Exhibit 99.1
Illumina Reports Financial Results for Third Quarter 2004;
Product Revenues Increase 86% Over Third Quarter 2003;
Company Also Announces Planned Q2 2005 Resignation of CFO
SAN DIEGO--(BUSINESS WIRE)--Oct. 19, 2004--Illumina, Inc.
(NASDAQ:ILMN) announced today its financial results for the third
quarter and nine-month period ended October 3, 2004.
For the quarter ended October 3, 2004, the Company reported total
revenue of $13.5 million, a 64% increase compared to total revenue of
$8.2 million in the third quarter of 2003. Product revenue for the
period was $12.1 million, a $5.6 million increase over the third
quarter of 2003. Total revenue for the nine-month period ended October
3, 2004 was $35.8 million, a 107% increase compared to total revenue
of $17.3 million for the same nine-month period in 2003. Product
revenue for the nine-month period was $30.1 million, nearly three
times the $10.6 million amount for the same period in the prior year.
For the quarter ended October 3, 2004, the Company reported a net loss
of $2.0 million, or $0.05 per share, compared to a net loss of $5.5
million, or $0.17 per share, in the third quarter of 2003. Results for
the third quarter include a one-time gain of $1.5 million, or $0.04
per share, due to the settlement of litigation with Applera
Corporation. Net loss for the nine-month period ended October 3, 2004
was $9.5 million, or $0.27 per share, compared to a net loss of $23.1
million, or $0.72 per share, for the same nine-month period in 2003.
Cash and investments at October 3, 2004, including restricted cash,
totaled $66.5 million.
During the quarter, Illumina announced two large-scale genotyping
service agreements. In collaboration with the Wellcome Trust Centre
for Human Genetics at Oxford University, Illumina is genotyping over
15,000 SNPs (single nucleotide polymorphisms) across 2,700 mouse
samples to search for genetic factors directly relevant to human
diseases including diabetes, obesity, asthma, anxiety and depression.
In September, Illumina began working with the North American
Rheumatoid Arthritis Consortium (NARAC) to generate over 25 million
genotypes and help identify genes associated with this chronic
autoimmune disease.
Illumina shipped 15 BeadStations in the third quarter of 2004.
Illumina BeadStations target the moderate-throughput market for
genetic analysis and offer options for future automation and sample
tracking. Under one such agreement with Genomas, Inc., Illumina is
supplying SNP-based genotyping panels, and has obtained rights to use
the resulting biomarkers in future diagnostic products. A $1.5 million
agreement with Galileo Genomics, Inc. provided for the sale of two
BeadStations and related reagents for fine mapping of candidate
chromosomal regions implicated in five different diseases including
Crohn's disease and osteoarthritis. As part of the agreement, Illumina
has licensed rights to the resulting diagnostic markers discovered in
the osteoarthritis project.
Commenting on the third quarter results, Jay Flatley, Illumina
president and CEO, stated, "We were very pleased with the growth in
shipments of our BeadStation systems for moderate-throughput genomics
applications. Over the next few quarters, we expect to build demand
for BeadStation systems in additional market segments as we launch our
new gene expression products. In addition, we are seeing further
growth in outsourcing of genetic studies as we signed 19 service
contracts this quarter. Our in-house services business is ideally
equipped to serve this developing market segment." Flatley noted that
"During the quarter we also began to lay the groundwork for future
diagnostic applications of BeadArray(TM) technology. Several of our
recent agreements involve access to diagnostic biomarkers with
potential clinical applications."
"Our rapidly expanding installed base is driving significant
growth in consumables sales, which accounted for the majority of the
86% increase in product revenues," stated Tim Kish, Illumina Vice
President and CFO. "And the higher consumables mix continues to
improve margins, as we achieved a 74% overall gross margin for the
quarter. We also significantly strengthened our balance sheet with the
sale/leaseback of our San Diego facilities, which eliminated all long
term debt and added over $15 million to our cash position. These
factors, combined with our ongoing expansion into the genotyping
market and the launch of our new gene expression arrays, should
provide us with a strong foundation for future growth and
profitability," added Kish.
Other Quarterly News and Highlights
-- Year to date, Illumina has sold three BeadLabs and 29
BeadStations against a 2004 fiscal year milestone of 20 system
sales.
-- Illumina has signed 30 genotyping service agreements through
the third quarter compared to a full-year milestone target of
20 such agreements.
-- Illumina was awarded a $1.2 million Phase 2 SBIR grant from
the National Institute of Allergy and Infectious Diseases
(part of the NIH) for continued development of high-multiplex,
low-cost peptide arrays to profile protein activity in small
volumes of cells or biological fluids.
-- Karin Eastham was appointed to our Board of Directors. Ms.
Eastham is currently Executive Vice President, Chief Operating
Officer and a member of the Board of Trustees of The Burnham
Institute.
-- Deloitte & Touche recognized Illumina as the nation's 44th
ranked public company (fifth-ranked in San Diego) in terms of
five-year percentage revenue growth rate.
-- The U.S. Patent and Trade Office awarded one new patent to
Illumina, bringing our total to 34 issued or allowed patents
and 71 pending patent applications.
The Company also announced today that Mr. Kish would resign in the
second quarter of 2005 and return to the East Coast to be closer to
family. He will continue in his role as CFO while the Company
initiates a search for his successor. "Illumina has been fortunate to
have had Tim's unparalleled dedication and professional counsel for
the last five years," said Jay Flatley. "We regret Tim's decision to
leave as he has been an extremely valuable asset to our management
team. He has been instrumental in the growth of Illumina from a near
startup, to going public, to preparing us strategically and
financially for large-scale growth. We thank Tim for his contributions
to our company and wish him well in his future endeavors," added
Flatley.
"I am very pleased with all that Illumina has accomplished during
the last five years and for the opportunity to have been part of that
success," stated Mr. Kish. "We have a tremendous technology platform,
a superb market growth opportunity, a solid financial position and a
core of dedicated people, all of which, I believe, positions Illumina
well for additional successes in the future. I look forward to working
with the team at Illumina and with members of the financial community
over the next six months to effect a smooth transition."
Illumina (www.illumina.com) is developing next-generation tools
that permit 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 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 correlate
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 may contain forward-looking
statements that involve risks and uncertainties. Among the important
factors that could cause actual results to differ materially from
those in any forward-looking statements are the costs and outcome of
Illumina's litigation with Affymetrix, the market acceptance of
Illumina's BeadArray-based products, Illumina's ability to fully
develop and commercialize its BeadArray technologies, to successfully
commercialize its integrated BeadLab and BeadStation systems for
high-throughput genetic analysis, to continue to attract and retain
customers in its services and oligonucleotide synthesis operations, to
fully develop its BeadArray technologies, to develop and deploy new
gene expression profiling and proteomics applications for its platform
technology, and to manufacture robust Sentrix(R) arrays and
Oligator(R) oligonucleotides, as well as changes in overall R&D
spending levels in the life sciences industry, changes in government
grant funding policies, timing of sales of our large value products
and services projects, other unpredictable fluctuations in quarterly
revenues 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
------------------------ ------------------------
October 3, September 28, October 3, September 28,
2004 2003 2004 2003
---------- ------------- ---------- -------------
Revenue:
Product $12,091 $6,491 $30,075 $10,625
Service 1,071 1,061 4,036 4,390
Research 350 697 1,689 2,279
---------- ------------- ---------- -------------
Total revenue 13,512 8,249 35,800 17,294
Costs and expenses:
Cost of revenue 3,517 2,681 9,385 6,617
Research and
development 5,356 5,114 15,852 17,058
Selling, general
and
administrative 7,563 5,096 19,294 13,816
Amortization of deferred
compensation and
other non-cash
compensation
charges 167 511 735 2,060
Litigation
judgment
(settlement), net (1,311) 189 (933) 567
---------- ------------- ---------- -------------
Total costs and
expenses 15,292 13,591 44,333 40,118
---------- ------------- ---------- -------------
Loss from operations (1,780) (5,342) (8,533) (22,824)
Interest expense,
net (246) (169) (939) (239)
---------- ------------- ---------- -------------
Net loss $(2,026) $(5,511) $(9,472) $(23,063)
========== ============= ========== =============
Net loss per share,
basic and diluted $(0.05) $(0.17) $(0.27) $(0.72)
========== ============= ========== =============
Shares used in
calculating net
loss per share,
basic and
diluted 37,614 32,055 34,906 31,814
========== ============= ========== =============
ILLUMINA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
October 3, December 28,
2004 2003
----------- ------------
(unaudited) (Note)
ASSETS
Current assets:
Cash and investments $66,506 $32,882
Other current assets 15,014 7,536
----------- ------------
Total current assets 81,520 40,418
Property and equipment, net 7,870 45,777
Long term restricted investments - 12,191
Intangible and other assets, net 2,682 848
----------- ------------
Total assets $92,072 $99,234
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $19,840 $8,189
Long-term debt and liabilities 3,503 43,657
Stockholders' equity 68,729 47,388
----------- ------------
Total liabilities and stockholders'
equity $92,072 $99,234
=========== ============
Note: The Balance Sheet at December 28, 2003 has been derived from the
audited financial statements as of that date.
CONTACT: Illumina, Inc.
Jay Flatley, President & CEO, 1-858-202-4501
jflatley@illumina.com
Timothy Kish, Chief Financial Officer, 1-858-202-4508
tkish@illumina.com