Illumina Reports Financial Results for Third Quarter of Fiscal Year 2012
Illumina Reports Financial Results for Third Quarter of Fiscal Year 2012
Business Wire
SAN DIEGO -- October 23, 2012
Illumina, Inc. (NASDAQ:ILMN) today announced financial results for the third
quarter of 2012.
Third quarter 2012 results:
* Revenue of $286 million, a 21% increase compared to $235 million in the
third quarter of 2011.
* GAAP net income for the quarter of $30 million, or $0.22 per diluted
share, compared to net income of $20 million, or $0.15 per diluted share,
for the third quarter of 2011.
* Non-GAAP net income for the quarter of $54 million, or $0.41 per diluted
share, compared to $30 million, or $0.22 per diluted share, for the third
quarter of 2011 (see the table entitled "Itemized Reconciliation Between
GAAP and Non-GAAP Net Income" for a reconciliation of these GAAP and
non-GAAP financial measures).
* Cash flow from operations of $51 million compared to cash flow from
operations of $90 million for the third quarter of 2011 primarily due to
changes in working capital associated with the timing of shipments.
Gross margin in the third quarter of 2012 was 68.5% compared to 66.7% in the
prior year period. Excluding the effect of non-cash charges associated with
stock compensation and amortization of acquired intangibles, non-GAAP gross
margin was 70.5% for the third quarter of 2012 compared to 68.9% in the prior
year period.
Research and development (R&D) expenses for the third quarter of 2012 were
$54.1 million compared to $50.4 million in the third quarter of 2011. R&D
expenses included $7.8 million and $8.6 million of non-cash stock compensation
expense in the third quarters of 2012 and 2011, respectively. Excluding these
charges and contingent compensation, R&D expenses as a percentage of revenue
were 15.9% compared to 17.4% in the prior year period.
Selling, general and administrative (SG&A) expenses for the third quarter of
2012 were $69.8 million compared to $66.0 million for the third quarter of
2011. SG&A expenses included $13.2 million and $13.8 million of non-cash stock
compensation expense in the third quarters of 2012 and 2011, respectively.
Excluding these charges, contingent compensation, and acquired intangible
asset amortization, SG&A expenses as a percentage of revenue were 19.5%
compared to 22.2% in the prior year period.
Depreciation and amortization expenses were $15.8 million and capital
expenditures were $17.7 million during the third quarter of 2012. The company
ended the quarter with $1.2 billion in cash, cash equivalents and short-term
investments which is essentially unchanged from January 1, 2012.
Highlights since our last earnings release
* Completed the acquisition of BlueGnome, a leading provider of cytogenetics
and in vitro fertilization (IVF) screening products
* Announced expedited Individual Genome Sequencing Services (IGS), powered
by HiSeq® 2500 to enable breakthrough turnaround time, available via
Illumina's CLIA-certified laboratory
* Announced an alliance with Partners HealthCare to introduce
next-generation sequencing (NGS) clinical interpretation and reporting
tools
* Announced TruSight™ targeted sequencing content sets, enabling labs to
offer cost-effective, streamlined, targeted sequencing solutions for
genetic diseases
* Held our inaugural 'Understand Your Genome' event
* Launched Infinium ® HumanCore Arrays for economical large-scale genetic
studies
* Announced that the FDA selected the MiSeq® system for use in an extensive
program to identify foodborne pathogens
* Launched TruSeq® Stranded mRNA and Total RNA Sequencing Sample Preparation
solutions, delivering superior data quality for challenging samples and
unprecedented views of the transcriptome
* Further strengthened Illumina's management team by appointing Paul Bianchi
to Senior Vice President of Human Resources
* Announced a favorable outcome in patent litigation against Helicos
BioSciences Corporation
* Repurchased $25 million of common stock under our previously announced
share repurchase program
Financial outlook and guidance
“We are very pleased with our operational execution so far in 2012,” said Jay
Flatley, Illumina's President and Chief Executive Officer. “As a result of our
performance and the recent announcement regarding NIH funding under the
continuing resolution, we are tightening our 2012 revenue and EPS guidance
ranges. However, we remain cautious given the uncertainty of the U.S. fiscal
cliff as well as the outcome of the Presidential election. Accordingly, we now
expect 2012 revenue to be between $1.134 billion and $1.144 billion, (previous
guidance was $1.1 billion to $1.175 billion), and non-GAAP earnings per fully
diluted share to be between $1.54 and $1.59 (previous guidance was $1.50 to
$1.60).”
Quarterly conference call information
The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time)
on Tuesday, October 23, 2012. Interested parties may listen to the call by
dialing 888-679-8038 (passcode: 10421979), or, if outside North America, by
dialing +1-617-213-4850 (passcode: 10421979). Individuals may access the live
teleconference in the Investor Relations section of Illumina's web site under
the “Company” tab at www.illumina.com.
A replay of the conference call will be available from 4:00 pm Pacific Time
(7:00 pm Eastern Time) on October 23, 2012 through October 30, 2012 by dialing
888-286-8010 (passcode: 78765276), or if outside North America by dialing
+1-617-801-6888 (passcode: 78765276).
Statement regarding use of non-GAAP financial measures
The company reports non-GAAP results for diluted net income per share, net
income, gross margins, operating expenses, operating margins, other income,
and free cash flow in addition to, and not as a substitute for, or superior
to, financial measures calculated in accordance with GAAP.
The company's financial measures under GAAP include substantial charges
related to stock compensation expense, non-cash interest expense associated
with the company's convertible debt instruments that may be settled in cash,
headquarter relocation expense, costs related to unsolicited tender offer for
the company's stock, amortization expense related to acquired intangible
assets, contingent compensation expense, restructuring charges, legal
contingencies, acquisition related expense, impairment of in-process research
and development, and loss on extinguishment of debt. Per share amounts also
include the double dilution associated with the accounting treatment of the
company's 0.625% convertible senior notes outstanding and the corresponding
call option overlay. Management believes that presentation of operating
results that excludes these items and per share double dilution provides
useful supplemental information to investors and facilitates the analysis of
the company's core operating results and comparison of operating results
across reporting periods. Management also believes that this supplemental
non-GAAP information is therefore useful to investors in analyzing and
assessing the company's past and future operating performance.
The company encourages investors to carefully consider its results under GAAP,
as well as its supplemental non-GAAP information and the reconciliation
between these presentations, to more fully understand its business.
Reconciliations between GAAP and non-GAAP results are presented in the tables
of this release.
Use of forward-looking statements
This release contains projections, information about our financial outlook,
earnings guidance, and other forward-looking statements that involve risks and
uncertainties. These forward-looking statements are based on our expectations
as of the date of this release and may differ materially from actual future
events or results. Among the important factors that could cause actual results
to differ materially from those in any forward-looking statements are (i) our
ability to develop and commercialize further our sequencing, array, PCR, and
consumables technologies and to deploy new products and applications, and
expand the markets, for our technology platforms; (ii) our ability to
manufacture robust instrumentation and consumables; (iii) our expectations and
beliefs regarding future conduct and growth of the business and the markets in
which we operate; (iv) challenges inherent in developing, manufacturing, and
launching new products and services; (v) our ability to maintain our revenue
and profitability during periods of research funding reduction or uncertainty
and adverse economic and business conditions, including as a result of slowing
economic growth in the United States or worldwide, together with other factors
detailed in our filings with the Securities and Exchange Commission, including
our most 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.
We undertake no obligation, and do not intend, to update these forward-looking
statements, to review or confirm analysts' expectations, or to provide interim
reports or updates on the progress of the current financial quarter.
About Illumina
Illumina (www.illumina.com) is a leading developer, manufacturer, and marketer
of life science tools and integrated systems for the analysis of genetic
variation and function. We provide innovative sequencing and array-based
solutions for genotyping, copy number variation analysis, methylation studies,
gene expression profiling, and low-multiplex analysis of DNA, RNA, and
protein. We also provide tools and services that are fueling advances in
consumer genomics and diagnostics. Our technology and products accelerate
genetic analysis research and its applications, paving the way for molecular
medicine and ultimately transforming healthcare.
Illumina, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
September 30, January 1,
2012 2012
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 343,089 $ 302,978
Short-term investments 889,977 886,590
Accounts receivable, net 218,145 173,886
Inventory, net 147,684 128,781
Deferred tax assets, current portion 27,229 23,188
Prepaid expenses and other current assets 20,112 29,196
Total current assets 1,646,236 1,544,619
Property and equipment, net 154,869 143,483
Goodwill 370,189 321,853
Intangible assets, net 134,829 106,475
Deferred tax assets, long-term portion 54,410 19,675
Other assets 77,450 59,735
Total assets $ 2,437,983 $ 2,195,840
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 74,971 $ 49,806
Accrued liabilities 191,821 177,115
Long-term debt, current portion 36,307 —
Total current liabilities 303,099 226,921
Long-term debt 797,162 807,369
Other long-term liabilities 111,690 80,613
Conversion option subject to cash settlement 3,818 5,722
Stockholders’ equity 1,222,214 1,075,215
Total liabilities and stockholders’ equity $ 2,437,983 $ 2,195,840
Illumina, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, October 2, September October 2,
2012 2011 30, 2011
2012
Revenue:
Product revenue $ 262,418 $ 220,296 $ 776,893 $ 756,884
Service and other 23,456 15,203 62,358 48,580
revenue
Total revenue 285,874 235,499 839,251 805,464
Cost of Revenue:
Cost of product 75,873 68,764 230,935 238,719
revenue (a)
Cost of service
and other revenue 10,540 6,585 28,761 19,178
(a)
Amortization of
acquired 3,588 3,035 9,674 9,055
intangible assets
Total cost of 90,001 78,384 269,370 266,952
revenue
Gross 195,873 157,115 569,881 538,512
profit
Operating Expenses:
Research and 54,056 50,399 174,118 151,400
development (a)
Selling, general
and 69,791 66,031 206,276 200,925
administrative
(a)
Unsolicited
tender offer 3,956 — 18,742 —
related expense
Restructuring 138 — 3,434 —
charges
Headquarter
relocation 19,475 6,519 23,445 11,583
expense
Acquisition
related (gain) (357 ) (2,598 ) 2,460 2,442
expense, net
Total
operating 147,059 120,351 428,475 366,350
expenses
Income from 48,814 36,764 141,406 172,162
operations
Other expense, (5,169 ) (8,973 ) (22,701 ) (59,339 )
net
Income
before 43,645 27,791 118,705 112,823
income
taxes
Provision for income 13,897 7,640 39,354 37,915
taxes
Net income $ 29,748 $ 20,151 $ 79,351 $ 74,908
Net income per basic $ 0.24 $ 0.17 $ 0.65 $ 0.60
share
Net income per $ 0.22 $ 0.15 $ 0.60 $ 0.52
diluted share
Shares used in
calculating basic 122,930 122,079 122,929 124,017
net income per share
Shares used in
calculating diluted 132,507 135,966 133,126 143,620
net income per share
(a) Includes total stock-based compensation expense for stock based awards:
Three Months Ended Nine Months Ended
September 30, October 2, September October 2,
2012 2011 30, 2011
2012
Cost of product $ 1,928 $ 1,955 $ 5,584 $ 5,267
revenue
Cost of service 142 194 327 536
and other revenue
Research and 7,764 8,621 22,878 24,810
development
Selling, general
and 13,238 13,801 41,359 39,663
administrative
Stock-based
compensation $ 23,072 $ 24,571 $ 70,148 $ 70,276
expense before
taxes
Illumina, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, October 2, September 30, October 2,
2012 2011 2012 2011
Net cash provided by $ 51,228 $ 90,042 $ 212,997 $ 249,840
operating activities
Net cash (used in)
provided by (17,105 ) 67,101 (168,623 ) (358,039 )
investing activities
Net cash (used in)
provided by (8,065 ) (187,830 ) (4,713 ) 89,168
financing activities
Effect of exchange
rate changes on cash 619 (551 ) 450 (70 )
and cash equivalents
Net increase
(decrease) in cash 26,677 (31,238 ) 40,111 (19,101 )
and cash equivalents
Cash and cash
equivalents, 316,412 261,084 302,978 248,947
beginning of period
Cash and cash
equivalents, end of $ 343,089 $ 229,846 $ 343,089 $ 229,846
period
Calculation of free
cash flow (a):
Net cash provided by $ 51,228 $ 90,042 $ 212,997 $ 249,840
operating activities
Purchases of
property and (17,650 ) (22,183 ) (51,680 ) (50,686 )
equipment
Free cash flow $ 33,578 $ 67,859 $ 161,317 $ 199,154
(a) Free cash flow, which is a non-GAAP financial measure, is calculated as
net cash provided by operating activities reduced by purchases of property and
equipment. Free cash flow is useful to management as it is one of the metrics
used to evaluate our performance and to compare us with other companies in our
industry. However, our calculation of free cash flow may not be comparable to
similar measures used by other companies.
Illumina, Inc.
Results of Operations - Non-GAAP
(In thousands, except per share amounts)
(unaudited)
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME PER SHARE:
Three Months Ended Nine Months Ended
September 30, October 2, September 30, October 2,
2012 2011 2012 2011
GAAP net income per $ 0.22 $ 0.15 $ 0.60 $ 0.52
share - diluted
Pro forma impact of
weighted average — — — 0.02
shares (a)
Adjustments to net
income:
Headquarter relocation 0.15 0.05 0.18 0.08
expense (b)
Non-cash interest 0.07 0.07 0.20 0.17
expense (c)
Unsolicited tender 0.03 — 0.14 —
offer related charges
Amortization of
acquired intangible 0.03 0.02 0.08 0.07
assets
Contingent
compensation expense 0.01 — 0.04 0.04
(d)
Restructuring charges — — 0.03 —
Acquisition related
(gain) expense, net — (0.02 ) 0.02 0.02
(e)
Legal contingencies — — 0.02 —
Impairment of
in-process research — — 0.16 —
and development
Loss on extinguishment — 0.01 — 0.27
of debt
Incremental non-GAAP (0.10 ) (0.06 ) (0.31 ) (0.24 )
tax expense (f)
Non-GAAP net income
per share - diluted $ 0.41 $ 0.22 $ 1.16 $ 0.95
(g)
Shares used in
calculating non-GAAP 131,601 134,674 132,185 138,735
diluted net income per
share
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME:
GAAP net income $ 29,748 $ 20,151 $ 79,351 $ 74,908
Headquarter relocation 19,475 6,519 23,445 11,583
expense (b)
Non-cash interest 8,846 9,200 26,230 23,953
expense (c)
Unsolicited tender 3,956 — 18,742 —
offer related charges
Amortization of
acquired intangible 3,740 3,188 10,130 9,501
assets
Contingent
compensation expense 1,496 496 4,804 5,326
(d)
Restructuring charges 138 — 3,434 —
Acquisition related
(gain) expense, net (357 ) (2,598 ) 2,460 2,442
(e)
Legal contingencies — — 3,021 —
Impairment of
in-process research — — 21,438 —
and development
Loss on extinguishment — 755 — 37,611
of debt
Incremental non-GAAP (13,539 ) (7,983 ) (39,427 ) (32,839 )
tax expense (f)
Non-GAAP net income $ 53,503 $ 29,728 $ 153,628 $ 132,485
(g)
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP DILUTED NUMBER OF SHARES:
Weighted average
shares used in
calculation of GAAP 132,507 135,966 133,126 143,620
diluted net income per
share
Weighted average
dilutive potential
common shares issuable (906 ) (1,292 ) (941 ) (4,885 )
of redeemable
convertible senior
notes (a)
Weighted average
shares used in
calculation of 131,601 134,674 132,185 138,735
Non-GAAP diluted net
income per share
(a) Pro forma impact of weighted average shares represents the impact of
double dilution associated with the accounting treatment of the company's
outstanding convertible debt and the corresponding call option overlay.
(b) Headquarter relocation expense in Q3 2012 and first three quarters of 2012
consists primarily of cease-use loss recorded upon vacating our prior
headquarters, double rent expense during the transition to our new headquarter
facility, accretion of interest expense on lease exit liability recorded upon
vacating certain buildings of our prior headquarters, and moving costs.
Headquarter relocation expense recorded in Q3 2011 and first three quarters of
2011 consisted of accelerated depreciation expense and double rent expense
during the transition to the new facility.
(c) Non-cash interest expense is calculated in accordance with the
authoritative accounting guidance for convertible debt instruments that may be
settled in cash.
(d) Contingent compensation expense relates to contingent payments for
post-combination services associated with acquisitions.
(e) Acquisition related (gain) expense, net during the first three quarters of
2012 year includes changes in fair value of contingent consideration of $1.7
million, $1.1 million, and $(1.1) million recorded in Q1, Q2, and Q3,
respectively, and transaction costs related to acquisition of BlueGnome Ltd.
of $0.7 million recorded in Q3. Acquisition related (gain) expense, net in Q3
2011 consists of change in fair value of contingent consideration of $2.6
million. Acquisition related (gain) expense, net in the first three quarters
of 2011 consists of an acquired in-process research and development charge of
$5.4 million in Q2 2011 related to a milestone payment for a prior
acquisition, offset by changes in fair value of contingent consideration of
$3.0 million.
(f) Incremental non-GAAP tax expense reflects the increase to GAAP tax expense
related to the non-GAAP adjustments listed above.
(g) Non-GAAP net income per share and net income exclude the effect of the pro
forma adjustments as detailed above. Non-GAAP diluted net income per share and
net income are key drivers of our core operating performance and major factors
in management's bonus compensation each year. Management has excluded the
effects of these items in these measures to assist investors in analyzing and
assessing our past and future core operating performance.
Illumina, Inc.
Results of Operations - Non-GAAP (continued)
(Dollars in thousands)
(unaudited)
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
Three Months Ended Nine Months Ended
September 30, October 2, September 30, October 2,
2012 2011 2012 2011
GAAP gross $ 195,873 68.5 % $ 157,115 66.7 % $ 569,881 67.9 % $ 538,512 66.9 %
profit
Stock-based
compensation 2,070 0.7 % 2,149 0.9 % 5,911 0.7 % 5,803 0.7 %
expense
Amortization
of acquired 3,588 1.3 % 3,035 1.3 % 9,674 1.1 % 9,055 1.1 %
intangible
assets
Legal — — — — 3,021 0.4 % — —
contingencies
Non-GAAP gross $ 201,531 70.5 % $ 162,299 68.9 % $ 588,487 70.1 % $ 553,370 68.7 %
profit
Research and
development $ 54,056 18.9 % $ 50,399 21.4 % $ 174,118 20.7 % $ 151,400 18.8 %
expense
Stock-based
compensation (7,764 ) (2.7 )% (8,621 ) (3.7 )% (22,878 ) (2.7 )% (24,810 ) (3.1 )%
expense
Contingent
compensation (754 ) (0.3 )% (775 ) (0.3 )% (2,218 ) (0.2 )% (4,067 ) (0.5 )%
expense (a)
Impairment of
in-process — — — — (21,438 ) (2.6 )% — —
research and
development
Non-GAAP
research and $ 45,538 15.9 % $ 41,003 17.4 % $ 127,584 15.2 % $ 122,523 15.2 %
development
expense
Selling,
general and $ 69,791 24.4 % $ 66,031 28.0 % $ 206,276 24.6 % $ 200,925 24.9 %
administrative
expense
Stock-based
compensation (13,238 ) (4.5 )% (13,801 ) (5.8 )% (41,359 ) (4.9 )% (39,663 ) (4.8 )%
expense
Contingent
compensation (742 ) (0.3 )% 279 0.1 % (2,586 ) (0.3 )% (1,259 ) (0.2 )%
(expense) gain
(a)
Amortization
of acquired (152 ) (0.1 )% (152 ) (0.1 )% (456 ) (0.1 )% (446 ) (0.1 )%
intangible
assets
Non-GAAP
selling,
general and $ 55,659 19.5 % $ 52,357 22.2 % $ 161,875 19.3 % $ 159,557 19.8 %
administrative
expense
GAAP operating $ 48,814 17.1 % $ 36,764 15.6 % $ 141,406 16.8 % $ 172,162 21.4 %
profit
Stock-based
compensation 23,072 8.1 % 24,571 10.4 % 70,148 8.4 % 70,276 8.7 %
expense
Headquarter
relocation 19,475 6.8 % 6,519 2.8 % 23,445 2.7 % 11,583 1.4 %
expense (b)
Unsolicited
tender offer 3,956 1.4 % — — 18,742 2.2 % — —
related
charges
Amortization
of acquired 3,740 1.3 % 3,187 1.4 % 10,130 1.2 % 9,501 1.2 %
intangible
assets
Contingent
compensation 1,496 0.5 % 496 0.2 % 4,804 0.6 % 5,326 0.7 %
gain (expense)
(a)
Restructuring 138 — — — 3,434 0.4 % — —
charges
Acquisition
related (gain) (357 ) (0.1 )% (2,598 ) (1.1 )% 2,460 0.3 % 2,442 0.3 %
expense, net
(c)
Impairment of
in-process — — — — 21,438 2.6 % — —
research and
development
Legal — — — — 3,021 0.4 % — —
contingencies
Non-GAAP
operating $ 100,334 35.1 % $ 68,939 29.3 % $ 299,028 35.6 % $ 271,290 33.7 %
profit (d)
GAAP other $ (5,169 ) (1.8 )% $ (8,973 ) (3.8 )% $ (22,701 ) (2.7 )% $ (59,339 ) (7.4 )%
expense, net
Non-cash
interest 8,846 3.1 % 9,200 3.9 % 26,230 3.1 % 23,953 3.0 %
expense (e)
Loss on
extinguishment — — 755 0.3 % — — 37,611 4.7 %
of debt
Non-GAAP other
income, net $ 3,677 1.3 % $ 982 0.4 % $ 3,529 0.4 % $ 2,225 0.3 %
(d)
(a) Contingent compensation expense relates to contingent payments for
post-combination services associated with acquisitions.
(b) Headquarter relocation expense in Q3 2012 and first three quarters of 2012
consists primarily of cease-use loss recorded upon vacating our prior
headquarters, double rent expense during the transition to our new headquarter
facility, accretion of interest expense on lease exit liability recorded upon
vacating certain buildings of our prior headquarters, and moving costs.
Headquarter relocation expense recorded in Q3 2011 and first three quarters of
2011 consisted of accelerated depreciation expense and double rent expense
during the transition to the new facility.
(c) Acquisition related (gain) expense, net during the first three quarters of
2012 year includes changes in fair value of contingent consideration of $1.7
million, $1.1 million, and $(1.1) million recorded in Q1, Q2, and Q3,
respectively, and transaction costs related to acquisition of BlueGnome Ltd.
of $0.7 million recorded in Q3. Acquisition related (gain) expense, net in Q3
2011 consists of change in fair value of contingent consideration of $2.6
million. Acquisition related (gain) expense, net in the first three quarters
of 2011 consists of an acquired in-process research and development charge of
$5.4 million in Q2 2011 related to a milestone payment for a prior
acquisition, offset by changes in fair value of contingent consideration of
$3.0 million.
(d) Non-GAAP operating profit, and non-GAAP other income, net, exclude the
effects of the pro forma adjustments as detailed above. Management has
excluded the effects of these items in these measures to assist investors in
analyzing and assessing our past and future core operating performance.
Non-GAAP gross profit, included within the non-GAAP operating profit, is a key
measure of the effectiveness and efficiency of our manufacturing processes,
product mix and the average selling prices of our products and services.
(e) Non-cash interest expense is calculated in accordance with the
authoritative accounting guidance for convertible debt instruments that may be
settled in cash.
Illumina, Inc.
Reconciliation of Non-GAAP Financial Guidance
The company's future performance and financial results are subject to risks
and uncertainties, and actual results could differ materially from the
guidance set forth below. More information on potential factors that could
affect the company's financial results is included from time to time in the
company's public reports filed with the SEC, including the company's Form 10-K
for the fiscal year ended January 1, 2012. The company assumes no obligation
to update any forward-looking statements or information.
Fiscal Year 2012
Gross Margin
Non-GAAP gross margin 70%
Stock-based compensation expense (1)%
Amortization of acquired intangible assets (1)%
GAAP gross margin 68%
Diluted net income per share
Non-GAAP diluted net income per share $1.54 - $1.59
Non-cash interest expense (a) (0.17)
Unsolicited tender offer charges (0.12)
Headquarter relocation expense (b) (0.11)
Impairment of in-process research and development (0.11)
Amortization of acquired intangible assets (0.08)
Contingent compensation expense (c) (0.04)
Restructuring charges (0.02)
Legal contingencies (0.02)
Acquisition related expense, net (d) (0.01)
Pro forma impact of weighted average shares (e) (0.01)
GAAP diluted net income per share $0.85 - $0.90
(a) Non-cash interest expense is calculated in accordance with the
authoritative accounting guidance for convertible debt instruments that may be
settled in cash.
(b) We expect to incur additional headquarter relocation expenses, the
majority of which are non-cash in nature. These expenses include items such as
additional cease-use loss upon vacating our former headquarter facilities,
accretion of interest expense on such cease-use liabilities, and double rent
expense during the transition to the new facility.
(c) Contingent compensation expense represents contingent consideration for
post-combination services associated with acquisitions.
(d) Acquisition related expense primarily represents changes in fair value of
contingent consideration.
(e) Pro forma impact of weighted average shares represents the estimated
impact of double dilution associated with the accounting treatment of the
company's outstanding convertible debt and the corresponding call option
overlay.
Contact:
Illumina, Inc.
Investors:
Rebecca Chambers
858-255-5243
rchambers@illumina.com
or
Media:
Jennifer Temple
858-882-6822
pr@illumina.com
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