SOUTH SAN FRANCISCO, Calif., Feb. 08, 2017 (GLOBE NEWSWIRE) -- Fluidigm Corporation (NASDAQ:FLDM) today announced its financial results for the fourth quarter and full year ended December 31, 2016. 

Total revenue for the fourth quarter of 2016 was $25.1 million, an increase of 13% from $22.2 million in the third quarter of 2016 and a decrease of 18% from $30.7 million in the fourth quarter of 2015. GAAP net loss for the fourth quarter of 2016 was $17.7 million, compared with a GAAP net loss of $12.9 million for the fourth quarter of 2015. Non-GAAP net loss for the fourth quarter of 2016 was $9.3 million, compared with a $6.9 million non-GAAP net loss for the fourth quarter of 2015 (see accompanying table for reconciliation of GAAP and non-GAAP measures).

Total revenue for the full year 2016 was $104.4 million, a decrease of 9% from $114.7 million for 2015. GAAP net loss for the full year 2016 was $76.0 million, compared to a net loss of $53.3 million for 2015. Non-GAAP net loss for 2016 was $41.6 million, compared with a $24.4 million non-GAAP net loss for 2015.

“While we are encouraged by our fourth quarter progress and sequential revenue growth, we are not satisfied. We have more work ahead of us. We are firmly focused on restoring momentum and delivering on our core strategic priorities of fostering innovation and partnerships; increasing operational efficiency; and improving financial discipline. We are confident that our strategic initiatives will position us for sustainable growth and long-term stockholder value creation. However, we view 2017 as a transition year, since it will take time to execute and realize the benefits of our action plan,” said Chris Linthwaite, President and CEO.

Fourth Quarter 2016 Performance

Total revenue of $25.1 million by category:

• Instrument revenue of $10.7 million decreased 32% from $15.7 million in the year ago period due to softness in instrument sales and driven primarily by decreased revenue from Helios™ systems and to a lesser extent C1™ systems.
• Consumables revenue of $10.3 million decreased 12% from $11.7 million in the year ago period due to lower revenue from integrated fluidic circuits (IFCs).
• Service revenue of $4.1 million in the fourth quarter increased 26% from $3.3 million in the year ago period mainly due to increased service contracts.

Product revenue of $20.9 million by market:

• Genomics product revenue of $12.3 million decreased 26% from $16.7 million in the prior year period driven primarily by decreased revenue from C1 and Access Array™ products.
• Mass cytometry product revenue of $8.6 million decreased 20% from $10.7 million in the prior year period due to decreased revenue from Helios systems, partly offset by increased revenue from consumables and imaging mass cytometry instruments. On a sequential basis, revenue from Helios systems increased 59% quarter-over-quarter.

Total revenue by geographic area:

Product margin:

• GAAP product margin was 52.1% in the fourth quarter of 2016 versus 58.1% in the year ago period. Non-GAAP product margin was 69.6% in the fourth quarter of 2016, compared with 70.0% in the year ago period. Non-GAAP product margin excludes the effects of amortization of developed technology, depreciation and amortization, and stock-based compensation expense (see accompanying table for reconciliation of GAAP and non-GAAP product margins).

Cash, cash equivalents, and investments as of December 31, 2016:

• As of December 31, 2016, Fluidigm had $59.4 million in cash, cash equivalents, and investments, compared with $71.2 million as of September 30, 2016.

Full Year 2016 Performance

Total revenue of $104.4 million by category:

• Instrument revenue of $46.8 million decreased 20% from $58.5 million in 2015, due to decreased revenue across most instruments, driven primarily by lower revenue from genomics instruments, particularly C1 systems.
• Consumables revenue of $42.2 million decreased 3% from $43.7 million in 2015, driven by lower revenue from IFCs, particularly Access Array IFCs, partially offset by Helios consumables.
• Service revenue of $15.2 million increased 23% from $12.3 million in 2015 mainly due to increased service contracts.

Product revenue of $89.0 million by market:

• Genomics product revenue of $60.3 million decreased 19% from $74.7 million in 2015, primarily driven by C1 and Access Array products.
• Mass cytometry product revenue of $28.7 million increased 5% from $27.4 million in 2015 due to increased revenue from consumables, partially offset by decreased revenue from Helios systems.

Active installed base of approximately 1,340 instruments as of December 31, 2016:

• The active installed base excludes instruments: (1) sold over six quarters ago and (2) for which customers have not purchased consumables in the last six quarters.
• As a reference, the total installed base was approximately 1,855 at the end of the fourth quarter 2016.

Strategic Priorities

Foster Innovation and Partnerships

• Delivering on our commitments on products innovation.
  -- In December 2016, Fluidigm commenced commercial delivery of imaging mass cytometry systems to high‑value customers. Imaging mass cytometry uniquely expands upon the capabilities of mass cytometry to enable high-dimensional biomarker detection from tissues and cells in spatial context.
  -- Fluidigm released a new medium‑cell high‑throughput integrated fluidic circuit (HT IFC) with higher single-cell capture performance on the C1 system in December 2016. Capturing up to 800 medium-size (10–17 µm) cells, the new medium‑cell HT IFC provides industry-leading sensitivity for high‑throughput automated single‑cell sequencing.
  -- Fluidigm launched a modular set of high-parameter Maxpar® mass cytometry panels for immuno‑oncology research in early November 2016. These comprehensive panels allow researchers to simultaneously profile T cell subpopulations from limited or precious samples with up to 34 highly informative markers, including checkpoint response. The panels can be easily combined for complete coverage or flexibly customized with access to hundreds of commercially available preconjugated antibodies and custom conjugation options.
• Entering into strategic partnerships. Fluidigm and GenomOncology entered into a distribution agreement in November 2016 to co-market the GO Clinical Workbench™ for molecular interpretation of somatic variants identified using Fluidigm systems. The combined offering will enable laboratories to achieve greater workflow efficiencies and productivity from next-generation sequencing library preparation, variant annotation, and reporting.

Increase Operational Efficiency and Reduce Costs

• Re-examining our cost structure. We established an Operations Council to identify and drive projects for significant cost savings and to enhance the efficiency and efficacy of our global operations and related functions.

Improve Financial Discipline

• Employing disciplined capital deployment without sacrificing growth. We established a Business Transformation Office to realign investments, infrastructure, organization, talent capital, and functional capability with the new strategic direction of the business.

2017 Outlook

Increase Rigor in Cash Management

• We have taken definitive actions to realign and right-size our organization including initiatives with respect to headcount and other operational efficiencies. As a result, we expect to realize approximately $8 million in reduced operating expenses in 2017 before severance expenses.
• We expect to begin realizing the benefit of these cost reduction initiatives in the second quarter of 2017.

First Quarter 2017 Guidance

• Total revenue for Q1 2017 is projected to be approximately flat compared to Q4 2016.
• GAAP operating expenses, including estimated severance costs, are projected to be in the range of $33 million to $34.5 million.
• Non-GAAP operating expenses are projected to be in the range of $28.5 million to $30 million, excluding stock-based compensation and depreciation and amortization expense of approximately $3 million and $1.5 million, respectively.
• Total cash outflow (includes capital spending, interest payment, and severance expenses) is projected to be in the range of $11 million to $12 million. Fluidigm’s semi-annual interest payments on outstanding convertible debt, of approximately $2.8 million, are paid in the first and third quarters of the year.

2017 Projected Annualized Pull-through

Conference Call Information
Fluidigm will host a conference call today, February 8, 2017, at 2:00 p.m. PT (5:00 p.m. ET). Individuals interested in listening to the conference call may do so by dialing (877) 556-5248 for domestic callers, or (720) 545-0029 for international callers. Please reference Conference ID 33823591. Interested parties may access the live teleconference in the Investor Relations section of the company’s website at: http://investors.fluidigm.com/events.cfm. The link will not be active until 1:45 p.m. PT (4:45 p.m. ET) on February 8, 2017.  

A telephone replay of the teleconference will be available 90 minutes after the end of the call at (855) 859-2056 (domestic toll-free), or (404) 537-3406 (international toll), Conference ID 33823591. The conference call will also be archived on the Fluidigm Investors page at: http://investors.fluidigm.com/.

Statement Regarding Use of Non-GAAP Financial Information
Fluidigm has presented certain financial information in accordance with U.S. GAAP and also on a non-GAAP basis for the fourth quarters of 2016 and 2015 and fiscal years ended December 31, 2016 and 2015. Management believes that non-GAAP financial measures, taken in conjunction with GAAP financial measures, provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of the company’s core operating results. Management uses non-GAAP measures to compare the company’s performance relative to forecasts and strategic plans and to benchmark the company’s performance externally against competitors. Our estimates of forward-looking non-GAAP operating expenses exclude estimates for stock-based compensation expense, depreciation and amortization; loss on disposal of property and equipment; future changes relating to developed and acquired technologies; other intangible assets; and income taxes, among other items, certain of which are presented in the table accompanying our earnings release. The time and amount of certain material items needed to estimate non-GAAP financial measures are inherently unpredictable or outside of our controls to predict. Accordingly, we cannot provide a quantitative reconciliation of our non-GAAP margins without a reasonable effort. Material changes to any of these items could have a significant effect on guidance and future GAAP results. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of the company’s operating results as reported under U.S. GAAP. Fluidigm encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP operating results are presented in the accompanying tables of this release.

Use of Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding planned strategic initiatives and expected timing and benefits of such initiatives, business prospects for 2017, the planned uses and expected benefits to customers of recently-introduced products, plans to increase operational efficiency and improve financial discipline, expected reductions in operating expenses based on efficiency initiatives, and the timing and amount of such reductions, projected revenues, expenses and cash flows for the first quarter of 2017, and projected annualized consumables pull-through for 2017. Forward‑looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from currently anticipated results, including but not limited to risks relating to the future financial performance of Fluidigm product lines; challenges inherent in developing, manufacturing, launching, marketing, and selling new products; potential product performance and quality issues; the possible loss of key employees, customers, or suppliers; intellectual property risks; competition; Fluidigm research and development, sales, marketing, and distribution plans and capabilities; reduction in research and development spending or changes in budget priorities by customers; interruptions or delays in the supply of components or materials for, or manufacturing of, its products; seasonal variations in customer operations; unanticipated increases in costs or expenses; and risks associated with international operations. Information on these and additional risks and uncertainties and other information affecting Fluidigm’s business and operating results is contained in Fluidigm’s Annual Report on Form 10-K for the year ended December 31, 2015, and in its other filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2016. These forward-looking statements speak only as of the date hereof. Fluidigm disclaims any obligation to update these forward-looking statements except as may be required by law.

About Fluidigm
Fluidigm (NASDAQ:FLDM) develops, manufactures, and markets life science analytical and preparatory systems for markets such as mass cytometry, high-throughput genomics, and single-cell genomics. We sell to leading academic institutions, clinical research laboratories, and pharmaceutical, biotechnology, and agricultural biotechnology companies worldwide. Our systems are based on proprietary microfluidics and multiparameter mass cytometry technology and are designed to significantly simplify experimental workflow, increase throughput, and reduce costs while providing excellent data quality. Fluidigm products are provided for Research Use Only. Not for use in diagnostic procedures.

We use our website (www.fluidigm.com), corporate Twitter account (@fluidigm), Facebook page (https://www.facebook.com/Fluidigm), and LinkedIn page (https://www.linkedin.com/company/fluidigm-corporation) as channels of distribution of information about our products, our planned financial and other announcements, our attendance at upcoming investor and industry conferences, and other matters. Such information may be deemed material information, and we may use these channels to comply with our disclosure obligations under Regulation FD. Therefore, investors should monitor our website and our social media accounts in addition to following our press releases, SEC filings, public conference calls, and webcasts.

Fluidigm, the Fluidigm logo, Access Array, Biomark, C1, EP1, Helios, Juno and Maxpar are trademarks or registered trademarks of Fluidigm Corporation.