Fluidigm’s Third Quarter Product Revenue Triples

In a struggling economic environment there are a few bright spots to be found. Fluidigm Corporation is one of them. The company today announced that its third quarter product revenue tripled year-over-year, to $4.2 million, compared to $1.4 million in the third quarter of 2007.

Product revenue consists of sales of single-use Integrated Fluidic Circuits (IFCs), instruments, software, reagents, and services. The company communicated that it had seen broad customer acceptance of its newest IFC introduced in June 2008, the 96.96 Dynamic Array that can perform 9,216 simultaneous experiments. Fluidigm also experienced continued strong growth of its flagship product -- the BioMark™ System for Genetic Analysis – and considered these examples as positive indicators for the future.

The company posted total revenue of $4.6 million (including grant and collaboration revenue) -- an increase of 124 percent over the third quarter of 2007.

Net loss was $8.9 million in the third quarter of 2008 compared to a net loss of $5.9 million in the third quarter of 2007. This year’s third quarter net loss included $3.6 million in expenses related to the company’s withdrawn Initial Public Offering (IPO). Fluidigm was essentially the only company active in the IPO market and was midway through its roadshow when investors’ attention was diverted by the volatility that hit the financial markets in September. The company withdrew its IPO registration on September 25, 2008.

“We sold record numbers of IFCs and BioMark systems this quarter. BioMark system sales volume doubled compared to the second quarter of 2008. This performance drove the strong business result for the quarter.” said Gajus Worthington, Fluidigm President and Chief Executive Officer. “Our high-throughput genotyping customers ramped into high volume this quarter. This generated significant global interest in our IFC technology for various high-throughput genotyping applications.”

Fluidigm acknowledged that it is unusual to issue an earnings statement when the company is not public. “We felt an obligation to update the financial world after we had promoted our company and its business prospects during our IPO roadshow. We do not plan to disclose our financial data regularly,” explained Worthington.

The company’s product gross margin increased to 36 percent, up from 29 percent in the year-ago quarter. In the first nine months of 2008, Fluidigm’s product gross margin climbed to 34 percent from 14 percent for the same period a year ago. Operating expenses, excluding IPO expenses, were $7.9 million in the third quarter of 2008 compared to $6.9 million in the third quarter of 2007 – an increase of 15 percent.

During the quarter, Fluidigm established vendor-specific objective evidence of fair value of undelivered software maintenance obligations. As a result, beginning in the third quarter of 2008, the company recognized the full revenue from system sales either upon installation or upon shipment. Previously, the company deferred the revenue from most instrument sales and recognized it over the service period of the software maintenance obligation. Consequently, the deferred product revenue balance decreased from $2.6 million as of the end of the second quarter of 2008 to $1.9 million as of the end of the third quarter.

“As we look to the balance of this year, our business continues to be healthy,” added Worthington. “We are investing carefully to ensure we continue to deliver what our customers need to be successful. While we are working to control our expenses even as revenues grow, we are expanding our sales and marketing capabilities to capture our growing business opportunities.”

Net cash outflow for the third quarter of 2008, including operating activities, debt repayment and capital expenditures declined by $2.2 million compared to the second quarter of 2008.

Quarterly Business Highlights

• Researchers at the Fred Hutchinson Cancer Research Center, using Fluidigm’s Dynamic Arrays to conduct digital PCR, developed a method that allows for the early detection of a common mechanism of resistance to drug treatment for chronic myeloid leukemia.
• Scientists at the Scripps Research Institute used Fluidigm's TOPAZ® Protein Crystallization System to help uncover the structure of a critical protein from the Ebola Virus that allows viral entry in human cells.
• LGC, an international leader in laboratory services and measurement standards, purchased the first BioMark System for Genetic Analysis in the United Kingdom.
• Fluidigm added distributors Bio-Gene Technology Ltd. in Hong Kong, and Millennium Science Pty. Ltd. for Australia and New Zealand, during the quarter.

About Fluidigm

Fluidigm develops, manufactures and markets proprietary Integrated Fluidic Circuit (IFC) systems that significantly improve productivity in life science research. Fluidigm’s IFCs enable the simultaneous performance of thousands of sophisticated biochemical measurements in extremely minute volumes. These “integrated circuits for biology” are made possible by miniaturizing and integrating liquid handling components on a single microfabricated device. Fluidigm’s IFC systems, consisting of instrumentation, software and single-use IFCs, increase throughput, decrease costs and enhance sensitivity compared to conventional laboratory systems. Fluidigm products have not been cleared or approved by the Food and Drug Administration for use as a diagnostic and are only available for research use.

For more information, please visit www.Fluidigm.com.

Forward-looking Statements

This press release includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “will,” “would,” “could,” and similar expressions or phrases, or the negative of those expressions or phrases identify forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on our projections of the future that are subject to known and unknown risks and uncertainties and other factors that may cause our actual results, level of activity, performance or achievements expressed or implied by these forward-looking statements, to differ. All forward looking statements are based on information currently available to Fluidigm, and Fluidigm assumes no obligation to update any such forward-looking statements.

Fluidigm, the Fluidigm logo, Topaz, BioMark, and NanoFlex are trademarks of Fluidigm Corporation and all other trademarks are the property of their respective owners.