Affymetrix Reports First Quarter 2010 Results

Affymetrix, Inc., (NASDAQ:AFFX) today reported its operating results for the first quarter of 2010. Total revenue for the quarter was $80.2 million, as compared to total revenue of $78.6 million in the first quarter of 2009.

For the first quarter of 2010, product revenue was $73.4 million, service revenue was $4.5 million, and royalties and other revenue were $2.3 million. This compares to first quarter 2009 product revenue of $64.9 million, service revenue of $11.6 million, and royalties and other revenue of $2.1 million. Affymetrix shipped 40 systems in the first quarter of 2010.

The Company reported a net loss of approximately $9.6 million, or $0.14 per diluted share, in the first quarter of 2010 which included an impairment charge of $4.9 million, or $0.07 per diluted share, on a nonmarketable investment. This compares to net loss of $25.2 million, or $0.37 per diluted share, in the same period of 2009 which included a pretax restructuring charge of $2.0 million, or $0.03 per diluted share.

For the first quarter of 2010, cost of product sales was $28.5 million compared to $34.4 million in the same period of 2009, which included $4.6 million of manufacturing consolidated-related costs. Cost of services and other was $4.6 million compared to $7.6 million in the same period of 2009.

Product gross margin was 61.3 percent, as compared to 47.0 percent in the same period of 2009.

For the first quarter of 2010, operating expenses were $49.9 million as compared to operating expenses of $57.2 million, which included restructuring charges of $2.0 million, in the first quarter of 2009.

"Fiscal 2010 is off to a good start,” stated Kevin King, President and CEO. "In the first quarter we generated double-digit growth in product revenue, achieved significant year over year improvements to our operating model and generated a positive operating cash flow for the quarter.”

Quarterly Highlights

• In March, the Company announced the launch of the GeneAtlas™ System, a complete, personal solution for processing Affymetrix arrays and characterizing changes in gene expression in a variety of research applications. The system is compact, affordable and easy to use, making array-based gene expression technology more accessible than ever before.
• The Company appointed Jami Dover Nachtsheim and Nelson C. Chan to the board of directors, effective March 8, 2010. The board appointed Ms. Nachtsheim to the Compensation Committee and Mr. Chan to the Audit Committee.
• The Company appointed Timothy Barabe as Executive Vice President and Chief Financial Officer. Mr. Barabe will lead the Company’s financial functions as well as the treasury, investor relations, and information technology departments, reporting to Kevin King.
• Affymetrix and The Jackson Laboratory announced the full commercial launch of the Affymetrix® Mouse Diversity Genotyping Array. This is the first high-density genotyping array that enables researchers to study the complexity of the mouse genome and the diversity among mouse strains. Because mice and humans share genomes of similar size, content, and organization, mice studies are a fundamental component of human health research.

Affymetrix's management team will host a conference call on April 21, 2010 at 2:00 p.m. PT to review its operating results for the first quarter of 2010. A live webcast can be accessed by visiting the Investor Relations section of the Company’s website at www.affymetrix.com. In addition, investors and other interested parties can listen by dialing domestic: (866) 500-AFFX, international: (706) 643-2771.

A replay of this call will be available from 5:00 p.m. PT on April 21, 2010 until 8:00 p.m. PT on April 28, 2010 at the following numbers: domestic: (800) 642-1687, international: (706) 645-9291. The passcode for both replays is 69103813. An archived webcast of the conference call will be available under the Investor Relations section of the Company's website.

About Affymetrix

Affymetrix technology is used by the world's top pharmaceutical, diagnostic, and biotechnology companies, as well as leading academic, government, and nonprofit research institutes. More than 1,900 systems have been shipped around the world and more than 21,000 peer-reviewed papers have been published using the technology. Affymetrix is headquartered in Santa Clara, Calif., and has manufacturing facilities in Cleveland, Ohio, and Singapore. The Company has about 1,000 employees worldwide and maintains sales and distribution operations across Europe and Asia. For more information about Affymetrix, please visit the Company's website.

All statements in this press release that are not historical are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act as amended, including statements regarding Affymetrix' "expectations," "beliefs," "hopes," "intentions," "strategies" or the like. Such statements are subject to risks and uncertainties that could cause actual results to differ materially for Affymetrix from those projected, including, but not limited to: risk relating to the Company’s ability to successfully commercialize new products, risk relating to past and future acquisitions, including the ability of the Company to successfully integrate such acquisitions into its existing business; risks of the Company's ability to achieve and sustain higher levels of revenue, higher gross margins and reduced operating expenses; uncertainties relating to technological approaches, risks associated with manufacturing and product development; personnel retention; uncertainties relating to cost and pricing of Affymetrix products; dependence on collaborative partners; uncertainties relating to sole-source suppliers; uncertainties relating to FDA and other regulatory approvals; competition; risks relating to intellectual property of others and the uncertainties of patent protection and litigation. These and other risk factors are discussed in Affymetrix' Annual Report on Form 10-K for the year ended December 31, 2009, and other SEC reports, including its Quarterly Reports on Form 10-Q for subsequent quarterly periods. Affymetrix expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Affymetrix' expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

PLEASE NOTE:

Affymetrix, the Affymetrix logo, GeneChip, and all other trademarks are the property of Affymetrix, Inc.

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