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Pacific Biosciences of California, Inc. Announces Second Quarter 2018 Financial Results

August 2, 2018

MENLO PARK, Calif., Aug. 02, 2018 (GLOBE NEWSWIRE) -- Pacific Biosciences of California, Inc. (NASDAQ: PACB) today announced financial results for its second quarter ended June 30, 2018.

Total revenue for the second quarter of 2018 was $21.6 million, compared to $20.1 million for the second quarter of 2017.

Gross profit for the second quarter of 2018 was $8.9 million, resulting in a gross margin of 41.1%. Gross profit for the second quarter of 2017 was $8.0 million, resulting in a gross margin of 39.9%.

Operating expenses for the second quarter of 2018 totaled $30.6 million, compared to $32.4 million for the second quarter of 2017. Operating expenses for the second quarter of 2018 and 2017 included non-cash stock-based compensation of $4.6 million and $4.4 million, respectively.

Net loss for the second quarter of 2018 was $22.5 million, compared to $25.5 million for the second quarter of 2017.

Cash, cash equivalents and investments, excluding restricted cash, at June 30, 2018 totaled $63.5 million, compared to $62.9 million at December 31, 2017.

Quarterly Conference Call Information

Management will host a quarterly conference call to discuss its second quarter ended June 30, 2018 results today at 4:30 p.m. Eastern Time. Investors may listen to the call by dialing 1.888.366.7247, or if outside the U.S., by dialing +1.707.287.9330, using Conference ID # 2075988. 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 sequencing systems to help scientists resolve genetically complex problems. Based on its novel Single Molecule, Real-Time (SMRT®) Technology, Pacific Biosciences’ products enable: de novo genome assembly to finish genomes in order to more fully identify, annotate and decipher genomic structures; full-length transcript analysis to improve annotations in reference genomes, characterize alternatively spliced isoforms in important gene families, and find novel genes; targeted sequencing to more comprehensively characterize genetic variations; and real-time kinetic information for epigenome characterization. Pacific Biosciences’ technology provides high accuracy, ultra-long reads, uniform coverage, and the ability to simultaneously detect epigenetic changes. PacBio® sequencing systems, including consumables and software, provide a simple, fast, end-to-end workflow for SMRT Sequencing. More information is available at www.pacb.com.

Forward-Looking Statements

All statements in this press release that are not historical are forward-looking statements, including, among other things, statements relating to the timeline for Pacific Biosciences’ potential development of products, future uses, quality or performance of, or benefits of using, products or technologies and other future events. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, changes in circumstances and other factors that are, in some cases, beyond Pacific Biosciences’ control and could cause actual results to differ materially from the information expressed or implied by forward-looking statements made in this press release. Factors that could materially affect actual results can be found in Pacific Biosciences’ most recent filings with the Securities and Exchange Commission, including Pacific Biosciences’ most recent reports on Forms 8-K, 10-K and 10-Q, and include those listed under the caption “Risk Factors.” Pacific Biosciences undertakes no obligation to revise or update information in this press release to reflect events or circumstances in the future, even if new information becomes available.

Contact: Trevin Rard 650.521.8450ir@pacificbiosciences.com

Pacific Biosciences of California, Inc. Unaudited Condensed Consolidated Statement of Operations (amounts in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, ------------------------ ------------------------- 2018 2017 2018 2017 Revenue: Product revenue $ 18,485 $ 16,548 $ 34,767 $ 37,842 Service and other revenue 3,093 3,525 6,173 7,146 - ------- - - ------- - - ------- - - ------- - Total revenue 21,578 20,073 40,940 44,988 Cost of Revenue: Cost of product revenue 9,858 8,155 18,877 19,517 Cost of service and other revenue 2,858 3,917 5,905 8,533 - ------- - - ------- - - ------- - - ------- - Total cost of revenue 12,716 12,072 24,782 28,050 - ------- - - ------- - - ------- - - ------- - Gross profit 8,862 8,001 16,158 16,938 Operating Expense: Research and development 15,664 16,883 31,975 33,854 Sales, general and administrative 14,943 15,505 29,877 30,770 - ------- - - ------- - - ------- - - ------- - Total operating expense 30,607 32,388 61,852 64,624 Operating loss (21,745 ) (24,387 ) (45,694 ) (47,686 ) Interest expense (598 ) (826 ) (1,179 ) (1,664 ) Other income (expense), net (197 ) (326 ) 154 (56 ) - ------- - - ------- - - ------- - - ------- - Net loss $ (22,540 ) $ (25,539 ) $ (46,719 ) $ (49,406 ) - ------- - - ------- - - ------- - - ------- - Basic and diluted net loss per share $ (0.17 ) $ (0.26 ) $ (0.37 ) $ (0.52 ) - ------- - - ------- - - ------- - - ------- - Shares used in computing basic and diluted net loss per 131,882 97,360 127,847 95,177 share - ------- - - ------- - - ------- - - ------- -

Pacific Biosciences of California, Inc. Unaudited Condensed Consolidated Balance Sheets (amounts in thousands) June 30, December 31, 2018 2017 --------- --------- Assets Cash and investments $ 63,491 $ 62,872 Accounts receivable 7,446 13,433 Inventory 23,440 23,065 Prepaid and other current assets 2,035 2,249 Property and equipment 36,103 37,920 Long-term restricted cash 4,500 4,500 Other long-term Assets 43 45 - ------- - ------- Total Assets $ 137,058 $ 144,084 - ------- - ------- Liabilities and Stockholders’ Equity Accounts payable $ 4,169 $ 9,093 Accrued expenses 10,935 12,618 Deferred service revenue 7,469 7,394 Deferred rent 14,106 14,453 Other liabilities 744 605 Financing derivative 40 183 Notes payable 14,121 13,635 Stockholders’ equity 85,474 86,103 - ------- - ------- Total Liabilities and Stockholders’ Equity $ 137,058 $ 144,084 - ------- - -------

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