Fourth quarter 2018 results:
- Revenue of
$867 million , an 11% increase compared to$778 million in the fourth quarter of 2017 - GAAP net income attributable to
Illumina stockholders for the quarter of$210 million , or$1.41 per diluted share, compared to$68 million , or$0.46 per diluted share, for the fourth quarter of 2017; GAAP earnings per share for the fourth quarter of 2017 included our provisional estimate of the one-time transition tax as a result of U.S. Tax Reform - Non-GAAP net income attributable to
Illumina stockholders for the quarter of$197 million , or$1.32 per diluted share, compared to$212 million , or$1.44 per diluted share, for the fourth quarter of 2017 (see the table entitled “Itemized Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders” for a reconciliation of these GAAP and non-GAAP financial measures) - Cash flow from operations of
$300 million compared to$294 million in the fourth quarter of 2017 - Free cash flow (cash flow from operations less capital expenditures) of
$235 million for the quarter compared to$218 million in the fourth quarter of 2017
Gross margin in the fourth quarter of 2018 was 68.1% compared to 69.7% in the prior year period. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 69.1% for the fourth quarter of 2018 compared to 70.9% in the prior year period.
Research and development (R&D) expenses for the fourth quarter of 2018 were
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2018 were
Depreciation and amortization expenses were
Fiscal year 2018 results:
- Revenue of
$3,333 million , a 21% increase compared to$2,752 million in fiscal 2017 - GAAP net income attributable to Illumina stockholders of
$826 million , or$5.56 per diluted share, compared to$726 million , or$4.92 per diluted share, in fiscal 2017; GAAP earnings per share for fiscal 2017 included the one-time transition tax referenced previously - Non-GAAP net income attributable to Illumina stockholders of
$850 million , or$5.72 per diluted share, compared to$591 million , or$4.00 per diluted share, in fiscal 2017 (see the table entitled “Itemized Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders” for a reconciliation of these GAAP and non-GAAP financial measures) - Cash flow from operations of
$1.1 billion compared to$875 million in fiscal 2017 - Free cash flow (cash flow from operations less capital expenditures) of
$846 million , compared to$565 million in fiscal 2017
Gross margin for fiscal 2018 was 69.0% compared to 66.4% in the prior year. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 70.1% for fiscal 2018 compared to 68.4% in the prior year period.
Research and development (R&D) expenses for fiscal 2018 were
Selling, general and administrative (SG&A) expenses for fiscal 2018 were
“With revenue growth of 21% in 2018,
Updates since our last earnings release:
- Signed a definitive agreement to acquire Pacific Biosciences to expand biological discovery and clinical insight by adding long-read sequencing technology
- Launched TruSight Oncology 500 (TSO 500) pan-cancer assay broadening insights into Tumor Mutational Burden and Microsatellite Instability. TSO 500 is shipping now as a research-use-only product
- Received Breakthrough Device Designation from the
FDA for Illumina’s TruSight Assay, which is based on the content of TSO 500.Illumina is seekingFDA approval of the assay as a companion diagnostic - Announced a new genotyping array and scientific contribution to support the All of Us research program
- Repurchased approximately
$98 million of common stock in the fourth quarter under the previously announced share repurchase program
Financial outlook and guidance
The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.
For fiscal 2019, the company projects revenue growth in the range of 13% to 14%, GAAP earnings per diluted share attributable to Illumina stockholders of
Quarterly conference call information
The conference call will begin at
A replay of the conference call will be posted on Illumina’s website after the event and will be available for at least 30 days following.
Statement regarding use of non-GAAP financial measures
The company reports non-GAAP results for diluted net income per share, net income, gross margins, operating expenses, operating margins, other income, 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 measures under GAAP include substantial charges such as amortization of acquired intangible assets, non-cash interest expense associated with the company’s convertible debt instruments that may be settled in cash, and others that are listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance. Additionally, non-GAAP net income attributable to
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.
Use of forward-looking statements
This release contains forward-looking statements that involve risks and uncertainties, including our financial outlook and guidance for fiscal 2019. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are: (i) our expectations and beliefs regarding future conduct and growth of the business and the markets in which we operate; (ii) the volume, timing and mix of customer orders among our products and services; (iii) our expectations regarding the pending acquisition of Pacific Biosciences; (iv) our ability to manufacture robust instrumentation and consumables; (v) the success of products and services competitive with our own; (vi) challenges inherent in developing, manufacturing, and launching new products and services, including expanding or modifying manufacturing operations and reliance on third-party suppliers for critical components; (vii) the impact of recently launched or pre-announced products and services on existing products and services; (viii) our ability to further develop and commercialize our instruments and consumables, to deploy new products, services, and applications, and to expand the markets for our technology platforms; (ix) our ability to successfully identify and integrate acquired technologies, products, or businesses; and (x) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments, together with other factors detailed in our filings with the
About
| Illumina, Inc. | |||||||||
| Condensed Consolidated Balance Sheets | |||||||||
| (In millions) | |||||||||
| December 30, | December 31, | ||||||||
| ASSETS | (unaudited) | ||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 1,144 | $ | 1,225 | |||||
| Short-term investments | 2,368 | 920 | |||||||
| Accounts receivable, net | 514 | 411 | |||||||
| Inventory | 386 | 333 | |||||||
| Prepaid expenses and other current assets | 78 | 91 | |||||||
| Total current assets | 4,490 | 2,980 | |||||||
| Property and equipment, net | 1,075 | 931 | |||||||
| Goodwill | 831 | 771 | |||||||
| Intangible assets, net | 185 | 175 | |||||||
| Deferred tax assets, net | 70 | 88 | |||||||
| Other assets | 308 | 312 | |||||||
| Total assets | $ | 6,959 | $ | 5,257 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 184 | $ | 160 | |||||
| Accrued liabilities | 513 | 432 | |||||||
| Build-to-suit lease liability | — | 144 | |||||||
| Long-term debt, current portion | 1,107 | 10 | |||||||
| Total current liabilities | 1,804 | 746 | |||||||
| Long-term debt | 890 | 1,182 | |||||||
| Other long-term liabilities | 359 | 360 | |||||||
| Redeemable noncontrolling interests | 61 | 220 | |||||||
| Stockholders’ equity | 3,845 | 2,749 | |||||||
| Total liabilities and stockholders’ equity | $ | 6,959 | $ | 5,257 | |||||
| Illumina, Inc. | |||||||||||||||||
| Condensed Consolidated Statements of Income | |||||||||||||||||
| (In millions, except per share amounts) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | Years Ended | ||||||||||||||||
| December 30, | December 31, | December 30, 2018 | December 31, 2017 | ||||||||||||||
| Revenue: | |||||||||||||||||
| Product revenue | $ | 738 | $ | 659 | $ | 2,749 | $ | 2,289 | |||||||||
| Service and other revenue | 129 | 119 | 584 | 463 | |||||||||||||
| Total revenue | 867 | 778 | 3,333 | 2,752 | |||||||||||||
| Cost of revenue: | |||||||||||||||||
| Cost of product revenue (a) | 198 | 172 | 738 | 679 | |||||||||||||
| Cost of service and other revenue (a) | 70 | 55 | 260 | 208 | |||||||||||||
| Amortization of acquired intangible assets | 9 | 9 | 35 | 39 | |||||||||||||
| Total cost of revenue | 277 | 236 | 1,033 | 926 | |||||||||||||
| Gross profit | 590 | 542 | 2,300 | 1,826 | |||||||||||||
| Operating expense: | |||||||||||||||||
| Research and development (a) | 176 | 137 | 623 | 546 | |||||||||||||
| Selling, general and administrative (a) | 217 | 175 | 794 | 674 | |||||||||||||
| Total operating expense | 393 | 312 | 1,417 | 1,220 | |||||||||||||
| Income from operations | 197 | 230 | 883 | 606 | |||||||||||||
| Other income (expense), net | 13 | (6 | ) | 11 | 437 | ||||||||||||
| Income before income taxes | 210 | 224 | 894 | 1,043 | |||||||||||||
| Provision for income taxes | 12 | 166 | 112 | 365 | |||||||||||||
| Consolidated net income | 198 | 58 | 782 | 678 | |||||||||||||
| Add: Net loss attributable to noncontrolling interests | 12 | 10 | 44 | 48 | |||||||||||||
| Net income attributable to Illumina stockholders | $ | 210 | $ | 68 | $ | 826 | $ | 726 | |||||||||
| Net income attributable to Illumina stockholders for earnings per share (b) | $ | 210 | $ | 68 | $ | 826 | $ | 725 | |||||||||
| Earnings per share attributable to Illumina stockholders: | |||||||||||||||||
| Basic | $ | 1.43 | $ | 0.47 | $ | 5.63 | $ | 4.96 | |||||||||
| Diluted | $ | 1.41 | $ | 0.46 | $ | 5.56 | $ | 4.92 | |||||||||
| Shares used in computing earnings per common share: | |||||||||||||||||
| Basic | 147 | 146 | 147 | 146 | |||||||||||||
| Diluted | 149 | 148 | 149 | 148 | |||||||||||||
| (a) Includes stock-based compensation expense for stock-based awards: | |||||||||||||||||
| Three Months Ended | Years Ended | ||||||||||||||||
| December 30, 2018 | December 31, 2017 | December 30, 2018 | December 31, 2017 | ||||||||||||||
| Cost of product revenue | $ | 4 | $ | 3 | $ | 16 | $ | 12 | |||||||||
| Cost of service and other revenue | — | — | 3 | 2 | |||||||||||||
| Research and development | 15 | 13 | 60 | 51 | |||||||||||||
| Selling, general and administrative | 28 | 25 | 114 | 99 | |||||||||||||
| Stock-based compensation expense before taxes (1) | $ | 47 | $ | 41 | $ | 193 | $ | 164 | |||||||||
|
| (1) | Includes stock-based compensation of $1.6 million and $3.9 million for Helix for the three months and year ended December 30, 2018, respectively. This compares to stock-based compensation of $0.9 million and $3.5 million for Helix for the three months and year ended December 31, 2017, respectively, and $10.1 million for GRAIL for the year ended December 31, 2017. | ||
| (b) | Amount reflects the additional losses attributable to the common shareholders of Helix and GRAIL for earnings per share purposes. | |||
| Illumina, Inc. | ||||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||
| (In millions) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||
| December 30, 2018 | December 31, 2017 | December 30, 2018 | December 31, 2017 | |||||||||||||||
| Net cash provided by operating activities | $ | 300 | $ | 294 | $ | 1,142 | $ | 875 | ||||||||||
| Net cash used in investing activities | (349 | ) | (315 | ) | (1,813 | ) | (214 | ) | ||||||||||
| Net cash (used in) provided by financing activities | (153 | ) | (109 | ) | 594 | (176 | ) | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | — | 1 | (4 | ) | 5 | |||||||||||||
| Net (decrease) increase in cash and cash equivalents | (202 | ) | (129 | ) | (81 | ) | 490 | |||||||||||
| Cash and cash equivalents, beginning of period | 1,346 | 1,354 | 1,225 | 735 | ||||||||||||||
| Cash and cash equivalents, end of period | $ | 1,144 | $ | 1,225 | $ | 1,144 | $ | 1,225 | ||||||||||
| Calculation of free cash flow: | ||||||||||||||||||
| Net cash provided by operating activities | $ | 300 | $ | 294 | $ | 1,142 | $ | 875 | ||||||||||
| Purchases of property and equipment | (65 | ) | (76 | ) | (296 | ) | (310 | ) | ||||||||||
| Free cash flow (a) | $ | 235 | $ | 218 | $ | 846 | $ | 565 | ||||||||||
| (a) | Free cash flow, which is a non-GAAP financial measure, is calculated as net cash provided by operating activities reduced by purchases of property and equipment. Free cash flow is useful to management as it is one of the metrics used to evaluate our performance and to compare us with other companies in our industry. However, our calculation of free cash flow may not be comparable to similar measures used by other companies. | |
| Illumina, Inc. | ||||||||||||||||||
| Results of Operations - Non-GAAP | ||||||||||||||||||
| (In millions, except per share amounts) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP EARNINGS PER SHARE ATTRIBUTABLE TO ILLUMINA STOCKHOLDERS: | ||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||
| December 30, 2018 | December 31, 2017 | December 30, 2018 | December 31, 2017 | |||||||||||||||
| GAAP earnings per share attributable to Illumina stockholders - diluted | $ | 1.41 | $ | 0.46 | $ | 5.56 | $ | 4.92 | ||||||||||
| Non-cash interest expense (a) | 0.10 | 0.05 | 0.28 | 0.20 | ||||||||||||||
| Amortization of acquired intangible assets | 0.07 | 0.07 | 0.25 | 0.30 | ||||||||||||||
| Strategic investment related gain, net (b) | (0.12 | ) | — | (0.16 | ) | (0.01 | ) | |||||||||||
| Restructuring (c) | 0.01 | 0.03 | 0.04 | 0.03 | ||||||||||||||
| Acquisition related expense (gain) (d) | 0.01 | — | 0.01 | (0.01 | ) | |||||||||||||
| Gain on deconsolidation of GRAIL (e) | — | — | — | (3.07 | ) | |||||||||||||
| Impairments (f) | — | — | — | 0.15 | ||||||||||||||
| Performance-based compensation related to GRAIL Series B financing (g) | — | — | — | 0.03 | ||||||||||||||
| Incremental non-GAAP tax expense (h) | (0.01 | ) | (0.05 | ) | (0.10 | ) | 0.80 | |||||||||||
| U.S. Tax Reform (i) | — | 1.01 | 0.07 | 1.01 | ||||||||||||||
| Excess tax benefit from share-based compensation (j) | (0.15 | ) | (0.13 | ) | (0.23 | ) | (0.35 | ) | ||||||||||
| Non-GAAP earnings per share attributable to Illumina stockholders - diluted (k) | $ | 1.32 | $ | 1.44 | $ | 5.72 | $ | 4.00 | ||||||||||
| ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME ATTRIBUTABLE TO ILLUMINA STOCKHOLDERS: | ||||||||||||||||||
| GAAP net income attributable to Illumina stockholders | $ | 210 | $ | 68 | $ | 826 | $ | 726 | ||||||||||
| Non-cash interest expense (a) | 15 | 8 | 41 | 30 | ||||||||||||||
| Amortization of acquired intangible assets | 10 | 10 | 37 | 45 | ||||||||||||||
| Strategic investment related gain, net (b) | (18 | ) | — | (24 | ) | (2 | ) | |||||||||||
| Restructuring (c) | 2 | 4 | 6 | 4 | ||||||||||||||
| Acquisition related expense (gain) (d) | 2 | — | 2 | (1 | ) | |||||||||||||
| Gain on deconsolidation of GRAIL (e) | — | — | — | (453 | ) | |||||||||||||
| Impairments (f) | — | — | — | 23 | ||||||||||||||
| Performance-based compensation related to GRAIL Series B financing (g) | — | — | — | 4 | ||||||||||||||
| Incremental non-GAAP tax expense (h) | (2 | ) | (7 | ) | (15 | ) | 117 | |||||||||||
| U.S. Tax Reform (i) | — | 150 | 11 | 150 | ||||||||||||||
| Excess tax benefit from share-based compensation (j) | (22 | ) | (21 | ) | (34 | ) | (52 | ) | ||||||||||
| Non-GAAP net income attributable to Illumina stockholders (k) | $ | 197 | $ | 212 | $ | 850 | $ | 591 | ||||||||||
| All amounts in tables are rounded to the nearest millions, except as otherwise noted. As a result, certain amounts may not recalculate using the rounded amounts provided. | ||
| (a) | Non-cash interest expense is calculated in accordance with the authoritative accounting guidance for convertible debt instruments that may be settled in cash. | |
| (b) | Amount consists primarily of mark-to-market adjustments and impairments from our strategic investments. | |
| (c) | Amount consists primarily of employee and lease exit costs related to restructuring that occurred in Q1 2018 and Q4 2017. | |
| (d) | Amount for 2018 consists of acquisition related expenses from the pending Pacific Biosciences acquisition. Amount for 2017 consists of change in fair value of contingent consideration. | |
| (e) | Amount represents the gain recognized as a result of the deconsolidation of GRAIL in Q1 2017. The $150 million tax effect of the gain is included in incremental non-GAAP tax expense. | |
| (f) | Impairments for 2017 include $18 million impairment of an acquired intangible asset and $5 million in-process research and development. | |
| (g) | Amount represents performance-based stock which vested as a result of the financing in Q1 2017, net of attribution to noncontrolling interest. | |
| (h) | Incremental non-GAAP tax expense reflects the tax impact of the non-GAAP adjustments listed above. | |
| (i) | Amount for 2017 primarily consists of the provisional estimate of the one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred. Amount for 2018 represents the discrete tax expense associated with updating prior year estimates of the impact of U.S. Tax Reform. | |
| (j) | Amount represents tax deductions taken in excess of stock compensation cost. | |
| (k) | Non-GAAP net income attributable to Illumina stockholders and diluted earnings per share attributable to Illumina stockholders exclude the effect of the pro forma adjustments as detailed above. Non-GAAP net income attributable to Illumina stockholders and diluted earnings per share attributable to Illumina stockholders are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation. Management has excluded the effects of these items in these measures to assist investors in analyzing and assessing our past and future core operating performance. | |
| Illumina, Inc. | ||||||||||||||||||||||||||||||
| Results of Operations - Non-GAAP (continued) | ||||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||
| ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: | ||||||||||||||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||||||||||||||
| December 30, 2018 | December 31, 2017 | December 30, 2018 | December 31, 2017 | |||||||||||||||||||||||||||
| GAAP gross profit | $ | 590 | 68.1 | % | $ | 542 | 69.7 | % | $ | 2,300 | 69.0 | % | $ | 1,826 | 66.4 | % | ||||||||||||||
| Amortization of acquired intangible assets | 9 | 1.0 | % | 9 | 1.2 | % | 35 | 1.1 | % | 39 | 1.4 | % | ||||||||||||||||||
| Impairment (a) | — | — | — | — | — | — | 18 | 0.6 | % | |||||||||||||||||||||
| Non-GAAP gross profit (b) | $ | 599 | 69.1 | % | $ | 551 | 70.9 | % | $ | 2,335 | 70.1 | % | $ | 1,883 | 68.4 | % | ||||||||||||||
| GAAP research and development expense | $ | 176 | 20.3 | % | $ | 137 | 17.7 | % | $ | 623 | 18.7 | % | $ | 546 | 19.8 | % | ||||||||||||||
| Restructuring (c) | — | — | (2 | ) | (0.3 | )% | (1 | ) | — | (2 | ) | (0.1 | )% | |||||||||||||||||
| Impairment (a) | — | — | — | — | — | — | (5 | ) | (0.1 | )% | ||||||||||||||||||||
| Non-GAAP research and development expense | $ | 176 | 20.3 | % | $ | 135 | 17.4 | % | $ | 622 | 18.7 | % | $ | 539 | 19.6 | % | ||||||||||||||
| GAAP selling, general and administrative expense | $ | 217 | 25.0 | % | $ | 175 | 22.5 | % | $ | 794 | 23.8 | % | $ | 674 | 24.6 | % | ||||||||||||||
| Restructuring (c) | (3 | ) | (0.3 | )% | (2 | ) | (0.3 | )% | (5 | ) | (0.2 | )% | (2 | ) | (0.1 | )% | ||||||||||||||
| Amortization of acquired intangible assets | — | — | (1 | ) | (0.1 | )% | (2 | ) | — | (6 | ) | (0.2 | )% | |||||||||||||||||
| Acquisition related (expense) gain (d) | (2 | ) | (0.2 | )% | — | — | (2 | ) | — | 1 | — | |||||||||||||||||||
| Performance-based compensation related to GRAIL Series B financing (e) | — | — | — | — | — | — | (10 | ) | (0.4 | )% | ||||||||||||||||||||
| Non-GAAP selling, general and administrative expense | $ | 212 | 24.5 | % | $ | 172 | 22.1 | % | $ | 785 | 23.6 | % | $ | 657 | 23.9 | % | ||||||||||||||
| GAAP operating profit | $ | 197 | 22.7 | % | $ | 230 | 29.6 | % | $ | 883 | 26.5 | % | $ | 606 | 22.0 | % | ||||||||||||||
| Amortization of acquired intangible assets | 10 | 1.2 | % | 10 | 1.3 | % | 37 | 1.1 | % | 45 | 1.6 | % | ||||||||||||||||||
| Restructuring (c) | 2 | 0.2 | % | 4 | 0.5 | % | 6 | 0.2 | % | 4 | 0.1 | % | ||||||||||||||||||
| Acquisition related expense (gain) (d) | 2 | 0.2 | % | — | — | 2 | 0.1 | % | (1 | ) | — | |||||||||||||||||||
| Impairments (a) | — | — | — | — | — | — | 23 | 0.9 | % | |||||||||||||||||||||
| Performance-based compensation related to GRAIL Series B financing (e) | — | — | — | — | — | — | 10 | 0.4 | % | |||||||||||||||||||||
| Non-GAAP operating profit (b) | $ | 211 | 24.3 | % | $ | 244 | 31.4 | % | $ | 928 | 27.9 | % | $ | 687 | 25.0 | % | ||||||||||||||
| GAAP other income (expense), net | $ | 13 | 1.5 | % | $ | (6 | ) | (0.8 | )% | $ | 11 | 0.3 | % | $ | 437 | 15.9 | % | |||||||||||||
| Non-cash interest expense (f) | 15 | 1.7 | % | 8 | 1.1 | % | 41 | 1.2 | % | 30 | 1.2 | % | ||||||||||||||||||
| Strategic investment related gain, net (g) | (18 | ) | (2.1 | )% | — | — | (24 | ) | (0.7 | )% | (2 | ) | (0.1 | )% | ||||||||||||||||
| Gain on deconsolidation of GRAIL (h) | — | — | — | — | — | — | (453 | ) | (16.5 | )% | ||||||||||||||||||||
| Non-GAAP other income, net (b) | $ | 10 | 1.1 | % | $ | 2 | 0.3 | % | $ | 28 | 0.8 | % | $ | 12 | 0.5 | % | ||||||||||||||
| All amounts in tables are rounded to the nearest millions, except as otherwise noted. As a result, certain amounts may not recalculate using the rounded amounts provided. | ||
| (a) | Impairments for 2017 include $18 million impairment of an acquired intangible asset and $5 million in-process research and development. | |
| (b) | Non-GAAP gross profit, included within non-GAAP operating profit, is a key measure of the effectiveness and efficiency of manufacturing processes, product mix and the average selling prices of our products and services. Non-GAAP operating profit, and non-GAAP other income, net, exclude the effects of the pro forma adjustments as detailed above. Management has excluded the effects of these items in these measures to assist investors in analyzing and assessing past and future operating performance. | |
| (c) | Amount consists primarily of employee and lease exit costs related to restructuring that occurred in Q1 2018 and Q4 2017. | |
| (d) | Amount for 2018 consists of acquisition related expenses from the pending Pacific Biosciences acquisition. Amount for 2017 consists of change in fair value of contingent consideration. | |
| (e) | Amount represents performance-based stock which vested as a result of the financing in Q1 2017. | |
| (f) | Non-cash interest expense is calculated in accordance with the authoritative accounting guidance for convertible debt instruments that may be settled in cash. | |
| (g) | Amount consists primarily of mark-to-market adjustments and impairments from our strategic investments. | |
| (h) | Amount represents the gain recognized as a result of the deconsolidation of GRAIL in Q1 2017. | |
Reconciliation of Non-GAAP Financial Guidance
Our future performance and financial results are subject to risks and uncertainties, and actual results could differ materially from the guidance set forth below. Some of the factors that could affect our financial results are stated above in this press release. More information on potential factors that could affect our financial results is included from time to time in the public reports filed with the
| Fiscal Year 2019 | |||
| GAAP diluted earnings per share attributable to Illumina stockholders (a) | $6.07 - $6.17 | ||
| Amortization of acquired intangible assets | 0.24 | ||
| Non-cash interest expense (b) | 0.33 | ||
| Incremental non-GAAP tax expense (c) | (0.14) | ||
| Non-GAAP diluted earnings per share attributable to Illumina stockholders (a) | $6.50 - $6.60 |
| (a) | Guidance does not include the potential impact of the pending Pacific Biosciences acquisition, which is expected to close in mid-2019. | |
| (b) | Non-cash interest expense is calculated in accordance with the authoritative accounting guidance for convertible debt instruments that may be settled in cash. | |
| (c) | Incremental non-GAAP tax expense reflects the tax impact related to the non-GAAP adjustments listed above. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190129005806/en/
Source:
Illumina, Inc.
Investors:
Jacquie Ross, CFA
858-882-2172
ir@illumina.com
Media:
Eric Endicott
858-882-6822
pr@illumina.com
