8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 30, 2014

AFFYMETRIX, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	0-28218	77-0319159
(State of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3420 Central Expressway

Santa Clara, California 95051

(Address of principal executive offices) (Zip Code)

(408) 731-5000

Registrant's telephone number, including area code

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On October 30, 2014, Affymetrix, Inc. (the "Company") issued a press release announcing the Company's operating results for the three and nine months ended September 30, 2014. A copy of the Company's press release is attached hereto as Exhibit 99.1.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including the exhibit, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference into Affymetrix' filings with the SEC under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated October 30, 2014

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AFFYMETRIX, INC.
By:	/s/ GAVIN WOOD
	Name:	Gavin H. J. Wood
	Title:	Executive Vice President and
		Chief Financial Officer

Dated: October 30, 2014

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated October 30, 2014

EX-99.1

EXHIBIT 99.1

Contact:

Doug Farrell

Vice President of Investor Relations

408-731-5285

AFFYMETRIX REPORTS THIRD QUARTER 2014 OPERATING RESULTS

Santa Clara, Calif.—October 30, 2014—Affymetrix, Inc., (NASDAQ: AFFX) today reported its operating results for the third quarter of 2014.

Results for the three months ended September 30, 2014:

• Total revenue was $87.1 million, compared to $80.4 million in third quarter of 2013. Total revenue grew by 8.4% over the third quarter of 2013.

• Product revenue was $78.1 million compared to $74.8 million in the third quarter of 2013, an increase of 4.4%.

• GAAP net income was $2.4 million, or $0.03 per diluted share, as compared to a GAAP net loss of $4.2 million, or $0.06 per diluted share, in the third quarter of 2013, an increase of $6.6 million or $0.09 per diluted share.

• Non-GAAP net income was $6.3 million, or $0.08 per diluted share, compared to a non-GAAP net income of $3.3 million, or $0.05 per diluted share, for the third quarter of 2013. Please refer to "Itemized Reconciliation Between GAAP and Non-GAAP Net Income (Loss)" for a reconciliation of these GAAP and non-GAAP financial measures.

• Total balance in cash and cash equivalents was $68.3 million and senior debt was $24.0 million as of September 30, 2014.

Product revenue for the third quarter of 2014 was $78.1 million and service and other revenue was $9.0 million. This compares to product revenue of $74.8 million and service and other revenue of $5.6 million in the third quarter of 2013. Product revenue for the third quarter of 2014 included consumable revenue of $73.7 million and instrument revenue of $4.4 million. Product revenue for the third quarter of 2013 included consumable revenue of $72.0 million and instrument revenue of $2.8 million.

Total GAAP gross margin was 59%, as compared to 55% in the same period of 2013. Excluding non-GAAP adjustments such as the amortization of acquired intangible assets, gross margin for the third quarter of 2014 was 61% compared to 61% in the same period of 2013. Please refer to the "Itemized Reconciliation Between GAAP and Non-GAAP Gross Margin" for a reconciliation of these GAAP and non-GAAP financial measures.

For the third quarter of 2014, operating expenses were $46.6 million on a GAAP basis as compared to $45.1 million in the same period of 2013. Excluding non-GAAP adjustments, such as the amortization of acquired intangible assets and non-recurring charges, operating expenses for the third quarter of 2014 were $44.1 million, compared to an adjusted total of $41.9 million in the same period of 2013. The increase is primarily due to higher variable compensation costs and legal costs associated with litigation matters. Please refer to the "Itemized Reconciliation Between GAAP and Non-GAAP Operating Expenses" for a reconciliation of these GAAP and non-GAAP financial measures.

“We are pleased with our overall financial performance for the third quarter. From a year-to-date perspective, we have grown our total revenue by approximately 7.5%,” stated Frank Witney, President and CEO. “This underscores the strength of our product portfolio and validates our strategy of diversifying our revenues and focusing on high-growth markets.”

"During the third quarter, we generated a GAAP profit driven by strong topline growth, rigorous cost controls and exceeding our target non-GAAP gross margin," stated Gavin Wood, EVP and CFO. "As a result of our strong year-to-date performance, we are raising our full-year guidance to total revenue of $345 million and adjusted EBITDA of approximately 17% of revenue."

Recent developments:

• The Company signed a multi-year supply agreement covering Affymetrix arrays and instruments to be utilized as part of Ariosa’s Harmony™ Non-Invasive Prenatal Test (NIPT). The partnership enables Ariosa to pursue the development of a Harmony test kit that will allow other laboratories around the world to adopt and perform this test. This announcement follows the recent publication of a study in Fetal Diagnosis and Therapy online in which Ariosa’s scientists successfully tested and implemented Affymetrix microarrays as part of a DNA quantification method for the Harmony test. The study demonstrated better performance of Affymetrix microarrays in comparison to a next generation sequencing approach in regard to shorter turn-around time and improved precision in measuring chromosome concentration and fetal fraction of cell-free DNA.

• Affymetrix exclusively licensed technology from Peptide Groove LLP that enables HLA typing of human samples from genotyping data generated from a variety of assays including the company's Axiom® genotyping assays. The partners at Peptide Groove LLP developed HLA*IMP, the first HLA typing statistical imputation method which can call 4-digit HLA types from SNP genotyping data with high accuracy. Alternative methods for HLA typing, such as DNA sequencing, can be laborious, time consuming, and expensive. Imputing HLA types from genotyping data, such as those from Affymetrix’ Axiom genotyping platform, offers a new, very high-throughput, and low-cost approach. The technology will enable purpose-built, highly efficient HLA typing screening arrays that could prove useful for a broad range of HLA typing application needs, including donor repositories, drug development clinical trials, and many translational research studies. Additionally, customers using Affymetrix Axiom biobank arrays and other genotyping arrays for GWAS and fine mapping will be able to ascertain HLA type information without the need for further experimentation.

Affymetrix will host a conference call on Thursday, October 30, 2014 at 2:00 p.m. PT to review its operating results for the third quarter of 2014. A live webcast can be accessed by visiting the Investor Relations section of the Company's website at www.affymetrix.com. In addition, investors and other interested parties can listen by dialing domestic: (877) 407-8291, international: (201) 689-8345.

A replay of this call will be available from 5:00 p.m. PT on October 30, 2014 until 8:00 p.m. PT on November 7, 2014 at the following numbers: domestic: (877) 660-6853, international: (201) 612-7415. The conference call passcode to access the replay is 13592101. An archived webcast of the conference call will be available under the Investor Relations section of the Company's website.

About Affymetrix

Affymetrix technology is used by the world's top pharmaceutical, diagnostic, and biotechnology companies, as well as leading academic, government, and nonprofit research institutes. More than 2,300 systems have been shipped around the world and more than 65,000 peer-reviewed papers have been published using the technology. Affymetrix is headquartered in Santa Clara, California, and has manufacturing facilities in Cleveland, Ohio, San Diego, California, Singapore and Vienna, Austria. The Company has about 1,100 employees worldwide and maintains sales and distribution operations across Europe, Asia and Latin America.

All statements in this press release that are not historical are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act as amended, including statements related to our plans to return to growth and sustained profitability as well as other statements regarding Affymetrix's "expectations," "beliefs," "hopes," "intentions," "strategies" or the like. Such statements are subject to risks and uncertainties that could cause actual results to differ materially for Affymetrix from those projected, including, but not limited to: Affymetrix's ability to stabilize its business and grow revenue, Affymetrix's ability to timely and successfully integrate and realize the anticipated strategic benefits and costs savings or other synergies of the acquisition of eBioscience in a cost-effective

manner while minimizing the disruption to its business; risks that eBioscience's future performance may not be consistent with its historical performance; risks relating to Affymetrix's ability to make scheduled payments of the principal of, to pay interest on or to refinance its indebtedness; risks relating to Affymetrix's ability to successfully develop and commercialize new products, including its ability to successfully develop and commercialize novel molecular solutions based on eBioscience's portfolio of reagents; risks relating to past and future acquisitions, including the ability of Affymetrix to successfully integrate such acquisitions into its existing business; risks of Affymetrix's ability to achieve and sustain higher levels of revenue, higher gross margins and reduced operating expenses; risks relating to Affymetrix's ability to generate cash after interest and principal payments; uncertainties relating to technological approaches; risks associated with manufacturing and product development; personnel retention; uncertainties relating to cost and pricing of Affymetrix products; dependence on collaborative partners; uncertainties relating to sole-source suppliers; uncertainties relating to FDA and other regulatory approvals; competition; risks relating to intellectual property of others and the uncertainties of patent protection and litigation. These and other risk factors are discussed in Affymetrix's Annual Report on Form 10-K for the year ended December 31, 2013, and other SEC reports. Affymetrix expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Affymetrix's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

In addition to providing financial measures based on generally accepted accounting principles in the United States (GAAP), Affymetrix has disclosed in this press release its net loss and net loss per share as well as its total gross margin and operating expenses for the third quarter of 2014 and 2013 excluding specified items. Reconciliation of GAAP to Non-GAAP measures can be found in the tables included in this press release. Affymetrix has determined to disclose this financial information to investors because it believes it will be useful, as a supplement to GAAP measures, in comparing Affymetrix's operating performance in the third quarter of 2014 as compared to the prior-year period. These Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

PLEASE NOTE:

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

- Financial Charts to Follow -

AFFYMETRIX, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

	September 30, 2014			December 31, 2013
ASSETS:				(Note 1)
Current assets:
Cash and cash equivalents	$	68,327		$	57,128
Accounts receivable, net	46,037			50,862
Inventories, net—short-term portion	51,674			58,059
Deferred tax assets—short-term portion	1,974			767
Prepaid expenses and other current assets	8,964			8,920
Total current assets	176,976			175,736
Property and equipment, net	16,137			18,671
Inventories, net—long-term portion	6,098			5,972
Goodwill	157,962			161,595
Intangible assets, net	112,339			131,108
Deferred tax assets—long-term portion	344			355
Other long-term assets	10,699			11,074
Total assets	$	480,555		$	504,511
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:	$	47,806		$	45,534
Accounts payable and accrued liabilities	4,000			12,750
Current portion of long-term debt	12,953			18,660
Deferred revenue—short-term portion	64,759			76,944
Total current liabilities	2,524			2,824
Deferred revenue—long-term portion	105,000			105,000
4.00% notes	19,950			26,700
Term loan—long-term portion	20,445			21,496
Other long-term liabilities	212,678			232,964
Total liabilities
Stockholders’ equity:	736			723
Common stock	778,393			768,149
Additional paid-in capital	3,466			8,392
Accumulated other comprehensive income	(514,718		)	(505,717		)
Accumulated deficit	267,877			271,547
Total stockholders’ equity	$	480,555		$	504,511
Total liabilities and stockholders’ equity

Note 1: The condensed consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements at that date included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

AFFYMETRIX, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
REVENUE:
Product sales	$	78,069		$	74,776		$	227,644		$	220,505
Services and other	9,017			5,578			27,845			17,258
Total revenue	87,086			80,354			255,489			237,763
COSTS AND EXPENSES:
Cost of product sales	29,140			32,600			89,211			100,621
Cost of services and other	6,426			3,915			19,358			11,128
Research and development	12,926			11,478			37,443			35,686
Selling, general and administrative	33,718			33,646			108,546			102,286
Litigation settlement	—			—			5,100			—
Restructuring charges	—			(2		)	—			4,484
Total costs and expenses	82,210			81,637			259,658			254,205
Income (loss) from operations	4,876			(1,283		)	(4,169		)	(16,442		)
Other (expense) income, net	(1,008		)	68			703			501
Interest expense	1,595			2,652			4,972			8,274
Income (loss) before income taxes	2,273			(3,867		)	(8,438		)	(24,215		)
Income tax (benefit) provision	(111		)	289			563			1,485
Net income (loss)	$	2,384		$	(4,156	)	$	(9,001	)	$	(25,700	)
Basic net income (loss) per common share	$	0.03		$	(0.06	)	$	(0.12	)	$	(0.36	)
Diluted net income (loss) per common share	$	0.03		$	(0.06	)	$	(0.12	)	$	(0.36	)
Shares used in computing basic net income (loss) per common share	73,413			71,600			72,955			71,227
Shares used in computing diluted net income (loss) per common share	76,315			71,600			72,955			71,227

AFFYMETRIX, INC.

RESULTS OF OPERATIONS – NON-GAAP

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME (LOSS)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014		2013			2014			2013
GAAP net income (loss) - basic and diluted	$	2,384	$	(4,156	)	$	(9,001	)	$	(25,700	)
Amortization of inventory fair value adjustment	—		2,896			4,666			11,980
Amortization of acquired intangible assets	3,913		4,536			12,593			13,691
Acquisition-related integration costs	—		—			—			748
Litigation settlement	—		—			5,100			—
Restructuring charges	—		(2		)	—			4,484
Non-GAAP net income - basic and diluted	$	6,297	$	3,274		$	13,358		$	5,203
Non-GAAP basic net income per common share	$	0.09	$	0.05		$	0.18		$	0.07
Non-GAAP diluted net income per common share	$	0.08	$	0.05		$	0.18		$	0.07
Shares used in computing Non-GAAP basic net income per common share	73,413		71,600			72,955			71,227
Shares used in computing Non-GAAP diluted net income per common share	76,315		71,600			72,955			71,227

ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP GROSS MARGIN

	Three Months Ended September 30,								Nine Months Ended September 30,
	2014				2013				2014				2013
GAAP total gross margin	$	51,520	59	%	$	43,839	55	%	$	146,920	58	%	$	126,014	53	%
Amortization of inventory fair value adjustment	—		—	%	2,896		4	%	4,666		2	%	11,980		5	%
Amortization of acquired intangible assets	1,352		2	%	1,332		2	%	4,073		1	%	4,023		2	%
Non-GAAP total gross margin	$	52,872	61	%	$	48,067	61	%	$	155,659	61	%	$	142,017	60	%

ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP OPERATING EXPENSES

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Total GAAP operating expenses	$	46,644		$	45,122		$	151,089		$	142,456
Amortization of acquired intangible assets	(2,561		)	(3,206		)	(8,520		)	(9,670		)
Acquisition-related integration costs	—			—			—			(748		)
Litigation settlement	—			—			(5,100		)	—
Restructuring charges	—			2			—			(4,484		)
Total Non-GAAP operating expenses	$	44,083		$	41,918		$	137,469		$	127,554

ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP ADJUSTED EBITDA AS PERCENTAGE OF REVENUE

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
GAAP net income (loss)	$	2,384		$	(4,156	)	$	(9,001	)	$	(25,700	)
Depreciation and amortization	7,318			9,612			23,844			30,076
Amortization of inventory fair value adjustment	—			2,896			4,666			11,980
Interest expense, net	1,588			2,646			4,919			8,279
Income tax provision	(111		)	289			563			1,485
EBITDA	11,179			11,287			24,991			26,120
Adjustments to EBITDA:
Share-based compensation	3,164			1,952			9,436			5,109
Loss (gain) on foreign currency	1,472			(499		)	1,807			22
Litigation charges	801			522			9,160			1,759
(Gain) loss on sales of securities	(444		)	175			(1,684		)	205
Restructuring and integration charges	—			(2		)	—			5,555
Other adjustments	(14		)	260			(772		)	(779		)
Adjusted EBITDA	$	16,158		$	13,695		$	42,938		$	37,991
Revenue	$	87,086		$	80,354		$	255,489		$	237,763
Adjusted EBITDA as percentage of revenue	19		%	17		%	17		%	16		%