Affymetrix Inc. Reports Operating Results (10-Q)
Affymetrix, Inc. has a market cap of $290.3 million; its shares were traded at around $4.06 with and P/S ratio of 1.1.
Highlight of Business Operations:In the second quarter of 2012, we reported $66.4 million in revenue, including $1.4 million from eBioscience, as compared to $64.7 million in the second quarter of 2011. The Company reported net income of approximately $30.9 million, or $0.43 per diluted share, in the second quarter of 2012 compared to a net loss of $3.7 million, or $0.05 per diluted share, in the same period of 2011. The second quarter of 2012 included certain non-recurring items: an income tax benefit related to the eBioscience acquisition of $44.7 million, acquisition-related non-recurring costs of $4.7 million, a share-based compensation charge of $8.3 million related to the acceleration of stock options held under eBioscience equity incentive plans, and the recovery of a $2.2 million note that was provided for in full during 2011.
The decrease of $10.8 million in Expression revenue for the six months ended June 30, 2012 also was primarily driven by a decline in sales of $10.0 million of our IVT arrays, partially offset by an increase in average selling prices. Additionally, revenue from Expression instruments declined by $1.6 million due to lower average selling price. These decreases were partially offset by higher revenue of $1.0 million reported on our QuantiGene line products.
For the six months ended June 30, 2012, Corporate revenue increased by $0.5 million due to the one-time royalty payment of $0.8 million and a realized gain of $1.2 million from designated cash flow hedges. These gains were partially offset by a decrease in revenue from service agreements of $1.4 million.
The change in interest income and other, net in the three months ended June 30, 2012 as compared to the same period in 2011 was primarily due to the receipt in cash of $2.2 million including accrued interest of a notes receivable that was previously fully reserved. Realized gains on sales of equity investments also increased by $0.5 million as a result of sales of available-for-sale securities to fund the Acquisition. These increases were partially offset by a decrease in interest income of $0.4 million due to a lower balance of available-for-sale securities in 2012 that were sold in connection with both the Acquisition and the repurchase of $91.6 million in aggregate principal amount of our 3.50% Senior Convertible Notes (the "3.50% Notes") in the first quarter of 2012.
During the second quarter of 2012, we completed our acquisition of eBioscience for $308.0 million, representing a purchase price of $315.1 million less $7.1 million cash transferred from eBioscience. The Acquisition was partially funded through the proceeds from sales of available-for-sale securities of $52.0 million. Other investing activities for the six months ended June 30, 2012 included capital expenditures of $5.2 million and purchases of technology rights of $2.0 million. We monitor the level of cash and cash equivalents as compared to available-for-sale securities to manage the return on funds Management of our portfolio and sale of securities for purposes of funding the Acquisition resulted in net sales of available-for-sale securities during the six months ended of 2012.
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