, making the Illumina Genome Analyzer the first platform to reach this important milestone. * We announced the following management changes. John West, the former CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Solexa, has joined Illumina as the Senior Vice President and General Manager of the Sequencing business. John Stuelpnagel, our COO, will take on the additional responsibility as General Manager of our Microarray business. Tristan Orpin, our Vice President of Sales, has been promoted to Sr. Vice President in charge of all commercial operations. Mr. Orpin will be responsible for sales, marketing and technical support across all of our products and geographies. Christian Henry, our Vice President and Chief Financial Officer, has been promoted to Sr. Vice President and Chief Financial Officer and has assumed the additional responsibility of investor relations Investor relations The process by which the corporation communicates with its investors. . Matt Posard, our Vice President of Marketing, has moved into the role of Vice President of Sales, while Omead Ostadan will take Mr. Posard's place as our Vice President in charge of marketing. Mr. Ostadan was the Vice President of Marketing at Solexa. Additionally, Blaine Bowman and Roy Whitfield have joined our Board of Directors. Mr. Bowman and Mr. Whitfield are joining from the Solexa Board of Directors. Financial Outlook The non-GAAP financial guidance discussed below excludes the effect of non-cash stock compensation expense (see table which reconciles these non-GAAP financial measures to the related GAAP measure). The Company's financial guidance for fiscal 2007 is as follows: Guidance for Fiscal 2007: * Based on the continued strong demand for the Company's products and services, total revenue for fiscal 2007 is expected to be between $295 and $315 million. * Research and development expenses are expected to be between $57 and $67 million. * Selling, general and administrative expenses are expected to be between $72 and $82 million. * We expect non-GAAP net income to be between $52 and $62 million, or $0.86 per diluted share, assuming 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 the range and fully diluted weighted-average shares of 66 million. * We expect non-cash stock compensation expense related to SFAS No. 123R to be between $20 and $25 million, or $0.34 per diluted share assuming the midpoint of the range. Guidance for Q1 2007: * The Company expects first quarter total revenue to be between $64 and $68 million, which would represent growth of 127% over the first quarter of 2006 assuming the midpoint of the range. Management expects non-GAAP net income to be between $9 and $11 million, or $0.16 per diluted share assuming the midpoint of the range and quarterly fully diluted weighted-average shares of 62 million. Conference Call Information A conference call has been scheduled for 2:00 p.m. Pacific Time today to discuss Illumina's fourth quarter and fiscal year 2006 results and 2007 guidance. Interested parties may listen to the call by dialing 866-770-7120 (passcode: 52458765) 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 +1-617-213-8065 (passcode: 52458765). Individuals may access the live webcast under the investor information section of Illumina's website at www.illumina.com. About Illumina Illumina (www.illumina.com) is developing next-generation tools for the large-scale analysis of genetic variation and function. The Company's proprietary BeadArray technology -- now used in leading genomics centers around the world -- provides the throughput, cost effectiveness and flexibility necessary to enable researchers in the life sciences and pharmaceutical industries to perform the billions of tests necessary to extract medically valuable information from advances in genomics and proteomics. This information will help pave the way to personalized medicine  The external links in this article or section may require cleanup to comply with Wikipedia's content policies. by correlating genetic variation and gene function
with particular disease states, enhancing drug discovery, allowing
diseases to be detected earlier and, more specifically, permitting
better choices of drugs for individual patients. On January 26, 2007,
the Company acquired Solexa, Inc. With this acquisition, Illumina is now
commercializing the Illumina Genome Analyzer, which is being used to
perform a range of analyses including whole genome resequencing, gene
expression analysis and small RNA RNA: see nucleic acid. RNA in full ribonucleic acid One of the two main types of nucleic acid (the other being DNA), which functions in cellular protein synthesis in all living cells and replaces DNA as the carrier of genetic analysis. Statement Regarding Use of Non-GAAP Measures The Company has reported non-GAAP results for net income (loss) per share, net income (loss), gross margins 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 and its acquisition of CyVera Corporation. Management believes that presentation of operating results that exclude those 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 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 the costs and outcome of Illumina's 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. with Affymetrix, our ability to effectively integrate our recent acquisition of Solexa, Inc., Illumina's ability to further develop and commercialize its BeadArray technologies and to deploy new gene expression and genotyping products and applications for its platform technology, Illumina's ability to manufacture robust Sentrix[R] arrays and Oligator[R] oligonucleotides, Illumina's ability to scale and integrate CyVera technology, Illumina's ability to further scale oligo synthesis output and technology to satisfy market demand derived from the Company's collaboration with Invitrogen, and other factors detailed in the Company's filings with the Securities and Exchange Commission including its 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. Illumina disclaims 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] |
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