Genetic products company,
) provided its guidance for the 2012 fourth quarter results,
based on available preliminary financial data. The company will
report its financial results on January 31, after market
Affymetrix expects revenues to be $84 million in the quarter,
which is in line with the Zacks Consensus Estimate. Revenues from
the acquired eBioscience business grew 5% year over year,
contributing $18 million to total revenues.
Organically, the company is expected to grow 1% year over
year. For 2012, total sales are estimated to be $295 million, an
increase of 10.3% from the prior year. The Zacks Consensus
Estimates for the fourth quarter and full year 2012 are expected
to be a loss of 2 cents and 14 cents per share, respectively.
Affymetrix also announced a restructuring initiative to boost
its bottom-line growth. The company will disembark 100 of its
employees, representing 8% of its workforce. The company will
incur most of the additional cost associated with the
restructuring in the first quarter of 2013, which is expected to
be roughly $7 million. Post restructuring, Affymetrix will be
able to save roughly $25 million annually based on its 2013
outlook, of which $5 million is in cost of goods
The company prepaid $9.6 million (the entire principal amount
due in 2013) of its senior-secured debt in December last year,
partly funded by the sale of its Sacramento manufacturing
facility. At the end of 2012, senior debt was $73 million and
cash-on-hand stood at roughly $35 million. Management believes
that the restructuring effort will improve the company's free
cash flow position in 2013 and quicken repayment of its senior
Affymetrix also revealed some changes in its top management in
2013. John F. (Rick) Runkel, executive vice president (EVP) and
general counsel, will retire on March 31, 2013, and will be
replaced by Ms. Siang Chin, who joined the company as vice
president, chief corporate counsel in 2007. Additionally, Mr. Tim
Barabe, EVP and CFO will also retire from the company.
Affymetrix is a leading provider of microarray-based products
and services to the global research community. Along with
), it is one of the two major providers of microarray
technologies, primarily serving the field of genetic research.
The company holds a leading position in the gene expression
products and services market.
Affymetrix is expanding its customer base through new product
launches and strategic alliances. Moreover, the company is
pursuing a number of strategies (including acquisitions and
expansion into new markets) aimed at expanding its top line.
However, research and development spending by Affymetrix's
customers have fallen considerably due to a weak macroeconomic
environment coupled with stringent government actions including
budget cuts. We currently have a Zacks Rank #2 (Buy) on the
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