Illumina 2010 third quarter revenue increases 50% to $237.3 million

Illumina, Inc. (NASDAQ:ILMN) today announced its financial results for the third quarter of 2010.

“An Itemized Reconciliation Between GAAP and Non-GAAP Net Income.”

Third quarter 2010 results:

• Revenue of $237.3 million, a 50% increase over the $158.4 million reported in the third quarter of 2009.
• GAAP net income for the quarter of $35.4 million, or $0.24 per diluted share, compared to net income of $17.1 million, or $0.12 per diluted share, for the third quarter of 2009. Net income for the third quarter of 2010 included $5.3 million in non-cash interest expense and other items listed in the table entitled "An Itemized Reconciliation Between GAAP and Non-GAAP Net Income."
• Non-GAAP net income for the quarter of $40.7 million, or $0.30 per diluted share, compared to $22.6 million, or $0.17 per diluted share, for the third quarter of 2009.

Gross margin in the third quarter of 2010 was 66.2% compared to 67.6% in the comparable period of 2009. Excluding the effect of non-cash charges associated with stock compensation and the amortization of intangibles, non-GAAP gross margin was 67.8% for the third quarter of 2010 compared to 69.5% in the prior year period.

Research and development (R&D) expenses for the third quarter of 2010 were $44.8 million compared to $34.4 million in the third quarter of 2009. R&D expenses include $6.5 million and $4.8 million of non-cash stock compensation expense in the third quarter of 2010 and 2009, respectively. R&D expenses in both periods also include $0.9 million of accrued contingent compensation. Excluding these charges, R&D expenses as a percentage of revenue were 15.7% compared to 18.1% in the prior year period.

Selling, general, and administrative (SG&A) expenses for the third quarter of 2010 were $55.0 million compared to $42.1 million for the third quarter of 2009. SG&A expenses include $9.9 million and $8.5 million of non-cash stock compensation expense in the third quarter of 2010 and 2009, respectively. Excluding these charges, SG&A expenses as a percentage of revenue were 19.0% compared to 21.2% in the prior year period.

The company generated $54.8 million in cash flow from operations during the third quarter of 2010 compared to $20.0 million in the prior year period. Depreciation and amortization expenses were $11.2 million and capital expenditures were $13.1 million during the third quarter. The company ended the third quarter with $806.8 million in cash and investments compared to $693.5 million as of January 3, 2010.

Highlights since our last earnings release:

• Launched the HiSeq 1000, a single flow cell sequencing system with half the throughput of the HiSeq 2000. The HiSeq 1000 is field upgradeable to the HiSeq 2000.
• Shipped first commercial units of the Eco™ Real-Time PCR System.
• Together with the Wellcome Trust Sanger Institute completed the de novo genome sequence of the endangered Tasmanian Devil genome for the purpose of finding genetic mutations in the transmissible cancer that is ravaging its population.