Exhibit 99.1
Illumina Reports Financial Results for Third Quarter 2003; Revenue
Increases 176% over Third Quarter 2002
SAN DIEGO--(BUSINESS WIRE)--Oct. 16, 2003--Illumina, Inc. (NASDAQ:
ILMN) announced today its financial results for the third quarter and
nine-month period ended September 28, 2003.
For the quarter ended September 28, 2003, the Company reported
revenue of $8.2 million, a 176% increase compared to revenue of $3.0
million in the third quarter of 2002. Revenue for the nine-month
period ended September 28, 2003 was $17.3 million, a 181% increase
compared to revenue of $6.2 million for the same nine-month period in
2002. For the quarter ended September 28, 2003, the Company reported a
net loss of $5.5 million, or $0.17 per share, compared to a net loss
of $7.6 million, or $0.24 per share, in the second quarter of 2002.
Net loss for the nine-month period ended September 28, 2003 was $23.1
million, or $0.72 per share, compared to a net loss of $32.7 million,
or $1.06 per share, for the same nine-month period in 2002. Cash and
investments at September 28, 2003 totaled $51.2 million.
During the quarter, Illumina completed installation of two
production-scale SNP genotyping BeadLabs. The first, located at Johns
Hopkins University, is supporting linkage and fine-mapping studies to
help researchers better understand the role of genetic variation in
disease susceptibility. The BeadLab will also be used by the Center
for Inherited Disease Research (CIDR), a federally funded organization
based at the University.
A second BeadLab was installed at the Whitehead Institute/MIT
Center for Genome Research, where it will help support HapMap Project
work and other large-scale genotyping projects. Illumina's SNP
genotyping solution is intended to be an important technology platform
for the new Eli and Edythe L. Broad Institute, a collaboration of MIT,
Harvard University, the Whitehead Institute and Harvard Hospitals. The
Broad Institute Director, Eric Lander Ph.D., characterized Illumina's
BeadLab as "the type of technology needed to accelerate our
understanding of disease etiology and apply this understanding to
clinical medicine."
Commenting on the quarter's results, Jay Flatley, Illumina
President and CEO, stated, "Illumina's third quarter represents an
important inflection point in our Company's growth plan. As a result
of our four BeadLab installations so far this year, we are beginning
to see a significant level of consumable sales added to our revenue
base. Even more important, there is a growing body of experimental
experience that is showing the superiority of BeadArray(TM) technology
over competing approaches for large-scale DNA analysis. In addition,
we believe we continue to gain market share in our oligo business and
sales volumes this quarter increased nearly 50% over last year's
comparable quarter. Finally, this quarter saw the introduction of our
BeadArray technology into a second major market with the launch of a
new gene expression product line. We are very proud of the progress
Illumina has made this year and we expect to see another good
performance in the fourth quarter."
In mid-September Illumina implemented the next step in its
commercialization strategy, launching a flexible product line for gene
expression profiling on focused sets of genes. Illumina's new
expression program enables researchers to order standard, partial
custom, or fully customized gene content and to deploy that content
interchangeably between two-different Sentrix multi-array platforms:
the Array Matrix, which can process 96 samples in parallel, and the
BeadChip, which can process eight samples at a time.
"We're pleased by the positive feedback we are receiving from our
growing customer base," Flatley said. "By delivering high sample
throughput, accurate results, and significantly lower costs to the
field of large-scale genetic analysis, Illumina is helping life
scientists discover and ultimately address the molecular basis of many
diseases."
During the quarter, the Company introduced a new version of the
Sentrix Array Matrix, enhancing multiplexing from 1152 data points per
array to 1536 per array. Over 30% more data can now be generated per
array bundle, lowering the cost per genotype to the customer by a
proportional amount. "This scale-up in multiplex levels is consistent
with our goal of continuing to lower the cost of large-scale
genotyping," Flatley asserted.
Research and development expense for the third quarter ending
September 28, 2003 was $5.1 million as compared to $6.4 million for
the same period in 2002. In 2002, Illumina made substantial
investments for the continued development of its BeadArray technology
for both the SNP genotyping and gene expression product lines, which
were not necessary in 2003 as a result of the commercial launch of
these products. In addition, the decrease in 2003 research and
development expense reflects the financial benefits of a higher amount
of manufacturing expense being absorbed by commercial product sales
rather than by research activities as occurred in the prior year.
Selling, general and administrative expenses for the third quarter
of 2003 were $5.1 million compared to $2.4 million in the same period
of 2002. This increase is due to the build-out of Illumina's sales and
marketing infrastructure, both domestic and international, to support
the commercial launch of the company's first set of products, as well
as higher legal expenses.
Other Quarterly News and Highlights
-- Year to date, Illumina has signed 16 genotyping service
agreements against a fiscal year milestone of 15 such
contracts.
-- Illumina has completed installation of four BeadLabs as of the
end of the third quarter and installation of the fifth was
completed in early October.
-- Illumina implemented new Oligator(R) manufacturing and
software enhancements, further improving product quality,
production rate and enabling improved pricing for larger
customers.
-- The U.S. Patent and Trade Office awarded one new patent to
Illumina, bringing our total to 29 issued or allowed and 60
pending.
A Look Ahead
"One of our key objectives is to enable broad access to the
benefits of BeadArray technology," Flatley commented further. "Over
time we plan to develop and launch complementary product offerings
that will put our genotyping solutions in the hands of individual labs
and core facilities. We will also continue the development of multiple
array formats and high-value content in the two application areas that
we now serve," concluded Flatley.
A significant portion of Illumina's current revenue is derived
from large, individual transactions such as the sale of production
genotyping systems or genotyping services contracts. In addition,
uncertain spending patterns in our markets could affect demand for
some of Illumina's products over the coming quarters. Given the
difficulty in predicting the timing and magnitude of sales for
Illumina's product offerings, the Company may experience
quarter-to-quarter fluctuations in revenue during the year, including
the potential for an occasional sequential revenue decline.
Illumina (www.illumina.com) is developing next-generation tools
for the large-scale analysis of genetic variation and function. The
Company's proprietary BeadArray technology -- now used in leading
genomics centers around the world -- provides the throughput, cost
effectiveness and flexibility necessary to enable researchers in the
life sciences and pharmaceutical industries to perform the billions of
tests necessary to extract medically valuable information from
advances in genomics and proteomics. This information will help pave
the way to personalized medicine by correlating genetic variation and
gene function with particular disease states, enhancing drug
discovery, allowing diseases to be detected earlier and more
specifically, and permitting better choices of drugs for individual
patients.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: this release contains forward-looking statements
that involve risks and uncertainties. Among the important factors
which could cause actual results to differ materially from those in
any forward-looking statements are Illumina's ability to fully develop
and commercialize its BeadArray technologies, the costs and outcome of
Illumina's litigation with Applied Biosystems, the Company's ability
to successfully commercialize its offerings for high-throughput SNP
genotyping and gene expression, to continue to attract and retain
customers, to manufacture robust Sentrix arrays for product sale, and
other factors detailed in the Company's filings with the Securities
and Exchange Commission including its 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. Illumina disclaims any
intent or obligation to update these forward-looking statements beyond
the date of this release.
ILLUMINA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(Unaudited)
Three months ended Nine months ended
Sept. Sept. Sept. Sept.
28, 29, 28, 29,
2003 2002 2003 2002
Revenue:
Product $6,491 $1,273 $10,625 $2,870
Service 1,061 1,121 4,390 1,220
Research 697 591 2,279 2,064
Total revenue 8,249 2,985 17,294 6,154
Costs and expenses:
Cost of revenue 2,681 965 6,617 1,900
Research and
development 5,114 6,405 17,058 20,519
Selling, general and
administrative 5,096 2,426 13,816 6,349
Amortization of deferred
compensation and other
non-cash compensation
charges 511 1,045 2,060 3,402
Litigation judgment 189 160 567 7,860
Total costs and
expenses 13,591 11,001 40,118 40,030
Loss from operations (5,342) (8,016) (22,824) (33,876)
Interest income, net (169) 414 (239) 1,161
Net loss $(5,511) $(7,602) $(23,063) $(32,715)
Net loss per share, basic
and diluted $(0.17) $(0.24) $(0.72) $(1.06)
Shares used in calculating
net loss per share, basic
and diluted 32,055 31,071 31,814 30,752
ILLUMINA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Sept. Dec.
28, 29,
2003 2002
(unaudited) (Note)
ASSETS
Current assets:
Cash and investments $51,208 $66,294
Other current assets 7,305 6,525
Total current assets 58,513 72,819
Property and equipment, net 46,743 48,279
Intangible and other assets, net 1,020 808
Total assets $106,276 $121,906
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $20,127 $14,297
Long-term debt and liabilities 35,090 35,865
Stockholders' equity 51,059 71,744
Total liabilities and stockholders'
equity $106,276 $121,906
Note: The Balance Sheet at December 29, 2002 has been derived from the
audited financial statements as of that date.
CONTACT: Illumina, Inc.
Jay Flatley, 858-202-4501
jflatley@illumina.com
or
Timothy Kish, 858-202-4508
tkish@illumina.com