-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q3zcXgkbzUsKAKysqEPn2IBZ4pM4voNq0j8P4y6l/Eo1DilNuHihCRgwCTQqjncW yL3zAOyD5iBzjPIbWQR4gw== 0001104659-08-026534.txt : 20080424 0001104659-08-026534.hdr.sgml : 20080424 20080424160717 ACCESSION NUMBER: 0001104659-08-026534 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20080424 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080424 DATE AS OF CHANGE: 20080424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AFFYMETRIX INC CENTRAL INDEX KEY: 0000913077 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 770319159 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28218 FILM NUMBER: 08774515 BUSINESS ADDRESS: STREET 1: 3420 CENTRAL EXPRESSWAY CITY: SANTA CLARA STATE: CA ZIP: 95051 BUSINESS PHONE: 4087315000 MAIL ADDRESS: STREET 1: 3420 CENTRAL EXPRESSWAY CITY: SANTA CLARA STATE: CA ZIP: 95051 8-K 1 a08-12421_18k.htm 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): April 24, 2008

 

AFFYMETRIX, INC.

(Exact name of registrant as specified in its charter)

 

DELAWARE
(State of incorporation)

 

0-28218
(Commission File Number)

 

77-0319159
(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):

 

 

o

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

 

 

 

 

o

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

 

 

 

 

o

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

 

 

 

 

o

Pre-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 April 24, 2008, Affymetrix, Inc. (the “Company”) issued a press release announcing the Company’s operating results for the first quarter ended March 31, 2008.  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 April 24, 2008

 

2



 

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/ John C. Batty

 

 

Name: John C. Batty

 

 

Title: Executive Vice President and Chief Financial

 

 

Officer, Treasurer and Principal Financial Officer

 

Dated:  April 24, 2008

 

3



 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release dated April 24, 2008

 

4


EX-99.1 2 a08-12421_1ex99d1.htm EX-99.1

 EXHIBIT 99.1

 

FOR IMMEDIATE RELEASE

 

Contact:

Doug Farrell

Vice President of Investor Relations

408-731-5285

 

AFFYMETRIX REPORTS FIRST QUARTER 2008 RESULTS

 

Santa Clara, Calif. — April 24, 2008 Affymetrix Inc., (Nasdaq: AFFX) today reported its operating results for the first quarter of 2008.  Total revenue for the quarter was $169.6 million, including an intellectual property payment of $90 million, as compared to total revenue of $80.4 million in the first quarter of 2007.

 

Product revenue was $62.8 million, which consists of array and reagent revenue of $58.8 million and instrument revenue of $4.0 million.  Service revenue was $8.4 million, and royalties and other revenue were $98.3 million for the first quarter of 2008.  This compares to first quarter 2007 product revenue of $64.5 million.  Service revenue was $8.8 million, and royalties and other revenue were $7.2 million for the first quarter of 2007.  Affymetrix shipped 17 GeneChip® systems in the quarter, bringing its cumulative systems shipped to 1,739 at the end of the first quarter.

 

The Company reported net income of approximately $46.3 million or $0.58 per diluted share in the first quarter of 2008, which includes a pretax restructuring charge of $13.9 million or $0.17 per diluted share, as compared to net loss of $4.0 million or $0.06 per diluted share in the first quarter of 2007, which included a pretax restructuring charge of $5.4 million or $0.08 per diluted share.

 

Cost of product sales was $26.0 million in the first quarter of 2008 compared to $22.1 million in the same period of 2007.  Cost of services was $5.7 million compared to $6.4 million in the first quarter of 2007.  Product gross margin was 59 percent in the first quarter of 2008 compared to 66 percent in the first quarter of 2007.

 

Operating expenses were $68.2 million for the first quarter of 2008, which includes restructuring charges of $13.9 million, as compared to $60.5 million in the first quarter of 2007, which includes restructuring charges of $5.4 million.

 

Financial Outlook for 2008

 

For fiscal 2008, the Company expects total revenue to be in the range of $490 million to $510 million.  Total gross margin is expected to be approximately 69 percent, of which 7 percent is expected to be attributable to the one-time $90 million payment.  The Company expects total operating expenses between $235 million to $240 million, including total restructuring of approximately $17 million.

 



 

Recent Highlights

 

DNA Analysis

 

·                  The Company signed an agreement with Avesthagen Limited, a leading biotechnology company based in Bangalore, India. Under the terms of the agreement, Affymetrix’ microarray technology will be used for The AVESTAGENOME Project™, a comprehensive genetic study of more than 60,000 Parsi individuals. The project will explore the genetic basis of longevity and create a genetic, genealogic and medical database of the Parsi-Zoroastrian population.

 

Copy Number

 

·                  Affymetrix announced the full commercial launch of its complete Cytogenetic Solution, which combines the high-density SNP Array 6.0 with a simple assay and intuitive software. The microarray-based solution provides cytogenetic researchers with an efficient and accurate method of detecting chromosomal abnormalities associated with congenital diseases such as autism and learning disabilities.

 

RNA Analysis

 

·                  The Company extended its Collaborations in Cancer Research Program (CCRP) to North America, forming an alliance between Affymetrix and 25 leading cancer researchers. The expansion builds on the success of the European CCRP, launched in April 2007. All of the researchers in the program are using Affymetrix’ SNP Array 6.0 and the Human Exon 1.0 ST Array to accelerate research on more than 10 types of cancer.

 

Drug Metabolism

 

·                  Affymetrix and Marshfield Clinic today announced that researchers at Marshfield Clinic used the Affymetrix Drug Metabolizing Enzymes and Transporters (DMET) solution to discover a genetic variation associated with an individual’s response to the drug warfarin.  The study, “CYP4F2 genetic variant alters required warfarin dose,” was published by Blood Online. The results of the study could help reduce much of the serious adverse events caused by incorrect warfarin dosage and enable doctors to treat patients with a more effective, personalized form of medicine.

 

Corporate

 

·                  Affymetrix was named as one of the world’s top 50 most innovative companies by Fast Company magazine.  Affymetrix was the only life sciences company to be recognized.  Published in the March 2008 issue, the Company was commended for its work relating to the discovery of genetic variations and drug metabolism.

 

Affymetrix’ management team will host a conference call on April 24, 2008 at 2:00 p.m. PT to review its operating results for the first quarter of 2008. 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: (866) 500-AFFX, international: (706) 643-2771.

 

A replay of this call will be available from 5:00 p.m. PT on April 24, 2008 until 8:00 p.m. PT on May 1, 2008 at the following numbers: domestic: (800) 642-1687, international: (706) 645-9291. The passcode for both replays is 43267963.  An archived webcast of the conference call will be available under the Investor Relations section of the Company’s website at www.affymetrix.com.

 

About Affymetrix

 

Affymetrix GeneChip® microarray technology is the industry-standard tool for analyzing complex genetic information. After inventing microarray technology in the late 1980s, Affymetrix scientists have been dedicated to developing innovative products that provide researchers with a more complete view of the genome. These products continue to accelerate genetic research and enable scientists to develop diagnostics and tailor treatments for individual patients by identifying and measuring the genetic information associated with complex diseases.

 

Today, Affymetrix technology is used by the world’s top pharmaceutical, diagnostic and biotechnology companies, as well as leading academic, government and not-for-profit research institutes. More than 1,700 systems have been shipped around the world and more than 12,000 peer-reviewed papers have been published using the technology.

 

Affymetrix is headquartered in Santa Clara, Calif., and has manufacturing facilities in Sacramento, Calif., Cleveland, Ohio and Singapore. The company has about 1,100 employees worldwide and maintains sales and distribution operations across Europe and Asia. For more information about Affymetrix, please visit: www.affymetrix.com.

 

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 regarding Affymetrix’ “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: risk related to past and future acquisitions; risks of the company’s ability to achieve and sustain higher levels of revenue, higher gross margins and reduced operating expenses; uncertainties relating to technological approaches, risks associated with manufacturing and product development, including risks relating to the relocation of a substantial portion of our manufacturing to Singapore; personnel retention; uncertainties related 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’ Form 10-K for the year ended December 31, 2007, and other SEC reports, including its Quarterly Reports on Form 10-Q for subsequent quarterly periods. 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’ expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

 

PLEASE NOTE:

 

Affymetrix, the Affymetrix logo and GeneChip are trademarks owned or used by Affymetrix, Inc.

 

– Financial Charts to Follow –

 



 

AFFYMETRIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

(UNAUDITED)

 

 

 

March 31,
2008

 

December 31,
2007

 

 

 

 

 

(Note 1)

 

ASSETS:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

431,156

 

$

288,644

 

Restricted cash

 

4,000

 

 

Available-for-sale securities – short-term portion

 

158,842

 

205,718

 

Accounts receivable, net ($67 in 2008 and $389 in 2007 from Perlegen Sciences)

 

75,959

 

81,941

 

Inventories

 

51,787

 

42,912

 

Deferred tax assets – current portion

 

21,259

 

28,584

 

Notes receivable from employees – current portion

 

 

1,376

 

Prepaid expenses and other current assets

 

9,748

 

17,933

 

Total current assets

 

752,751

 

667,108

 

Available-for-sale securities – long-term portion

 

8,434

 

89,912

 

Property and equipment, net

 

129,786

 

143,884

 

Acquired technology rights, net

 

60,558

 

46,797

 

Goodwill

 

173,657

 

125,050

 

Deferred tax assets – long-term portion

 

34,069

 

18,426

 

Notes receivable from employees – long-term portion

 

133

 

487

 

Other assets

 

35,874

 

41,927

 

Total assets

 

$

1,195,262

 

$

1,133,591

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

53,859

 

$

61,543

 

Deferred revenue – current portion

 

17,438

 

22,498

 

Total current liabilities

 

71,297

 

84,041

 

Deferred revenue – long-term portion

 

3,838

 

3,922

 

Other long-term liabilities

 

10,135

 

10,971

 

Convertible notes

 

436,250

 

436,250

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

694

 

692

 

Additional paid-in capital

 

735,097

 

704,189

 

Accumulated other comprehensive income

 

171

 

1,998

 

Accumulated deficit

 

(62,220

)

(108,472

)

Total stockholders’ equity

 

673,742

 

598,407

 

Total liabilities and stockholders’ equity

 

$

1,195,262

 

$

1,133,591

 

 


Note 1:

 

The condensed consolidated balance sheet at December 31, 2007 has been derived from the audited consolidated financial statements at that date included in the Company’s Form 10-K for the fiscal year ended December 31, 2007.

 



 

AFFYMETRIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2008

 

2007

 

Revenue

 

 

 

 

 

Product sales ($791 in 2008 and $6,678 in 2007 from Perlegen Sciences)

 

$

62,806

 

$

64,485

 

Services

 

8,420

 

8,757

 

Royalties and other revenue

 

98,349

 

7,193

 

Total revenue

 

169,575

 

80,435

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of product sales ($442 in 2008 and $2,421 in 2007 from Perlegen Sciences)

 

25,977

 

22,145

 

Cost of services

 

5,678

 

6,406

 

Cost of royalties and other revenue

 

 

66

 

Research and development

 

18,768

 

19,227

 

Selling, general and administrative

 

34,733

 

35,858

 

Acquired in-process technology

 

800

 

 

Restructuring

 

13,910

 

5,371

 

Total costs and expenses

 

99,866

 

89,073

 

Income (loss) from operations

 

69,709

 

(8,638

)

Interest income and other, net

 

6,872

 

2,751

 

Interest expense

 

(3,589

)

(415

)

 

 

 

 

 

 

Income (loss) before income taxes

 

72,992

 

(6,302

)

Income tax (provision) benefit

 

(26,740

)

2,296

 

Net income (loss)

 

$

46,252

 

$

(4,006

)

 

 

 

 

 

 

Basic net income (loss) per common share

 

$

0.68

 

$

(0.06

)

Diluted net income (loss) per common share

 

$

0.58

 

$

(0.06

)

 

 

 

 

 

 

Shares used in computing basic net income (loss) per share

 

68,504

 

67,905

 

Shares used in computing diluted net income (loss) per share

 

83,001

 

67,905

 

 



 

AFFYMETRIX, INC.

RECONCILIATION OF PRIOR YEAR PRESENTATION TO CURRENT YEAR PRESENTATION

(IN THOUSANDS)

(UNAUDITED)

 

Prior Year Presentation:

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 2007

 

June 30, 2007

 

September 30, 2007

 

December 31, 2007

 

Product sales

 

$

57,807

 

$

63,986

 

$

69,373

 

$

88,617

 

Product related revenue

 

13,528

 

17,167

 

15,758

 

11,351

 

Total product and product related revenue

 

71,335

 

81,153

 

85,131

 

99,968

 

Royalties and other revenue

 

2,422

 

2,731

 

9,500

 

7,034

 

Revenue from Perlegen Sciences

 

6,678

 

4,423

 

355

 

590

 

Total revenue

 

$

80,435

 

$

88,307

 

$

94,986

 

$

107,592

 

 

 

 

 

 

 

 

 

 

 

Cost of product sales

 

19,721

 

23,833

 

28,082

 

32,501

 

Cost of product related revenue

 

6,475

 

10,826

 

7,344

 

5,166

 

Cost of revenue from Perlegen Sciences

 

2,421

 

1,907

 

166

 

274

 

Total cost of goods sold

 

$

28,617

 

$

36,566

 

$

35,592

 

$

37,941

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 2007

 

June 30, 2007

 

September 30, 2007

 

December 31, 2007

 

Revenue

 

 

 

 

 

 

 

 

 

Product sales (1)

 

6,678

 

4,423

 

355

 

590

 

Product related revenue (2)

 

(13,528

)

(17,167

)

(15,758

)

(11,351

)

Royalties and other revenue (2)

 

4,771

 

5,136

 

4,929

 

4,895

 

Revenue from Perlegen Sciences (1)

 

(6,678

)

(4,423

)

(355

)

(590

)

Services (2)

 

8,757

 

12,031

 

10,829

 

6,457

 

 

 

 

 

 

 

 

 

 

 

COGS

 

 

 

 

 

 

 

 

 

Cost of product sales (3)

 

2,424

 

1,893

 

164

 

266

 

Cost of product related revenue (4)

 

(6,475

)

(10,826

)

(7,344

)

(5,166

)

Cost of revenue from Perlegen Sciences (3)

 

(2,421

)

(1,907

)

(166

)

(274

)

Cost of services (4)

 

6,406

 

10,760

 

7,307

 

5,129

 

Cost of royalties and other revenue (4)

 

66

 

80

 

39

 

45

 

 

Current Year Presentation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 2007

 

June 30, 2007

 

September 30, 2007

 

December 31, 2007

 

Product sales

 

$

64,485

 

$

68,409

 

$

69,727

 

$

89,207

 

Services

 

8,757

 

12,031

 

10,829

 

6,457

 

Royalties and other revenue

 

7,193

 

7,867

 

14,430

 

11,928

 

Total revenue

 

$

80,435

 

$

88,307

 

$

94,986

 

$

107,592

 

 

 

 

 

 

 

 

 

 

 

Cost of product sales

 

22,145

 

25,726

 

28,246

 

32,767

 

Cost of services

 

6,406

 

10,760

 

7,307

 

5,129

 

Cost of royalties and other revenue

 

66

 

80

 

39

 

45

 

Total cost of goods sold

 

$

28,617

 

$

36,566

 

$

35,592

 

$

37,941

 

 


Description of Adjustments:

 

 

 

(1)

 

To reclassify Revenue from Perlegen Sciences into Product sales

 

 

 

(2)

 

To reclassify revenue from Product related revenue to Royalties and other revenue and Services

 

 

 

(3)

 

To reclassify Cost of revenue from Perlegen Sciences into Cost of product sales

 

 

 

(4)

 

To reclassify Cost of product related revenue to Cost of services and Cost of royalties and other revenue

 


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