July 26, 2012

Pacific Biosciences of California, Inc. Announces Second Quarter 2012 Financial Results

MENLO PARK, Calif., July 26, 2012 (GLOBE NEWSWIRE) -- Pacific Biosciences of California, Inc. (Nasdaq:PACB) today announced financial results for the second quarter ended June 30, 2012.

During the second quarter of 2012, the Company recognized revenue from installations of its PacBio RS systems, SMRT® Cell and reagent consumables, instrument service contracts and grants. Revenue for the second quarter of 2012 totaled $7.3 million and net loss was $22.5 million.

Gross profit for the second quarter of 2012 totaled $0.3 million, resulting in a gross margin of 4%, compared to a $0.2 million gross loss for the first quarter of 2012 and a negative margin of 2%. Gross profit for the second quarter of 2011 was $7.9 million representing a gross margin of 74%. The margin for the second quarter 2011 reflects the positive margin impact of instrument components expensed during earlier periods when the Company was in the development stage.

Operating expenses comprised of research and development and selling, general and administrative expenses for the second quarter of 2012 totaled $22.8 million, representing a 17% decrease compared to $27.4 million for the first quarter of 2012.   Operating expenses in the second quarter of 2012 include $2.5 million of non-cash stock-based compensation with $1.1 million and $1.4 million recorded in research and development and selling, general and administrative expenses, respectively. Operating expenses in the second quarter of 2011 were $30.6 million.

Research and development expense during the second quarter of 2012 totaled $11.3 million, representing a 7% decrease compared to $12.1 million for the first quarter of 2012. Selling, general and administrative expense during the second quarter of 2012 totaled $11.5 million, representing a 24% decrease compared to $15.3 million for the first quarter of 2012. The $3.8 million decrease in quarterly SG&A expense reflects a $3.2 million decrease in outside legal expense as we settled two intellectual property matters in the first quarter of 2012. During the second quarter of 2011, research and development expense totaled $19.5 million and selling, general and administrative expense totaled $11.0 million.

Cash and investments at June 30, 2012 totaled $137.1 million compared to $161.3 million at March 31, 2012.

The Company's system revenue backlog was less than $1.0 million as of June 30, 2012, which represents an order for one PacBio RS instrument received during the second quarter of 2012. Installation has been completed for all instruments that were in backlog as of March 31, 2012.

Quarterly Conference Call Information

Management will host a quarterly conference call to discuss its second quarter 2012  results today at 4:30pm Eastern / 1:30pm Pacific. Investors may listen to the call by dialing 888.366.7247, or if outside the U.S., by dialing +1.707.287.9330. The call will be webcast live and will be available for replay at Pacific Biosciences' website at http://investor.pacificbiosciences.com/.

About Pacific Biosciences

Pacific Biosciences of California, Inc. (Nasdaq:PACB) offers the PacBio® RS High Resolution Genetic Analyzer to help scientists solve genetically complex problems.  Based on its novel Single Molecule, Real-Time (SMRT®) technology, the company's products enable: targeted sequencing to more comprehensively characterize genetic variations; de novo genome assembly to more fully identify, annotate and decipher genomic structures; and DNA base modification identification to help characterize epigenetic regulation and DNA damage. By providing access to genetic information that was previously inaccessible, Pacific Biosciences enables scientists to increase their understanding of biological systems.

Forward-Looking Statements

This press release contains forward-looking statements relating to the Company's operations and operating results, including statements relating to the Company's revenue. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and that could materially affect actual results. Factors that could materially affect actual results can be found in Pacific Biosciences of California's filings with the Securities and Exchange Commission, including the most recently filed Quarterly Report on Form 10-Q, including those listed under the caption "Risk Factors." Pacific Biosciences of California expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law.

Pacific Biosciences of California, Inc.
Unaudited Consolidated Statement of Operations and Comprehensive Income
 (amounts in thousands, except per share amounts)
       
       
  Quarters Ended
  June 30, March 31, June 30,
  2012 2012 2011
Revenue:      
Product revenue  $ 5,827  $ 8,715  $ 10,148
Service and other revenue 1,284 1,053 192
Grant revenue 180 270 290
Total revenue 7,291 10,038 10,630
Cost of revenue:      
Cost of product revenue 5,382 8,607 2,537
Cost of service and other revenue 1,634 1,583 194
Total cost of revenue 7,016 10,190 2,731
 Gross profit (loss) 275 (152) 7,899
Operating expense:      
Research and development 11,272 12,073 19,546
Sales, general and administrative 11,558 15,285 11,016
Total operating expense 22,830 27,358 30,562
Operating loss (22,555) (27,510) (22,663)
Other income (expense), net 68 (70) 188
Net loss  $ (22,487)  $ (27,580)  $ (22,475)
       
Basic and diluted net loss per share ($0.40) ($0.50) ($0.42)
       
Shares used in computing basic and diluted net  55,658  55,201 53,414
 loss per share      
       
 Comprehensive loss  $ (22,547)  $ (27,502)  $ (22,297)
     
     
     
Pacific Biosciences of California, Inc.
Unaudited Consolidated Statement of Operations and Comprehensive Income
 (amounts in thousands, except per share amounts)
     
  Year to Date 
  June 30, June 30,
  2012 2011
Revenue:    
Product revenue  $ 14,542  $ 10,148
Service and other revenue 2,337 192
Grant revenue 450 560
Total revenue 17,329 10,900
Cost of revenue:    
Cost of product revenue 13,989 2,537
Cost of service and other revenue 3,217 194
Total cost of revenue 17,206 2,731
 Gross profit 123 8,169
Operating expense:    
Research and development 23,345 43,664
Sales, general and administrative 26,843 22,135
Total operating expense 50,188 65,799
Operating loss (50,065) (57,630)
Other income (expense), net (2) 346
Net loss  $ (50,067)  $ (57,284)
     
Basic and diluted net loss per share  $ (0.90)  $ (1.08)
     
Shares used in computing basic and  55,433 53,057
 diluted net loss per share    
     
  Comprehensive loss    (50,049)     (57,082) 
       
       
       
Pacific Biosciences of California, Inc.
Consolidated Balance Sheets
 (amounts in thousands, except per share amounts)
       
       
  June 30, March 31, December 31,
  2012 2012 2011 (1)
Assets (unaudited) (unaudited)  
Cash and investments  $ 137,108  $ 161,349  $ 177,434
Accounts receivable 3,371 1,505 4,557
Inventory 10,271 11,821 15,517
Prepaid and other current
assets
1,893 2,131 2,093
       
Total current assets 152,643 176,806 199,601
Property and equipment 16,937 17,592 18,398
Other assets 350 340 317
       
Total Assets  $ 169,930  $ 194,738  $ 218,316
       
Liabilities and Stockholders'
Equity
     
Accounts payable  $ 4,061  $ 4,250  $ 4,742
Deferred revenue 4,170 3,920 4,236
Accrued and other current
liabilities
6,695 11,626 10,398
       
Total current liabilities 14,926 19,796 19,376
Facility financing and
other non-current liabilities
6,800 7,039 7,477
Stockholders' equity 148,204 167,903 191,463
       
Total Liabilities and
Stockholders' Equity
 $ 169,930  $ 194,738  $ 218,316
       
Note 1: The condensed consolidated balance sheet at December 31, 2011 has been derived from the audited
consolidated financial statements at that date included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2011.
CONTACT: Trevin Rard

         650.521.8450

         ir@pacificbiosciences.com
Source: Pacific Biosciences of California, Inc.

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