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

Thursday, October 27, 2011

MENLO PARK, Calif., Oct. 27, 2011 (GLOBE NEWSWIRE) — Pacific Biosciences of California, Inc. (Nasdaq:PACB) today announced financial results for the third quarter ended September 30, 2011.

During the third quarter of 2011, the Company recognized revenue from deliveries of its third generation sequencing platform, the PacBio RS, SMRT® cell and reagent consumables, as well as revenue derived from instrument service contracts, totaling $10.5 million, compared to revenue recognized of $10.6 million for the second quarter of 2011. Net loss for the quarter increased to $29.3 million, including workforce reduction charges of $4.9 million, compared to the $22.5 million net loss recognized during the second quarter of 2011.

Gross profit for the third quarter totaled $3.3 million, resulting in a gross margin of 32%, compared to gross profit for the second quarter 2011 of $7.9 million and a gross margin of 74%. Gross margin for both the third and second quarter reflect the ongoing, but declining, margin positive impact of significant instrument component costs that were expensed during prior periods. During development, costs relating to instrument components and manufacturing costs were expensed until commercial production started.

Research and development expense during the third quarter of 2011 totaled $20.0 million representing a 2% increase compared to $19.5 million for the second quarter. The reported expense includes non-cash stock-based compensation totaling $1.6 million and $1.5 million for the third and second quarters of 2011, respectively.

Selling, general, and administrative expense during the third quarter of 2011 totaled $12.8 million representing a 16% increase compared to $11.0 million for the second quarter. The reported expense includes non-cash stock-based compensation totaling $1.4 million and $1.3 million for the third and second quarters of 2011, respectively.

As announced on September 20, 2011, in consideration of uncertainties associated with the economic environment and to position the Company for long-term success, the Company implemented a reduction of approximately 28% of its total workforce. During the third quarter the Company recorded reduction related charges totaling $4.9 million, comprised primarily of personnel separation costs paid during the third quarter and those expected to be paid during the fourth quarter. Research and development and sales, general and administrative expenses for the quarter include workforce reduction related charges of $3.5 million and $1.4 million, respectively.

Cash and investments at September 30, 2011 totaled $193.7 million compared to $216.6 million at June 30, 2011.

Quarterly Conference Call Information

Management will host a quarterly conference call to discuss its Third Quarter 2011 results today at 4:30pm Eastern / 1:30pm Pacific. Investors may listen to the call by dialing 866.831.6267, or if outside the U.S., by dialing +1.617.213.8857, and entering passcode 76006005. The call will be webcast live and will be available for replay at Pacific Biosciences' website at http://investor.pacificbiosciences.com/.

Forward-Looking Statements

This press release contains forward-looking statements relating to the Company's operations and operating results, including statements relating to the Company's margins and restructuring costs. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and that could materially affect actual results. Factors that could materially affect actual results can be found in Pacific Biosciences of California's recently filed Quarterly Report on Form 10-Q, including those listed under the caption "Risk Factors." Pacific Biosciences of California expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law.

 

       
Pacific Biosciences of California, Inc.  
Unaudited Consolidated Statement of Operations  
 (amounts in thousands, except share and per share amounts)  
   
  Quarters Ended
 
  September 30,
2011
 
June 30,
2011
 
September 30,
2010
 
Revenue:      
Product revenue $ 9,819 $ 10,148 $ — 
Service and other revenue  535  192  — 
Grant revenue  165  290  220
       
Total revenue  10,519  10,630  220
       
Cost of revenue:      
Cost of product revenue  6,546  2,537  — 
Cost of service and other revenue  645  194  — 
       
Total cost of revenue  7,191  2,731  — 
       
Gross profit  3,328  7,899  220
       
Operating expense:      
Research and development  20,001  19,546  32,873
Sales, general and administrative  12,764  11,016  8,043
       
Total operating expense  32,765  30,562  40,916
       
Operating loss  (29,437 )  (22,663 )  (40,696 )
Other income (expense), net  156  188  (12 )
       
Net loss $ (29,281 ) $ (22,475 ) $ (40,708 )
       
Basic and diluted net loss per share $ (0.54 ) $ (0.42 ) $ (39.70 )
       
Shares used in computing basic and diluted net loss per share  54,283,162  53,413,565  1,025,326
       

 

     
Pacific Biosciences of California, Inc.  
Unaudited Consolidated Statement of Operations  
 (amounts in thousands, except per share amounts)  
   
  Year to Date
 
  September 30,
2011
 
September 30,
2010
 
Revenue:    
Product revenue $ 19,966 $ — 
Service and other revenue  728  — 
Grant revenue  725  1,394
     
Total revenue  21,419  1,394
     
Cost of revenue:    
Cost of product revenue  9,083  — 
Cost of service and other revenue  839  — 
     
Total cost of revenue  9,922  — 
     
Gross profit  11,497  1,394
     
Operating expense:    
Research and development  63,665  85,279
Sales, general and administrative  34,899  19,760
     
Total operating expense  98,564  105,039
     
Operating loss  (87,067 )  (103,645 )
Other income (expense), net  502  (102 )
     
Net loss $ (86,565 ) $ (103,747 )
     
Basic and diluted net loss per share $ (1.62 ) $ (134.07 )
     
Shares used in computing basic and diluted net loss per share  53,465,836  773,839
     

 

       
Pacific Biosciences of California, Inc.      
Consolidated Balance Sheets      
 (amounts in thousands, except per share amounts)      
       
  September 30,
2011
 
June 30,
2011
 
December 31,
2010 (1)
 
  (unaudited) (unaudited)  
Assets      
Cash and investments $ 193,696 $ 216,588 $ 283,674
Accounts receivable  4,434  5,437  341
Inventory  20,262  19,552  6,864
Prepaid and other current assets  1,891  3,151  2,235
       
Total current assets  220,283  244,728  293,114
Property and equipment  17,359  16,180  12,311
Other assets  319  312  322
       
Total Assets $ 237,961 $ 261,220 $ 305,747
       
Liabilities and Stockholders' Equity      
Accounts payable $ 8,158 $ 9,032 $ 9,515
Deferred revenue  3,970  2,381  3,221
Accrued and other current liabilities  9,004  10,050  8,104
       
Total current liabilities  21,132  21,463  20,840
Facility financing and deferred rent  6,145  6,431  5,041
Stockholders' equity  210,684  233,326  279,866
       
       
Total Liabilities and Stockholders' Equity $ 237,961 $ 261,220 $ 305,747
       

Note 1:   The condensed consolidated balance sheet at December 31, 2010 has been derived from the audited consolidated financial statements at that date included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

CONTACT: Trevin Rard

         650.521.8450

         ir@pacificbiosciences.com

Source: Pacific Biosciences of California, Inc.

 

 

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