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Illumina's Q3 Revenues Soar 54 Percent; Avantome Purchase Impacts Bottom Line

NEW YORK (GenomeWeb News) - Illumina today reported a 54 percent boost in third-quarter revenue as a profit swung to a loss due to charges associated with its acquisition of sequencing startup Avantome.
 
For the quarter ended Sept. 30, Illumina reported revenues of $150.3 million, a 54 percent increase over $97.5 million in the third quarter of 2007 and its 29th consecutive quarter of revenue growth.
 
Third-quarter product revenue climbed 56 percent to $140.3 million while revenue from services and other sources grew 32 percent to $9.9 million.
 
Illumina’s third-quarter R&D expenses rose 39 percent to $27.6 million from $19.8 million in the comparable period of 2007. R&D expenses include $3.5 million and $2.6 million of non-cash stock compensation expense in the third quarter of 2008 and 2007, respectively, as well as $600,000 of accrued contingent compensation associated with the Avantome acquisition completed during the third quarter of 2008.
 
Selling, general and administrative expenses for the quarter rose 62 percent to $39.4 million from $24.3 million in the year-ago period. SG&A expenses include $8 million and $4.9 million of non-cash stock compensation expense in the third quarter of 2008 and 2007, respectively.
 
Illumina said that its acquisition of Avantome, which it completed during the quarter, brought a charge of $24.7 million associated with in-process research and development.
 
As a result of this charge, the company recorded a GAAP net loss of $7.3 million, or $.06 per share, compared to net income of $14.5 million, or $.12 per share, in the comparable period of 2007.
 
The third-quarter net loss also included non-cash charges of $12.7 million in stock compensation expense, $2.7 million associated with the amortization of intangible assets, and $600,000 of accrued contingent compensation associated with the acquisition of Avantome.
 
Excluding the impact of these items, Illumina said that its third-quarter net income on a non-GAAP basis was $28.6 million, or $.22 per diluted share, compared to $19.9 million, or $.17 per diluted share, for the third quarter of 2007.
 
As of Sept. 30, Illumina had $355 million in cash and cash equivalents.
 
The company said it expects full-year 2008 revenue to be between $564 million and $568 million, which would be year-over-year growth of between 54 percent and 55 percent.
 
For the fourth quarter of 2008, Illumina expects revenues between $152 million and $156 million, which would represent year-over-year growth of between 35 percent and 38 percent compared to the fourth quarter of 2007.

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