Affymetrix reports total revenue of $73.7 million for first quarter 2011

AffymetrixApr 28 2011

Affymetrix, Inc., (NASDAQ:AFFX) today reported its operating results for the first quarter of 2011. Total revenue for the quarter was $73.7 million, as compared to total revenue of $80.2 million in the first quarter of 2010.

The Company reported a slight profit in the first quarter of 2011. This compares to net loss of $9.6 million, or $0.14 per diluted share, in the same period of 2010.

For the first quarter of 2011, product revenue was $67.5 million, which consisted of consumable revenue of $62.9 million and instrument revenue of $4.6 million. Service revenue was $4.5 million, and royalties and other revenue was $1.7 million. This compares to first quarter 2010 product revenue of $73.4 million, which consisted of consumable revenue of $66.2 million and instrument revenue of $7.2 million. Service revenue was $4.5 million, and royalties and other revenue was $2.3 million.

For the first quarter of 2011, cost of product sales was $23.9 million compared to $28.5 million in the same period of 2010. Cost of services and other was $3.2 million compared to $4.6 million in the same period of 2010.

Product gross margin was 65%, as compared to 61% in the same period of 2010.

For the first quarter of 2011, operating expenses were $43.5 million as compared to operating expenses of $49.9 million in the same period of 2010, a reduction of 13%.

"A key goal for 2011 is to generate at least 25% of our revenue from new markets including cytogenetics and cancer. We grew this segment to 22% of revenue through the first quarter," said Kevin M. King, president & CEO. "We continue to make progress in our efforts to return to sustained profitability, with operating expenses down by 13% and gross margins improving 4 percentage points, generating a slight profit on $74 million of quarterly revenue."

During the First Quarter, the Company:

• Launched the GeneChip® miRNA 2.0 Array. This enhanced microRNA tool enables the research community's pursuit of personalized medicine by accelerating the identification of biomarkers and gene expression signatures associated with disease. The miRNA 2.0 Array combines the most comprehensive miRNA view with the highest level of sensitivity available.
• Introduced the Affymetrix SNP 6 Core Reagent Kit, a comprehensive workflow solution that provides pre-mixed and validated reagents for nearly every step in the SNP 6.0 assay. This convenient kit eliminates the need for mixing buffers, reduces the need to order from multiple vendors, and enables easier inventory management with a single kit. Comprised of validated reagents available from Affymetrix and leading reagent suppliers, the SNP 6 Core Reagent Kit performs to Affymetrix specifications with genomic DNA from blood, saliva, and cell lines, as well as whole-genome-amplified DNA.
• Announced OncoScan™ FFPE Express 2.0, a second-generation platform that offers enhanced coverage of tumor suppressors and oncogenes. Designed in collaboration with leading cancer researchers representing the Stand Up To Cancer (SU2C) initiative, OncoScan FFPE Express 2.0 overcomes the challenge of analyzing DNA from formalin-fixed, paraffin-embedded (FFPE) tissues to extract important retrospective clinical data from archived samples. This innovative assay goes beyond limitations of standard array comparative genomic hybridization methods to yield copy number, allelic ratio, and somatic mutation data from only 75 nanograms of input DNA, the lowest sample requirement available. In addition, it provides the highest quality data, as demonstrated by greater than 92 percent pass rates across thousands of the most degraded and challenging FFPE samples.
• Expanded its Axiom™ product line with the Genome-Wide CHB 1 Array, the first commercial product to maximize genetic coverage of common alleles in Han Chinese populations. The CHB 1 array is a powerful tool for characterizing the genetic basis of disease and studying disease associations in Han Chinese populations. To design the array, researchers at the Bio-X Center of Shanghai Jiao Tong University and Beijing's Fuwai Hospital took advantage of more than 10 million validated markers in the Axiom Genomic Database, including content drawn from the 1000 Genomes Project and the International HapMap Project.

Affymetrix' management team will host a conference call on April 27, 2011 at 2:00 p.m. PT to review its operating results for the first quarter of 2011. A live webcast can be accessed by visiting the Investor Relations section of the Company's website at www.affymetrix.com. In addition, investors and other interested parties can listen by dialing domestic: (877) 407-8291, international: (201) 689-8345.

A replay of this call will be available from 5:00 p.m. PT on April 27, 2011 until 8:00 p.m. PT on May 4, 2011 at the following numbers: domestic: (877) 660-6853, international: (201) 612-7415. The passcode for both replays is 370998. An archived webcast of the conference call will be available under the Investor Relations section of the Company's website.