Full Press Release Details
FLUIDIGM ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
SOUTH SAN FRANCISCO, Calif., November 3, 2016 - Fluidigm Corporation (NASDAQ:FLDM) today announced its financial results for the third quarter ended September 30, 2016.
Total revenue for the third quarter of 2016 was $22.2 million, a decrease of 23% from $28.6 million in the third quarter of 2015. GAAP net loss for the third quarter of 2016 was $19.8 million, compared with a GAAP net loss of $9.3 million for the third quarter of 2015. Non-GAAP net loss for the third quarter of 2016 was $10.9 million, compared with a $4.4 million non-GAAP net loss for the third quarter of 2015 (see accompanying table for reconciliation of GAAP and non-GAAP measures).
Total revenue for the first nine months of 2016 was $79.4 million, a decrease of 6% from $84.0 million in the first nine months of 2015. GAAP net loss for the first nine months of 2016 was $58.3 million, compared with a GAAP net loss of $40.4 million in the first nine months of 2015. Non-GAAP net loss for the first nine months of 2016 was $32.3 million, compared with a $17.5 million non-GAAP net loss for the first nine months of 2015 (see accompanying table for reconciliation of GAAP and non-GAAP measures).
"We are very disappointed with our performance in the third quarter. We had expected the decline in genomics instruments on a year-over-year basis to be offset by strong Helios sales. However, both Helios sales as well as genomics analytical consumables were lower than we expected," said Chris Linthwaite, president and chief executive officer.
"I joined Fluidigm because I believed that with a refined strategy and increased discipline, the pieces were in place to reignite growth. Despite our third quarter performance, I remain confident that we can re-establish growth, but it is clear we have real work ahead. Our immediate action plan includes a strategic redefinition of how to leverage Fluidigm's strengths as well as a disciplined focus on taking cost out of the business. Entering this new chapter is humbling, but it is also an exciting opportunity to reimagine and recommit to how we will deliver on our promises to our customers, employees and stockholders," continued Linthwaite, who was appointed as chief executive officer in October 2016, succeeding founder Gajus Worthington, who had served as chief executive officer since 1999.
"On behalf of the board, management and everyone at Fluidigm, we thank Gajus for his 17 years of service. Under his leadership, Fluidigm became a market leader in single cell biology through strong customer engagement and new product innovation, particularly the Biomark , C1 , and Helios franchises. We believe these platforms, supplemented by new product developments, will be the foundation for our return to growth," added Linthwaite.
Financial Highlights
Total revenue of $22.2 million by category for Q3 2016:
Total product revenue of $18.0 million by customer for Q3 2016:
Total installed base of approximately 1,813 units at the end of Q3 2016:
Total revenue of $22.2 million by geographic region for Q3 2016:
Product margin and cash, cash equivalents, and investments:
Financial Outlook for Full Year 2016
Given the recent volatility in our business, we are not reinstating guidance pending completion of a business review and implementation of the associated action plan.
Conference Call Information
Fluidigm will host a conference call today, November 3, 2016, at 2:00 p.m. PT (5:00 p.m. ET). Individuals interested in listening to the conference call may do so by dialing (877) 556-5248 for domestic callers, or (720) 545-0029 for international callers. Please reference Conference ID 93535469. Interested parties may access the live teleconference in the Investor Relations section of the company's website at: http://investors.fluidigm.com/events.cfm. The link will not be active until 1:45 p.m. PT (4:45 p.m. ET) on November 3, 2016.
A telephone replay of the teleconference will be available 90 minutes after the end of the call at (855) 859-2056 (domestic toll-free), or (404) 537-3406 (international toll), Conference ID 93535469. The conference call will also be archived on the Fluidigm investor's page at: http://investors.fluidigm.com/.
Statement Regarding Use of Non-GAAP Financial Information
Fluidigm has presented certain financial information in accordance with GAAP and also on a non-GAAP basis for the third quarter and first nine months of 2016 and 2015. Management believes that non-GAAP financial measures, taken in conjunction with GAAP financial measures, provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of the company's core operating results. Management uses non-GAAP measures to compare the company's performance relative to forecasts and strategic plans and to benchmark the company's performance externally against competitors. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of the company's operating results as reported under U.S. GAAP. Fluidigm 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 operating results are presented in the accompanying tables of this release.
Use of Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding Fluidigm's ability to re-establish growth; Fluidigm's ability to reduce costs associated with its business and deliver on promises to customers, employees and stockholders; and Fluidigm's ability to implement its action plan. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from currently anticipated results, including but not limited to, risks relating to the future financial performance of Fluidigm product lines; challenges inherent in developing, manufacturing, launching, marketing, and selling new products; potential product performance and quality issues; the possible loss of key employees, customers, or suppliers; intellectual property risks; competition; Fluidigm research and development, sales, marketing, and distribution plans and capabilities; reduction in research and development spending or changes in budget priorities by customers; interruptions or delays in the supply of components or materials for, or manufacturing of, its products; seasonal variations in customer operations; unanticipated increases in costs or expenses; and risks associated with international operations. Information on these and additional risks, uncertainties, and other information affecting Fluidigm business and operating results are contained in Fluidigm's Annual Report on Form 10-K for the year ended December 31, 2015, and in its other filings with the Securities and Exchange Commission. Additional information will also be set forth in Fluidigm's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 to be filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Fluidigm disclaims any obligation to update these forward-looking statements except as may be required by law.
Fluidigm (NASDAQ:FLDM) develops, manufactures, and markets life science analytical and preparatory systems for growth markets such as single-cell biology and production genomics. We sell to leading academic institutions, clinical laboratories, and pharmaceutical, biotechnology, and agricultural biotechnology companies worldwide. Our systems are based on proprietary microfluidics and multiparameter mass cytometry technology and are designed to significantly simplify experimental workflow, increase throughput, and reduce costs while providing excellent data quality. Fluidigm products are provided for Research Use Only. Not for use in diagnostic procedures.
We use our website (www.fluidigm.com), corporate Twitter account (@fluidigm), Facebook page (https://www.facebook.com/Fluidigm), and LinkedIn page (https://www.linkedin.com/company/fluidigm-corporation) as channels of distribution of information about our products, our planned financial and other announcements, our attendance at upcoming investor and industry conferences, and other matters. Such information may be deemed material information, and we may use these channels to comply with our disclosure obligations under Regulation FD. Therefore, investors should monitor our website and our social media accounts in addition to following our press releases, SEC filings, public conference calls, and webcasts.
Fluidigm, the Fluidigm logo, Biomark, C1, Callisto, CyTOF, Helios, and Polaris are trademarks or registered trademarks of Fluidigm Corporation.
FLUIDIGM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue: | ||||||||||||||||
| Instruments | $ | 9,172 | $ | 15,057 | $ | 36,181 | $ | 42,757 | ||||||||
| Consumables | 8,820 | 10,044 | 31,914 | 31,992 | ||||||||||||
| Product revenue | 17,992 | 25,101 | 68,095 | 74,749 | ||||||||||||
| Service revenue | 4,152 | 3,487 | 11,085 | 9,043 | ||||||||||||
| License and grant revenue | 47 | 55 | 182 | 198 | ||||||||||||
| Total revenue | 22,191 | 28,643 | 79,362 | 83,990 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of product revenue | 9,071 | 10,463 | 31,097 | 31,512 | ||||||||||||
| Cost of service revenue | 1,228 | 967 | 3,673 | 2,529 | ||||||||||||
| Research and development | 9,252 | 9,444 | 29,642 | 29,524 | ||||||||||||
| Selling, general and administrative | 21,123 | 19,558 | 70,444 | 60,874 | ||||||||||||
| Gain on escrow settlement | - | (3,986 | ) | - | (3,986 | ) | ||||||||||
| Total costs and expenses | 40,674 | 36,446 | 134,856 | 120,453 | ||||||||||||
| Loss from operations | (18,483 | ) | (7,803 | ) | (55,494 | ) | (36,463 | ) | ||||||||
| Interest expense | (1,454 | ) | (1,451 | ) | (4,361 | ) | (4,355 | ) | ||||||||
| Other expense, net | (161 | ) | (377 | ) | (527 | ) | (889 | ) | ||||||||
| Loss before income taxes | (20,098 | ) | (9,631 | ) | (60,382 | ) | (41,707 | ) | ||||||||
| Benefit from income taxes | 309 | 362 | 2,093 | 1,271 | ||||||||||||
| Net loss | $ | (19,789 | ) | $ | (9,269 | ) | $ | (58,289 | ) | $ | (40,436 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.68 | ) | $ | (0.32 | ) | $ | (2.01 | ) | $ | (1.41 | ) | ||||
| Shares used in computing net loss per share, basic and diluted | 29,069 | 28,758 | 28,959 | 28,677 |
FLUIDIGM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2016 | December 31, 2015 (1) | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 32,306 | $ | 29,117 | ||||
| Short-term investments | 38,941 | 65,855 | ||||||
| Accounts receivable, net | 12,835 | 25,457 | ||||||
| Inventories | 20,838 | 17,924 | ||||||
| Prepaid expenses and other current assets | 3,167 | 5,742 | ||||||
| Total current assets | 108,087 | 144,095 | ||||||
| Long-term investments | - | 6,493 | ||||||
| Property and equipment, net | 17,305 | 15,258 | ||||||
| Other non-current assets | 8,278 | 9,048 | ||||||
| Developed technology, net | 82,643 | 91,048 | ||||||
| Goodwill | 104,108 | 104,108 | ||||||
| Total assets | $ | 320,421 | $ | 370,050 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,871 | $ | 6,094 | ||||
| Accrued compensation and related benefits | 2,972 | 3,553 | ||||||
| Other accrued liabilities | 10,348 | 11,015 | ||||||
| Deferred revenue, current portion | 9,724 | 9,419 | ||||||
| Total current liabilities | 27,915 | 30,081 | ||||||
| Convertible notes, net | 194,881 | 194,673 | ||||||
| Deferred tax liability, net | 21,035 | 23,595 | ||||||
| Other non-current liabilities | 8,618 | 6,800 | ||||||
| Total liabilities | 252,449 | 255,149 | ||||||
| Total stockholders' equity | 67,972 | 114,901 | ||||||
| Total liabilities and stockholders' equity | $ | 320,421 | $ | 370,050 |
(1) Derived from audited consolidated financial statements
FLUIDIGM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended September 30, | ||||||||
| 2016 | 2015 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (58,289 | ) | $ | (40,436 | ) | ||
| Depreciation and amortization | 4,972 | 4,030 | ||||||
| Stock-based compensation expense | 11,033 | 12,850 | ||||||
| Amortization of developed technology | 8,400 | 8,400 | ||||||
| Gain on escrow settlement | - | (3,986 | ) | |||||
| Other non-cash items | 592 | 223 | ||||||
| Changes in assets and liabilities, net | 4,915 | (11,410 | ) | |||||
| Net cash used in operating activities | (28,377 | ) | (30,329 | ) | ||||
| Investing activities | ||||||||
| Purchases of investments | (38,564 | ) | (53,704 | ) | ||||
| Proceeds from sales and maturities of investments | 71,922 | 77,319 | ||||||
| Proceeds from sale of investment in Verinata | 2,330 | - | ||||||
| Purchase of intangible assets | - | (170 | ) | |||||
| Purchases of property and equipment | (4,371 | ) | (2,545 | ) | ||||
| Net cash provided by investing activities | 31,317 | 20,900 | ||||||
| Financing activities | ||||||||
| Proceeds from exercise of stock options, net of tax payments | 96 | 5,272 | ||||||
| Net cash provided by financing activities | 96 | 5,272 | ||||||
| Effect of foreign exchange rate fluctuations on cash and cash equivalents | 153 | (739 | ) | |||||
| Net increase in cash and cash equivalents | 3,189 | (4,896 | ) | |||||
| Cash and cash equivalents at beginning of period | 29,117 | 33,713 | ||||||
| Cash and cash equivalents at end of period | $ | 32,306 | $ | 28,817 |
FLUIDIGM CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net loss (GAAP) | $ | (19,789 | ) | $ | (9,269 | ) | $ | (58,289 | ) | $ | (40,436 | ) | ||||
| Gain on escrow settlement | - | (3,986 | ) | - | (3,986 | ) | ||||||||||
| Stock-based compensation expense | 3,586 | 4,144 | 11,033 | 12,850 | ||||||||||||
| Amortization of developed technology (a) | 2,800 | 2,800 | 8,400 | 8,400 | ||||||||||||
| Interest expense (b) | 1,454 | 1,451 | 4,361 | 4,355 | ||||||||||||
| Depreciation and amortization | 1,605 | 1,132 | 4,621 | 3,559 | ||||||||||||
| Benefit from acquisition related income taxes (c) | (571 | ) | (710 | ) | (2,397 | ) | (2,324 | ) | ||||||||
| Loss on disposal of property and equipment | - | - | 12 | 93 | ||||||||||||
| Net loss (Non-GAAP) | $ | (10,915 | ) | $ | (4,438 | ) | $ | (32,259 | ) | $ | (17,489 | ) | ||||
| Shares used in net loss per share calculation - basic and diluted (GAAP and Non-GAAP) | 29,069 | 28,758 | 28,959 | 28,677 | ||||||||||||
| Net loss per share - basic and diluted (GAAP) | $ | (0.68 | ) | $ | (0.32 | ) | $ | (2.01 | ) | $ | (1.41 | ) | ||||
| Net loss per share - basic and diluted (Non-GAAP) | $ | (0.38 | ) | $ | (0.15 | ) | $ | (1.11 | ) | $ | (0.61 | ) |
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP PRODUCT MARGIN
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Product margin (GAAP) | $ | 8,921 | $ | 14,638 | $ | 36,998 | $ | 43,237 | ||||||||
| Amortization of developed technology (a) | 2,800 | 2,800 | 8,400 | 8,400 | ||||||||||||
| Depreciation and amortization (d) | 569 | 260 | 1,657 | 775 | ||||||||||||
| Stock-based compensation expense (d) | $ | 337 | 412 | 1,053 | 1,420 | |||||||||||
| Product margin (Non-GAAP) | $ | 12,627 | $ | 18,110 | $ | 48,108 | $ | 53,832 | ||||||||
| Product margin percentage (GAAP) | 49.6 | % | 58.3 | % | 54.3 | % | 57.8 | % | ||||||||
| Product margin percentage (Non-GAAP) | 70.2 | % | 72.1 | % | 70.6 | % | 72.0 | % |
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP OPERATING EXPENSES
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Operating expenses (GAAP) | $ | 30,375 | $ | 25,016 | $ | 100,086 | $ | 86,412 | ||||||||
| Gain on escrow settlement | - | 3,986 | - | 3,986 | ||||||||||||
| Stock-based compensation expense (e) | (3,249 | ) | (3,732 | ) | (9,980 | ) | (11,430 | ) | ||||||||
| Depreciation and amortization (e) | (1,036 | ) | (872 | ) | (2,964 | ) | (2,784 | ) | ||||||||
| Loss on disposal of property and equipment (e) | - | - | (12 | ) | (93 | ) | ||||||||||
| Operating expenses (Non-GAAP) | $ | 26,090 | $ | 24,398 | $ | 87,130 | $ | 76,091 |
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP LOSS FROM OPERATIONS
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Loss from operations (GAAP) | $ | (18,483 | ) | $ | (7,803 | ) | $ | (55,494 | ) | $ | (36,463 | ) | ||||
| Gain on escrow settlement | - | (3,986 | ) | - | (3,986 | ) | ||||||||||
| Stock-based compensation expense | 3,586 | 4,144 | 11,033 | 12,850 | ||||||||||||
| Amortization of developed technology (a) | 2,800 | 2,800 | 8,400 | 8,400 | ||||||||||||
| Depreciation and amortization (e) | 1,605 | 1,132 | 4,621 | 3,559 | ||||||||||||
| Loss on disposal of property and equipment (e) | - | - | 12 | 93 | ||||||||||||
| Loss from operations (Non-GAAP) | $ | (10,492 | ) | $ | (3,713 | ) | $ | (31,428 | ) | $ | (15,547 | ) |
| (a) | represents amortization of developed technology in connection with the DVS acquisition | |
| (b) | represents interest expense on Senior Convertible Notes | |
| (c) | represents the tax impact on the purchase of intangible assets in connection with the DVS acquisition | |
| (d) | represents expense associated with cost of product revenue | |
| (e) | represents expense associated with research and development, selling, general and administrative activities |