SAN DIEGO--(BUSINESS WIRE)--Feb. 7, 2012-- ILLUMINA REPORTS FINANCIAL RESULTS FOR FOURTH QUARTER AND FISCAL YEAR 2011
Fourth quarter 2011 results:
- Revenue of
$250 million , a 4% decrease compared to the$261 million in the fourth quarter of 2010. - GAAP net income for the quarter of
$11.7 million , or$0.09 per diluted share, compared to net income of$38.4 million , or$0.25 per diluted share, for the fourth quarter of 2010. - Non-GAAP net income for the quarter of
$43.5 million , or$0.35 per diluted share, compared to$40.9 million , or$0.29 per diluted share, for the fourth quarter of 2010 (see the table entitled "Itemized Reconciliation Between GAAP and Non-GAAP Net Income" for a reconciliation of these GAAP and non-GAAP financial measures). - Record cash flow from operations of
$108 million and record free cash flow of$81 million for the quarter. - Excluding a very large sequencing equipment order in the fourth quarter of 2009, record orders during the quarter and a book-to-bill ratio of 1.2.
- As a result of our strong book-to-bill ratio we exited the year with a backlog of
$251 million .
Gross margin in the fourth quarter of 2011 was 68.2% compared to 63.6% in the prior year period. Excluding the effect of non-cash charges associated with stock compensation and the amortization of acquired intangibles, non-GAAP gross margin was 70.2% for the fourth quarter of 2011 compared to 65.1% in the prior year period.
Research and development (R&D) expenses for the fourth quarter of 2011 were
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2011 were
The company generated
Fiscal 2011 results:
- Revenue of
$1.056 billion , a 17% increase over the$902.7 million reported in fiscal 2010. - GAAP net income of
$86.6 million , or$0.62 per diluted share, compared to$124.9 million or$0.87 per share in fiscal 2010. - Non-GAAP net income of
$176.0 million , or$1.30 per diluted share, compared to$142.2 million , or$1.06 per diluted share in fiscal 2010 (see table entitled "An Itemized Reconciliation Between GAAP and Non-GAAP Net Income" for a reconciliation of these GAAP and non-GAAP financial measures). - Record cash flow from operations of
$358 million .
Gross margin for fiscal 2011 was 67.2% compared to 66.6% in fiscal 2010. Excluding the effect of non-cash charges associated with stock compensation and the amortization of acquired intangibles, non-GAAP gross margin was 69.0% in fiscal 2011 compared to 68.1% in fiscal 2010.
R&D expenses for fiscal 2011 were
SG&A expenses for fiscal 2011 were
The company generated
Highlights since our last earnings release
- Announced the HiSeq 2500, a new multi-mode next-generation sequencer which enables researchers and clinicians to sequence an entire human genome in approximately a day (120Gb/run). Alternatively, the instrument can be operated in the standard 600Gb-run mode. Existing HiSeq 2000 instruments are upgradable through a simple, field-based upgrade priced at
$50,000 . The system and upgrades will be available in the second half of 2012. - Announced significant enhancements to the MiSeq platform that enable read-lengths of up to 2 x 250 base pairs per run, faster cycle times, and threefold higher throughput (up to 7Gb per run) compared to the original MiSeq launched just over four months ago.
- Announced a ground-breaking partnership with
Siemens Healthcare Diagnostics to use the MiSeq platform for Siemens’ molecular HIV tests and to establish new standards based on the use of next-generation sequencing for the identification of infectious diseases and potential treatment paths. - Appointed
Marc Stapley , formerly Pfizer's Senior Vice President of Finance, as Chief Financial Officer. - Further strengthened Illumina’s management team by appointing Dr.
Daniel Grosu to the newly created position of Chief Medical Officer andLaura Lauman to the position of Vice President of Marketing. - Promoted
Matt Posard to the newly created position of Senior Vice President and General Manager of our Translational and Consumer Genomics Business Unit; promoted Omead Ostadan, formerly our Vice President of Marketing, to the position of Senior Vice President Product Development. - Expanded the Illumina Genome Network by adding the
British Columbia Cancer Agency to the growing list of prestigious participants.
Financial outlook and guidance
The non-GAAP financial guidance discussed below excludes various one-time or specified non-cash charges. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and Non-GAAP financial measures.
We currently expect revenue for 2012 between
For the first quarter of 2012, we expect revenues between
Quarterly conference call information
The conference call will begin at
A replay of the conference call will be available from
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 related to stock compensation expense, headquarter relocation expense, non-cash interest expense associated with the company’s convertible debt instruments that may be settled in cash, restructuring charges, amortization expense related to acquired intangible assets, loss on the extinguishment of convertible debt, contingent compensation expense, legal settlement gain, and acquisition related gain or expense. Per share amounts also include the double dilution associated with the accounting treatment of the company’s 0.625% convertible senior notes outstanding and the corresponding call option overlay. Management believes that presentation of operating results that excludes these items and per share double dilution 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 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 sequencing, array, PCR, and consumables technologies and to deploy new products and applications, and expand the markets, for our technology platforms; (ii) our ability to manufacture robust instrumentation and consumables; (iii) our expectations and beliefs regarding future conduct and growth of the business and the markets in which we operate; (iv) challenges inherent in developing, manufacturing, and launching new products and services; (v) business disruptions associated with the tender offer commenced by
About
Additional Information and Where to Find It
This communication does not constitute an offer to buy or a solicitation of an offer to sell any securities. In response to the tender offer commenced by
In addition,
Certain Information Regarding Participants in the Solicitation
Illumina, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
January 1, 2012 | January 2, 2011 | |||||||
ASSETS | (unaudited) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 302,978 | $ | 248,947 | ||||
Short-term investments | 886,590 | 645,342 | ||||||
Accounts receivable, net | 173,886 | 165,598 | ||||||
Inventory, net | 128,781 | 142,211 | ||||||
Deferred tax assets, current portion | 23,188 | 19,378 | ||||||
Prepaid expenses and other current assets | 29,196 | 36,922 | ||||||
Total current assets | 1,544,619 | 1,258,398 | ||||||
Property and equipment, net | 143,483 | 129,874 | ||||||
Goodwill | 321,853 | 278,206 | ||||||
Intangible assets, net | 106,475 | 91,462 | ||||||
Deferred tax assets, long-term portion | 19,675 | 39,497 | ||||||
Other assets | 59,735 | 41,676 | ||||||
Total assets | $ | 2,195,840 | $ | 1,839,113 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 49,806 | $ | 66,744 | ||||
Accrued liabilities | 187,774 | 156,164 | ||||||
Long-term debt, current portion | - | 311,609 | ||||||
Total current liabilities | 237,580 | 534,517 | ||||||
Long-term debt | 807,369 | - | ||||||
Other long-term liabilities | 69,954 | 28,531 | ||||||
Conversion option subject to cash settlement | 5,722 | 78,390 | ||||||
Stockholders’ equity | 1,075,215 | 1,197,675 | ||||||
Total liabilities and stockholders’ equity | $ | 2,195,840 | $ | 1,839,113 | ||||
Illumina, Inc. | |||||||||||||||||||
Condensed Consolidated Statements of Income | |||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
January 1, | January 2, | January 1, | January 2, | ||||||||||||||||
Revenue: | |||||||||||||||||||
Product revenue | $ | 230,396 | $ | 245,626 | $ | 987,280 | $ | 842,510 | |||||||||||
Service and other revenue | 19,675 | 15,672 | 68,255 | 60,231 | |||||||||||||||
Total revenue | 250,071 | 261,298 | 1,055,535 | 902,741 | |||||||||||||||
Cost of Revenue: | |||||||||||||||||||
Cost of product revenue (a) | 69,509 | 87,183 | 308,228 | 271,997 | |||||||||||||||
Cost of service and other revenue (a) | 6,940 | 5,694 | 26,118 | 21,399 | |||||||||||||||
Amortization of acquired intangible assets | 3,036 | 2,295 | 12,091 | 7,805 | |||||||||||||||
Total cost of revenue | 79,485 | 95,172 | 346,437 | 301,201 | |||||||||||||||
Gross profit | 170,586 | 166,126 | 709,098 | 601,540 | |||||||||||||||
Operating Expenses: | |||||||||||||||||||
Research and development (a) | 45,513 | 45,800 | 196,913 | 177,947 | |||||||||||||||
Selling, general and administrative (a) | 60,918 | 62,034 | 261,843 | 220,454 | |||||||||||||||
Headquarter relocation expense | 30,243 | - | 41,826 | - | |||||||||||||||
Restructuring charges | 8,136 | - | 8,136 | - | |||||||||||||||
Acquisition related (gain) expense, net | (1,523 | ) | (10,376 | ) | 919 | (8,515 | ) | ||||||||||||
Total operating expenses | 143,287 | 97,458 | 509,637 | 389,886 | |||||||||||||||
Income from operations | 27,299 | 68,668 | 199,461 | 211,654 | |||||||||||||||
Other expense, net | (7,077 | ) | (17,886 | ) | (66,416 | ) | (26,275 | ) | |||||||||||
Income before income taxes | 20,222 | 50,782 | 133,045 | 185,379 | |||||||||||||||
Provision for income taxes | 8,502 | 12,342 | 46,417 | 60,488 | |||||||||||||||
Net income | $ | 11,720 | $ | 38,440 | $ | 86,628 | $ | 124,891 | |||||||||||
Net income per basic share | $ | 0.10 | $ | 0.31 | $ | 0.70 | $ | 1.01 | |||||||||||
Net income per diluted share | $ | 0.09 | $ | 0.25 | $ | 0.62 | $ | 0.87 | |||||||||||
Shares used in calculating basic net income per share | 121,541 | 125,876 | 123,399 | 123,581 | |||||||||||||||
Shares used in calculating diluted net income per share | 124,888 | 151,171 | 138,937 | 143,433 | |||||||||||||||
(a) Includes total stock-based compensation expense for stock based awards: | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
January 1, | January 2, | January 1, | January 2, | ||||||||||||||||
Cost of product revenue | $ | 1,684 | $ | 1,508 | $ | 6,951 | $ | 5,378 | |||||||||||
Cost of service and other revenue | 159 | 76 | 695 | 470 | |||||||||||||||
Research and development | 7,295 | 6,977 | 32,105 | 25,428 | |||||||||||||||
Selling, general and administrative | 12,678 | 11,279 | 52,341 | 40,369 | |||||||||||||||
Stock-based compensation expense before taxes | $ | 21,816 | $ | 19,840 | $ | 92,092 | $ | 71,645 | |||||||||||
Illumina, Inc. | ||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
(In thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
January 1, | January 2, | January 1, | January 2, | |||||||||||||
Net cash provided by operating activities | $ | 108,300 | $ | 81,481 | $ | 358,140 | $ | 272,573 | ||||||||
Net cash used in investing activities | (42,960 | ) | (70,056 | ) | (400,999 | ) | (285,053 | ) | ||||||||
Net cash provided by financing activities | 7,848 | 26,543 | 97,016 | 116,474 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (56 | ) | 212 | (126 | ) | 320 | ||||||||||
Net increase in cash and cash equivalents | 73,132 | 38,180 | 54,031 | 104,314 | ||||||||||||
Cash and cash equivalents, beginning of period | 229,846 | 210,767 | 248,947 | 144,633 | ||||||||||||
Cash and cash equivalents, end of period | $ | 302,978 | $ | 248,947 | $ | 302,978 | $ | 248,947 | ||||||||
Calculation of free cash flow (a): | ||||||||||||||||
Net cash provided by operating activities | $ | 108,300 | $ | 81,481 | $ | 358,140 | $ | 272,573 | ||||||||
Purchases of property and equipment | (27,114 | ) | (12,384 | ) | (77,800 | ) | (49,818 | ) | ||||||||
Free cash flow | $ | 81,186 | $ | 69,097 | $ | 280,340 | $ | 222,755 | ||||||||
(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) | |||||||||||||||||||
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME PER SHARE: | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
January 1, | January 2, | January 1, | January 2, | ||||||||||||||||
GAAP net income per share - diluted | $ | 0.09 | $ | 0.25 | $ | 0.62 | $ | 0.87 | |||||||||||
Pro forma impact of weighted average shares (a) | - | 0.01 | 0.03 | 0.06 | |||||||||||||||
Adjustments to net income: | |||||||||||||||||||
Headquarter relocation expense (b) | 0.24 | - | 0.31 | - | |||||||||||||||
Non-cash interest expense (c) | 0.07 | 0.04 | 0.24 | 0.16 | |||||||||||||||
Restructuring charges | 0.07 | - | 0.06 | - | |||||||||||||||
Amortization of acquired intangible assets | 0.02 | 0.02 | 0.09 | 0.06 | |||||||||||||||
Legal settlement gain | (0.02 | ) | - | (0.02 | ) | - | |||||||||||||
Acquisition related (gain) expense, net (d) | (0.01 | ) | (0.07 | ) | 0.01 | (0.09 | ) | ||||||||||||
Contingent compensation expense (e) | 0.01 | 0.01 | 0.04 | 0.03 | |||||||||||||||
Loss on extinguishment of debt | - | - | 0.28 | - | |||||||||||||||
Impairment loss related to a cost-method investment | - | 0.09 | - | 0.10 | |||||||||||||||
Incremental non-GAAP tax expense (f) | (0.12 | ) | (0.06 | ) | (0.36 | ) | (0.13 | ) | |||||||||||
Non-GAAP net income per share - diluted (g) | $ | 0.35 | $ | 0.29 | $ | 1.30 | $ | 1.06 | |||||||||||
Shares used in calculating non-GAAP diluted net income per share | 124,409 | 140,080 | 135,154 | 134,375 | |||||||||||||||
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME: | |||||||||||||||||||
GAAP net income | $ | 11,720 | $ | 38,440 | $ | 86,628 | $ | 124,891 | |||||||||||
Headquarter relocation expense (b) | 30,243 | - | 41,826 | - | |||||||||||||||
Non-cash interest expense (c) | 8,542 | 5,363 | 32,495 | 20,832 | |||||||||||||||
Restructuring charges | 8,136 | - | 8,136 | - | |||||||||||||||
Amortization of acquired intangible assets | 3,188 | 2,295 | 12,689 | 7,805 | |||||||||||||||
Legal settlement gain | (2,300 | ) | - | (2,300 | ) | - | |||||||||||||
Acquisition related (gain) expense, net (d) | (1,523 | ) | (10,376 | ) | 919 | (11,429 | ) | ||||||||||||
Contingent compensation expense (e) | 732 | 919 | 6,057 | 3,675 | |||||||||||||||
Loss on extinguishment of debt | - | - | 37,611 | - | |||||||||||||||
Impairment loss related to a cost-method investment | - | 13,223 | - | 13,223 | |||||||||||||||
Incremental non-GAAP tax expense (f) | (15,215 | ) | (9,014 | ) | (48,053 | ) | (16,813 | ) | |||||||||||
Non-GAAP net income (g) | $ | 43,523 | $ | 40,850 | $ | 176,008 | $ | 142,184 | |||||||||||
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP DILUTED NUMBER OF SHARES: | |||||||||||||||||||
Weighted average shares used in calculation of GAAP diluted net income per share | 124,888 | 151,171 | 138,937 | 143,433 | |||||||||||||||
Weighted average dilutive potential common shares issuable of redeemable convertible senior notes (a) | (479 | ) | (11,091 | ) | (3,783 | ) | (9,058 | ) | |||||||||||
Weighted average shares used in calculation of Non-GAAP diluted net income per share | 124,409 | 140,080 | 135,154 | 134,375 | |||||||||||||||
(a) Pro forma impact of weighted average shares represents the impact of double dilution associated with the accounting treatment of the company's outstanding convertible debt and the corresponding call option overlay. | |||||||||||||||||||
(b) The Company relocated its headquarters to a new facility in San Diego, California during the second half of 2011. Headquarter relocation expense in Q4 2011 and fiscal year 2011 are primarily non-cash in nature and includes a cease-use loss upon vacating certain buildings of our prior headquarters, accelerated depreciation expense, and double rent expense during the transition to our new headquarter facility. | |||||||||||||||||||
(c) Non-cash interest expense is calculated in accordance with the authoritative accounting guidance for convertible debt instruments that may be settled in cash. | |||||||||||||||||||
(d) Acquisition related (gain) expense, net includes the following current year and prior year adjustments: | |||||||||||||||||||
2011 adjustments: | |||||||||||||||||||
- IPR&D charge of $5.4 million related to milestone payments for a prior acquisition | |||||||||||||||||||
- Gain of $4.5 million for changes in fair value of contingent consideration, $1.5 million of which was recorded in Q4 2011 | |||||||||||||||||||
2010 adjustments: | |||||||||||||||||||
- IPR&D charge of $1.3 million related to milestone payments for a prior acquisition | |||||||||||||||||||
- Acquisition expenses of $0.5 million | |||||||||||||||||||
- Gain on acquisition of $2.9 million recorded for the difference between the carrying value of a cost-method investment prior to acquisition and the fair value of that investment at the time of acquisition | |||||||||||||||||||
- Gain of $10.4 million recorded in Q4 2010 for changes in fair value of contingent consideration | |||||||||||||||||||
(e) Contingent compensation expense represents contingent consideration for post-combination services associated with acquisitions. | |||||||||||||||||||
(f) Incremental non-GAAP tax expense reflects the increase to GAAP tax expense related to the non-GAAP adjustments listed above. | |||||||||||||||||||
(g) 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. | |||||||||||||||||||
Illumina, Inc. | ||||||||||||||||||||||||||||
Results of Operations - Non-GAAP (continued) | ||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: | ||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
January 1, 2012 | January 2, 2011 | January 1, 2012 | January 2, 2011 | |||||||||||||||||||||||||
GAAP gross profit | $ | 170,586 | 68.2 | % | $ | 166,126 | 63.6 | % | $ | 709,098 | 67.2 | % | $ | 601,540 | 66.6 | % | ||||||||||||
Stock-based compensation expense | 1,843 | 0.7 | % | 1,584 | 0.6 | % | 7,646 | 0.7 | % | 5,848 | 0.6 | % | ||||||||||||||||
Amortization of acquired intangible assets | 3,036 | 1.2 | % | 2,295 | 0.9 | % | 12,091 | 1.1 | % | 7,805 | 0.9 | % | ||||||||||||||||
Non-GAAP gross profit | $ | 175,465 | 70.2 | % | $ | 170,005 | 65.1 | % | $ | 728,835 | 69.0 | % | $ | 615,193 | 68.1 | % | ||||||||||||
Research and development expense | $ | 45,513 | 18.2 | % | $ | 45,800 | 17.5 | % | $ | 196,913 | 18.7 | % | $ | 177,947 | 19.7 | % | ||||||||||||
Stock-based compensation expense | (7,295 | ) | (2.9 | %) | (6,977 | ) | (2.7 | %) | (32,105 | ) | (3.0 | %) | (25,428 | ) | (2.8 | %) | ||||||||||||
Contingent compensation expense (a) | (732 | ) | (0.3 | %) | (919 | ) | (0.4 | %) | (4,799 | ) | (0.5 | %) | (3,675 | ) | (0.4 | %) | ||||||||||||
Non-GAAP research and development expense | $ | 37,486 | 15.0 | % | $ | 37,904 | 14.5 | % | $ | 160,009 | 15.2 | % | $ | 148,844 | 16.5 | % | ||||||||||||
Selling, general and administrative expense | $ | 60,918 | 24.4 | % | $ | 62,034 | 23.7 | % | $ | 261,843 | 24.8 | % | $ | 220,454 | 24.4 | % | ||||||||||||
Stock-based compensation expense | (12,678 | ) | (5.1 | %) | (11,279 | ) | (4.3 | %) | (52,341 | ) | (5.0 | %) | (40,369 | ) | (4.5 | %) | ||||||||||||
Legal settlement gain | 2,300 | 0.9 | % | - | - | 2,300 | 0.2 | % | - | - | ||||||||||||||||||
Contingent compensation expense (a) | - | - | - | - | (1,258 | ) | (0.1 | %) | - | - | ||||||||||||||||||
Amortization of acquired intangible assets | (152 | ) | (0.1 | %) | - | - | (598 | ) | (0.1 | %) | - | - | ||||||||||||||||
Non-GAAP selling, general and administrative expense | $ | 50,388 | 20.1 | % | $ | 50,755 | 19.4 | % | $ | 209,946 | 19.9 | % | $ | 180,085 | 19.9 | % | ||||||||||||
GAAP operating profit | $ | 27,299 | 10.9 | % | $ | 68,668 | 26.3 | % | $ | 199,461 | 18.9 | % | $ | 211,654 | 23.4 | % | ||||||||||||
Stock-based compensation expense | 21,816 | 8.7 | % | 19,840 | 7.6 | % | 92,092 | 8.7 | % | 71,645 | 7.9 | % | ||||||||||||||||
Headquarter relocation expense (b) | 30,243 | 12.1 | % | - | - | 41,826 | 4.0 | % | - | - | ||||||||||||||||||
Amortization of acquired intangible assets | 3,188 | 1.3 | % | 2,295 | 0.9 | % | 12,689 | 1.2 | % | 7,805 | 0.9 | % | ||||||||||||||||
Restructuring charges | 8,136 | 3.3 | % | - | - | 8,136 | 0.8 | % | - | - | ||||||||||||||||||
Contingent compensation expense (a) | 732 | 0.3 | % | 919 | 0.4 | % | 6,057 | 0.6 | % | 3,675 | 0.4 | % | ||||||||||||||||
Legal settlement gain | (2,300 | ) | (0.9 | %) | - | - | (2,300 | ) | (0.2 | %) | - | - | ||||||||||||||||
Acquisition related (gain) expense, net (c) | (1,523 | ) | (0.6 | %) | (10,376 | ) | -4.0 | % | 919 | 0.1 | % | (8,515 | ) | -0.9 | % | |||||||||||||
Non-GAAP operating profit (d) | $ | 87,591 | 35.0 | % | $ | 81,346 | 31.1 | % | $ | 358,880 | 34.0 | % | $ | 286,264 | 31.7 | % | ||||||||||||
GAAP other expense, net | $ | (7,077 | ) | (2.8 | %) | $ | (17,886 | ) | (6.8 | %) | $ | (66,416 | ) | (6.3 | %) | $ | (26,275 | ) | (2.9 | %) | ||||||||
Loss on extinguishment of debt | - | - | - | - | 37,611 | 3.6 | % | - | - | |||||||||||||||||||
Acquisition related gain (c) | - | - | - | - | - | - | (2,914 | ) | (0.3 | %) | ||||||||||||||||||
Impairment loss related to a cost-method investment | - | - | 13,223 | 5.1 | % | - | - | 13,223 | 1.5 | % | ||||||||||||||||||
Non-cash interest expense (e) | 8,542 | 3.4 | % | 5,363 | 2.1 | % | 32,495 | 3.1 | % | 20,832 | 2.3 | % | ||||||||||||||||
Non-GAAP other income, net (d) | $ | 1,465 | 0.6 | % | $ | 700 | 0.3 | % | $ | 3,690 | 0.3 | % | $ | 4,866 | 0.5 | % | ||||||||||||
(a) Contingent compensation expense represents contingent consideration for post-combination services associated with acquisitions. | ||||||||||||||||||||||||||||
(b) Headquarter relocation expense in Q4 2011 and fiscal year 2011 are primarily non-cash in nature and includes a cease-use loss upon vacating certain buildings of our prior headquarters, accelerated depreciation expense, and double rent expense during the transition to our new headquarter facility. | ||||||||||||||||||||||||||||
(c) Acquisition related (gain) expense, net includes the following current year and prior year adjustments: | ||||||||||||||||||||||||||||
2011 adjustments: | ||||||||||||||||||||||||||||
- IPR&D charge of $5.4 million related to milestone payments for a prior acquisition | ||||||||||||||||||||||||||||
- Gain of $4.5 million for changes in fair value of contingent consideration, $1.5 million of which was recorded in Q4 2011 | ||||||||||||||||||||||||||||
2010 adjustments: | ||||||||||||||||||||||||||||
- IPR&D charge of $1.3 million related to milestone payments for a prior acquisition | ||||||||||||||||||||||||||||
- Acquisition expenses of $0.5 million | ||||||||||||||||||||||||||||
- Gain on acquisition of $2.9 million recorded for the difference between the carrying value of a cost-method investment prior to acquisition and the fair value of that investment at the time of acquisition | ||||||||||||||||||||||||||||
- Gain of $10.4 million recorded in Q4 2010 for changes in fair value of contingent consideration | ||||||||||||||||||||||||||||
(d) 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 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. | ||||||||||||||||||||||||||||
(e) Non-cash interest expense is calculated in accordance with the authoritative accounting guidance for convertible debt instruments that may be settled in cash. | ||||||||||||||||||||||||||||
Illumina, Inc. | ||||
Reconciliation of Non-GAAP Financial Guidance | ||||
The financial guidance provided below is an estimate based on information available as of February 7, 2012. 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 January 1, 2012 to be filed with the SEC, and the company's Form 10-Q for the fiscal quarters ended April 3, 2011, July 3, 2011, and October 2, 2011. The company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. | ||||
Fiscal Year 2012 | Q1 2012 | |||
Gross Margin | ||||
Non-GAAP gross margin | 70% | 69% | ||
Stock-based compensation expense | (1%) | (1%) | ||
Amortization of acquired intangible assets | (1%) | (1%) | ||
GAAP gross margin | 68% | 67% | ||
Diluted net income per share | ||||
Non-GAAP diluted net income per share | $1.40 - $1.50 | $0.29 - $0.32 | ||
Non-cash interest expense (a) | (0.16) | (0.04) | ||
Headquarter relocation expense (b) | (0.11) | -- | ||
Amortization of intangible assets | (0.06) | (0.02) | ||
Contingent compensation expense (c) | (0.03) | (0.01) | ||
Restructuring charges | (0.03) | (0.02) | ||
Pro forma impact of weighted average shares (d) | (0.01) | -- | ||
GAAP diluted net income per share | $1.00 - $1.10 | $0.20 - $0.23 | ||
(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) We expect to incur additional headquarter relocation expenses during the first half of 2012, the majority of which are non-cash in nature. These expenses include items such as additional cease-use loss upon vacating our former headquarter facilities, accelerated depreciation of certain property and equipment, and double rent expense during the transition to the new facility. | ||||
(c) Contingent compensation expense represents contingent consideration for post-combination services associated with acquisitions. | ||||
(d) Pro forma impact of weighted average shares represents the estimated impact of double dilution associated with the accounting treatment of the company's outstanding convertible debt and the corresponding call option overlay. |
Source:
Illumina, Inc.
Investors:
Kevin Williams, MD
Investor Relations
858-332-4989
kwilliams@illumina.com
or
Media:
Laura Trotter
Public Relations
858-882-6822
PR@illumina.com