SAN DIEGO, Feb 04, 2010 (BUSINESS WIRE) -- Illumina, Inc. (NASDAQ:ILMN) today announced its financial results for the fourth quarter and fiscal year of 2009.
Fourth quarter 2009 results:
- Revenue of $180.6 million, a 12% increase over the $160.9 million reported in the fourth quarter of 2008.
- GAAP net income for the quarter of $11.7 million, or $0.09 per diluted share, compared to net income of $26.1 million, or $0.20 per diluted share in the comparable period of 2008. Net income for the fourth quarter of 2009 included non-cash charges of $16.5 million in stock compensation expense, $10 million of acquired in-process research and development expense associated with the acquisition of Avantome, Inc., $5.3 million in non-cash interest expense, and other items listed in the table entitled "An Itemized Reconciliation Between GAAP and Non-GAAP Net Income."
- Non-GAAP net income for the fourth quarter of 2009 of $37.8 million, or $0.29 per diluted share, compared to $39.4 million, or $0.31 per diluted share, for the fourth quarter of 2008. Net income in the prior year period included a one-time benefit of approximately $2.2 million from the retroactive extension of the US R&D tax credit.
Gross margin in the fourth quarter of 2009 was 69.5% compared to 64.4% in the comparable period of 2008. Excluding the effect of non-cash charges associated with stock compensation and the amortization of intangibles, non-GAAP gross margin was 71.2% for the fourth quarter of 2009 compared to 66.7% in the prior year period.
It should be noted that due to the structure of our financial reporting calendar, the company incurred an additional week of operating activity in the fourth quarter of 2009 as compared to both sequential and prior year periods.
Research and development (R&D) expenses for the fourth quarter of 2009 were $40.4 million compared to $28.3 million in the fourth quarter of 2008. R&D expenses include $5.6 million and $3.8 million of non-cash stock compensation expense in the fourth quarter of 2009 and 2008, respectively. R&D expenses in both periods also include $0.9 million of accrued contingent compensation associated with the Avantome acquisition. Excluding these charges, R&D expenses as a percentage of revenues were 18.8% compared to 14.7% in the prior year period.
Selling, general, and administrative (SG&A) expenses for the fourth quarter of 2009 were $49.5 million compared to $39.2 million for the fourth quarter of 2008. SG&A expenses include $9.6 million and $6.9 million of non-cash stock compensation expense in the fourth quarter of 2009 and 2008, respectively. Excluding these charges, SG&A expenses as a percentage of revenues were 22.1% compared to 20.1% in the prior year period.
The company generated $61.3 million in cash flow from operations during the fourth quarter of 2009 compared to $50.1 million in the prior year period. Depreciation and amortization expenses were $7.9 million and capital expenditures were $6.4 million during the fourth quarter. The company ended the fourth quarter with $693.5 million in cash and investments compared to $815.4 million as of September 27, 2009. During the quarter, the company purchased over 6 million shares of its common stock for approximately $175 million completing both outstanding share repurchase programs.
Fiscal 2009 results:
- Revenue of $666.3 million, a 16% increase over the $573.2 million reported in fiscal 2008.
- GAAP net income of $72.3 million, or $0.53 per diluted share, compared to $39.4 million or $0.30 per share in 2008. 2009 GAAP net income included non-cash charges of $60.8 million related to stock compensation expense, $19.7 million in non-cash interest expense, $11.3 million of in-process research and development primarily associated with the acquisition of Avantome, Inc., and other items listed in the table entitled "An Itemized Reconciliation Between GAAP and Non-GAAP Net Income."
- Non-GAAP net income of $144.9 million, or $1.11 per diluted share, compared to $118.0 million, or $0.93 per diluted share in fiscal 2008.
Gross margin for fiscal 2009 was 68.1%, compared to 61.6% in fiscal 2008. Excluding non-cash charges associated with stock compensation, the amortization of intangibles, and the impairment of manufacturing equipment, non-GAAP gross margin was 69.9% in fiscal 2009 compared to 65.0% in fiscal 2008.
R&D expenses for fiscal 2009 were $140.6 million compared to $100.0 million in fiscal 2008. R&D expenses for 2009 included non-cash stock compensation expense of $20.0 million compared to $14.1 million in 2008. R&D expenses also included $3.7 million and $1.5 million of accrued contingent compensation associated with the acquisition of Avantome, Inc. in 2009 and 2008 respectively. SG&A expenses for fiscal 2009 were $176.3 million compared to $148.0 million in 2008 and included $35.6 million and $28.5 million of non-cash stock compensation expense respectively.
The company generated $174.5 million in cash from operations in 2009 compared to $87.9 million in 2008. The 2008 amount included $54.5 million in litigation settlement payments, without which the company generated $142.4 million in cash from operations. Depreciation and amortization expenses for 2009 were $31.3 million and capital expenditures were $52.7 million.
Highlights since our last earnings release:
- Launched HiSeq 2000, the next generation sequencing system, capable of generating 200Gb of data per run using two flowcells and dual surface imaging.
- Announced that the BGI purchased 128 HiSeq2000 systems, representing the largest order for next-generation sequencing systems to date.
- Launched the Genome Analyzer IIe, a lower-priced sequencing by synthesis sequencing system ideal for smaller labs and expected to generate output up to 40Gb of data per run.
- Launched the OmniExpress, a 12 sample BeadChip incorporating Illumina's 3rd generation array technology and containing over 700,000 variants per sample, or a total of 8.4 million total markers. Customers can process over 1,400 samples per week at a list price $250 per sample.
- Launched the BovineHD, a 12 sample BeadChip for agricultural livestock with over 700,000 loci from more than 20 different bovine breeds.
- Announced that The Broad Institute purchased an additional 30 Genome Analyzers bringing its installed base to 89 systems.
Financial Outlook and Guidance
The non-GAAP financial guidance discussed below excludes the incremental interest expense associated with the company's convertible debt instruments that may be settled in cash, the amortization expense related to intangible assets, contingent compensation expense and the accrual of in-process research and development related to the Avantome acquisition, and the double dilution associated with the accounting treatment of the company's outstanding convertible debt and the corresponding call option overlay (see table which reconciles these non-GAAP financial measures to the related GAAP measures).
The company expects:
- Revenue growth for the full year 2010 of approximately 20% from 2009 revenue of $666 million.
- Gross margins in the mid to high 60s.
- Non-GAAP earnings per share between $0.90 and $1.00.
- Full year pro forma tax rate of approximately 34%.
- Stock compensation expense of approximately $73 million or a tax adjusted amount of $0.36 per fully diluted pro forma share.
- Full-year weighted-average diluted shares outstanding for the measurement of pro forma results of approximately 132 million.
Quarterly Conference Call Information
The conference call will begin at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Thursday, February 4, 2010. Interested parties may listen to the call by dialing 866-788-0546 (passcode: 47715520), or if outside North America, by dialing +1-857-350-1684 (passcode: 47715520). Individuals may access the live teleconference under the "Corporate/Investor Information" tab of Illumina's web site at http://www.illumina.com.
A replay of the conference call will be available from 5:00 p.m. Pacific Time (8:00 p.m. Eastern Time) on February 4, 2010 through February 11, 2010 by dialing 888-286-8010, or if outside North America, by dialing +1-617-801-6888 (passcode: 71521642).
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 margins, cash flow from operations 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, incremental interest expense and gain on debt extinguishment associated with the company's convertible debt instruments that may be settled in cash, expense related to in-process and acquired research and development, the amortization expense related to intangible assets, compensation expense related to contingent consideration due to stockholders of Avantome, Inc., and charges for the impairment of manufacturing equipment. Per share amounts also include the double dilution associated with the accounting treatment of the company's convertible debt outstanding and the corresponding call option overlay. Management believes that presentation of operating results that excludes these non-cash charges provides useful supplemental information to investors and facilitates the analysis of the company's core operating results and comparison of operating results across reporting periods. Management also 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.
Use of Forward-Looking Statements
This release contains projections, information about our financial outlook, earnings guidance, and other forward-looking statements that involve risks and uncertainties. These forward-looking statements are made based on our expectations as of the date of this release and may differ materially from actual future events or results. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are (i) our ability 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, (ii) our ability to manufacture robust instrumentation and reagents technology, and (iii) reductions in the funding levels to our primary customers, including as a result of the timing and amount of funding provided by the American Recovery and Reinvestment Act of 2009, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most 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 undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts' expectations, or to provide interim reports or updates on the progress of the current financial quarter.
About Illumina
Illumina (http://www.illumina.com) is a leading developer, manufacturer, and marketer of next-generation life-science tools and integrated systems for the 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. 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.
| Illumina, Inc. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (In thousands) | |||||||
| (unaudited) | |||||||
| January 3, 2010 | December 28, 2008 (a) | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 144,633 | $ | 327,024 | |||
| Short-term investments | 548,894 | 313,051 | |||||
| Accounts receivable, net | 157,751 | 133,266 | |||||
| Inventory, net | 92,776 | 73,431 | |||||
| Deferred tax assets, current portion | 20,021 | 8,635 | |||||
| Prepaid expenses and other current assets | 17,515 | 14,154 | |||||
| Total current assets | 981,590 | 869,561 | |||||
| Property and equipment, net | 117,188 | 89,436 | |||||
| Long-term investments | - | 55,900 | |||||
| Goodwill (b) | 213,452 | 228,734 | |||||
| Intangible assets, net | 43,788 | 47,755 | |||||
| Deferred tax assets, long-term portion | 47,371 | 30,960 | |||||
| Other assets | 26,548 | 4,825 | |||||
| Total assets | $ | 1,429,937 | $ | 1,327,171 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 52,781 | $ | 29,204 | |||
| Accrued liabilities | 98,253 | 80,355 | |||||
| Long-term debt, current portion | 290,202 | 276,889 | |||||
| Total current liabilities | 441,236 | 386,448 | |||||
| Other long-term liabilities | 24,656 | 18,946 | |||||
| Conversion option subject to cash settlement | 99,797 | 123,110 | |||||
| Stockholders' equity | 864,248 | 798,667 | |||||
| Total liabilities and stockholders' equity | $ | 1,429,937 | $ | 1,327,171 | |||
| (a) Adjusted for the required retroactive adoption of authoritative accounting guidance for convertible debt instruments that may be settled in cash upon conversion. | |||||||
(b) Reclassified a portion of goodwill to deferred tax assets to reflect the tax effect of Solexa's pre-acquisition net operating losses that can be utilized by Illumina. | |||||||
| Illumina, Inc. | |||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| January 3, | December 28, | January 3, | December 28, | ||||||||||||||
| 2010 | 2008 (a) | 2010 | 2008 (a) | ||||||||||||||
| Revenue: | |||||||||||||||||
| Product revenue | $ | 167,532 | $ | 152,836 | $ | 627,240 | $ | 532,390 | |||||||||
| Service and other revenue | 13,032 | 8,091 | 39,084 | 40,835 | |||||||||||||
| Total revenue | 180,564 | 160,927 | 666,324 | 573,225 | |||||||||||||
| Costs and expenses: | |||||||||||||||||
| Cost of product revenue (excluding impairment of manufacturing equipment and amortization of intangible assets) (b) | 48,337 | 52,107 | 190,714 | 192,868 | |||||||||||||
| Cost of service and other revenue (b) | 5,031 | 2,547 | 15,055 | 12,756 | |||||||||||||
| Research and development (b) | 40,368 | 28,339 | 140,616 | 99,963 | |||||||||||||
| Selling, general and administrative (b) | 49,471 | 39,205 | 176,337 | 148,014 | |||||||||||||
| Impairment of manufacturing equipment | - | - | - | 4,069 | |||||||||||||
| Amortization of intangible assets | 1,670 | 2,653 | 6,680 | 10,438 | |||||||||||||
| Acquired in-process research and development | 10,000 | - | 11,325 | 24,660 | |||||||||||||
| Total costs and expenses | 154,877 | 124,851 | 540,727 | 492,768 | |||||||||||||
| Income from operations | 25,687 | 36,076 | 125,597 | 80,457 | |||||||||||||
| Interest and other income (expense), net | (3,399 | ) | (1,096 | ) | (11,472 | ) | (7,770 | ) | |||||||||
| Income before income taxes | 22,288 | 34,980 | 114,125 | 72,687 | |||||||||||||
| Provision for income taxes | 10,583 | 8,888 | 41,844 | 33,271 | |||||||||||||
| Net income | $ | 11,705 | $ | 26,092 | $ | 72,281 | $ | 39,416 | |||||||||
| Net income per basic share | $ | 0.10 | $ | 0.21 | $ | 0.59 | $ | 0.34 | |||||||||
| Net income per diluted share | $ | 0.09 | $ | 0.20 | $ | 0.53 | $ | 0.30 | |||||||||
| Shares used in calculating basic net income per share | 122,818 | 122,447 | 123,154 | 116,855 | |||||||||||||
| Shares used in calculating diluted net income per share | 136,095 | 131,301 | 137,096 | 133,607 | |||||||||||||
| (a) Adjusted for the required retroactive adoption of authoritative accounting guidance for convertible debt instruments that may be settled in cash upon conversion. | |||||||||||||||||
| (b) Includes total stock-based compensation expense for employee stock options and stock purchases: | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| January 3, | December 28, | January 3, | December 28, | ||||||||||||||
| 2010 | 2008 | 2010 | 2008 | ||||||||||||||
| Cost of product revenue | $ | 1,160 | $ | 976 | $ | 4,776 | $ | 4,710 | |||||||||
| Cost of service and other revenue | 117 | 112 | 514 | 400 | |||||||||||||
| Research and development | 5,571 | 3,797 | 19,960 | 14,086 | |||||||||||||
| Selling, general and administrative | 9,629 | 6,933 | 35,561 | 28,492 | |||||||||||||
| Stock-based compensation expense before taxes | $ | 16,477 | $ | 11,818 | $ | 60,811 | $ | 47,688 | |||||||||
| Illumina, Inc. | ||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
| (In thousands) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| January 3, | December 28, | January 3, | December 28, | |||||||||||||
| 2010 | 2008 | 2010 | 2008 | |||||||||||||
| Net cash provided by operating activities | $ | 61,328 | $ | 50,117 | $ | 174,496 | $ | 87,882 | ||||||||
| Net cash provided by (used) in investing activities | 16,404 | (31,222 | ) | (255,718 | ) | (277,249 | ) | |||||||||
| Net cash (used in) provided by financing activities | (171,149 | ) | (49,414 | ) | (98,862 | ) | 337,672 | |||||||||
| Effect of foreign currency translation on cash and cash equivalents | (478 | ) | 2,324 | (2,307 | ) | 3,778 | ||||||||||
| Net (decrease) increase in cash and cash equivalents | (93,895 | ) | (28,195 | ) | (182,391 | ) | 152,083 | |||||||||
| Cash and cash equivalents, beginning of period | 238,528 | 355,219 | 327,024 | 174,941 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 144,633 | $ | 327,024 | $ | 144,633 | $ | 327,024 | ||||||||
| Calculation of free cash flow (a): | ||||||||||||||||
| Net cash provided by operating activities | $ | 61,328 | $ | 50,117 | $ | 174,496 | $ | 87,882 | ||||||||
| Purchases of property and equipment | (6,385 | ) | (14,554 | ) | (52,673 | ) | (59,693 | ) | ||||||||
| Free cash flow | $ | 54,943 | $ | 35,563 | $ | 121,823 | $ | 28,189 | ||||||||
| (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 thousands, except per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| AN ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME PER SHARE: | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| January 3, | December 28, | January 3, | December 28, | |||||||||||||
| 2010 | 2008 | 2010 | 2008 | |||||||||||||
| GAAP net income per share - diluted | $ | 0.09 | $ | 0.20 | $ | 0.53 | $ | 0.30 | ||||||||
| Pro forma impact of weighted average shares | - | 0.01 | 0.03 | 0.01 | ||||||||||||
| Adjustments to net income: | ||||||||||||||||
| Pro forma impact of stock-based compensation expense | 0.08 | 0.06 | 0.31 | 0.25 | ||||||||||||
| Pro forma impact of non-cash interest expense (a) | 0.03 | 0.02 | 0.09 | 0.09 | ||||||||||||
| Other pro forma adjustments | 0.09 | 0.02 | 0.15 | 0.28 | ||||||||||||
| Non-GAAP net income per share - diluted (b) | $ | 0.29 | $ | 0.31 | $ | 1.11 | $ | 0.93 | ||||||||
| Shares used in calculating non-GAAP diluted net income per share | 129,698 | 128,044 | 130,599 | 126,836 | ||||||||||||
| AN ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME: | ||||||||||||||||
| GAAP net income | $ | 11,705 | $ | 26,092 | $ | 72,281 | $ | 39,416 | ||||||||
| Stock-based compensation expense | 16,477 | 11,818 | 60,811 | 47,688 | ||||||||||||
| Non-cash interest expense (a) | 5,331 | 4,689 | 19,656 | 18,219 | ||||||||||||
| Acquired in-process research and development expense | 10,000 | - | 11,325 | 24,660 | ||||||||||||
| Amortization of intangible assets | 1,670 | 2,653 | 6,680 | 10,438 | ||||||||||||
| Compensation expense (c) | 919 | 919 | 3,675 | 1,531 | ||||||||||||
| Acquired research and development | - | - | 2,000 | - | ||||||||||||
| Gain on extinguishment of debt | - | - | (767 | ) | - | |||||||||||
| Impairment of manufacturing equipment | - | - | - | 4,069 | ||||||||||||
| Pro forma impact on tax expense: | ||||||||||||||||
| stock-based compensation | (5,744 | ) | (4,397 | ) | (20,121 | ) | (15,844 | ) | ||||||||
| non-cash interest expense (a) | (2,082 | ) | (1,842 | ) | (7,691 | ) | $ | (7,158 | ) | |||||||
| other pro forma adjustments | (516 | ) | (499 | ) | (2,984 | ) | $ | (5,014 | ) | |||||||
| Incremental non-GAAP tax expense (d) | (8,342 | ) | (6,738 | ) | (30,796 | ) | $ | (28,016 | ) | |||||||
| Non-GAAP net income (b) | $ | 37,760 | $ | 39,433 | $ | 144,865 | $ | 118,005 | ||||||||
| (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) Non-GAAP net income per share and net income exclude the effect of the pro forma adjustments as detailed above. Non-GAAP diluted net income per share and net income are key drivers of our core operating performance and major factors in management's bonus compensation each year. 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. | ||||||||||||||||
| (c) Compensation expense represents the contingent consideration due to stockholders of Avantome, Inc. for post-combination services for a three year period contingent upon the primary stockholders' continued employment. This expense is included within research and development on our statements of operations. | ||||||||||||||||
| (d) Incremental non-GAAP tax expense reflects the increase to GAAP tax expense related to the non-GAAP adjustments listed above. | ||||||||||||||||
| Illumina, Inc. | ||||||||||||||||||||||||||||
| Results of Operations - Non-GAAP (continued) | ||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||
| AN ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: | ||||||||||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||
| January 3, | December 28, | January 3, | December 28, | |||||||||||||||||||||||||
| 2010 | 2008 | 2010 | 2008 | |||||||||||||||||||||||||
| GAAP gross profit | $ | 125,526 | 69.5 | % | $ | 103,620 | 64.4 | % | $ | 453,875 | 68.1 | % | $ | 353,094 | 61.6 | % | ||||||||||||
| Stock-based compensation expense | 1,277 | 0.7 | % | 1,088 | 0.7 | % | 5,290 | 0.8 | % | 5,110 | 0.9 | % | ||||||||||||||||
| Amortization of intangible assets | 1,670 | 0.9 | % | 2,653 | 1.6 | % | 6,680 | 1.0 | % | 10,438 | 1.8 | % | ||||||||||||||||
| Impairment of manufacturing equipment | - | - | - | - | - | - | 4,069 | 0.7 | % | |||||||||||||||||||
| Non-GAAP gross profit | $ | 128,473 | 71.2 | % | $ | 107,361 | 66.7 | % | $ | 465,845 | 69.9 | % | $ | 372,711 | 65.0 | % | ||||||||||||
| Research and development expense | $ | 40,368 | 22.4 | % | $ | 28,339 | 17.6 | % | $ | 140,616 | 21.1 | % | $ | 99,963 | 17.4 | % | ||||||||||||
| Stock-based compensation expense | (5,571 | ) | (3.1 | %) | (3,797 | ) | (2.4 | %) | (19,960 | ) | (3.0 | %) | (14,086 | ) | (2.5 | %) | ||||||||||||
| Compensation expense (a) | (919 | ) | (0.5 | %) | (919 | ) | (0.6 | %) | (3,675 | ) | (0.6 | %) | (1,531 | ) | (0.3 | %) | ||||||||||||
| Acquired research and development | - | - | - | - | (2,000 | ) | (0.3 | %) | - | - | ||||||||||||||||||
| Non-GAAP research and development expense | $ | 33,878 | 18.8 | % | $ | 23,623 | 14.7 | % | $ | 114,981 | 17.3 | % | $ | 84,346 | 14.7 | % | ||||||||||||
| Selling, general and administrative expense | $ | 49,471 | 27.4 | % | $ | 39,205 | 24.4 | % | $ | 176,337 | 26.5 | % | $ | 148,014 | 25.8 | % | ||||||||||||
| Stock-based compensation expense | (9,629 | ) | (5.3 | %) | (6,933 | ) | (4.3 | %) | (35,561 | ) | (5.3 | %) | (28,492 | ) | (5.0 | %) | ||||||||||||
| Non-GAAP selling, general and administrative expense | $ | 39,842 | 22.1 | % | $ | 32,272 | 20.1 | % | $ | 140,776 | 21.1 | % | $ | 119,522 | 20.9 | % | ||||||||||||
| GAAP operating profit | $ | 25,687 | 14.2 | % | $ | 36,076 | 22.4 | % | $ | 125,597 | 18.8 | % | $ | 80,457 | 14.0 | % | ||||||||||||
| Stock-based compensation expense | 16,477 | 9.1 | % | 11,818 | 7.3 | % | 60,811 | 9.1 | % | 47,688 | 8.3 | % | ||||||||||||||||
| Acquired in-process research and development | 10,000 | 5.5 | % | - | - | 11,325 | 1.7 | % | 24,660 | 4.3 | % | |||||||||||||||||
| Amortization of intangible assets | 1,670 | 0.9 | % | 2,653 | 1.6 | % | 6,680 | 1.0 | % | 10,438 | 1.8 | % | ||||||||||||||||
| Compensation expense (a) | 919 | 0.5 | % | 919 | 0.6 | % | 3,675 | 0.6 | % | 1,531 | 0.3 | % | ||||||||||||||||
| Acquired research and development | - | - | - | - | 2,000 | 0.3 | % | - | - | |||||||||||||||||||
| Impairment of manufacturing equipment | - | - | - | - | - | - | 4,069 | 0.7 | % | |||||||||||||||||||
| Non-GAAP operating profit (b) | $ | 54,753 | 30.3 | % | $ | 51,466 | 32.0 | % | $ | 210,088 | 31.5 | % | $ | 168,843 | 29.5 | % | ||||||||||||
| (a) Compensation expense represents the contingent consideration due to stockholders of Avantome, Inc. for post-combination services for a three year period contingent upon the primary stockholders' continued employment. This expense is included within research and development on our statements of operations. | ||||||||||||||||||||||||||||
| (b) Non-GAAP operating profit excludes the effect 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 our past and future core operating performance. Non-GAAP gross profit, included within the non-GAAP operating profit, is a key measure of the effectiveness and efficiency of our manufacturing processes, product mix and the average selling prices of our products and services. | ||||||||||||||||||||||||||||
| Illumina, Inc. | ||||||||||||
| Condensed Consolidated Statements of Cash Flow - Non-GAAP | ||||||||||||
| (unaudited) | ||||||||||||
| AN ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||
| Three Months Ended | Year Ended | |||||||||||
| January 3, | December 28, | January 3, | December 28, | |||||||||
| 2010 | 2008 | 2010 | 2008 | |||||||||
| Net cash provided by operating activities | $ | 61,328 | $ | 50,117 | $ | 174,496 | $ | 87,882 | ||||
| Litigation settlements paid in cash (a) | - | - | - | 54,536 | ||||||||
| Non-GAAP net cash provided by operating activities (b) | $ | 61,328 | $ | 50,117 | $ | 174,496 | $ | 142,418 | ||||
| (a) The company made payments of $90.5 million during the first quarter of 2008 associated with two litigation settlement agreements. Of the total $90.5 million payments, $54.5 million was charged to expense during the fourth quarter of 2007 and $36.0 million was recorded as an intangible asset. | ||||||||||||
| (b) Non-GAAP cash provided by operating activities is a key driver of our core operating performance. Management has excluded the cash effect of the litigation settlement payments to assist investors in analyzing and assessing our past and future core operating performance. | ||||||||||||
| Illumina, Inc. | ||
| Reconciliation of Non-GAAP Financial Guidance | ||
| The financial guidance provided below is an estimate based on information available as ofFebruary 4, 2010. The company's 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 the company's financial results are stated above in this press release. More information on potential factors that could affect the company's financial results is included from time to time in the company's public reports filed with the SEC, including the company's Form 10-K for the fiscal year ended December 28, 2008, the company's Form 10-Q for the fiscal quarters ended March 29, 2009, June 28, 2009 and September 27, 2009 and the company's Form 10-K for the fiscal year ended January 3, 2010 to be filed with the SEC. The company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. | ||
| Diluted net income per share | ||
| Fiscal Year 2010 | ||
| Non-GAAP | $0.90 - $1.00 | |
| Non-cash interest expense (a) | ($0.10) | |
| Other non-GAAP adjustments (b) | ($0.11) | |
| GAAP | $0.69 - $0.79 | |
| (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) Other non-GAAP adjustments reflect the estimated impact on diluted net income per share for fiscal year 2010 from the amortization of intangible assets, compensation expense for the contingent consideration due to stockholders of Avantome, Inc., acquired in-process research and development and the adjustment to the number of diluted shares due to the double dilution associated with the accounting treatment of the company's convertible debt outstanding and the corresponding call option overlay. | ||
SOURCE: Illumina, Inc.
Illumina, Inc.
Investors:
Peter J. Fromen
Senior Director
Investor Relations
858-202-4507
pfromen@illumina.com
or
Media:
Wilson Grabill
Senior Manager
Public Relations
858-882-6822
wgrabill@illumina.com
