Fluidigm Corporation
Nov 2, 2017

Fluidigm Announces Third Quarter Financial Results and Operational Progress

SOUTH SAN FRANCISCO, Calif., Nov. 02, 2017 (GLOBE NEWSWIRE) -- Fluidigm Corporation (NASDAQ:FLDM) today announced financial results for the third quarter ended September 30, 2017.

Total revenue for the third quarter was $24.7 million, an increase of 12% from $22.2 million in the third quarter of 2016 and an increase of 3% from $23.9 million in the second quarter of 2017. GAAP net loss for the third quarter of 2017 was $15.9 million, compared with a GAAP net loss of $19.8 million for the third quarter of 2016. Non-GAAP net loss for the third quarter of 2017 was $8.6 million, compared with a $10.9 million non-GAAP net loss for the third quarter of 2016 (see accompanying table for reconciliation of GAAP and non-GAAP measures).

"Fluidigm made great strides in recent months in developing breakthrough innovation that empowers the global scientific community," said Chris Linthwaite, President and CEO. "Our Hyperion™ Imaging System, launched last month, is a powerful new tool that expands our market leadership in high-parameter protein analysis. Using Imaging Mass Cytometry™, the Hyperion Imaging System provides a unique value proposition for medical and scientific researchers through a comprehensive visualization of tissue microenvironments with spatial context. These capabilities will benefit many fields of research including oncology, immunology and cancer immunotherapy.

"We believe this technology has the potential to revolutionize disease research, empowering future development of better diagnostics and more effective therapies," added Linthwaite.

At a technical level, the Hyperion Imaging System sets a new standard in highly multiplexed protein detection, enabling researchers to simultaneously image four to 37 protein markers with minimal background and utilize up to a total of 135 channels to detect additional parameters.

"In the area of new partnerships, we forged a distribution agreement with the University of Zurich to offer histoCAT™ software for Imaging Mass Cytometry," Linthwaite said.

"As we move into the final months of the year, I am proud of the progress we've made as a team and as an organization," he said. "We remain focused on delivering improving financial results."

Shifting to a financial perspective, Linthwaite commented, "In the third quarter, we delivered revenue within guidance and made progress on our strategic pillars of innovation and partnership; operational efficiency; and financial discipline.

"We posted sequential and year-over-year revenue growth in mass cytometry, driven by sales of both Helios™ and Imaging Mass Cytometry products. In our high-throughput genomics business, consumables revenue increased sequentially in the third quarter. On a geographic basis, revenue growth was strong in Europe and Asia as we placed new instruments and focused on consumables pull-through."

Third Quarter 2017 Performance
Total revenue of $24.7 million by category:

Product revenue of $20.6 million:

Total revenue by geographic area:

Geographic AreaRevenue by GeographyYear-over-Year Change% of Total Revenue
United States $11.2 million(11%)45%
Europe$7.7 million48%31%
Asia-Pacific $4.8 million34%20%
Other $1.0 million20%4%

Product margin:
GAAP product margin was 44.5% in the third quarter of 2017 compared to 49.6% in the year ago period. Non-GAAP product margin was 62.1% in the third quarter of 2017 compared to 70.2% in the year ago period. Non-GAAP product margin excludes the effects of amortization of developed technology, depreciation and amortization, and stock-based compensation expense (see accompanying table for the reconciliation of GAAP and non-GAAP product margins).

The year-over-year decreases in product margins were primarily due to increased genomics unit product costs from lower production volumes. The decrease in GAAP product margin was partially offset by fixed amortization of developed technology over higher revenues.

Cash, cash equivalents, and investments as of September 30, 2017:
Cash, cash equivalents, and investments as of September 30, 2017, were $62.4 million, which included net proceeds of $28.8 million from our "at-the-market" equity offering completed in August 2017. Cash, cash equivalents, and investments were $42.0 million as of June 30, 2017.

Strategic Priorities and Other Business Highlights

Foster Innovation and Partnerships

Increase Operational Efficiency and Reduce Costs

Operating expenses for the third quarter were at the lower end of our guidance. In addition, the company continues to focus on value engineering, vendor negotiation, and other operational expense reduction programs. As noted previously, we expect to achieve more than $6 million in savings over four years from the exit or sublease of certain Fluidigm facilities. These savings are incremental to the approximately $8 million in savings before severance expenses we expected in 2017 as a result of steps taken to right-size the organization. For the first nine months of 2017, operating expenses decreased by $12.8 million or 13% on GAAP basis and $10 million or 11% on a non-GAAP basis compared to the year ago period.

Improve Financial Discipline and Manage Cash Balance

Fourth Quarter 2017 Guidance  

Conference Call Information
Fluidigm will host a conference call today, November 2, 2017, 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 85402256. 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 2, 2017

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 85402256. The conference call will also be archived on the Fluidigm Investors page at: http://investors.fluidigm.com/.

Statement Regarding Use of Non-GAAP Financial Information
Fluidigm has presented certain financial information in accordance with U.S. GAAP and also on a non-GAAP basis for the three and nine-month periods ended September 30, 2017, and September 30, 2016, as well as projected for the fourth quarter of 2017. 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. Our estimates of forward-looking non-GAAP operating expenses exclude estimates for stock-based compensation expense, depreciation and amortization; loss on disposal of property and equipment; future changes relating to developed and acquired technologies; other intangible assets; and income taxes, among other items, certain of which are presented in the table accompanying our earnings release. The time and amount of certain material items needed to estimate non-GAAP financial measures are inherently unpredictable or outside of our control. Material changes to any of these items could have a significant effect on guidance and future GAAP results. 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 planned strategic initiatives and expected timing and benefits of such initiatives, expectations for the benefits of commercial agreements, the anticipated value of recently introduced products to customers and their benefits for various applications, cash flow expectations and cash management plans, and projected revenues, expenses, and cash flows for the fourth quarter of 2017. 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 introductions of new capital equipment products driving volatility in revenue from period to period; the future financial performance of Fluidigm product lines, particularly with respect to legacy instruments that may have contributed significant revenue in prior periods; 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 and uncertainties and other information affecting Fluidigm's business and operating results is contained in Fluidigm's Annual Report on Form 10-K for the year ended December 31, 2016, and in its other filings with the Securities and Exchange Commission, including Fluidigm's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017. 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.

About Fluidigm
Fluidigm (NASDAQ:FLDM) develops, manufactures, and markets life science analytical and preparatory systems for markets such as mass cytometry, high-throughput genomics, and single-cell genomics. We sell to leading academic institutions, clinical research 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, Helios, Hyperion, Imaging Mass Cytometry, and Juno are trademarks or registered trademarks of Fluidigm Corporation. All other trademarks are the sole property of their respective owners.

Contact:

Fluidigm Corporation

Ana Petrovic
Director, Corporate Development and Investor Relations
650 243 6628
ana.petrovic@fluidigm.com

 

 FLUIDIGM CORPORATION 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
 (In thousands, except per share amounts) 
 (Unaudited) 
   
   Three Months Ended September 30,  Nine Months Ended September 30, 
    2017   2016   2017   2016  
 Revenue:        
    Instruments $  10,518  $  9,172  $  31,183  $  36,181  
    Consumables    10,058     8,820     30,200     31,914  
   Product revenue    20,576     17,992     61,383     68,095  
   Service revenue     4,133     4,152     12,620     11,085  
   License revenue    38     47     190      182  
 Total revenue   24,747     22,191     74,193     79,362  
 Costs and expenses:        
   Cost of product revenue    11,414     9,071     33,060     31,097  
   Cost of service revenue    1,150     1,228     3,437     3,673  
   Research and development    7,683     9,252     23,668     29,642  
   Selling, general and administrative    20,102     21,123     63,653     70,444  
 Total costs and expenses   40,349     40,674     123,818     134,856  
 Loss from operations   (15,602)    (18,483)    (49,625)    (55,494) 
 Interest expense   (1,456)    (1,454)    (4,367)    (4,361) 
 Other income (expense), net    379     (161)    571     (527) 
 Loss before income taxes    (16,679)    (20,098)    (53,421)    (60,382) 
 Benefit from income taxes    735     309     3,343     2,093  
 Net loss$  (15,944) $  (19,789) $  (50,078) $  (58,289) 
           
 Net loss per share, basic and diluted$  (0.46) $  (0.68) $  (1.61) $  (2.01) 
           
 Shares used in computing net loss per share, basic and diluted  34,513   29,069   31,051   28,959  
           

 

FLUIDIGM CORPORATION 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(In thousands) 
        
     September 30, 2017 December 31, 2016 (1) 
      (Unaudited)   
ASSETS      
Current assets:       
  Cash and cash equivalents    $  60,944 $  35,045 
  Short-term investments      1,430    24,385 
  Accounts receivable, net      13,732    14,610 
  Inventories      17,746    20,114 
  Prepaid expenses and other current assets      2,314    2,517 
Total current assets      96,166    96,671 
Property and equipment, net       13,335    16,525 
Other non-current assets      6,987    9,291 
Developed technology, net      71,400    79,800 
Goodwill       104,108    104,108 
Total assets    $  291,996 $  306,395 
         
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:       
  Accounts payable   $  4,721 $  3,967 
  Accrued compensation and related benefits      8,954    3,996 
  Other accrued liabilities      8,332    12,374 
  Deferred revenue, current portion      9,877    9,163 
Total current liabilities      31,884    29,500 
Convertible notes, net      195,166    194,951 
Deferred tax liability, net      15,916    21,140 
Other non-current liabilities      9,960    7,571 
Total liabilities      252,926    253,162 
Total stockholders' equity      39,070    53,233 
Total liabilities and stockholders' equity  $  291,996 $  306,395 
         
(1) Derived from audited consolidated financial statements  
         

 

FLUIDIGM CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(In thousands) 
(Unaudited) 
           
      Nine Months Ended September 30, 
       2017   2016  
Operating activities    
Net loss   $  (50,078) $  (58,289) 
Depreciation and amortization   5,820     4,972  
Stock-based compensation expense   7,097     11,033  
Amortization of developed technology   8,400     8,400  
Other non-cash items   (535)    592  
Changes in assets and liabilities, net    4,537     4,884  
Net cash used in operating activities   (24,759)    (28,408) 
          
Investing activities    
Purchases of investments   (1,450)    (38,564) 
Proceeds from sales and maturities of investments   24,375     71,922  
Proceeds from sale of investment in Verinata   -     2,330  
Purchases of property and equipment   (1,388)    (4,371) 
Net cash provided by investing activities   21,537      31,317  
           
Financing activities    
Proceeds from issuance of common stock   28,843     -   
Proceeds from exercise of stock options   63     217  
Payments for taxes related to net share settlement of equity awards   (90)    (90) 
Net cash provided by financing activities   28,816      127  
          
Effect of foreign exchange rate fluctuations on cash and cash equivalents   305     153   
Net increase in cash and cash equivalents   25,899     3,189  
Cash and cash equivalents at beginning of period   35,045     29,117  
Cash and cash equivalents at end of period$  60,944  $  32,306  
          

 

FLUIDIGM CORPORATION 
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION  
(In thousands, except per share amounts) 
(Unaudited) 
  
   Three Months Ended September 30,  Nine Months Ended September 30,  
     2017   2016   2017    2016  
            
Net loss (GAAP)   $  (15,944) $  (19,789)  $  (50,078) $  (58,289) 
Stock-based compensation expense     2,322     3,586     7,097     11,033  
Amortization of developed technology  (a)    2,800     2,800     8,400     8,400  
Interest expense (b)      1,456     1,454     4,367     4,361  
Depreciation and amortization      1,658     1,605     5,578     4,621   
Benefit from acquisition related income taxes (c)     (877)    (571)    (2,535)    (2,397) 
Loss on disposal of property and equipment    1     -     1     12  
Net loss (Non-GAAP)   $  (8,584) $  (10,915) $  (27,170) $  (32,259) 
Shares used in net loss per share calculation -          
basic and diluted (GAAP and Non-GAAP)    34,513     29,069     31,051     28,959  
             
Net loss per share - basic and diluted (GAAP) $  (0.46) $  (0.68) $  (1.61) $  (2.01) 
Net loss per share - basic and diluted (Non-GAAP) $  (0.25) $  (0.38) $  (0.88) $  (1.11) 
            
            
            
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP PRODUCT MARGIN 
            
     Three Months Ended September 30,  Nine Months Ended September 30,  
     2017   2016   2017   2016  
Product margin (GAAP)   $  9,162  $  8,921  $  28,323  $  36,998  
Amortization of developed technology  (a)    2,800     2,800     8,400     8,400  
Depreciation and amortization (d)      533     569     1,627     1,657  
Stock-based compensation expense (d)    285     337     854     1,053  
Product margin (Non-GAAP)   $  12,780  $  12,627  $  39,204   $  48,108  
            
Product margin percentage (GAAP)   44.5%  49.6%  46.1%  54.3% 
Product margin percentage (Non-GAAP)  62.1%  70.2%  63.9%  70.6% 
            
            
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP OPERATING EXPENSES 
            
     Three Months Ended September 30,  Nine Months Ended September 30,  
     2017   2016   2017   2016  
Operating expenses (GAAP)   $  27,785  $  30,375  $  87,321  $  100,086  
Stock-based compensation expense (e)  (2,037)  (3,249)  (6,243)  (9,980) 
Depreciation and amortization (e)     (1,125)    (1,036)    (3,951)    (2,964) 
Loss on disposal of property and equipment (e)    (1)    -     (1)    (12) 
Operating expenses (Non-GAAP)  $  24,622  $  26,090  $  77,126  $  87,130  
            
            
            
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP LOSS FROM OPERATIONS 
            
    Three Months Ended September 30,  Nine Months Ended September 30,  
      2017   2016    2017   2016   
Loss from operations (GAAP)   $  (15,602) $  (18,483) $  (49,625) $  (55,494) 
Stock-based compensation expense      2,322     3,586   7,097     11,033  
Amortization of developed technology  (a)    2,800     2,800     8,400     8,400  
Depreciation and amortization (e)     1,658     1,605     5,578     4,621  
Loss on disposal of property and equipment (e)    1     -     1     12  
Loss from operations (Non-GAAP)  $  (8,821) $  (10,492) $  (28,549) $  (31,428) 
            
             
(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  
            

Source: Fluidigm Corporation

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