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Pacific Biosciences

Pacific Biosciences of California, Inc. Announces Third Quarter 2017 Financial Results

Thursday, November 2, 2017

MENLO PARK, Calif., Nov. 02, 2017 (GLOBE NEWSWIRE) — Pacific Biosciences of California, Inc. (NASDAQ:PACB) today announced financial results for its third quarter ended September 30, 2017.

Product, service and other revenue for the third quarter of 2017 increased by 9% to $23.5 million, compared to $21.5 million for the third quarter of 2016. Total revenue for the third quarter of 2017 was $23.5 million, compared to $25.1 million for the third quarter of 2016. Total revenue for the third quarter of 2016 included $3.6 million of contractual revenue, whereas the third quarter of 2017 included no contractual revenue. 

Gross profit for the third quarter of 2017 was $8.2 million, resulting in a gross margin of 35%. Gross profit for the third quarter of 2016 was $12.6 million, resulting in a gross margin of 50%. This included $3.6 million of contractual revenue at a 100% gross margin. Excluding this contractual revenue and related margin, adjusted
gross margin for the third quarter of 2016 would have been 42%. Adjusted gross margin is not meant to be considered in isolation or as a substitute for gross margin. Adjusted gross margin is subject to limitations and should be read only in conjunction with the Company’s condensed consolidated financial statements prepared in accordance with GAAP.

Operating expenses for the third quarter of 2017 totaled $29.8 million, compared to $29.4 million for the third quarter of 2016. Operating expenses for the third quarter of 2017 and 2016 included non-cash stock-based compensation of $4.4 million and $4.6 million, respectively.

Net loss for the third quarter of 2017 was $22.0 million, compared to $17.5 million for the third quarter of 2016.

Cash, cash equivalents and investments,
excluding restricted cash, at September 30, 2017 totaled $84.0 million, compared to $72.0 million at December 31, 2016.

Quarterly Conference Call Information

Management will host a quarterly conference call to discuss its third quarter 2017 results today at 4:30 p.m. Eastern Time. Investors may listen to the call by dialing 1.888.366.7247, or if outside the U.S., by dialing +1.707.287.9330, using an Audience Passcode of 329-7738. The call will be webcast live and will be available for replay at Pacific Biosciences’ website at https://investor.pacificbiosciences.com/.

About Pacific Biosciences

Pacific Biosciences of California, Inc. (NASDAQ:PACB) offers sequencing systems to help scientists resolve genetically complex problems. Based on its novel Single Molecule, Real-Time (SMRT®) Technology, Pacific Biosciences’ products enable: de novo genome assembly to finish genomes in order to more fully identify, annotate and decipher genomic structures; full-length transcript analysis to improve annotations in reference genomes, characterize alternatively spliced isoforms in important gene families, and find novel genes; targeted sequencing to more comprehensively characterize genetic variations; and real-time kinetic information for epigenome characterization. Pacific
Biosciences’ technology provides high accuracy, ultra-long reads, uniform coverage, and the ability to simultaneously detect epigenetic changes. PacBio® sequencing systems, including consumables and software, provide a simple, fast, end-to-end workflow for SMRT Sequencing.  More information is available at www.pacb.com

Forward-Looking Statements
All statements in this press release that are not historical are forward-looking statements, including, among other things, statements relating to the timeline for Pacific Biosciences’ potential development of products, future uses, quality or performance of, or benefits of using, products or technologies and other future
events. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, changes in circumstances and other factors that are, in some cases, beyond Pacific Biosciences’ control and could cause actual results to differ materially from the information expressed or implied by forward-looking statements made in this press release. Factors that could materially affect actual results can be found in Pacific Biosciences’ most recent filings with the Securities and Exchange Commission, including Pacific Biosciences’ most recent reports on Forms 8-K, 10-K and 10-Q, and include those listed under the caption “Risk Factors.” Pacific Biosciences undertakes no obligation to revise or update information in this press release to reflect events or circumstances in the future, even if new information becomes available.

Contact: Trevin Rard650.521.8450

 Pacific Biosciences of California, Inc.
Unaudited Condensed Consolidated Statement of Operations
 (amounts in thousands, except per share amounts) 
 Three Months Ended September 30, Nine Months Ended
September 30
 2017  2016  2017  2016 
Product revenue$ 20,343  $ 18,050  $ 58,185  $ 44,016 
Service and other revenue  3,202    3,472    10,348    10,188 
Contractual revenue  —    3,596    —    10,788 
Total revenue  23,545    25,118    68,533    64,992 
Cost of Revenue:           
Cost of product revenue  11,547    9,273    31,064    23,268  
Cost of service and other revenue  3,771    3,207    12,304    8,938 
Total cost of revenue  15,318    12,480     43,368    32,206 
Gross profit  8,227    12,638    25,165    32,786  
Operating Expense:           
Research and development  15,844    17,479    49,698    51,362 
Sales, general and administrative  13,952    11,894    44,722    34,794 
Total operating expense  29,796    29,373    94,420    86,156 
Operating loss  (21,569)   (16,735)   (69,255)   (53,370)
Interest expense  (633)   (821)   (2,297)   (2,395)
Other income (expense), net  181    62    125    420 
Net loss$ (22,021) $ (17,494) $ (71,427) $ (55,345)
Basic and diluted net loss per share$ (0.19) $ (0.19) $ (0.70) $ (0.63)
Shares used in computing basic and diluted net loss per share  115,771    92,110    102,117    87,969 

 Pacific Biosciences of
California, Inc.

Unaudited Condensed Consolidated Balance Sheets
 (amounts in thousands)
 September 30, December 31,
 2017 2016
Cash and investments$ 83,965 $ 71,978
Accounts receivable  8,897   11,421
Inventory  18,201   15,634
Prepaid and other current assets  2,548   9,978
Property and equipment  39,605   14,560
Long-term restricted cash  4,500   4,500
Other long-term Assets  188   9,813
Total Assets$ 157,904 $ 137,884
Liabilities and Stockholders’ Equity     
Accounts payable$ 8,574 $ 8,359
Accrued expenses  11,232    16,604
Deferred service revenue  7,225   8,427
Deferred rent  14,504   19
Other liabilities  1,428   3,345
Financing derivative  170   356
Notes payable  13,363   16,106
Stockholders’ equity  101,408   84,668
Total Liabilities and Stockholders’ Equity$ 157,904 $ 137,884


Source: Pacific Biosciences, Inc.

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