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Affymetrix's Q4 Revenues Rise 10 Percent

NEW YORK (GenomeWeb News) – Affymetrix reported after the close of the market Wednesday that its fourth quarter revenues climbed around 10 percent year over year, as sales growth for its consumables products and eBioscience business more than offset a decline in instrument revenue.

The microarray technologies firm brought in total revenues of $92.6 million for the three months ended Dec. 31, up from $84.3 million for Q4 2012. The revenues were slightly higher than the firm's preliminary announcement of an expected $91 million in revenues and above the consensus Wall Street estimate of $90 million.

On a conference call following the release of the results, CEO Frank Witney said the company's growth in the quarter was "driven by the strength of our CytoScan and our Axiom product lines, sequential improvements in expression and eBioscience [sales], as well as a contribution from new products."

CytoScan continues to be the company's greatest revenue generator. According to Witney, sales of CytoScan chromosomal microarrays rose 18 percent in Q4, due to a "combination of factors including expanding our customer base in all geographies, increased business in existing accounts, as well as expanding our application base."

The US Food and Drug Administration cleared CytoScan last month for use in pediatric constitutional cytogenetic testing. Witney said the clearance will allow Affymetrix to more aggressively market its array against competitors' research-use-only products, as well as to lay the foundation for regulatory clearances outside the US.

Axiom genotyping array revenues grew 63 percent during the quarter, "primarily driven by our expanded menu of standard products, continued success for our custom array program, and our strengthened competitive position in biobanking and ag-bio," Witney said.

The company's eBioscience business grew by about 13 percent in Q4, Witney said, driven by sales in Europe and Asia. Witney said that eBioscience is also poised to benefit from increased interest in single-cell biology, noting that eBioscience "offers the industry's second largest portfolio of product for analysis of single cells by flow cytometry."

Life science reagents revenues were down 6 percent year over year. Witney said that Affy expects the business unit to be "flat to slightly down over the next several quarters."

Witney said that the firm's expression business declined by about 10 percent in the quarter, but noted that given the success of its genotyping array products and eBioscience contributions, expression array sales now generate less than a third of the firm's revenues. He also said that expression "showed improvement" in the quarter, with roughly half of sales generated by newer products, such as its Human Transcriptome Array.

Affy said that its product sales were $82.1 million versus $76.4 million for Q4 2012, and its services and other revenues were $10.5 million compared to $8 million.

Its product revenue for Q4 2013 included core consumable revenue of $57.6 million, instrument revenue of $4 million, and revenue from eBioscience of $20.5 million. That compares to Q4 2012 core consumable revenue of $53.1 million, instrument revenue of $5.2 million, and revenue from eBioscience of $18.1 million.

In its preliminary announcement of revenues a month ago, Affy said that the fourth quarter of 2013 included a one-time licensing payment of $5.3 million from an unnamed diagnostic partner.

Affy posted a profit of $9.4 million, or $.10 per share, for Q4 2013, compared to a profit of $12.3 million, or $.17 per share, for Q4 2012. On a non-GAAP basis, it had EPS of $.02, flat with the prior year and below analysts' consensus estimate of $.07.

The firm spent $12 million on R&D during the quarter, down 17 percent from $14.5 million. Its SG&A expenses increased nearly 3 percent to $39.1 million from $38.1 million.

On the call, CFO Gavin Wood attributed the decline in R&D spending to reductions in headcount and reduced spending on supplies and consulting, while he said that SG&A costs rose on compensation costs.

For full-year 2013 Affy reported revenues of $330.4 million, up 12 percent from $295.6 million in FY 2012. The company beat the average analyst estimate of $327.9 million.

Its product sales for the year were $302.6 million compared to $266.1 million for 2012, and its services and other revenues decreased to $27.8 million from $29.6 million year over year. It said that eBioscience provided $78.2 million of its total revenues in 2013 versus $37 million in 2012.

Affy's net income for the year was $16.3 million, or $.23 per share, compared to $10.7 million, or $.15 per share, for FY 2012. On a non-GAAP basis, its EPS for the year was $.10, flat with 2012 and below the Street estimate of $.15.

Affy finished the year with $57.1 million in cash and cash equivalents.

Wood noted that the firm paid down more than $24 million against its senior debt during Q4, reducing its outstanding senior debt to around $39 million.

Shares of Affy fell around 14 percent to $7.18 in Thursday morning trade on the Nasdaq.