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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Affymetrix, Inc. | NASDAQ:AFFX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 14.01 | 0 | 01:00:00 |
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(Mark One)
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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013
OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-28218
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Title of Each Class
Common Stock, $0.01 par value
Preferred Stock Purchase Rights
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Name of Each Exchange on Which Registered
The Nasdaq Global Select Market
The Nasdaq Global Select Market
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Large accelerated filer
o
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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Item No.
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Page
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•
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Phase 1 (2011-2012) –Portfolio Realignment.
During this phase, we reorganized ourselves into business units to sharpen our business focus based on target markets. We also launched CytoScan®, our growing cytogenetic microarray product line and acquired eBioscience. Through eBioscience, we now offer flow cytometry and immunoassay reagent products that enable us to broaden our reach into the translational
|
•
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Phase II (2013-2014) – Profitability, Strengthen Balance Sheet, Development of Newer Product Lines.
In the beginning of 2013, we implemented a corporate restructuring with a goal of accelerating our path to profitability. Our priorities for this phase, in addition to profitability include reducing our senior secured debt, successfully commercializing our newer product lines (CytoScan®, Axiom®, Human Transcriptome Array and QuantiGene® View RNA lines, as well as our eBioscience products) and investing in new product offerings. In addition, we are training and refocusing our global commercial organization to expand our reach to customers in the translational medicine, molecular diagnostics and applied markets.
|
•
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Phase III (2015 -2016) –
Strategic Flexibility, Expansion of Product Lines, Growth.
In this phase, our goal is to have well established product lines in translational medicine, clinical diagnostics and applied science such as AgBio. We also intend to have a strong balance sheet that will provide us with the flexibility to make strategic acquisitions.
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•
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the availability of government funding for basic and disease-related research;
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•
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the amount of capital expenditures allocated to research and development by biotechnology, pharmaceutical and diagnostic companies;
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•
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the regulatory and reimbursement environment for our customers in the translational medicine and molecular diagnostics markets;
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•
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the application of gene, protein and cell analyses to new areas including molecular diagnostics, agriculture, human identity and consumer goods;
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•
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technological innovation that creates price competition and lowers the costs of life science research;
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•
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the development of new computational techniques to handle and analyze large amounts of life science search data; and
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•
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the availability of genetic markers and signatures of the human population that have clinical value or of other organisms that have commercial value, and novel binding agents (such as antibodies) to new protein markers.
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•
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Expression:
This business unit markets the Company's GeneChip® gene expression products and services.
|
•
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Genetic Analysis and Clinical Applications:
This business unit markets the Company's genotyping product line, such as the Axiom® product line; and arrays and assays with clinical research applications, such as the CytoScan® and OncoScan products. Effective 2014, this unit will market the QuantiGene ViewRNA in-situ hybridization platform for clinical translational research of RNA in tissue sections. QuantiGene ViewRNA was previously part of the Expression Business Unit.
|
•
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Life Science Reagents:
This business unit sells reagents, enzymes, purification kits and biochemicals used by life science researchers.
|
•
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Corporate
: This business unit is comprised primarily of incidental revenue from royalty arrangements and field revenue from services provided to customers of the Company.
|
•
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eBioscience:
This reportable segment specializes in the development, manufacturing, marketing and distribution of research products in the areas of flow cytometry, immunoassays, microscopic imaging and other protein-based analyses. During the second half of 2013, eBioscience started integrating the development and marketing of the remaining QuantiGene and Procarta product line (not including the QuantiGeneRNA View in-situ platform) previously reported by the Expression Business Unit. This change is expected to have a material impact in 2014 when compared to 2013 results for the eBioscience Business Unit and Expression Business Unit.
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Product
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Product Description
|
GeneTitan®
|
The GeneTitan® instrument automates array processing from target hybridization to data generation by combining a hybridization oven, fluidics processing and imaging device into a single bench-top instrument. It runs array plates and supports both gene expression and genotyping studies.
|
Axiom® Genotyping Solution
|
The Axiom® Genotyping Solution includes array plates with validated genomic content, complete reagent kits, data analysis tools and a fully automated workflow utilizing the GeneTitan®. These plates are available in 96 and 384 array formats.
·
Axiom
®
Human Array Plates –
these arrays are designed to maximize genomic coverage of common and novel SNPs and insertions and deletions in Caucasian, Asian and African populations. In addition, through our functional genotyping arrays such as the
Axiom Exome Array Plates
and the
BioBank Array plates,
we enable researchers to search for genetic variants in regions of the genome that have potential biological impact.
·
Axiom
®
Custom Arrays –
Customers can make custom arrays utilizing our proprietary database of validated genomic markers or with newly discovered markets.
Our ability to make custom arrays in a rapid and reproducible manner is critical to serve the growing needs of both the human and Ag Bio market.
|
Gene Expression Array Plates
|
We offer a catalog of gene expression array plates similar to our catalog gene expression cartridge arrays to be used on the GeneTitan® instrument. These arrays are available for the study of human, rat, mouse and a broad range of other mammalian and model organisms.
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•
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ExoSAP-IT® For PCR Product Clean-Up,
a reagent for the rapid clean-up of PCR products used in downstream applications, such as DNA sequencing or SNP analysis.
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•
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HotStart-IT® line of PCR reagents,
reagents that utilize a novel primer binding protein to inhibit primer dimer formation, with results in sensitive and consistent amplification for real-time PCR.
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•
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availability, quality and price as compared to competitive technologies, products and services;
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•
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the functionality of new and existing products and services, and whether they address market requirements;
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•
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the timing of introduction of our technologies, products and services as compared to competitive technologies, products and services;
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•
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the existence of product defects;
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•
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scientists' and customers' opinions of the utility of our products and services and our ability to incorporate their feedback into future products and services;
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•
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citation of our products in published research; and
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•
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general trends in life science and clinical diagnostics research and life science informatics software development.
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•
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our ability to retain key employees of the acquired company;
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•
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the performance of the acquired business, technology, product or service;
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•
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our ability to integrate operations, financial and other systems;
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•
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the ability of the combined company to achieve synergies among its constituent companies, such as increasing sales of the combined company's products and services, achieving expected cost savings and effectively combining technologies to develop new products and services;
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•
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any disruption in order fulfillment or loss of sales due to integration processes, including relationships with suppliers or distributors;
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•
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the presence or absence of adequate internal controls and/or significant fraud in the financial systems of acquired companies;
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•
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any decrease in customer and distributor loyalty and product orders caused by dissatisfaction with the combined companies' product lines and sales and marketing practices, including price increases; and
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•
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our assumption of known contingent liabilities that are realized, known liabilities that prove greater than anticipated, or unknown liabilities that come to light, to the extent that the realization of any of these liabilities increases our expenses or adversely affects our business or financial position.
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•
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incur additional debt, including guarantees by us or our subsidiaries;
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•
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make investments, pay dividends on our capital stock, redeem or repurchase our capital stock, redeem or repurchase the notes or any subordinated obligations;
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•
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create liens;
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•
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make capital expenditures;
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•
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dispose of assets;
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•
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make acquisitions;
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•
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create or permit restrictions on the ability of our subsidiaries to pay dividends or make other distributions to us;
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•
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engage in transactions with affiliates;
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•
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engage in sale and leaseback transactions; and
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•
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consolidate or merge with or into other companies or sell all or substantially all of our assets.
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•
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changes in government programs, including available funding, which support research and development expenditures by companies and research institutions;
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•
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weakness in the global economy and changing market conditions that affect our customers;
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•
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changes in the extent to which the pharmaceutical industry may use genetic information and genetic testing as a methodology for drug discovery and development;
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•
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changes in the regulatory environment affecting life science companies and life science research;
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•
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impact of consolidation within the pharmaceutical industry; and
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•
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cost reduction initiatives of customers.
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•
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our partners may develop technologies or components competitive with our products and services;
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•
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our existing collaborations may preclude us from entering into additional future arrangements or impact the integration of acquired businesses and technologies;
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•
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our partners may not obtain regulatory approvals necessary to continue the collaborations in a timely manner;
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•
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some of our agreements may terminate prematurely due to disagreements between us and our partners or licensors;
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•
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our partners may not devote sufficient resources to the development and sale of our products and services;
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•
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our partners may be unable to provide the resources required for us to progress in the collaboration on a timely basis;
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•
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our collaborations may be unsuccessful; or
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•
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some of our agreements have expired and we may not be able to negotiate future collaborative arrangements or renew current licenses on acceptable terms.
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•
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competition;
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•
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our inability to produce products in sufficient quantities and with appropriate quality;
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•
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the frequency of experiments conducted by our customers;
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•
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our customers' inventory of products;
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•
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the receipt of relatively large orders with short lead times; and
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•
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our customers' expectations as to how long it takes us to fill future orders.
|
|
Low
|
|
High
|
||||
2013
|
|
|
|
||||
First Quarter
|
$
|
3.28
|
|
|
$
|
4.74
|
|
Second Quarter
|
$
|
3.30
|
|
|
$
|
4.73
|
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Third Quarter
|
$
|
3.54
|
|
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$
|
6.30
|
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Fourth Quarter
|
$
|
6.35
|
|
|
$
|
8.85
|
|
2012
|
|
|
|
|
|
||
First Quarter
|
$
|
4.11
|
|
|
$
|
5.21
|
|
Second Quarter
|
$
|
3.99
|
|
|
$
|
5.39
|
|
Third Quarter
|
$
|
3.60
|
|
|
$
|
4.69
|
|
Fourth Quarter
|
$
|
3.01
|
|
|
$
|
3.75
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Consolidated Statement of Operations Data:
|
(in thousands, except per share amounts)
|
||||||||||||||||||
Total revenue (1)
|
$
|
330,399
|
|
|
$
|
295,623
|
|
|
$
|
267,474
|
|
|
$
|
310,746
|
|
|
$
|
327,094
|
|
Loss from operations (2)
|
(12,552
|
)
|
|
(39,091
|
)
|
|
(16,641
|
)
|
|
(5,167
|
)
|
|
(33,158
|
)
|
|||||
Net loss (3)
|
$
|
(16,327
|
)
|
|
$
|
(10,696
|
)
|
|
$
|
(28,161
|
)
|
|
$
|
(10,233
|
)
|
|
$
|
(23,909
|
)
|
Basic and diluted net loss per common share
|
$
|
(0.23
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.35
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash, cash equivalents, and available-for-sale securities (4)
|
$
|
57,128
|
|
|
$
|
35,736
|
|
|
$
|
265,067
|
|
|
$
|
237,184
|
|
|
$
|
346,574
|
|
Working capital
|
98,792
|
|
|
97,384
|
|
|
259,961
|
|
|
159,932
|
|
|
345,486
|
|
|||||
Total assets (4)
|
504,511
|
|
|
544,294
|
|
|
438,015
|
|
|
460,785
|
|
|
630,950
|
|
|||||
Long-term obligations (5)
|
153,196
|
|
|
188,252
|
|
|
104,596
|
|
|
107,220
|
|
|
257,496
|
|
(1)
|
Included in the total revenue for the year ended December 31,
|
•
|
2013 is a one-time licensing payment of $5.3 million from a diagnostic partner and $78.2 million from eBioscience,
|
•
|
2012 is $37.0 million from eBioscience which we acquired on June 25, 2012.
|
(2)
|
Included in loss from operations for the year ended December 31, 2012 was $8.8 million from eBioscience and the following items related to the acquisition of eBioscience:
|
•
|
$8.2 million in acquisition- and integration-related costs, and
|
•
|
$8.3 million in share-based compensation charges.
|
(3)
|
As part of our repurchases of our 3.50% Notes, we recognized the following gains (see (5) for further details):
|
•
|
In 2013, we redeemed our remaining 3.50% Senior Convertible Notes and recognized a gain of $0.1 million; and
|
•
|
In 2010, we recognized a net gain of $6.3 million on repurchases totaling $151.7 million in aggregate principal amount; and
|
•
|
In 2009, we recognized a net gain of $17.4 million on the repurchase of $69.1 million in aggregate principal amount.
|
(4)
|
In 2013, we sold our Anatrace-branded reagent product line for net proceeds of approximately $11.8 million. The carrying value of the group of assets sold was approximately $2.5 million. In 2012, we completed the acquisition of eBioscience for aggregate cash consideration of $307.8 million.
|
(5)
|
In 2013, we amended the Credit Agreement and refinanced our Senior Secured Credit Facility. The Fourth Amendment provides, among other things, for new term loans in the aggregate principal amount of $38.0 million and new revolving loan commitments in the aggregate principal amount of $10.0 million. Long-term obligations include $26.7 million and Current liabilities include $12.7 million outstanding debt under our Senior Secured Credit Facility as of December 31, 2013.
|
•
|
In 2013, we redeemed the remaining outstanding 3.50% Notes for cash considerations of $3.9 million, including accrued interest and transaction costs.
|
•
|
In 2012, a total of $91.6 million aggregate principal amount was purchased for cash consideration of $92.1 million, including accrued interest and transaction costs of $0.5 million;
|
•
|
In 2010, a total of $151.7 million aggregate principal amount was purchased for cash consideration of $143.6 million, including accrued interest and transaction costs; and
|
•
|
In 2009, $69.1 million aggregate principal amount was purchased for cash consideration of $50.6 million, including accrued interest and transactions costs.
|
•
|
Expression:
This business unit markets the Company's GeneChip gene expression products and services.
|
•
|
Genetic Analysis and Clinical Applications:
This business unit markets the Company's genotyping product line, such as the Axiom® product line, and arrays and assays with clinical research applications, such as the CytoScan® and OncoScan products. Effective 2014, this unit will market the QuantiGene ViewRNA in-situ hybridization platform for clinical translational research of RNA in tissue sections. QuantiGene ViewRNA was previously part of the Expression Business Unit.
|
•
|
Life Science Reagents:
This business unit sells reagents, enzymes, purification kits and biochemicals used by life science researchers.
|
•
|
Corporate
: This business unit is comprised primarily of incidental revenue from royalty arrangements and field revenue from services provided to customers of the Company.
|
•
|
eBioscience:
This reportable segment specializes in the development, manufacturing, marketing and distribution of research products in the areas of flow cytometry, immunoassays, microscopic imaging and other protein-based analyses. During the second half of 2013, eBioscience started integrating the development and marketing of the remaining QuantiGene and Procarta product line (not including the QuantiGene ViewRNA in-situ platform) previously reported by the Expression Business Unit. This change is expected to have a material impact in 2014 when compared to 2013 results for the eBioscience Business Unit and Expression Business Unit.
|
•
|
Phase 1 (2011-2012) –Portfolio Realignment.
During this phase, we reorganized ourselves into business units to sharpen our business focus based on target markets. We also launched CytoScan®, our growing cytogenetic microarray product line and acquired eBioscience. Through eBioscience, we now offer flow cytometry and immunoassay products that enable us to broaden our reach into the translational medicine and molecular diagnostics markets. We believe these actions have and will promote stabilization of our core business and the realignment of our product portfolio has positioned us for growth.
|
•
|
Phase II (2013-2014) – Profitability, Strengthen Balance Sheet, Development of Newer Product Lines.
In the beginning of 2013, we implemented a corporate restructuring with a goal of accelerating our path to profitability. Our priorities for this phase are to achieve profitability, repay our senior secured debt, successfully commercialize our newer product lines (CytoScan®, Axiom®, OncoScan, Human Transcriptome Array and QuantiGene® View RNA lines, as well as our eBioscience products) and invest in new product offerings. In addition, we are training and refocusing our global commercial organization to expand our reach to customers in the translational medicine, molecular diagnostics and applied markets.
|
•
|
Phase III (2015 -2016) –
Strategic Flexibility, Expansion of Product Lines; Growth.
In this phase our goal is to have well established product lines in translational medicine, clinical diagnostics and applied science such as Ag Bio. We also intend to have a strong balance sheet in this phase that will provide us with the flexibility to make strategic acquisitions.
|
Dollars in thousands
|
|
|
|
|
|
|
Dollar
|
|
Percentage
|
||||||||||||||||
|
Year ended December 31,
|
|
change from
|
|
change from
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||
Consumables
|
$
|
288,208
|
|
|
$
|
247,687
|
|
|
$
|
224,972
|
|
|
$
|
40,521
|
|
|
$
|
22,715
|
|
|
16
|
%
|
|
10
|
%
|
Instruments
|
14,410
|
|
|
18,376
|
|
|
16,301
|
|
|
(3,966
|
)
|
|
2,075
|
|
|
(22
|
)%
|
|
13
|
%
|
|||||
Product sales
|
$
|
302,618
|
|
|
$
|
266,063
|
|
|
$
|
241,273
|
|
|
$
|
36,555
|
|
|
$
|
24,790
|
|
|
14
|
%
|
|
10
|
%
|
Dollars in thousands
|
|
|
|
|
|
|
Dollar
|
|
Percentage
|
||||||||||||||||
|
Year ended December 31,
|
|
change from
|
|
change from
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||
Services and other
|
$
|
27,781
|
|
|
$
|
29,560
|
|
|
$
|
26,201
|
|
|
$
|
(1,779
|
)
|
|
$
|
3,359
|
|
|
(6
|
)%
|
|
13
|
%
|
Dollars in thousands
|
|
|
|
|
|
|
Dollar
|
|
%
|
|
Dollar
|
|
%
|
||||||||||||
|
Year ended December 31,
|
|
change from
|
|
change from
|
|
change from
|
|
change from
|
||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
2011
|
|
2011
|
||||||||||||
Affymetrix Core reportable operating segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Expression
|
$
|
99,616
|
|
|
$
|
119,831
|
|
|
$
|
137,253
|
|
|
$
|
(20,215
|
)
|
|
(17
|
)%
|
|
$
|
(17,422
|
)
|
|
(13
|
)%
|
Genetic analysis and clinical applications
|
96,872
|
|
|
83,225
|
|
|
71,435
|
|
|
13,647
|
|
|
16
|
%
|
|
11,790
|
|
|
17
|
%
|
|||||
Life science reagents
|
30,228
|
|
|
32,049
|
|
|
33,619
|
|
|
(1,821
|
)
|
|
(6
|
)%
|
|
(1,570
|
)
|
|
(5
|
)%
|
|||||
Corporate
|
25,448
|
|
|
23,507
|
|
|
25,167
|
|
|
1,941
|
|
|
8
|
%
|
|
(1,660
|
)
|
|
(7
|
)%
|
|||||
eBioscience reportable operating segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
eBioscience
|
78,235
|
|
|
37,011
|
|
|
—
|
|
|
41,224
|
|
|
111
|
%
|
|
37,011
|
|
|
100
|
%
|
|||||
Total revenue
|
$
|
330,399
|
|
|
$
|
295,623
|
|
|
$
|
267,474
|
|
|
$
|
34,776
|
|
|
12
|
%
|
|
$
|
28,149
|
|
|
11
|
%
|
|
Year ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Affymetrix Core reportable operating segment
|
|
|
||||||
Expression
|
30
|
%
|
|
41
|
%
|
|
51
|
%
|
Genetic analysis and clinical applications
|
29
|
%
|
|
28
|
%
|
|
27
|
%
|
Life science reagents
|
9
|
%
|
|
11
|
%
|
|
13
|
%
|
Corporate
|
8
|
%
|
|
8
|
%
|
|
9
|
%
|
eBioscience reportable operating segment
|
|
|
|
|
|
|||
eBioscience
|
24
|
%
|
|
12
|
%
|
|
—
|
%
|
Total revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Dollars in thousands
|
|
|
|
|
Dollar/Point
|
||||||||||||||
|
Year ended December 31,
|
|
change from
|
||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||
Total gross profit on product sales
|
$
|
168,636
|
|
|
$
|
149,802
|
|
|
$
|
143,458
|
|
|
$
|
18,834
|
|
|
$
|
6,344
|
|
Total gross profit on services and other
|
12,402
|
|
|
13,686
|
|
|
13,064
|
|
|
(1,284
|
)
|
|
622
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Product gross margin as a percentage of product sales
|
56
|
%
|
|
56
|
%
|
|
59
|
%
|
|
—
|
%
|
|
(3
|
)%
|
|||||
Service gross margin as a percentage of services and other
|
45
|
%
|
|
46
|
%
|
|
50
|
%
|
|
(1
|
)%
|
|
(4
|
)%
|
Dollars in thousands
|
|
|
|
|
|
|
Dollar
|
|
Percentage
|
||||||||||||||||
|
Year ended December 31,
|
|
change from
|
|
change from
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||
Research and development
|
$
|
47,670
|
|
|
$
|
57,881
|
|
|
$
|
63,591
|
|
|
$
|
(10,211
|
)
|
|
$
|
(5,710
|
)
|
|
(18
|
)%
|
|
(9
|
)%
|
Dollars in thousands
|
|
|
|
|
|
|
Dollar
|
|
Percentage
|
||||||||||||||||
|
Year ended December 31,
|
|
change from
|
|
change from
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||
Selling, general and administrative
|
$
|
141,430
|
|
|
$
|
142,853
|
|
|
$
|
109,572
|
|
|
$
|
(1,423
|
)
|
|
$
|
33,281
|
|
|
(1
|
)%
|
|
30
|
%
|
Dollars in thousands
|
|
|
|
|
|
|
Dollar
|
|
Percentage
|
||||||||||||||||
|
Year ended December 31,
|
|
change from
|
|
change from
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||
Interest income
|
$
|
56
|
|
|
$
|
643
|
|
|
$
|
2,627
|
|
|
$
|
(587
|
)
|
|
$
|
(1,984
|
)
|
|
(91
|
)%
|
|
(76
|
)%
|
Realized (loss) income on equity investments, net
|
(674
|
)
|
|
616
|
|
|
(2,251
|
)
|
|
(1,290
|
)
|
|
2,867
|
|
|
(209
|
)%
|
|
127
|
%
|
|||||
Foreign currency gain (loss), net
|
66
|
|
|
(1,259
|
)
|
|
(2,483
|
)
|
|
1,325
|
|
|
1,224
|
|
|
105
|
%
|
|
49
|
%
|
|||||
Other
|
1,354
|
|
|
(265
|
)
|
|
(4,195
|
)
|
|
1,619
|
|
|
3,930
|
|
|
611
|
%
|
|
94
|
%
|
|||||
Total interest income and other, net
|
$
|
802
|
|
|
$
|
(265
|
)
|
|
$
|
(6,302
|
)
|
|
$
|
1,067
|
|
|
$
|
6,037
|
|
|
403
|
%
|
|
96
|
%
|
•
|
Interest income and Realized (loss) income on equity investments decreased in 2013 as we sold the majority of our available-for-sale securities in conjunction with the Acquisition in the second quarter of 2012;
|
•
|
In 2013, the Realized (loss) income on equity investments, net includes a total of $0.5 million in OTTI on our non-marketable investment in a limited partnership fund, a non-marketable investment in a private biotechnology company;
|
•
|
The foreign currency gain in 2013 was due to the weakening of the U.S. dollar against other foreign currency in 2013 as compared to 2012; and
|
•
|
In 2013, Other included a property tax refund of approximately $0.6 million and receipt of $0.2 million for a private biotechnology company investment that was fully impaired. In 2012, Other included a net $3.5 million impairment loss on our West Sacramento facility partially offset by the receipt of $2.2 million for a note receivable from a private biotechnology company that was previously fully reserved for in 2011 and a gain of $0.7 million on a disposal of an eBioscience product line.
|
•
|
Interest income decreased as we sold the majority of our available-for-sale securities in conjunction with the Acquisition in the second quarter of 2012;
|
•
|
Realized income (loss) on equity investments increased in 2012 as we recognized a net gain on sale of $0.5 million on the liquidation of our available-for-sale securities while in 2011, we recognized a total of $2.1 million in other-than-temporary impairment (“OTTI”) on our non-marketable investment in a limited partnership fund, a non-marketable investment in a private biotechnology company and an investment classified as available-for-sale in a publicly-traded company;
|
•
|
Currency loss, net, improved primarily due to the weakening of the U.S. dollar against other foreign currency in 2012 as compared to 2011; and
|
•
|
In 2012, Other included a net $3.5 million impairment loss on our West Sacramento facility partially offset by the receipt of $2.2 million for a note receivable from a private biotechnology company that was previously fully reserved for in 2011 and a gain of $0.7 million on a disposal of an eBioscience product line. We also recognized a $1.7 million impairment charge against our West Sacramento facility in 2011.
|
Dollars in thousands
|
|
|
|
|
|
|
Dollar
|
|
Percentage
|
||||||||||||||||
|
Year ended December 31,
|
|
change from
|
|
change from
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||
Interest expense
|
$
|
12,711
|
|
|
$
|
7,193
|
|
|
$
|
3,813
|
|
|
$
|
5,518
|
|
|
$
|
3,380
|
|
|
77
|
%
|
|
89
|
%
|
Dollars in thousands
|
|
|
|
|
|
|
Dollar
|
|
Percentage
|
||||||||||||||||
|
Year ended December 31,
|
|
change from
|
|
change from
|
||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||
Income tax provision(benefit)
|
$
|
1,161
|
|
|
$
|
(35,853
|
)
|
|
$
|
1,405
|
|
|
$
|
37,014
|
|
|
$
|
(37,258
|
)
|
|
(103
|
)%
|
|
(2,652
|
)%
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net cash provided by operating activities
|
$
|
53,584
|
|
|
$
|
3,731
|
|
|
$
|
39,337
|
|
Net cash provided by (used in) investing activities
|
15,652
|
|
|
(258,933
|
)
|
|
127,634
|
|
|||
Net cash (used in) provided by financing activities
|
(37,936
|
)
|
|
78,500
|
|
|
(486
|
)
|
|||
Effect of foreign currency translation on cash and cash equivalents
|
157
|
|
|
436
|
|
|
(32
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
31,457
|
|
|
$
|
(176,266
|
)
|
|
$
|
166,453
|
|
|
Total
|
|
2014
|
|
2015-2016
|
|
2017-2018
|
|
After 2018
|
||||||||||
Convertible notes (1)
|
$
|
105,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105,000
|
|
Senior secured credit facility (2)
|
29,450
|
|
|
12,750
|
|
|
16,700
|
|
|
—
|
|
|
—
|
|
|||||
Revolving loan (2)
|
10,000
|
|
|
—
|
|
|
8,800
|
|
|
1,200
|
|
|
—
|
|
|||||
Interest payments
|
2,696
|
|
|
1,448
|
|
|
1,222
|
|
|
26
|
|
|
—
|
|
|||||
Operating leases
|
55,674
|
|
|
9,181
|
|
|
13,823
|
|
|
9,721
|
|
|
22,949
|
|
|||||
Purchase commitments (3)
|
1,846
|
|
|
1,846
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
204,666
|
|
|
$
|
25,225
|
|
|
$
|
40,545
|
|
|
$
|
10,947
|
|
|
$
|
127,949
|
|
(1)
|
Our 4.00% Notes may be converted into shares at the option of holder prior to maturity date. On or after July 1, 2017, the Company may redeem all or part of the 4.00% Notes for cash following certain events. Refer to "Item 8. Financial Statements and Supplementary Data-Note 12. Long Term Debt Obligation" for additional discussion.
|
(2)
|
Reflects anticipated principal payment obligations that will be made each year.
|
(3)
|
Purchase commitments include agreements to purchase goods or services that are enforceable and legally binding on Affymetrix and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable without penalty.
|
|
Periods of Maturity
|
|
|
|
Fair Value at December 31, 2013
|
||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
Thereafter
|
|
Total
|
|
|||||||||||||
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
4.00% convertible senior notes due 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105,000
|
|
|
$
|
105,000
|
|
|
$
|
169,383
|
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
4.00
|
%
|
|
|
|
|
|
|
||||||
Revolving credit facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,000
|
|
|
$
|
10,000
|
|
|
$
|
10,000
|
|
Average interest rate
|
|
|
|
|
|
|
Variable
|
|
|
|
|
|
|||||||||||
Senior secured credit facility
|
$
|
3,800
|
|
|
$
|
3,800
|
|
|
$
|
3,800
|
|
|
$
|
18,050
|
|
|
$
|
29,450
|
|
|
$
|
29,450
|
|
Average interest rate
|
Variable
|
|
Variable
|
|
Variable
|
|
Variable
|
|
|
|
|
|
|
|
Notional
Amount
|
|
Weighted-
Average
Settlement
Price
|
|
Fair
Value
|
|||||
December 31, 2013
|
|
|
|
|
|
|||||
Currency
|
|
|
|
|
|
|||||
Euro
|
$
|
21,990
|
|
|
1.37
|
|
|
$
|
(623
|
)
|
Japanese Yen
|
4,588
|
|
|
103.00
|
|
|
185
|
|
||
British Pound
|
5,653
|
|
|
1.63
|
|
|
304
|
|
||
Interest rate swap
|
10,308
|
|
|
|
|
|
(11
|
)
|
||
Total
|
$
|
42,539
|
|
|
|
|
|
$
|
(145
|
)
|
December 31, 2012
|
|
|
|
|
|
|
|
|
||
Currency
|
|
|
|
|
|
|
|
|
||
Euro
|
$
|
16,933
|
|
|
1.27
|
|
|
$
|
(637
|
)
|
Japanese Yen
|
10,542
|
|
|
79.34
|
|
|
832
|
|
||
British Pound
|
4,278
|
|
|
1.59
|
|
|
(105
|
)
|
||
Interest rate swap
|
27,519
|
|
|
|
|
(77
|
)
|
|||
Total
|
$
|
59,272
|
|
|
|
|
|
$
|
13
|
|
|
Page No.
|
/s/ Ernst & Young LLP
|
|
|
|
Redwood City, California
|
|
March 3, 2014
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
ASSETS:
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
57,128
|
|
|
$
|
25,671
|
|
Restricted cash
|
—
|
|
|
699
|
|
||
Available-for-sale securities—short-term portion
|
—
|
|
|
9,366
|
|
||
Accounts receivable, net
|
50,862
|
|
|
53,893
|
|
||
Inventories—short-term portion
|
58,059
|
|
|
72,691
|
|
||
Deferred tax assets—short-term portion
|
767
|
|
|
359
|
|
||
Prepaid expenses and other current assets
|
8,920
|
|
|
10,126
|
|
||
Total current assets
|
175,736
|
|
|
172,805
|
|
||
Property and equipment, net
|
18,671
|
|
|
28,663
|
|
||
Inventories—long-term portion
|
5,972
|
|
|
11,772
|
|
||
Goodwill
|
161,595
|
|
|
159,736
|
|
||
Intangible assets, net
|
131,108
|
|
|
152,718
|
|
||
Deferred tax assets—long-term portion
|
355
|
|
|
3,394
|
|
||
Other long-term assets
|
11,074
|
|
|
15,206
|
|
||
Total assets
|
$
|
504,511
|
|
|
$
|
544,294
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
45,534
|
|
|
$
|
50,355
|
|
Convertible notes—short-term portion
|
—
|
|
|
3,855
|
|
||
Term loan—short-term portion
|
12,750
|
|
|
12,713
|
|
||
Deferred revenue—short-term portion
|
18,660
|
|
|
8,498
|
|
||
Total current liabilities
|
76,944
|
|
|
75,421
|
|
||
Deferred revenue—long-term portion
|
2,824
|
|
|
3,450
|
|
||
Convertible notes
|
105,000
|
|
|
105,000
|
|
||
Term loan—long-term portion
|
26,700
|
|
|
60,563
|
|
||
Other long-term liabilities
|
21,496
|
|
|
22,689
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Convertible preferred stock, $0.01 par value; 5,000 shares authorized; no shares issued and outstanding at December 31, 2013 and 2012
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 200,000 shares authorized; 72,305 and 71,030 shares issued and outstanding at December 31, 2013 and 2012, respectively
|
723
|
|
|
710
|
|
||
Additional paid-in capital
|
768,149
|
|
|
759,549
|
|
||
Accumulated other comprehensive income
|
8,392
|
|
|
6,302
|
|
||
Accumulated deficit
|
(505,717
|
)
|
|
(489,390
|
)
|
||
Total stockholders' equity
|
271,547
|
|
|
277,171
|
|
||
Total liabilities and stockholders' equity
|
$
|
504,511
|
|
|
$
|
544,294
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
REVENUE:
|
|
|
|
|
|
||||||
Product sales
|
$
|
302,618
|
|
|
$
|
266,063
|
|
|
$
|
241,273
|
|
Services and other
|
27,781
|
|
|
29,560
|
|
|
26,201
|
|
|||
Total revenue
|
330,399
|
|
|
295,623
|
|
|
267,474
|
|
|||
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
|||
Cost of product sales
|
133,982
|
|
|
116,261
|
|
|
97,815
|
|
|||
Cost of services and other
|
15,379
|
|
|
15,874
|
|
|
13,137
|
|
|||
Research and development
|
47,670
|
|
|
57,881
|
|
|
63,591
|
|
|||
Selling, general and administrative
|
141,430
|
|
|
142,853
|
|
|
109,572
|
|
|||
Restructuring charges
|
4,490
|
|
|
1,845
|
|
|
—
|
|
|||
Total costs and expenses
|
342,951
|
|
|
334,714
|
|
|
284,115
|
|
|||
Loss from operations
|
(12,552
|
)
|
|
(39,091
|
)
|
|
(16,641
|
)
|
|||
Interest income and other, net
|
802
|
|
|
(265
|
)
|
|
(6,302
|
)
|
|||
Interest expense
|
12,711
|
|
|
7,193
|
|
|
3,813
|
|
|||
Gain on sale of product line
|
9,295
|
|
|
—
|
|
|
—
|
|
|||
Loss before income taxes
|
(15,166
|
)
|
|
(46,549
|
)
|
|
(26,756
|
)
|
|||
Income tax (benefit) provision
|
1,161
|
|
|
(35,853
|
)
|
|
1,405
|
|
|||
Net loss
|
$
|
(16,327
|
)
|
|
$
|
(10,696
|
)
|
|
$
|
(28,161
|
)
|
|
|
|
|
|
|
||||||
Basic and diluted net loss per common share
|
$
|
(0.23
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.40
|
)
|
|
|
|
|
|
|
||||||
Shares used in computing basic and diluted net loss per common share
|
71,441
|
|
|
70,300
|
|
|
70,877
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net loss
|
$
|
(16,327
|
)
|
|
$
|
(10,696
|
)
|
|
$
|
(28,161
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustment
|
2,410
|
|
|
4,553
|
|
|
79
|
|
|||
Unrealized change in available-for-sale and non-marketable securities
|
476
|
|
|
51
|
|
|
211
|
|
|||
Unrealized change in cash flow hedges
|
(796
|
)
|
|
(794
|
)
|
|
826
|
|
|||
Net change in other comprehensive income (loss), net of tax
|
2,090
|
|
|
3,810
|
|
|
1,116
|
|
|||
Comprehensive loss
|
$
|
(14,237
|
)
|
|
$
|
(6,886
|
)
|
|
$
|
(27,045
|
)
|
|
|
|
|
|
Additional
|
|
Accumulated
Other
|
|
|
|
|
|||||||||||
|
Common Stock
|
|
Paid-In
|
|
Comprehensive
|
|
Accumulated
|
|
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Income
|
|
Deficit
|
|
Total
|
|||||||||||
Balance as of December 31, 2010
|
70,578
|
|
|
$
|
706
|
|
|
$
|
742,206
|
|
|
$
|
1,376
|
|
|
$
|
(450,533
|
)
|
|
$
|
293,755
|
|
Issuance of common stock in connection with employee stock plans and other
|
(124
|
)
|
|
(2
|
)
|
|
(681
|
)
|
|
—
|
|
|
—
|
|
|
(683
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
8,771
|
|
|
—
|
|
|
—
|
|
|
8,771
|
|
|||||
Income tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||
Net change in other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1,116
|
|
|
—
|
|
|
1,116
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,161
|
)
|
|
(28,161
|
)
|
|||||
Balance as of December 31, 2011
|
70,454
|
|
|
704
|
|
|
750,332
|
|
|
2,492
|
|
|
(478,694
|
)
|
|
274,834
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
271
|
|
|
5
|
|
|
(756
|
)
|
|
—
|
|
|
—
|
|
|
(751
|
)
|
|||||
Employee stock purchase plan
|
305
|
|
|
1
|
|
|
1,026
|
|
|
—
|
|
|
—
|
|
|
1,027
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
8,947
|
|
|
—
|
|
|
—
|
|
|
8,947
|
|
|||||
Net change in other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
3,810
|
|
|
—
|
|
|
3,810
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,696
|
)
|
|
(10,696
|
)
|
|||||
Balance as of December 31, 2012
|
71,030
|
|
|
710
|
|
|
759,549
|
|
|
6,302
|
|
|
(489,390
|
)
|
|
277,171
|
|
|||||
Issuance of common stock in connection with employee stock plans and other
|
924
|
|
|
9
|
|
|
(94
|
)
|
|
—
|
|
|
—
|
|
|
(85
|
)
|
|||||
Employee stock purchase plan
|
351
|
|
|
4
|
|
|
907
|
|
|
—
|
|
|
—
|
|
|
911
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
7,727
|
|
|
—
|
|
|
—
|
|
|
7,727
|
|
|||||
Income tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|||||
Net change in other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
2,090
|
|
|
—
|
|
|
2,090
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,327
|
)
|
|
(16,327
|
)
|
|||||
Balance as of December 31, 2013
|
72,305
|
|
|
$
|
723
|
|
|
$
|
768,149
|
|
|
$
|
8,392
|
|
|
$
|
(505,717
|
)
|
|
$
|
271,547
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(16,327
|
)
|
|
$
|
(10,696
|
)
|
|
$
|
(28,161
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
38,988
|
|
|
36,068
|
|
|
32,309
|
|
|||
Amortization of inventory step-up in fair value
|
14,876
|
|
|
9,444
|
|
|
—
|
|
|||
Excess tax benefits for share-based compensation
|
60
|
|
|
—
|
|
|
(200
|
)
|
|||
Share-based compensation
|
7,727
|
|
|
17,207
|
|
|
8,771
|
|
|||
Deferred tax assets
|
(167
|
)
|
|
(34,003
|
)
|
|
415
|
|
|||
Property and equipment, net—held for sale
|
—
|
|
|
3,491
|
|
|
1,710
|
|
|||
Gain on sale of product line
|
(9,295
|
)
|
|
—
|
|
|
—
|
|
|||
Other non-cash transactions
|
5,423
|
|
|
1,348
|
|
|
6,702
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable, net
|
2,347
|
|
|
(514
|
)
|
|
8,260
|
|
|||
Inventories
|
2,455
|
|
|
12
|
|
|
6,522
|
|
|||
Prepaid expenses and other assets
|
(9
|
)
|
|
6,338
|
|
|
3,297
|
|
|||
Accounts payable and accrued liabilities
|
(816
|
)
|
|
(21,655
|
)
|
|
(448
|
)
|
|||
Deferred revenue
|
9,596
|
|
|
(2,023
|
)
|
|
(1,740
|
)
|
|||
Other long-term liabilities
|
(1,274
|
)
|
|
(1,286
|
)
|
|
1,900
|
|
|||
Net cash provided by operating activities
|
53,584
|
|
|
3,731
|
|
|
39,337
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(307,796
|
)
|
|
—
|
|
|||
Purchases of available-for-sale securities
|
—
|
|
|
—
|
|
|
(86,252
|
)
|
|||
Proceeds from sales of available-for-sale securities
|
9,364
|
|
|
52,063
|
|
|
189,440
|
|
|||
Proceeds from maturities of available-for-sale securities
|
—
|
|
|
1,138
|
|
|
32,982
|
|
|||
Proceeds from sale of property and equipment
|
—
|
|
|
5,509
|
|
|
493
|
|
|||
Proceeds from sale of product line
|
11,832
|
|
|
—
|
|
|
—
|
|
|||
Capital expenditures
|
(4,808
|
)
|
|
(8,166
|
)
|
|
(5,779
|
)
|
|||
Capital distribution from non-marketable investments
|
—
|
|
|
681
|
|
|
—
|
|
|||
Purchase of technology rights
|
(736
|
)
|
|
(2,362
|
)
|
|
(3,250
|
)
|
|||
Net cash provided by (used in) investing activities
|
15,652
|
|
|
(258,933
|
)
|
|
127,634
|
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|||
Issuance of common stock, net
|
825
|
|
|
276
|
|
|
(683
|
)
|
|||
Proceeds from term loan and revolver
|
48,000
|
|
|
80,500
|
|
|
—
|
|
|||
Payments of term loan
|
(81,826
|
)
|
|
(11,724
|
)
|
|
—
|
|
|||
Debt issuance costs
|
(1,080
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of 4.00% convertible senior notes
|
—
|
|
|
101,062
|
|
|
—
|
|
|||
Repurchase of 3.50% senior convertible notes
|
(3,855
|
)
|
|
(91,614
|
)
|
|
(3
|
)
|
|||
Excess tax benefits for share-based compensation
|
—
|
|
|
—
|
|
|
200
|
|
|||
Net cash (used in) provided by financing activities
|
(37,936
|
)
|
|
78,500
|
|
|
(486
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
157
|
|
|
436
|
|
|
(32
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
31,457
|
|
|
(176,266
|
)
|
|
166,453
|
|
|||
Cash and cash equivalents at beginning of period
|
25,671
|
|
|
201,937
|
|
|
35,484
|
|
|||
Cash and cash equivalents at end of period
|
$
|
57,128
|
|
|
$
|
25,671
|
|
|
$
|
201,937
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|||
Cash paid for interest
|
$
|
12,456
|
|
|
$
|
6,968
|
|
|
$
|
3,341
|
|
Cash (paid) received for income taxes, net of refunds
|
$
|
(2,222
|
)
|
|
$
|
3,905
|
|
|
$
|
(633
|
)
|
•
|
Marketable securities
–As part of its review, the Company is required to take into consideration current market conditions, extent and nature of change in fair value, issuer rating changes and trends, volatility of earnings, current analysts' evaluations, all available information relevant to the collectability of debt securities and other factors when evaluating for the existence of OTTI in its securities portfolio. OTTI is separated into credit-related losses, which exist when amortized cost basis is not expected to be fully recovered, and non-credit related losses, which are the result of all other factors, such as illiquidity. Any credit-related OTTI is recognized in earnings while noncredit-related OTTI is recorded in other comprehensive income (loss) ("OCI"). During the years ended December 31,
2013
and
2012
, the Company recorded
no
impairment charges on its marketable securities. Refer to Note 5. "Financial Instruments – Investments in Debt and Equity Securities" for further information.
|
•
|
Non-marketable securities
– The Company periodically monitors the liquidity and financing activities of its non-marketable securities to determine if any impairment exists and accordingly writes down, to the extent necessary, the carrying value of the non-marketable equity securities to their estimated fair values. In order to determine whether a decline in value is other-than-temporary, the Company evaluates, among other factors: the duration and extent to which the fair value has been less than the carrying value; the financial condition of and business outlook of the issuer, including key operational and cash flow metrics, current market conditions; and the Company's intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in estimated fair value. The Company recognized impairment changes of
$0.5 million
on its non-marketable securities during the year ended
December 31, 2013
. During the year ended
December 31, 2012
,
no
impairment charges were recorded. Refer to Note 5. "Financial Instruments – Non-Marketable Securities" for further information.
|
|
Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
Foreign currency translation adjustment
|
$
|
7,784
|
|
|
$
|
5,374
|
|
Unrealized gains on available-for-sale and non-marketable securities
|
1,373
|
|
|
896
|
|
||
Unrealized gains on cash flow hedges
|
(765
|
)
|
|
32
|
|
||
Accumulated other comprehensive income
|
$
|
8,392
|
|
|
$
|
6,302
|
|
|
|
December 31, 2012
|
|
(Decrease) / Increase
|
|
Reclassification Adjustment
|
|
December 31, 2013
|
||||||||
Foreign currency translation adjustment
|
|
$
|
5,374
|
|
|
$
|
2,410
|
|
|
$
|
—
|
|
|
$
|
7,784
|
|
Unrealized change in available-for-sale and non-marketable securities
|
|
896
|
|
|
915
|
|
|
(438
|
)
|
(1)
|
1,373
|
|
||||
Unrealized change in cash flow hedges
|
|
32
|
|
|
161
|
|
|
(958
|
)
|
(2)
|
(765
|
)
|
||||
Total accumulated other comprehensive income, net of tax
|
|
$
|
6,302
|
|
|
$
|
3,486
|
|
|
$
|
(1,396
|
)
|
|
$
|
8,392
|
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Employee stock options
|
5,141
|
|
|
6,101
|
|
|
6,276
|
|
Employee stock purchase plan
|
153
|
|
|
210
|
|
|
64
|
|
Restricted stock and restricted stock units
|
4,161
|
|
|
3,734
|
|
|
2,597
|
|
Convertible notes
|
17,862
|
|
|
9,899
|
|
|
3,169
|
|
Total
|
27,317
|
|
|
19,944
|
|
|
12,106
|
|
|
Quoted Prices
In Active
Markets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Total
|
||||||
December 31, 2013:
|
|
|
|
|
|
||||||
Derivative assets
|
$
|
—
|
|
|
$
|
185
|
|
|
$
|
185
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|||
Derivative liabilities
|
$
|
—
|
|
|
$
|
938
|
|
|
$
|
938
|
|
|
|
|
|
|
|
||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|||
Assets:
|
|
|
|
|
|
|
|
|
|||
U.S. government obligations and agency securities
|
$
|
—
|
|
|
$
|
6,829
|
|
|
$
|
6,829
|
|
U.S. corporate debt
|
—
|
|
|
664
|
|
|
664
|
|
|||
Foreign corporate debt and equity securities
|
—
|
|
|
1,873
|
|
|
1,873
|
|
|||
Total
|
$
|
—
|
|
|
$
|
9,366
|
|
|
$
|
9,366
|
|
|
|
|
|
|
|
||||||
Derivative assets
|
$
|
—
|
|
|
$
|
842
|
|
|
$
|
842
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|||
Derivative liabilities
|
$
|
—
|
|
|
$
|
829
|
|
|
$
|
829
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
U.S. government obligations and agency securities
|
$
|
6,775
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
6,829
|
|
U.S. corporate debt
|
651
|
|
|
13
|
|
|
—
|
|
|
664
|
|
||||
Foreign corporate debt and equity securities
|
1,837
|
|
|
36
|
|
|
—
|
|
|
1,873
|
|
||||
Total available-for-sale securities
|
$
|
9,263
|
|
|
$
|
103
|
|
|
$
|
—
|
|
|
$
|
9,366
|
|
|
December 31, 2012
|
||
Less than one year
|
$
|
7,083
|
|
One to two years
|
664
|
|
|
More than two years
|
1,619
|
|
|
Total available-for-sale securities
|
$
|
9,366
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
Euro
|
$
|
21,990
|
|
|
$
|
16,933
|
|
Japanese yen
|
4,588
|
|
|
10,542
|
|
||
British pound
|
5,653
|
|
|
4,278
|
|
||
Interest rate swap
|
10,307
|
|
|
27,519
|
|
||
Total
|
$
|
42,538
|
|
|
$
|
59,272
|
|
|
December 31, 2013
|
|
December 31, 2012
|
Balance Sheet
Classification
|
||||
Derivative assets:
|
|
|
|
|
||||
Foreign exchange contracts
|
$
|
185
|
|
|
$
|
842
|
|
Other current assets
|
Derivative liabilities:
|
|
|
|
|
|
|
||
Foreign exchange contracts
|
927
|
|
|
752
|
|
Accrued liabilities
|
||
Interest rate swap
|
11
|
|
|
77
|
|
Accrued liabilities
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
||||||
Net (loss) gain recognized in OCI, net of tax (1)
|
$
|
(796
|
)
|
|
$
|
(794
|
)
|
|
$
|
826
|
|
Net gain reclassified from accumulated OCI into Revenue, net of tax (2)
|
800
|
|
|
1,226
|
|
|
—
|
|
|||
Net gain reclassified from accumulated OCI into Interest income and other, net, net of tax (3)
|
158
|
|
|
—
|
|
|
—
|
|
|||
Net gain (loss) recognized in Interest income and other, net, net of tax (4)
|
74
|
|
|
109
|
|
|
(103
|
)
|
|||
Derivatives not designated as hedging relationships:
|
|
|
|
|
|
||||||
Net (loss) recognized in Interest income and other, net, net of tax (5)
|
(122
|
)
|
|
(539
|
)
|
|
(1,720
|
)
|
(1)
|
Net change in the fair value of the effective portion classified in OCI
|
(2)
|
Effective portion classified as Revenue
|
(3)
|
Ineffective portion classified as Interest income and other, net
|
(4)
|
Amount excluded from effectiveness testing classified as Interest and other, net
|
(5)
|
Classified in Interest and other, net
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Raw materials
|
$
|
11,587
|
|
|
$
|
11,167
|
|
Work-in-process
|
22,139
|
|
|
35,562
|
|
||
Finished goods
|
30,305
|
|
|
37,734
|
|
||
Total
|
$
|
64,031
|
|
|
$
|
84,463
|
|
|
|
|
|
||||
Short-term portion
|
$
|
58,059
|
|
|
$
|
72,691
|
|
Long-term portion
|
$
|
5,972
|
|
|
$
|
11,772
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Property and equipment:
|
|
|
|
||||
Construction-in-progress
|
$
|
1,214
|
|
|
$
|
1,790
|
|
Equipment and furniture
|
119,848
|
|
|
126,790
|
|
||
Building and leasehold improvements
|
48,503
|
|
|
54,579
|
|
||
|
169,565
|
|
|
183,159
|
|
||
Less: accumulated depreciation and amortization
|
(150,894
|
)
|
|
(154,496
|
)
|
||
Net property and equipment
|
$
|
18,671
|
|
|
$
|
28,663
|
|
|
Carrying Value, Gross
|
|
Accumulated Amortization
|
|
Intangible Assets, Net
|
Weighted
|
||||||||||||||||||||||||||
|
December 31, 2012
|
|
(Decrease)/Increase (1)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
(Increase)/Decrease (2)
|
|
December 31, 2013
|
|
December 31, 2012
|
|
December 31, 2013
|
Average
Useful Life
|
||||||||||||||||
Customer relationships
|
$
|
76,874
|
|
|
$
|
852
|
|
|
$
|
77,726
|
|
|
$
|
(14,346
|
)
|
|
$
|
(7,188
|
)
|
|
$
|
(21,534
|
)
|
|
$
|
62,528
|
|
|
$
|
56,192
|
|
11 years
|
Developed technologies
|
76,814
|
|
|
813
|
|
|
77,627
|
|
|
(18,489
|
)
|
|
(5,881
|
)
|
|
(24,370
|
)
|
|
58,325
|
|
|
53,257
|
|
10 years
|
||||||||
Trademarks and tradenames
|
17,818
|
|
|
13
|
|
|
17,831
|
|
|
(3,009
|
)
|
|
(3,395
|
)
|
|
(6,404
|
)
|
|
14,809
|
|
|
11,427
|
|
5 years
|
||||||||
Other contractual agreements
|
3,055
|
|
|
40
|
|
|
3,095
|
|
|
(785
|
)
|
|
(1,557
|
)
|
|
(2,342
|
)
|
|
2,270
|
|
|
753
|
|
2 years
|
||||||||
Licenses
|
81,156
|
|
|
553
|
|
|
81,709
|
|
|
(66,370
|
)
|
|
(5,860
|
)
|
|
(72,230
|
)
|
|
14,786
|
|
|
9,479
|
|
14 years
|
||||||||
Total definite-lived intangible assets
|
$
|
255,717
|
|
|
$
|
2,271
|
|
|
$
|
257,988
|
|
|
$
|
(102,999
|
)
|
|
$
|
(23,881
|
)
|
|
$
|
(126,880
|
)
|
|
$
|
152,718
|
|
|
$
|
131,108
|
|
|
|
Amortization
|
||
For the Year Ending December 31,
|
Expense
|
||
2014
|
$
|
21,058
|
|
2015
|
14,899
|
|
|
2016
|
14,047
|
|
|
2017
|
12,370
|
|
|
2018
|
10,789
|
|
|
Thereafter
|
57,945
|
|
|
Total
|
$
|
131,108
|
|
Balance at December 31, 2012
|
$
|
159,736
|
|
Effects of foreign currency change
|
1,859
|
|
|
Balance at December 31, 2013
|
$
|
161,595
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Accounts payable
|
$
|
9,571
|
|
|
$
|
13,716
|
|
Accrued compensation and related liabilities
|
20,701
|
|
|
15,760
|
|
||
Accrued interest
|
—
|
|
|
324
|
|
||
Accrued taxes
|
4,793
|
|
|
8,135
|
|
||
Accrued legal
|
447
|
|
|
594
|
|
||
Accrued audit and tax
|
383
|
|
|
1,106
|
|
||
Accrued warranties
|
1,697
|
|
|
802
|
|
||
Accrued royalties
|
2,475
|
|
|
2,267
|
|
||
Other
|
5,467
|
|
|
7,651
|
|
||
Total
|
$
|
45,534
|
|
|
$
|
50,355
|
|
|
Amount
|
||
Balance as of December 31, 2011
|
$
|
1,500
|
|
Additions charged to cost of product sales
|
611
|
|
|
Repairs and replacements
|
(1,309
|
)
|
|
Balance as of December 31, 2012
|
$
|
802
|
|
Additions charged to cost of product sales
|
1,172
|
|
|
Repairs and replacements
|
(277
|
)
|
|
Balance as of December 31, 2013
|
$
|
1,697
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Costs of product sales
|
$
|
1,002
|
|
|
$
|
1,554
|
|
|
$
|
1,143
|
|
Research and development
|
1,331
|
|
|
1,337
|
|
|
1,850
|
|
|||
Selling, general and administrative (1)
|
5,394
|
|
|
14,316
|
|
|
5,778
|
|
|||
Total share-based compensation expense
|
$
|
7,727
|
|
|
$
|
17,207
|
|
|
$
|
8,771
|
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Risk free interest rate
|
1.0
|
%
|
|
0.6
|
%
|
|
1.5
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected volatility
|
68
|
%
|
|
67
|
%
|
|
67
|
%
|
Expected option term (in years)
|
4.6
|
|
|
4.6
|
|
|
4.5
|
|
|
Shares
|
|
Weighted-Average
Exercise Price
Per Share
|
|
Weighted-Average
Remaining
Contractual Terms
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
(in years)
|
|
(in thousands)
|
|||||
Outstanding at December 31, 2012
|
6,101
|
|
|
$
|
7.75
|
|
|
|
|
|
||
Grants
|
988
|
|
|
4.43
|
|
|
|
|
|
|||
Exercises
|
(424
|
)
|
|
4.03
|
|
|
|
|
|
|||
Forfeitures or expirations
|
(1,523
|
)
|
|
10.02
|
|
|
|
|
|
|||
Outstanding at December 31, 2013
|
5,142
|
|
|
$
|
6.75
|
|
|
3.87
|
|
$
|
15,475
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at December 31, 2013
|
2,979
|
|
|
$
|
8.36
|
|
|
2.68
|
|
$
|
6,761
|
|
|
|
|
|
|
|
|
|
|||||
Vested and expected to vest at December 31, 2013
|
4,808
|
|
|
$
|
6.91
|
|
|
3.72
|
|
$
|
14,121
|
|
Range of Exercise Prices
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||||||
|
|
|
|
|
|
Weighted-Average
|
|
Weighted-Average
|
|
|
|
Weighted-Average
|
||||||||||
|
|
|
|
|
|
Remaining
|
|
Exercise Price
|
|
|
|
Exercise Price
|
||||||||||
Lower
|
|
Upper
|
|
Number
|
|
Contractual Life
|
|
Per Share
|
|
Number
|
|
Per Share
|
||||||||||
|
|
|
|
(in thousands)
|
|
(in years)
|
|
|
|
(in thousands)
|
|
|
||||||||||
$
|
2.63
|
|
|
$
|
3.84
|
|
|
897
|
|
|
5.07
|
|
$
|
3.52
|
|
|
243
|
|
|
$
|
2.97
|
|
$
|
3.86
|
|
|
$
|
4.16
|
|
|
686
|
|
|
5.34
|
|
$
|
3.93
|
|
|
200
|
|
|
$
|
3.93
|
|
$
|
4.21
|
|
|
$
|
4.44
|
|
|
629
|
|
|
3.75
|
|
$
|
4.24
|
|
|
387
|
|
|
$
|
4.22
|
|
$
|
4.46
|
|
|
$
|
5.29
|
|
|
672
|
|
|
4.42
|
|
$
|
4.84
|
|
|
390
|
|
|
$
|
4.94
|
|
$
|
5.31
|
|
|
$
|
6.51
|
|
|
634
|
|
|
4.38
|
|
$
|
5.73
|
|
|
345
|
|
|
$
|
5.77
|
|
$
|
6.57
|
|
|
$
|
8.29
|
|
|
709
|
|
|
3.66
|
|
$
|
7.54
|
|
|
500
|
|
|
$
|
7.75
|
|
$
|
8.71
|
|
|
$
|
19.92
|
|
|
734
|
|
|
1.07
|
|
$
|
12.66
|
|
|
733
|
|
|
$
|
12.66
|
|
$
|
21.36
|
|
|
$
|
37.22
|
|
|
181
|
|
|
1.05
|
|
$
|
25.82
|
|
|
181
|
|
|
$
|
25.81
|
|
Total
|
|
|
|
|
5,142
|
|
|
3.87
|
|
$
|
6.75
|
|
|
2,979
|
|
|
$
|
8.36
|
|
Options outstanding
|
5,142
|
|
Options available for future grants
|
4,684
|
|
Convertible notes
|
17,857
|
|
Total at December 31, 2013
|
27,683
|
|
|
Number
of Shares
|
|
Weighted-Average
Grant Date Fair Value per Share
|
|||
Restricted stock awards
|
|
|
|
|||
Outstanding at December 31, 2012
|
167
|
|
|
$
|
5.89
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
(130
|
)
|
|
5.68
|
|
|
Forfeited
|
(28
|
)
|
|
6.77
|
|
|
Outstanding at December 31, 2013
|
9
|
|
|
$
|
6.11
|
|
|
|
|
|
|||
Restricted stock units
|
|
|
|
|
|
|
Outstanding at December 31, 2012
|
2,511
|
|
|
$
|
4.51
|
|
Granted
|
1,972
|
|
|
6.30
|
|
|
Vested
|
(692
|
)
|
|
4.62
|
|
|
Forfeited
|
(588
|
)
|
|
4.49
|
|
|
Outstanding at December 31, 2013
|
3,203
|
|
|
$
|
5.59
|
|
|
Number
of Shares
|
|
Weighted-Average
Grant Date Fair Value per PRSU
|
|||
Performance based restricted stock awards
|
|
|
|
|||
Outstanding at December 31, 2012
|
1,056
|
|
|
$
|
3.98
|
|
Granted
|
487
|
|
|
4.34
|
|
|
Vested
|
(189
|
)
|
|
4.22
|
|
|
Forfeited
|
(405
|
)
|
|
4.24
|
|
|
Outstanding at December 31, 2013
|
949
|
|
|
$
|
4.01
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
(Loss) Income Before Income Taxes:
|
|
|
|
|
|
||||||
U.S.
|
$
|
(11,240
|
)
|
|
$
|
(36,248
|
)
|
|
$
|
(26,778
|
)
|
Foreign
|
(3,926
|
)
|
|
(10,301
|
)
|
|
22
|
|
|||
Loss before income taxes
|
$
|
(15,166
|
)
|
|
$
|
(46,549
|
)
|
|
$
|
(26,756
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Provision (Benefit) For Income Taxes:
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
State
|
(383
|
)
|
|
568
|
|
|
106
|
|
|||
Foreign
|
2,652
|
|
|
1,104
|
|
|
1,038
|
|
|||
Subtotal
|
2,269
|
|
|
1,644
|
|
|
1,144
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
(268
|
)
|
|
(35,329
|
)
|
|
$
|
—
|
|
|
State
|
(21
|
)
|
|
(1,811
|
)
|
|
—
|
|
|||
Foreign
|
(819
|
)
|
|
(357
|
)
|
|
261
|
|
|||
Subtotal
|
(1,108
|
)
|
|
(37,497
|
)
|
|
261
|
|
|||
Income tax provision (benefit)
|
$
|
1,161
|
|
|
$
|
(35,853
|
)
|
|
$
|
1,405
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Tax at federal statutory rate
|
$
|
(5,308
|
)
|
|
$
|
(16,292
|
)
|
|
$
|
(9,364
|
)
|
State taxes, net
|
(1,289
|
)
|
|
(1,136
|
)
|
|
(1,740
|
)
|
|||
Non-deductible stock compensation
|
327
|
|
|
3,470
|
|
|
453
|
|
|||
Non-deductible acquisition costs
|
—
|
|
|
410
|
|
|
878
|
|
|||
Foreign rate differential
|
3,245
|
|
|
4,353
|
|
|
1,274
|
|
|||
Research credits
|
(930
|
)
|
|
—
|
|
|
(692
|
)
|
|||
Change in valuation allowance
|
4,961
|
|
|
(26,795
|
)
|
|
10,461
|
|
|||
Other
|
155
|
|
|
137
|
|
|
135
|
|
|||
Income tax (benefit) provision
|
$
|
1,161
|
|
|
$
|
(35,853
|
)
|
|
$
|
1,405
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
65,830
|
|
|
$
|
75,622
|
|
Tax credit carryforwards
|
54,887
|
|
|
50,704
|
|
||
Deferred revenue
|
1,434
|
|
|
1,537
|
|
||
Capitalized research and development costs
|
315
|
|
|
394
|
|
||
Intangibles
|
19,254
|
|
|
21,175
|
|
||
Share-based compensation
|
5,232
|
|
|
5,808
|
|
||
Accrued compensation
|
3,441
|
|
|
1,775
|
|
||
Accrued warranty
|
612
|
|
|
446
|
|
||
Inventory reserves
|
6,835
|
|
|
5,664
|
|
||
Reserves and other
|
11,150
|
|
|
13,216
|
|
||
Depreciation and amortization
|
5,958
|
|
|
6,731
|
|
||
Other, net
|
7,518
|
|
|
6,069
|
|
||
Total deferred tax assets
|
182,466
|
|
|
189,141
|
|
||
Valuation allowance for deferred tax assets
|
(135,697
|
)
|
|
(130,979
|
)
|
||
Net deferred tax assets
|
46,769
|
|
|
58,162
|
|
||
Net deferred tax liabilities:
|
|
|
|
|
|
||
Acquired intangible assets
|
(39,836
|
)
|
|
(45,397
|
)
|
||
Acquired tangible assets
|
(1,993
|
)
|
|
(7,701
|
)
|
||
Cancellation of debt
|
(9,654
|
)
|
|
(9,669
|
)
|
||
Foreign earnings
|
(2,923
|
)
|
|
(3,282
|
)
|
||
Other, net
|
(1,378
|
)
|
|
(1,296
|
)
|
||
Total deferred tax liabilities
|
(55,784
|
)
|
|
(67,345
|
)
|
||
Net deferred tax (liabilities) assets
|
$
|
(9,015
|
)
|
|
$
|
(9,183
|
)
|
|
2013
|
|
2012
|
||||
Unrecognized tax benefits, beginning of year
|
$
|
20,413
|
|
|
$
|
16,480
|
|
Gross increases - tax positions in prior period
|
2,003
|
|
|
3,027
|
|
||
Gross decreases - tax positions in prior period
|
(762
|
)
|
|
(376
|
)
|
||
Gross increases - current period tax positions
|
718
|
|
|
1,282
|
|
||
Unrecognized tax benefits, end of year
|
$
|
22,372
|
|
|
$
|
20,413
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue (a):
|
|
|
|
|
|
||||||
Affymetrix Core
|
$
|
252,164
|
|
|
$
|
258,612
|
|
|
$
|
267,474
|
|
eBioscience
|
78,235
|
|
|
37,011
|
|
|
—
|
|
|||
Totals
|
$
|
330,399
|
|
|
$
|
295,623
|
|
|
$
|
267,474
|
|
Income (loss) from operations (a):
|
|
|
|
|
|
|
|
||||
Affymetrix Core
|
$
|
528
|
|
|
$
|
(30,299
|
)
|
|
$
|
(16,641
|
)
|
eBioscience
|
(13,080
|
)
|
|
(8,792
|
)
|
|
—
|
|
|||
Totals
|
$
|
(12,552
|
)
|
|
$
|
(39,091
|
)
|
|
$
|
(16,641
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Customer location:
|
|
|
|
|
|
||||||
United States
|
$
|
202,323
|
|
|
$
|
171,176
|
|
|
$
|
142,508
|
|
Europe
|
80,844
|
|
|
71,526
|
|
|
76,286
|
|
|||
Japan
|
15,511
|
|
|
21,039
|
|
|
19,989
|
|
|||
Other
|
31,721
|
|
|
31,882
|
|
|
28,691
|
|
|||
Total
|
$
|
330,399
|
|
|
$
|
295,623
|
|
|
$
|
267,474
|
|
|
Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
Net property and equipment:
|
|
|
|
||||
United States
|
$
|
13,829
|
|
|
$
|
22,203
|
|
Singapore
|
3,218
|
|
|
4,260
|
|
||
Europe
|
1,319
|
|
|
1,770
|
|
||
Other countries
|
305
|
|
|
430
|
|
||
Total
|
$
|
18,671
|
|
|
$
|
28,663
|
|
|
2013
|
|
2012
|
||||||||||||||||||||||||||||
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter (1)
|
|
First
Quarter
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||||||||||||||
Total revenue
|
$
|
92,636
|
|
|
$
|
80,354
|
|
|
$
|
79,464
|
|
|
$
|
77,945
|
|
|
$
|
84,349
|
|
|
$
|
79,624
|
|
|
$
|
66,403
|
|
|
$
|
65,247
|
|
Total cost of goods sold
|
37,613
|
|
|
36,515
|
|
|
37,293
|
|
|
37,940
|
|
|
39,171
|
|
|
37,938
|
|
|
27,682
|
|
|
27,344
|
|
||||||||
Net (loss) income
|
9,373
|
|
|
(4,156
|
)
|
|
(6,107
|
)
|
|
(15,437
|
)
|
|
(12,269
|
)
|
|
(17,859
|
)
|
|
23,649
|
|
|
(4,217
|
)
|
||||||||
Basic net (loss) income per common share
|
0.13
|
|
|
(0.06
|
)
|
|
(0.09
|
)
|
|
(0.22
|
)
|
|
(0.17
|
)
|
|
(0.25
|
)
|
|
0.34
|
|
|
(0.06
|
)
|
||||||||
Diluted net (loss) income per common share
|
0.11
|
|
|
(0.06
|
)
|
|
(0.09
|
)
|
|
(0.22
|
)
|
|
(0.17
|
)
|
|
(0.25
|
)
|
|
0.33
|
|
|
(0.06
|
)
|
/s/ Ernst & Young LLP
|
|
Redwood City, California
|
March 3, 2014
|
|
Balance at
Beginning of
Period
|
|
Additions
Charged to
Operations or
Other Accounts
|
|
Write-offs, net
of recoveries
|
|
Balance at
End of Period
|
||||||||
Allowance for Doubtful Accounts:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2013
|
$
|
691
|
|
|
$
|
142
|
|
|
$
|
(232
|
)
|
|
$
|
601
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2012 (1)
|
$
|
496
|
|
|
$
|
590
|
|
|
$
|
(395
|
)
|
|
$
|
691
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2011
|
$
|
949
|
|
|
$
|
(282
|
)
|
|
$
|
(171
|
)
|
|
$
|
496
|
|
(1)
|
Activity in 2012 includes the addition of eBioscience since the Acquisition Date
|
|
Affymetrix, Inc.
(Registrant)
|
|
|
|
|
March 3, 2014
|
By:
|
/s/ Frank Witney
|
|
|
Frank Witney
DIRECTOR, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
|
|
Name
|
Title
|
Date
|
By:
|
/s/ Frank Witney
|
Director, President and Chief Executive Officer
|
March 3, 2014
|
|
Frank Witney
|
(Principal Executive Officer)
|
|
|
|
|
|
By:
|
/s/ Gavin Wood
|
Executive Vice President and Chief Financial
|
March 3, 2014
|
|
Gavin H.J. Wood
|
Officer (Principal Financial and Accounting Officer)
|
|
|
|
|
|
By:
|
/s/ Stephen P.A. Fodor, Ph.D.
|
Founder and Chairman of the Board
|
March 3, 2014
|
|
Stephen P.A. Fodor, Ph.D.
|
||
|
|
|
|
By:
|
/s/ Nelson C. Chan
|
Director
|
March 3, 2014
|
|
Nelson C. Chan
|
||
|
|
|
|
By:
|
/s/ Gary S. Guthart, Ph.D.
|
Director
|
March 3, 2014
|
|
Gary S. Guthart, Ph.D.
|
||
|
|
|
|
By:
|
/s/ Jami Dover Nachtsheim
|
Director
|
March 3, 2014
|
|
Jami Dover Nachtsheim
|
||
|
|
|
|
By:
|
/s/ Robert H. Trice, Ph.D.
|
Director
|
March 3, 2014
|
|
Robert H. Trice, Ph.D.
|
||
|
|
|
|
By:
|
/s/ Robert P. Wayman
|
Director
|
March 3, 2014
|
|
Robert P. Wayman
|
EXHIBIT
NUMBER
|
DESCRIPTION OF DOCUMENT
|
2.1(1)
|
Agreement and Plan of Merger by and among Panomics, Inc., the Company, Panda Acquisition Corporation and the Equityholders' Representative dated as of November 11, 2008.
|
2.2(2)
|
Agreement and Plan of Merger dated as of November 29, 2011 among the Company, eBioscience Holding Company, Inc., Excalibur Acquisition Sub, Inc. and the Securityholders' Representative.
|
2.3(3)
|
Amended and Restated Agreement and Plan of Merger dated as of May 3, 2012 among the Company, eBioscience Holding Company, Inc., Excalibur Acquisition Sub, Inc. and the Securityholders' Representative.
|
3.1(4)
|
Restated Certificate of Incorporation.
|
3.2(5)
|
Amended and Restated Bylaws.
|
4.1(6)
|
Indenture dated as of June 25, 2012 by and between the Company and The Bank of New York Mellon Trust Company, N.A. as Trustee.
|
4.2(6)
|
First Supplemental Indenture dated as of June 25, 2012 by and between the Company and The Bank of New York Mellon Trust Company, N.A. as Trustee.
|
4.3(6)
|
Form of 4.00% Convertible Senior Note Due 2019 (included in Exhibit 4.2).
|
10.1(7)‡
|
1996 Nonemployee Directors Stock Option Plan.
|
10.2(8)‡
|
1998 Stock Incentive Plan.
|
10.3(9)‡
|
Amendment No. 1 to the 1996 Nonemployee Directors Stock Option Plan of the Company.
|
10.4(10)‡
|
Amended and Restated 1996 Non-Employee Directors Stock Plan.
|
10.5(11)‡
|
Affymetrix, Inc. Amended and Restated 2000 Equity Incentive Plan, as adopted effective March 9, 2000 and amended through May 14, 2010.
|
10.6(12)‡
|
Form of Non-Qualified Stock Option Agreement under the Affymetrix, Inc. Amended and Restated 1996 Non-Employee Directors Stock Plan.
|
10.7(24)‡
|
Form of Stock Option Agreement under the Affymetrix, Inc. Amended and Restated 2000 Equity Incentive Plan.
|
10.8(24)‡
|
Form of Restricted Stock Unit Agreement under the Affymetrix, Inc. Amended and Restated 2000 Equity Incentive Plan.
|
10.9(13)‡
|
First Amendment to Affymetrix, Inc. 1998 Stock Incentive Plan.
|
10.10(24)‡
|
Form of Performance Based Restricted Stock Unit Grant Notice and Agreement under the Affymetrix, Inc. Amended and Restated 2000 Equity Incentive Plan
|
10.11(14)‡
|
2011 Employee Stock Purchase Plan.
|
10.12(15)‡
|
2012 Inducement Plan.
|
10.13(16)
|
Lease between Sobrato Interests and the Company dated June 12, 1996 (3380 Central Expressway, Santa Clara, CA).
|
10.14(17)
|
Fifth Amendment to Lease between Sobrato Interests and the Company dated July 3, 2002 (3380 Central Expressway, Santa Clara, CA).
|
10.15(18)
|
Sixth Amendment to Lease between SI 34, LLC, as successor in interest to Sobrato Interests, and the Company dated July 11, 2011 (3380 Central Expressway, Santa Clara, CA).
|
10.16(16)
|
Lease between Sobrato Interests and the Company dated May 31, 1996 (3450 Central Expressway, Santa Clara, CA).
|
10.17(17)
|
First Amendment to Lease between Sobrato Interests and the Company dated July 3, 2002 (3450 Central Expressway, Santa Clara, CA).
|
10.18(18)
|
Second Amendment to Lease between SI 34, LLC, as successor in interest to Sobrato Interests, and the Company dated July 11, 2011 (3450 Central Expressway, Santa Clara, CA).
|
10.19(19)
|
Lease between Sobrato Interests and the Company dated July 3, 2002 (3420 Central Expressway, Santa Clara, CA).
|
10.20(19)
|
First Amendment to Lease between Sobrato Interests and the Company dated September 30, 2003 (3420 Central Expressway, Santa Clara, CA).
|
10.21(18)
|
Second Amendment to Lease between SI 34, LLC, as successor in interest to Sobrato Interests, and the Company dated July 11, 2011 (3420 Central Expressway, Santa Clara, CA).
|
10.22(20)
|
Lease between Keppel Logistics Pte Ltd. and Affymetrix Pte Ltd. dated as of January 1, 2006 (7 Gul Circle, Singapore 629363).
|
10.23(21)
|
Addendum to Lease Agreement between Keppel Logistics Pte Ltd. and Affymetrix Pte Ltd. dated June 1, 2010 (7 Gul Circle, Singapore 629363).
|
10.24(22)
|
Lease Agreement between SBP Limited Partnership and the Company dated August 10, 2008 (26309 Miles Road, Warrensville Heights, OH).
|
10.25(22)
|
First Amendment and Lease Expansion Agreement between SBP Limited Partnership and the Company dated May 20, 2009 (26309 Miles Road, Warrensville Heights, OH).
|
10.26(22)
|
Lease Agreement between OTR, acting as the duly authorized nominee of The State Teacher Retirement System of Ohio and Anatrace, Inc. dated February 14, 2001 (434 Dussel Drive, Maumee, OH).
|
10.27(22)
|
Assignment and Assumption of Lease between Anatrace, Inc. and USB Acquisition dated April 30, 2005 (434 Dussel Drive, Maumee, OH).
|
10.28(23)
|
Lease Agreement between the Company and Miles/Commerce Ltd. dated April 1, 2010 (26101 Miles Road, Warrensville Heights, OH).
|
10.29(23)
|
Lease Agreement between the Company and 26111 Miles Road Ltd. dated April 1, 2010 (26111 Miles Road, Warrensville Heights, OH).
|
10.30(24)
|
Sublease Agreement between eBioscience, Inc. and STMicroelectronics, Inc. dated as of January 11, 2013 (4690 Executive Drive, San Diego, CA).
|
10.31(24)
|
Office Lease by and between eBioscience, Inc. and Kilroy Realty, L.P., dated as of January 9, 2013 (4690 Executive Drive, San Diego, CA).
|
10.32(24)
|
Sublease by and between and eBioscience, Inc. and Ligand Pharmaceuticals Incorporated dated as of December 6, 2007 (10255 Science Center Drive). (Attached as Annex A: Lease by and between Chevon/Nexus Partnership (Lot 13) and Ligand Pharmaceuticals, Inc. dated as of July 6, 1994).
|
10.33(24)
|
Lease between VBC Vienna Bio Center Errichtungs GmBH and Competence Investment AG, as Landlord and Medsystems Diagnostics GmbH (former name of Bender MedSystems GmBH), as Tenant, dated December 2, 2002 (Portion of Vienna Bio Center Building EZ 4335, Land Register 1006 Highway, District Court Innere Stadt, Vienna, Austria), as amended on June 2, 2004 (Landlord is Blue Capital Europa Immbilien GmBH & Co. Fünfte Objekte Österreich KG), October 2007, October 2008 and October 2010.
|
10.34(25)‡
|
Offer Letter from the Company to John F. (Rick) Runkel dated October 6, 2008.
|
10.35(22)‡
|
Offer Letter from the Company to Andrew J. Last, Ph.D. dated November 2, 2009.
|
10.36(23)‡
|
Offer Letter from the Company to Timothy C. Barabe dated March 9, 2010.
|
10.37(26)‡
|
Offer Letter from the Company to Frank Witney, Ph.D. dated May 26, 2011.
|
10.38(27)‡
|
Offer Letter from the Company to David Weber dated December 2, 2011.
|
10.39(27)‡
|
Consulting Agreement between the Company and John F. Runkel, Jr. dated March 22, 2013.
|
10.40(27)‡
|
Separation Agreement between the Company and John F. Runkel Jr. dated March 29, 2013.
|
10.41(28)‡
|
Offer Letter from the Company to Gavin Wood dated May 20, 2013.
|
10.42(28)‡
|
Separation Agreement between the Company and Timothy C. Barabe dated June 28, 2013.
|
10.43(8)‡
|
Form of Officer and Director Indemnification Agreement.
|
10.44(29)‡
|
Affymetrix, Inc. Change of Control Plan, as amended through May 14, 2010.
|
10.45(30)‡
|
Executive Severance Policy (Amended as of May 11, 2012).
|
10.46(31)
|
Settlement and Release Agreement dated January 9, 2008 between the Company and Illumina, Inc.
|
10.47(32)
|
Stipulation of Settlement regarding the Affymetrix Derivative Litigation in the United States District Court, Northern District of California.
|
10.48(33)
|
Letter Agreement dated as of January 21, 2012 between the Company and Tang Capital Partners, LP.
|
10.49(6)
|
Credit Agreement dated as of June 25, 2012 by and among the Company and its subsidiaries, General Electric Capital Corporation, Silicon Valley Bank and the other financial institutions and their securities affiliates party thereto.
|
10.50(24)
|
First Amendment to Credit Agreement dated as of July 20, 2012.
|
10.51(24)
|
Second Amendment to Credit Agreement dated as of December 5, 2012.
|
10.52(27)
|
Third Amendment to Credit Agreement dated April 8, 2013.
|
10.53(34)
|
Fourth Amendment to Credit Agreement dated October 17, 2013.
|
12
|
Statement regarding computation of Consolidated Ratio of Earnings to Fixed Charges.
|
21
|
List of Subsidiaries.
|
23
|
Consent of Independent Registered Public Accounting Firm.
|
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
EX-101.INS
|
XBRL Instance Document
|
EX-101.SCH
|
XBRL Taxonomy Extension Schema Document
|
EX-101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
EX-101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
EX-101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
EX-101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(1)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on March 2, 2009 (File No. 000-28218).
|
(2)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on February 28, 2012 (File No. 000-28218).
|
(3)
|
Incorporated by reference to Registrant's Current Report on Form 8-K as filed on May 31, 2012 (File No. 000-28218).
|
(4)
|
Incorporated by reference to Registrant's Current Report on Form 8-K as filed on June 13, 2000 (File No. 000-28218).
|
(5)
|
Incorporated by reference to Registrant's Quarterly Report on Form 10-Q as filed on August 7, 2009 (File No. 000-28218).
|
(6)
|
Incorporated by reference to Registrant's Current Report on Form 8-K as filed on June 25, 2012 (File No. 000-28218).
|
(7)
|
Incorporated by reference to Registrant's Registration Statement on Form S-1 (File No. 333-3648), as amended.
|
(8)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on March 31, 1999 (File No. 000-28218).
|
(9)
|
Incorporated by reference to Registrant's Registration Statement on Form S-3 as filed on July 12, 1999 (File No. 333-82685), as amended.
|
(10)
|
Incorporated by reference to Registrant's Quarterly Report on Form 10-Q as filed on May 15, 2001 (File No. 000-28218).
|
(11)
|
Incorporated by reference to Registrant's Registration Statement on Form S-8 as filed on May 17, 2010 (File No. 333-166894).
|
(12)
|
Incorporated by reference to Registrant's Quarterly Report on Form 10-Q as filed on November 9, 2004 (File No. 000-28218).
|
(13)
|
Incorporated by reference to Registrant's Registration Statement on Form S-8 as filed on April 18, 2001 (File No. 333-59158).
|
(14)
|
Incorporated by reference to Registrant's Registration Statement on Form S-8 as filed on September 1, 2011 (File No. 333-176638).
|
(15)
|
Incorporated by reference to Registrant's Registration Statement on Form S-8 as filed on June 29, 2012 (File No. 333-182456).
|
(16)
|
Incorporated by reference to Registrant's Quarterly Report on Form 10-Q as filed on August 14, 1996 (File No. 000-28218).
|
(17)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on March 16, 2005 (File No. 000-28218).
|
(18)
|
Incorporated by reference to Registrant's Current Report on Form 8-K as filed on July 15, 2011 (File No. 000-28218).
|
(19)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on March 15, 2004 (File No. 000-28218).
|
(20)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on March 9, 2006 (File No. 000-28218).
|
(21)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on February 28, 2011 (File No. 000-28218).
|
(22)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on March 1, 2010 (File No. 000-28218).
|
(23)
|
Incorporated by reference to Registrant's Quarterly Report on Form 10-Q as filed on May 6, 2010 (File No. 000-28218).
|
(24)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on March 4, 2013 (File No. 000-28218).
|
(25)
|
Incorporated by reference to Registrant's Quarterly Report on Form 10-Q as filed on November 7, 2008 (File No. 000-28218).
|
(26)
|
Incorporated by reference to Registrant's Current Report on Form 8-K/A as filed on August 4, 2011 (File No. 000-28218).
|
(27)
|
Incorporated by reference to Registrant's Quarterly Report on Form 10-Q as filed on May 1, 2013 (File No. 000-28218).
|
(28)
|
Incorporated by reference to Registrant's Quarterly Report on Form 10-Q as filed on August 6, 2013 (File No. 000-28218)
|
(29)
|
Incorporated by reference to Registrant's Current Report on Form 8-K as filed on May 18, 2010 (File No. 000-28218).
|
(30)
|
Incorporated by reference to Registrant's Quarterly Report on Form 10-Q as filed on August 9, 2012 (File No. 000-28218).
|
(31)
|
Incorporated by reference to Registrant's Annual Report on Form 10-K as filed on February 29, 2008 (File No. 000-28218).
|
(32)
|
Incorporated by reference to Registrant's Current Report on Form 8-K as filed on May 20, 2009 (File No. 000-28218).
|
(33)
|
Incorporated by reference to Registrant's Schedule TO as filed on February 3, 2012 (File No. 005-48829).
|
(34)
|
Incorporated by reference to Registrant's Current Report on Form 8-K as filed on October 21, 2013 (File No. 000-28218).
|
‡
|
Management contract, compensatory plan, contract or arrangement
|
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