San Diego, California, USA
April 23, 2014
Illumina, Inc. (NASDAQ:ILMN) today announced its financial results for the first quarter of 2014.
First quarter 2014 results:
- Revenue of $421 million, a 27% increase compared to $331 million in the first quarter of 2013
- GAAP net income for the quarter of $60 million, or $0.40 per diluted share, compared to net loss of $23 million, or $0.18 per diluted share, for the first quarter of 2013
- Non-GAAP net income for the quarter of $80 million, or $0.53 per diluted share, compared to $63 million, or $0.46 per diluted share, for the first quarter of 2013 (see the table entitled “Itemized Reconciliation Between GAAP and Non-GAAP Net Income (Loss)” for a reconciliation of these GAAP and non-GAAP financial measures)
- Cash flow from operations of $37 million and free cash flow of $18 million for the quarter
Gross margin in the first quarter of 2014 was 66.1% compared to 66.3% in the prior year period. Excluding the effect of non-cash charges associated with stock compensation, amortization of acquired intangible assets, legal contingencies, and inventory revaluation adjustments, non-GAAP gross margin was 70.4% for the first quarter of 2014 compared to 69.2% in the prior year period.
Research and development (R&D) expenses for the first quarter of 2014 were $77.0 million compared to $61.5 million in the prior year period. R&D expenses included $11.7 million and $8.0 million of non-cash stock compensation expense in the first quarters of 2014 and 2013, respectively. Excluding these charges and contingent compensation, R&D expenses as a percentage of revenue were 15.5% compared to 16.0% in the prior year period.
Selling, general and administrative (SG&A) expenses for the first quarter of 2014 were $109.6 million compared to $85.1 million in the prior year period. SG&A expenses included $19.4 million and $14.6 million of non-cash stock compensation expense in the first quarters of 2014 and 2013, respectively. Excluding these charges, amortization of acquired intangible assets and contingent compensation, SG&A expenses as a percentage of revenue were 19.9%, flat compared to the prior year period.
Depreciation and amortization expenses were $28.4 million and capital expenditures were $19.0 million during the first quarter of 2014. The Company ended the first quarter of 2014 with $1.09 billion in cash, cash equivalents and short-term investments, compared to $1.17 billion as of December 29, 2013.
“Our first quarter results have set the stage for a strong 2014,” stated Jay Flatley, CEO. “We are experiencing an exciting uptake of our new products, including the NextSeq™ 500 and HiSeq X™ Ten, while demand for the overall product portfolio remains robust. We continue to innovate across the entire spectrum of the sequencing workflow to more broadly enable the adoption of genomics.”
Updates since our last earnings release:
- Introduced new products to support oncology clinical research and discovery including the TruSeq® RNA Access Library Prep Kit, and the TruSight™ Myeloid Sequencing Panel and several new BaseSpace Core Apps
- Announced that Novogene, Human Longevity, Inc., and WuXi Genome Center have purchased HiSeq X Ten sequencing systems
- Published results in the New England Journal of Medicine that demonstrate that the verifi® Prenatal Test performs consistently well in pregnant women regardless of their risk level for fetal aneuploidy
- Announced that Science for Life Laboratory (SciLifeLab) in Sweden has joined the Illumina Genome Network (IGN)
- Launched the Illumina Accelerator Program, the world’s first business accelerator focused solely on creating an innovation ecosystem for the genomics industry
- Repurchased $130 million of common stock under our previously announced share repurchase programs
Financial outlook and guidance
The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.
For fiscal 2014 the Company has increased projections to approximately 21% to 23% revenue growth and non-GAAP earnings per fully diluted share of $2.10 to $2.15.
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