Illumina, Inc. (NASDAQ:ILMN) today announced its full financial
results for the third quarter of fiscal year 2016.
Third quarter 2016 results:
- As previously announced on October 10,
2016, revenue of $607 million, a 10% increase compared to $550
million in the third quarter of 2015
- GAAP net income attributable to
Illumina stockholders for the quarter of $129 million, or $0.87 per
diluted share, compared to $118 million, or $0.79 per diluted
share, for the third quarter of 2015
- Non-GAAP net income attributable to
Illumina stockholders for the quarter of $144 million, or $0.97 per
diluted share, compared to $120 million, or $0.80 per diluted
share, for the third quarter of 2015 (see the table entitled
“Itemized Reconciliation Between GAAP and Non-GAAP Net Income
Attributable to Illumina Stockholders” for a reconciliation of
these GAAP and non-GAAP financial measures)
- Cash flow from operations of $150
million and free cash flow of $93 million for the quarter, compared
to $181 million and $152 million in the prior year period
Gross margin in the third quarter of 2016 was 70.2% compared to
70.4% in the prior year period. Excluding the effect of non-cash
stock compensation expense and amortization of acquired intangible
assets, non-GAAP gross margin was 72.5% for the third quarter of
2016 compared to 73.2% in the prior year period.
Research and development (R&D) expenses for the third
quarter of 2016 were $125.9 million, or 20.7% of revenue, compared
to $99.2 million, or 18.1% of revenue, in the prior year period.
R&D expenses included $11.5 million and $9.1 million of
non-cash stock compensation expense in the third quarters of 2016
and 2015, respectively. Excluding these charges and contingent
compensation, R&D expenses as a percentage of revenue were
18.8%, including 2.4% attributable to GRAIL and Helix. This
compares to 16.4% in the prior year period.
Selling, general and administrative (SG&A) expenses for the
third quarter of 2016 were $139.1 million, or 22.9% of revenue,
compared to $136.6 million, or 24.8% of revenue, in the prior year
period. SG&A expenses included $20.0 million and $20.1 million
of non-cash stock compensation expense in the third quarters of
2016 and 2015, respectively. Excluding these charges, amortization
of acquired intangible assets, and contingent compensation,
SG&A expenses as a percentage of revenue were 19.3%, including
1.5% attributable to GRAIL and Helix. This compares to 20.9% in the
prior year period, including 0.9% attributable to Helix.
Depreciation and amortization expenses were $35.9 million and
capital expenditures for free cash flow purposes were $57.1 million
during the third quarter of 2016, which excludes an increase
of $83.9 million in property and equipment recorded under
build-to-suit lease accounting since such expenses were paid for by
the landlord. At the close of the quarter, the company held $1.54
billion in cash, cash equivalents and short-term investments,
compared to $1.39 billion as of January 3, 2016.
"While sequencing sample volume growth remains robust, our
lowered revenue outlook reflects our updated expectations for HiSeq
2500, HiSeq 4000 and HiSeq X instrument purchases, as well as HiSeq
2500 reagent sales,” stated Francis deSouza, President and CEO.
“Over the last few weeks it has become clear that certain academic
funding practices were modified in the third quarter, limiting our
customers’ ability to make HiSeq X capital commitments. Further,
HiSeq 2500 and 4000 demand has been impacted by a migration to
NextSeq, for enhanced workflow flexibility and HiSeq X, given its
beneficial pricing for whole genome sequencing.”
Updates since our last earnings release:
- Announced a partnership with FlowJo,
LLC to develop and co-market analysis software for single cell
next-generation sequencing data
- Received orders for an additional 2
million samples of the Infinium® Global Screening Array, for a
total of more than 5 million samples ordered to date
- Appointed Philip W. Schiller to the
company’s Board of Directors
- Announced that Christian Henry,
Executive Vice President and Chief Commercial Officer, will be
leaving the company. Appointed Mark Van Oene, currently Senior Vice
President and General Manager, Americas, as Interim Chief
Commercial Officer
- Announced that Illumina’s Board of
Directors has authorized the company to repurchase up to $250
million of outstanding common shares in the open market or in
privately negotiated transactions, subject to market conditions and
other factors. The company repurchased $13 million of
common stock under this new stock authorization
Financial outlook and guidance
The non-GAAP financial guidance discussed below reflects certain
pro forma adjustments to assist in analyzing and assessing our
operational performance. Please see our Reconciliation of Non-GAAP
Financial Guidance included in this release for a reconciliation of
the GAAP and non-GAAP financial measures.
The company continues to project fourth quarter revenue to be
flat to slightly up compared to the third quarter. For fiscal 2016,
non-GAAP earnings per diluted share attributable to Illumina
stockholders is forecasted to be $3.27 to $3.32.
Quarterly conference call information
The conference call will begin at 2:00 pm Pacific Time (5:00 pm
Eastern Time) on Tuesday, November 1, 2016. Interested parties may
listen to the call by dialing 888.771.4371 (passcode: 43579048), or
if outside North America by dialing +1.
847.585.4405 (passcode: 43579048). Individuals may access the
live teleconference in the Investor Relations section of Illumina’s
web site under the “company” tab at www.illumina.com.
A replay of the conference call will be available from 4:30 pm
Pacific Time (7:30 pm Eastern Time) on November 1, 2016 through
November 8, 2016 by dialing 888.843.7419 (passcode: 43579048), or
if outside North America by dialing +1.630.652.3042 (passcode:
43579048).
Statement regarding use of non-GAAP financial
measures
The company reports non-GAAP results for diluted net income per
share, net income, gross margins, operating expenses, operating
margins, other income, and free cash flow in addition to, and not
as a substitute for, or superior to, financial measures calculated
in accordance with GAAP. The company’s financial measures under
GAAP include substantial charges such as stock compensation
expense, amortization of acquired intangible assets, non-cash
interest expense associated with the company’s convertible debt
instruments that may be settled in cash, and others that are listed
in the itemized reconciliations between GAAP and non-GAAP financial
measures included in this press release. Management has excluded
the effects of these items in non-GAAP measures to assist investors
in analyzing and assessing past and future core operating
performance. Additionally, non-GAAP net income attributable to
Illumina stockholders and diluted earnings per share attributable
to Illumina stockholders are key components of the financial
metrics utilized by the company’s board of directors to measure, in
part, management’s performance and determine significant elements
of management’s compensation.
The company 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 results are presented in the tables of this
release.
Use of forward-looking statements
This release contains projections, information about our
financial outlook, earnings guidance, and other forward-looking
statements that involve risks and uncertainties. These
forward-looking statements are based on our expectations as of the
date of this release and may differ materially from actual future
events or results. Among the important factors that could cause
actual results to differ materially from those in any
forward-looking statements are (i) our ability to further develop
and commercialize our instruments and consumables and to deploy new
products, services and applications, and expand the markets for our
technology platforms; (ii) our ability to manufacture robust
instrumentation and consumables; (iii) our ability to successfully
identify and integrate acquired technologies, products or
businesses; (iv) the future conduct and growth of the business and
the markets in which we operate; (v) challenges inherent in
developing, manufacturing, and launching new products and services;
and (vi) the application of generally accepted accounting
principles, which are highly complex and involve many subjective
assumptions, estimates, and judgments, together with other factors
detailed in our filings with the Securities and Exchange
Commission, including our most recent filings on Forms 10-K and
10-Q, or in information disclosed in public conference calls, the
date and time of which are released beforehand. We undertake no
obligation, and do not intend, to update these forward-looking
statements, to review or confirm analysts’ expectations, or to
provide interim reports or updates on the progress of the current
quarter.
About Illumina
Illumina is improving human health by unlocking the power of the
genome. Our focus on innovation has established us as the global
leader in DNA sequencing and array-based technologies, serving
customers in the research, clinical and applied markets. Our
products are used for applications in the life sciences, oncology,
reproductive health, agriculture and other emerging segments. To
learn more, visit www.illumina.com and follow
@illumina.
Illumina, Inc. Condensed Consolidated Balance
Sheets (In thousands) October 2,
2016 January 3, 2016 ASSETS
(unaudited) Current assets: Cash and cash equivalents $
794,697 $ 768,770 Short-term investments 741,569 617,450 Accounts
receivable, net 381,632 385,529 Inventory 312,242 270,777 Prepaid
expenses and other current assets 47,696 54,297 Total
current assets 2,277,836 2,096,823 Property and equipment, net
633,856 342,694 Goodwill 775,995 752,629 Intangible assets, net
255,560 273,621 Deferred tax assets 182,122 134,515 Other assets
102,458 87,465 Total assets $ 4,227,827 $ 3,687,747
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities: Accounts payable $ 134,090 $ 139,226 Accrued
liabilities 315,204 386,844 Build-to-suit lease liability 178,311
9,495 Long-term debt, current portion 1,250 74,929 Total
current liabilities 628,855 610,494 Long-term debt 1,040,765
1,015,649 Other long-term liabilities 204,273 180,505 Redeemable
noncontrolling interests 34,257 32,546 Stockholders’ equity
2,319,677 1,848,553 Total liabilities and stockholders’
equity $ 4,227,827 $ 3,687,747
Illumina, Inc.
Condensed Consolidated Statements of Income (In
thousands, except per share amounts) (unaudited)
Three Months Ended Nine Months Ended October
2, 2016 September 27, 2015
October 2, 2016 September 27,
2015 Revenue: Product revenue $ 513,744 $ 470,824 $
1,506,416 $ 1,392,711 Service and other revenue 93,395
79,447 272,610 235,503 Total revenue 607,139
550,271 1,779,026 1,628,214 Cost of
revenue: Cost of product revenue
(a) 132,423 120,954 382,856
360,037 Cost of service and other revenue
(a) 37,606 29,590
117,156 94,289 Amortization of acquired intangible assets 10,960
12,188 32,005 34,957 Total cost of
revenue 180,989 162,732 532,017 489,283
Gross profit 426,150 387,539 1,247,009
1,138,931 Operating expense: Research and development
(a) 125,917 99,226 374,500 287,180 Selling, general and
administrative
(a) 139,146 136,648 436,914 377,406 Legal
contingencies — 15,000 (9,490 ) 15,000 Headquarter relocation 385
(5,226 ) 1,069 (3,047 ) Acquisition related expense (gain), net —
1,109 — (6,449 ) Total operating expense
265,448 246,757 802,993 670,090 Income
from operations 160,702 140,782 444,016 468,841 Other expense, net
(6,338 ) (11,865 ) (17,081 ) (20,706 ) Income before income taxes
154,364 128,917 426,935 448,135 Provision for income taxes 37,429
13,296 106,387 93,609 Consolidated net
income 116,935 115,621 320,548 354,526 Add: Net loss attributable
to noncontrolling interests 11,953 2,556 18,339
2,556 Net income attributable to Illumina
stockholders $ 128,888 $ 118,177 $ 338,887 $
357,082 Net income attributable to Illumina stockholders for
earnings per share
(b) $ 128,682 $ 118,128 $
335,597 $ 357,033 Earnings per share attributable to
Illumina stockholders: Basic $ 0.88 $ 0.81 $ 2.29 $ 2.47 Diluted $
0.87 $ 0.79 $ 2.27 $ 2.39 Shares used in computing earnings per
common share: Basic 146,705 145,349 146,783 144,447 Diluted 147,901
149,672 148,049 149,108
(a) Includes stock-based
compensation expense for stock-based awards:
Three Months Ended Nine Months Ended October
2, 2016 September 27, 2015
October 2, 2016 September 27, 2015 Cost
of product revenue $ 1,799 $ 2,567 $ 5,949 $ 7,012 Cost of service
and other revenue 1,261 498 2,114 1,243 Research and development
(1) 11,515 9,098 32,889 31,152 Selling, general and
administrative
(2) 20,008 20,066 60,893
57,697 Stock-based compensation expense before taxes $ 34,583
$ 32,229 $ 101,845 $ 97,104
(1) Includes stock-based
compensation from GRAIL and Helix of $0.2 million and $0.5 million
for the three and nine months ended October 2, 2016,
respectively.
(2) Includes stock-based
compensation from GRAIL and Helix of $0.4 million and $1.4 million
for the three and nine months ended October 2, 2016,
respectively.
_____________________________________________________________________________________________________(b)
Amount reflects the additional losses attributable to the common
shareholders of GRAIL and Helix for earnings per share purposes.
For the nine months ended October 2, 2016, the additional losses
were partially offset by the net impact of a deemed dividend from
the company’s common to preferred share exchange with GRAIL.
Illumina, Inc. Condensed Consolidated Statements
of Cash Flows (In thousands) (unaudited)
Three Months Ended Nine Months
Ended October 2, 2016 September 27,
2015 October 2, 2016 September 27,
2015 Net cash provided by operating activities
(a) $
150,300 $ 180,994 $ 407,085 $ 419,218 Net cash used in investing
activities (341,231 ) (38,927 ) (341,247 ) (335,544 ) Net cash
provided by (used in) financing activities
(a) 34,473
(180,897 ) (41,221 ) (165,621 ) Effect of exchange rate changes on
cash and cash equivalents (507 ) (698 ) 1,310 (2,678 ) Net
(decrease) increase in cash and cash equivalents (156,965 ) (39,528
) 25,927 (84,625 ) Cash and cash equivalents, beginning of period
951,662 591,057 768,770 636,154 Cash
and cash equivalents, end of period $ 794,697 $ 551,529
$ 794,697 $ 551,529 Calculation of free
cash flow: Net cash provided by operating activities
(a) $
150,300 $ 180,994 $ 407,085 $ 419,218 Purchases of property and
equipment
(b) (57,122 ) (29,459 ) (178,353 ) (107,361 ) Free
cash flow
(c) $ 93,178 $ 151,535 $ 228,732
$ 311,857
______________________________________________________________________________________________________(a)
Net cash provided by operating activities excludes excess tax
benefit related to stock-based compensation of $109.9 million in
the first three quarters of 2016, of which $25.7 million was
recorded in Q3, and $121.7 million in the first three quarters of
2015, of which $15.5 million was recorded in Q3. Net cash used in
financing activities reflects the excess tax benefit as a
corresponding in-flow in the respective periods.
(b) Excludes increase of $168.8 million in the first
three quarters of 2016, of which $83.9 million was in Q3, in
property and equipment recorded under build-to-suit lease
accounting, which are non-cash expenditures.
(c) Free cash flow, which is a non-GAAP financial
measure, is calculated as net cash provided by operating activities
reduced by purchases of property and equipment. Free cash flow is
useful to management as it is one of the metrics used to evaluate
our performance and to compare us with other companies in our
industry. However, our calculation of free cash flow may not be
comparable to similar measures used by other companies.
Illumina, Inc. Results of Operations -
Non-GAAP (In thousands, except per share amounts)
(unaudited) ITEMIZED RECONCILIATION BETWEEN
GAAP AND NON-GAAP EARNINGS PER SHARE ATTRIBUTABLE TO ILLUMINA
STOCKHOLDERS: Three Months Ended
Nine Months Ended October 2, 2016
September 27, 2015 October 2, 2016
September 27, 2015 GAAP earnings per share
attributable to Illumina stockholders - diluted $
0.87 $ 0.79 $ 2.27 $
2.39 Amortization of acquired intangible assets 0.08 0.09
0.25 0.26 Non-cash interest expense
(a) 0.05 0.06 0.15 0.20
Contingent compensation expense
(b) 0.01 — 0.01 — Legal
contingencies
(c) — 0.10 (0.06 ) 0.10 Headquarter relocation
— (0.03 ) 0.01 (0.02 ) Deemed dividend
(d) — — (0.01 ) —
Loss on extinguishment of debt — 0.03 — 0.03 Acquisition related
expense (gain), net
(e) — 0.01 — (0.04 ) Cost-method
investment gain, net
(f) — (0.02 ) — (0.10 ) Tax benefit
related to cost-sharing arrangement
(g) — (0.17 ) — (0.17 )
Incremental non-GAAP tax expense
(h) (0.04 ) (0.06 ) (0.10 )
(0.14 ) Non-GAAP earnings per share attributable to Illumina
stockholders - diluted
(i) $ 0.97 $ 0.80 $
2.52 $ 2.51
ITEMIZED RECONCILIATION BETWEEN
GAAP AND NON-GAAP NET INCOME ATTRIBUTABLE TO ILLUMINA
STOCKHOLDERS: GAAP net income attributable to
Illumina stockholders (j) $ 128,888 $
118,177 $ 338,887 $ 357,082
Amortization of acquired intangible assets 12,423 13,794 36,561
39,453 Non-cash interest expense
(a) 7,346 9,469 22,382
29,884 Contingent compensation expense
(b) 691 249 2,085 249
Headquarter relocation 385 (5,226 ) 1,069 (3,047 ) Legal
contingencies
(c) — 15,000 (9,490 ) 15,000 Loss on
extinguishment of debt — 3,504 — 3,737 Acquisition related expense
(gain), net
(e) — 1,109 — (6,449 ) Cost-method investment
gain, net
(f) — (2,900 ) — (15,482 ) Tax benefit related to
cost-sharing arrangement
(g) — (24,757 ) — (24,757 )
Incremental non-GAAP tax expense
(h) (5,675 ) (8,833 )
(14,695 ) (21,037 ) Non-GAAP net income attributable to Illumina
stockholders
(i) $ 144,058 $ 119,586 $ 376,799
$ 374,633
_____________________________________________________________________________________________________(a)
Non-cash interest expense is calculated in accordance with the
authoritative accounting guidance for convertible debt instruments
that may be settled in cash.
(b) Contingent compensation expense relates to contingent
payments for post-combination services associated with an
acquisition.
(c) Legal contingencies in 2016 represent a reversal of
previously recorded expense related to the settlement of patent
litigation. Legal contingencies in 2015 represent charges related
to patent litigation.
(d) Amount represents the impact of a deemed dividend,
net of Illumina’s portion of the losses incurred by GRAIL’s common
shareholders resulting from the company’s common to preferred share
exchange with GRAIL. The amount was added to net income
attributable to Illumina stockholders for purposes of calculating
Illumina’s consolidated earnings per share. The deemed dividend,
net of tax, was recorded through equity.
(e) Acquisition related expense (gain), net consists of
changes in fair value of contingent consideration.
(f) Cost-method investment gain, net consists primarily
of a gain on the sale of a cost-method investment.
(g) Tax benefit related to cost-sharing arrangement
refers to the exclusion of stock compensation from prior period
cost-sharing charges as a result of a tax court ruling.
(h) Incremental non-GAAP tax expense reflects the tax
impact related to the non-GAAP adjustments listed above.
(i) Non-GAAP net income attributable to Illumina
stockholders and diluted earnings per share attributable to
Illumina stockholders exclude the effect of the pro forma
adjustments as detailed above. Non-GAAP net income attributable to
Illumina stockholders and diluted earnings per share attributable
to Illumina stockholders are key components of the financial
metrics utilized by the company’s board of directors to measure, in
part, management’s performance and determine significant elements
of management’s compensation. Management has excluded the effects
of these items in these measures to assist investors in analyzing
and assessing our past and future core operating performance.
(j) GAAP net income attributable to Illumina stockholders
excludes the net impact of the deemed dividend as detailed in
(d) above and the additional losses attributable to common
shareholders of GRAIL and Helix for earnings per share purposes.
These amounts are included in GAAP net income attributable to
Illumina stockholders for earnings per share of $128.7 million and
$335.6 million for the three and nine months ended October 2, 2016,
respectively and $118.1 million and $357.0 million for the three
and nine months ended September 27, 2015, respectively.
Illumina, Inc. Results of Operations - Non-GAAP
(continued) (Dollars in thousands) (unaudited)
ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS
OF OPERATIONS AS A PERCENT OF REVENUE: Three
Months Ended Nine Months Ended October 2,
2016 September 27, 2015 October
2, 2016 September 27, 2015 GAAP
gross profit $ 426,150 70.2
% $ 387,539 70.4 %
$ 1,247,009 70.1 % $
1,138,931 69.9 % Stock-based
compensation expense 3,060 0.5 % 3,065 0.6 % 8,063 0.4 % 8,255 0.5
% Amortization of acquired intangible assets 10,960 1.8 %
12,188 2.2 % 32,005 1.8 % 34,957 2.2 %
Non-GAAP gross profit
(a) $ 440,170 72.5 % $ 402,792
73.2 % $ 1,287,077 72.3 % $ 1,182,143 72.6 %
GAAP research and development expense $
125,917 20.7 % $ 99,226
18.1 % $ 374,500 21.1 %
$ 287,180 17.6 % Stock-based
compensation expense (11,515 ) (1.9 )% (9,098 ) (1.7 )% (32,889 )
(1.9 )% (31,152 ) (1.9 )% Contingent compensation expense
(b) (108 ) — (44 ) — (325 ) — (44 ) —
Non-GAAP research and development expense $ 114,294
18.8 % $ 90,084 16.4 % $ 341,286 19.2 % $ 255,984
15.7 %
GAAP selling, general and administrative
expense $ 139,146 22.9 % $
136,648 24.8 % $ 436,914
24.6 % $ 377,406 23.2 %
Stock-based compensation expense (20,008 ) (3.3 )% (20,066 ) (3.6
)% (60,893 ) (3.4 )% (57,697 ) (3.5 )% Amortization of acquired
intangible assets (1,463 ) (0.2 )% (1,606 ) (0.3 )% (4,556 ) (0.3
)% (4,496 ) (0.4 )% Contingent compensation expense
(b) (583
) (0.1 )% (205 ) — (1,760 ) (0.1 )% (205 ) — Non-GAAP
selling, general and administrative expense $ 117,092 19.3 %
$ 114,771 20.9 % $ 369,705 20.8 % $ 315,008
19.3 %
GAAP operating profit $ 160,702
26.5 % $ 140,782 25.6 %
$ 444,016 25.0 % $
468,841 28.8 % Stock-based compensation
expense 34,583 5.7 % 32,229 5.9 % 101,845 5.7 % 97,104 6.0 %
Amortization of acquired intangible assets 12,423 2.0 % 13,794 2.5
% 36,561 2.1 % 39,453 2.4 % Contingent compensation expense
(b) 691 0.1 % 249 — 2,085 0.1 % 249 — Headquarter relocation
385 0.1 % (5,226 ) (0.9 )% 1,069 0.1 % (3,047 ) (0.2 )% Legal
contingencies
(c) — — 15,000 2.7 % (9,490 ) (0.6 )% 15,000
0.9 % Acquisition related expense (gain), net
(d) — —
1,109 0.2 % — — (6,449 ) (0.4 )%
Non-GAAP operating profit
(a) $ 208,784 34.4 % $
197,937 36.0 % $ 576,086 32.4 % $ 611,151 37.5
%
GAAP other expense, net $ (6,338
) (1.0 )% $ (11,865 )
(2.2 )% $ (17,081 ) (1.0
)% $ (20,706 ) (1.3 )%
Non-cash interest expense
(e) 7,346 1.2 % 9,469 1.7 % 22,382
1.3 % 29,884 1.8 % Loss on extinguishment of debt — — 3,504 0.6 % —
— 3,737 0.2 % Cost-method investment gain, net
(f) —
— (2,900 ) (0.4 )% — — (15,482 ) (0.9 )%
Non-GAAP other income (expense), net
(a) $ 1,008 0.2
% $ (1,792 ) (0.3 )% $ 5,301 0.3 % $ (2,567 ) (0.2 )%
______________________________________________________________________________________________________(a)
Non-GAAP gross profit, included within non-GAAP operating profit,
is a key measure of the effectiveness and efficiency of
manufacturing processes, product mix and the average selling prices
of the company’s products and services. Non-GAAP operating profit,
and non-GAAP other income (expense), net, exclude the effects of
the pro forma adjustments as detailed above. Management has
excluded the effects of these items in these measures to assist
investors in analyzing and assessing past and future operating
performance.
(b) Contingent compensation expense relates to contingent
payments for post-combination services associated with an
acquisition.
(c) Legal contingencies in 2016 represent a reversal of
previously recorded expense related to the settlement of patent
litigation. Legal contingencies in 2015 represent charges related
to patent litigation.
(d) Acquisition related expense (gain), net consists of
changes in fair value of contingent consideration.
(e) Non-cash interest expense is calculated in accordance
with the authoritative accounting guidance for convertible debt
instruments that may be settled in cash.
(f) Cost-method investment gain, net consists primarily
of a gain on the sale of a cost-method investment.
Illumina, Inc.Reconciliation of
Non-GAAP Financial Guidance
The company’s future performance and financial results are
subject to risks and uncertainties, and actual results could differ
materially from the guidance set forth below. Some of the factors
that could affect the company’s financial results are stated above
in this press release. More information on potential factors that
could affect the company’s financial results is included from time
to time in the company’s public reports filed with the Securities
and Exchange Commission, including the company’s Form 10-K for the
fiscal year ended January 3, 2016, and the company’s Form 10-Q for
the fiscal quarters ended April 3, 2016 and July 3, 2016. The
company assumes no obligation to update any forward-looking
statements or information.
Fiscal Year 2016 Diluted earnings per share
attributable to Illumina stockholders GAAP diluted earnings
per share attributable to Illumina stockholders $2.92 -
$2.97 Amortization of acquired intangible assets 0.33 Non-cash
interest expense
(a) 0.20 Legal contingencies
(b)
(0.06) Contingent compensation
(c) 0.02 Headquarter
relocation 0.01 Deemed dividend
(d) (0.01) Incremental
non-GAAP tax expense
(e) (0.14) Non-GAAP diluted earnings
per share attributable to Illumina stockholders $3.27 - $3.32
____________________________________________________________________________________________________(a)
Non-cash interest expense is calculated in accordance with the
authoritative accounting guidance for convertible debt instruments
that may be settled in cash.
(b) Legal contingencies represent a reversal of
previously recorded expense related to the settlement of patent
litigation.
(c) Contingent compensation expense relates to contingent
payments for post-combination services associated with an
acquisition.
(d) Amount represents the impact of a deemed dividend,
net of Illumina’s portion of the losses incurred by GRAIL’s common
shareholders resulting from the company’s common to preferred share
exchange with GRAIL. The amount was added to net income
attributable to Illumina stockholders for purposes of calculating
Illumina’s consolidated earnings per share. The deemed dividend,
net of tax, was recorded through equity.
(e) Incremental non-GAAP tax expense reflects the tax
impact related to the non-GAAP adjustments listed above.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161101006726/en/
Illumina, Inc.Investors:Rebecca
Chambers858.255.5243ir@illumina.comorMedia:Eric
Endicott858.882.6822pr@illumina.com
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