Fluidigm Reports Financial Results for First Quarter 2011
News May 11, 2011
Product revenue for the first quarter of 2011 was $8.4 million, an increase of 34% from $6.3 million in the first quarter of 2010. Product margin improved 760 basis points to 65%. Net loss for the quarter was $7.3 million, excluding the impact of a decrease in the conversion price of the Series E convertible preferred stock that resulted in a non-recurring, non-cash deemed dividend of $9.9 million. The Q1 2011 net loss is compared to a $5.6 million net loss in the first quarter of 2010. Non-GAAP net loss for the first quarter of 2011 was $3.7 million as compared to $4.5 million for the first quarter of 2010. Non-GAAP net loss excludes deemed dividend, stock-based compensation expense and certain other charges (see accompanying table for reconciliation of GAAP and non-GAAP measures).
“This was a solid quarter for Fluidigm. Growth in product revenues and margins were robust. We experienced strong interest in single-cell genomics, genotyping consumables, and sample preparation for next-generation sequencing. More than half of the BioMark™ and new BioMark HD Systems sold during Q1 are being used to conduct single-cell research,” stated Gajus Worthington, Fluidigm president and chief executive officer. “We watched with great concern as some of our Japanese customers and employees experienced the catastrophic earthquake and tsunami in March. Fluidigm experienced no direct physical damage from these events. Given this extreme environment, the performance of our Japan team during this period was just stellar.”
Financial Highlights and Analysis
• Revenue growth in the first quarter of 2011, compared to the prior year, was a result of product revenue growth, with a stronger increase in consumables sales compared to instrument sales. Revenue from grants and collaborations was 37% lower than the prior year first quarter primarily due to reduced activity under our Singapore Economic Development Board (EDB) grant agreement as we approach the end of the grant period.
• Instrument/consumable mix was 59% and 41%, respectively, for the first quarter of 2011, compared to 66% and 34%, respectively, in the first quarter of 2010.
• Product margin increased to 65% in the first quarter of 2011, from 58% in the first quarter of 2010 primarily due to a favorable product mix and improved chip capacity utilization and yields resulting in lower chip costs.
• Geographic revenues as a percent of total product revenue were as follows: United States - 49%; Europe – 26%; Asia Pacific – 12%; Japan – 11%; and Other 2%.
• Research and development expense was $3.2 million in the first quarter of 2011, comparable to the expense in the first quarter of 2010.
• Selling, general and administrative expense was $7.4 million in the first quarter of 2011, compared to $6.1 million in the first quarter of 2010, an increase of 22%, reflecting factors such as the expansion of the Company’s sales and marketing infrastructure and activities.
• Fluidigm ended the first quarter of 2011 with $77.7 million in cash, cash equivalents and available-for-sale securities as a result of the company’s successful IPO in February of this year.
Business Highlights Since Fluidigm’s Last Earnings Release
• Unit numbers and percentage of sales of BioMark and BioMark HD Systems designated for single-cell use reached an all time high during the first quarter of 2011. Over half the BioMark instruments sold during the quarter are being used for single-cell genomics.
• During the first quarter, Fluidigm completed the worldwide launch of its new BioMark HD Real-Time PCR System. Production of the Company’s original BioMark product line has now converted fully to the BioMark HD System, providing customers with high sensitivity and improved workflow in a reduced footprint.
• In early May, Fluidigm introduced a line of platform-optimized assay and primer products marketed as DELTAgene™ Assays (gene expression), SNPtype™ Assays (SNP genotyping), and Access Array™ Target-specific Primers (target enrichment for next-generation sequencing).
• Fluidigm has surpassed a significant operational milestone, having now manufactured and delivered more than one billion microscopic NanoFlex™ valves to customers world-wide. These valves control the flow of fluids within the Fluidigm chips and provide precise control over complex fluid-handling steps to help ensure high reliability.
• Publication activity of scientific research using Fluidigm technology continues at a strong pace. In the first quarter alone, Fluidigm technology was cited in at least four papers describing research in single-cell genomics, a fast-growing field that is enabled by the BioMark System.
• Fluidigm made two appointments to its Board of Directors: Evan Jones, who will join the Compensation Committee; and Patrick S. Jones who will chair the Board’s audit committee. Both new members bring extensive industry experience to the Board.
For the full year 2011, year-over-year product revenue growth is projected to be in the range of 27%-30%, an increase from the 25% - 27% growth projection provided in our earnings release for the fourth quarter and full year 2010. Revenue from grants and collaborations is projected to be around $2 million, which is at the lower end of the range provided previously. This is due to modifications in the milestones and timing of payments from the collaboration agreement with Novartis.