Fluidigm Corporation (NASDAQ:FLDM) today announced its financial results for the third quarter ended September 30, 2011. Total revenue for the third quarter of 2011 was $10.6 million, an increase of 25% from $8.5 million in the third quarter of 2010. Product revenue for the third quarter of 2011 was $10.2 million, an increase of 42% from $7.2 million in the third quarter of 2010. Product margin in the third quarter of 2011 increased to 67% compared to 66% in the third quarter of 2010.
Net loss for the third quarter of 2011 was $4.5 million compared to a $3.4 million net loss in the third quarter of 2010. Non-GAAP net loss for the third quarter of 2011 was $3.1 million compared to $2.1 million for the third quarter of 2010. Non-GAAP net loss excludes stock-based compensation expense, one time charges and certain other charges (see accompanying table for reconciliation of GAAP and non-GAAP measures).
"We experienced strong year-on-year product growth in North America, Europe and most of Asia in the third quarter. Our BioMark™ HD Systems are both driving and benefiting from scientists embracing single-cell genetics research. Our Access Array™ Systems continue to experience strong growth servicing the targeted amplicon sequencing market segment and our new assay services are allowing us to offer a better solution to our customers. In the third quarter we continued to fulfill our expectations and achieve the goals we've outlined for the company," said Gajus Worthington, Fluidigm president and chief executive officer.
"We remain focused on three emerging marketplace trends that benefit from Fluidigm technology. One is the emergence of single-cell genomics where we offer an industry-leading solution. Increasingly, the research community is finding that you can't fully understand what is happening at the biological level if you don't understand what is happening at the individual cell level. Second, we are seeing a change in the cutting edge of the human genetics market, as sample numbers increase and both throughput and low cost-per-data-point are becoming critical attributes. We believe this trend is driving genotyping consumable growth for us. Third, we continue to benefit from a shift to targeted re-sequencing within the NGS community," noted Worthington.
Financial Highlights and Analysis
- Product revenue in the third quarter of 2011, compared to the third quarter of 2010, benefited from strong internal execution and growing pursuit of applications that Fluidigm serves. In North America, Fluidigm had solid sales from government-funded labs as their fiscal year concluded. Fluidigm sales in Europe benefited from strong order rates during the third quarter, which has traditionally been a softer quarter for the company in that region. For the third quarter of 2011, instrument revenue grew at 29% and consumables revenue grew at 71% compared to the third quarter of 2010.
- Instrument/consumable mix was 63% and 37%, respectively, for the third quarter of 2011.
- Product margin was 67% in the third quarter of 2011 compared to 66% in the third quarter of 2010.
- Research and development expense was $3.3 million in the third quarter of 2011 compared to $3.5 million in the third quarter of 2010.
- Selling, general and administrative expense was $8.1 million in the third quarter of 2011 compared to $5.6 million in the third quarter of 2010.
- Fluidigm ended the third quarter of 2011 with $58.9 million in cash, cash equivalents and available-for-sale securities compared to $64.3 million at the beginning of the quarter. The reduction in cash resulted, in part, from our payment of $2.0 million to Life Technologies in connection with our exercise of an option to preclude Life Technologies from pursuing litigation against us for our current or equivalent future products for a period of four years. In addition, we paid Caliper Life Sciences $0.5 million in connection with an amendment to our agreement with Caliper. Pursuant to the amendment, the rates for royalties payable to Caliper beginning in January 2012 were substantially reduced and the period for which we are obligated to make royalty payments was shortened, with the last payment due in mid-2018.
Business Highlights Since Fluidigm's Last Earnings Release
- Customers of almost half of BioMark HD System instruments sold during the quarter identified single-cell research as one of the target usage areas.
- Access Array Systems unit sales more than doubled when comparing Q3 2011 to Q3 2010.
- Genotyping chips sales were strong during the quarter.
- Sales in China showed significant growth during the quarter as Fluidigm sales were up more than 200% in China compared to a year ago. Sales in Japan decreased in the third quarter 2011 as compared to the third quarter 2010.
- The company experienced a high level of accessories sales (controllers, loaders, etc.) during the quarter, as existing Access Array and BioMark HD customers increased the number of applications or the throughput they were running on the instruments - broadening their uses of Fluidigm technology.
- Fluidigm was selected by Deloitte as a member of the 2011 Technology Fast 500 list, which identifies the fastest growing companies in North America over the past five years.
Fluidigm is raising product revenue guidance for the full year 2011. The company now projects year-over-year product revenue growth will be in the range of 31% to 33%, up from the company's prior guidance of being at the high end of its 27% to 30% growth range. Revenue from grants and collaborations is projected to be around $2.0 million for the year.