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Affymetrix Inc. Reports Operating Results (10-Q)

November 06, 2012 | About:

Affymetrix Inc. (NASDAQ:AFFX) filed Quarterly Report for the period ended 2012-09-30.

Affymetrix, Inc. has a market cap of $235.1 million; its shares were traded at around $3.34 with and P/S ratio of 0.9.

Highlight of Business Operations:

In the third quarter of 2012, we reported $79.6 million in revenue, including $17.6 million from eBioscience, as compared to $64.0 million in the third quarter of 2011. We reported net loss of approximately $17.9 million, or $0.25 per diluted share, in the third quarter of 2012 compared to a net loss of $9.8 million, or $0.14 per diluted share, in the same period of 2011, primarily due to a tightening academic funding environment worldwide, which negatively affected our revenue, as well as expenses related to the Acquisition, including interest expense of $2.9 million paid on the Term Loan and 4.00% Notes, release of inventory step-up of $4.5 million, amortization expense of $5.0 million on acquired intangible assets, non-recurring integration costs of $1.6 million and other Acquisition-related costs of $0.3 million. In addition, the third quarter of 2012 included a $4.0 million impairment charge on property held for sale.

The decrease of $14.2 million in Expression revenue for the nine months ended September 30, 2012 also was primarily due to the lower volume of sales of our IVT arrays. Additionally, revenue from Expression instruments declined by $1.0 million due to lower average selling price. These decreases were partially offset by higher revenue of $1.1 million reported on our QuantiGene line products.

For the nine months ended September 30, 2012, revenue also increased over the prior year period primarily due to increased revenue from our Cytogenetics and Axiom products of $16.2 million and $2.8 million, respectively, as well as higher instrument sales of $2.0 million, partially offset by a decline in sales of our SNP 6.0 arrays of $9.8 million.

he decrease in interest income and other, net in the three months ended September 30, 2012 as compared to the same period in 2011 was primarily due to an impairment charge of $4.0 million recognized on our West Sacramento facility during the third quarter of 2012, as compared to a note receivable for $2.2 million that was fully reserved during the third quarter of 2011. Interest income decreased as compared to 2011 as a result of the sale of most of our available-for-sale securities during the eBioscience acquisition while realized losses on sales of equity investments also decreased due to an other-than-temporary impairment that was recognized on our available-for-sale securities of $0.7 million in 2011.

During the second quarter of 2012, we completed our acquisition of eBioscience for $307.8 million, representing a purchase price of $314.9 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 nine months ended September 30, 2012 included capital expenditures of $6.5 million and purchases of technology rights of $2.3 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 nine months ended of 2012.

Read the The complete Report

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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