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Illumina Annual Report, Year Ended Jan 2, 2005

Filing Date
Filed March 8, 2005
Period End
January 2, 2005
Security
ILMN
In the record · 2016–202610-K1110-Q338-K167

ILMN filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 167 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Feb ’17Feb ’17
  2. Material agreement8-K · Sep ’19Sep ’19
  3. Deal closed8-K · Oct ’21Oct ’21
  4. Leadership change8-K · Jan ’26Jan ’26

01—Abstract

Summary

Summary of the 10-K filed March 8, 2005. Cited figures are marked; the original filing is the authoritative source.

Illumina, Inc. filed its Form 10-K for the fiscal year ended January 2, 2005, on March 8, 2005.

The company develops and markets next-generation tools for large-scale analysis of genetic variation and function, centered on its BeadArray technology for SNP genotyping and gene expression, along with its Oligator oligonucleotide synthesis platform. Total revenue rose to $50.6 milliona in 2004 from $28.0 million in 2003, with product revenue of $40.5 million, service revenue of $8.1 million, and research revenue of $2.0 million. The company still reported a net loss of $6.2 million, or $0.17 per share, compared with a net loss of $27.1 million, or $0.85 per share, in 2003.

Results were helped by a $4.2 millionb net litigation benefit and a $3.3 million gain on the Applied Biosystems settlement and judgment reduction, and the filing notes that roughly 30% of 2004 revenue came from International HapMap Project transactions that are expected to wind down in early 2005. The balance sheet strengthened during the year. Cash, cash equivalents and current restricted cash and investments totaled $67.0 million at year-end, up from $32.9 million, following the August 2004 sale of the San Diego land and buildings for $42.0 million and a May 2004 common stock sale that netted $28.7 million.

Accumulated deficit stood at $123.7 millionc and stockholders' equity at $72.3 million. Management states that current cash, investments, revenues and grant funding should be sufficient for at least 24 months, while also noting it may need additional funding within that period. Looking ahead, management expects revenue growth in 2005 from new products including the DASL gene expression assay, whole-genome expression and genotyping BeadChips, BeadStation sales, and the Invitrogen oligo collaboration, while acknowledging declines in HapMap and BeadLab revenue.

Research and development expense is expected to rise, and stock-based compensation will increase significantly after SFAS 123R adoption in July 2005. The company also agreed in February 2005 to acquire CyVera Corporation for $17.5 milliond, and it faces a pending patent infringement lawsuit from Affymetrix filed in July 2004.

02—Key points

Key Highlights

  1. Total revenue grew 80% to $50.6 million in 2004 from $28.0 million in 2003, driven mainly by product revenue, which rose to $40.5 million from $18.4 million on sales of BeadLab and BeadStation consumables and BeadStation systems.
  2. Net loss narrowed to $6.2 million ($0.17 per share) from $27.1 million ($0.85 per share), with 2004 results including a $4.2 million net litigation benefit.
  3. Product gross margin improved to 71% from 60%, and service gross margin rose to 79% from 60%, per the MD&A.
  4. Cash, cash equivalents and current restricted cash and investments reached $67.0 million at year-end, supported by $40.7 million in net proceeds from the sale of the San Diego facilities and $28.7 million net from a May 2004 stock offering.
  5. About 30% of 2004 revenue came from International HapMap Project transactions, which management expects to be substantially complete in early 2005, creating a revenue headwind in 2005.
  6. Agreed in February 2005 to acquire CyVera Corporation for $17.5 million in aggregate consideration, consisting of about 1.5 million shares and approximately $2.3 million of CyVera liabilities.
  7. Affymetrix filed a July 2004 complaint alleging that six of its patents are infringed by certain Illumina products; the company intends to defend vigorously and no trial date has been set.

03—Questions

Frequently Asked Questions

  1. How did Illumina's revenue and losses change in 2004?

    Total revenue increased to $50.6 million in 2004 from $28.0 million in 2003. Net loss decreased to $6.2 million, or $0.17 per share, from $27.1 million, or $0.85 per share. Product revenue was $40.5 million, service revenue $8.1 million, and research revenue $2.0 million.

  2. How much cash does the company have and how long is it expected to last?

    Cash, cash equivalents and current restricted cash and investments totaled $67.0 million as of January 2, 2005. Management believes current cash, investments, revenues and grant funding will be sufficient to fund operating needs for at least 24 months, but notes that it may require additional funding within that period.

  3. What is driving expected growth and what risks could affect 2005?

    Management expects new products such as the DASL assay, whole-genome gene expression and genotyping BeadChips, BeadStation sales, and the Invitrogen collaboration to drive revenue above 2004 levels. Risks include the expected decline in HapMap-funded revenue, possible reduced BeadLab sales, intense competition, and the pending Affymetrix patent lawsuit.

  4. What is the CyVera acquisition?

    In February 2005, Illumina signed a definitive merger agreement with CyVera Corporation, a privately held Connecticut company with a digital-microbead platform. Aggregate consideration is $17.5 million, consisting of about 1.5 million Illumina shares and about $2.3 million of CyVera liabilities. Closing is expected by the end of March 2005, and the first CyVera-based products are expected in the second half of 2006.

  5. How did the Applied Biosystems and termination lawsuits affect 2004 results?

    The Applied Biosystems dispute was settled in August 2004 with an $8.5 million payment to Applera, and the company removed a $10.0 million liability, recording a $1.5 million litigation settlement gain. The termination-of-employment judgment was reduced in December 2004, producing a $3.3 million gain. Together these items were reflected in a net litigation benefit of $4.2 million for 2004.

04—Continue

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