Illumina, Inc. (ILMN) Earnings Call Transcript & Summary

Good morning. I want to welcome all of you to the Annual Meeting of the Stockholders of Illumina, Inc. I am Francis deSouza, Illumina's CEO, and I will preside as the Chairman of this meeting. It is 9:00 a.m., and I will call the meeting to order. This morning, our program will proceed as follows: first, we will conduct the official business of the 2021 Annual Meeting. Following that, we will open the meeting to a question-and-answer session. [Operator Instructions] I would like to begin by noting the presence at this meeting, Mr. Charles Dadswell, General Counsel and Secretary; and Mr. Sam Samad, Chief Financial Officer. Robert Bruning and Casey Hayes are also present, representing Ernst & Young, our independent public accountants. Mr. Dadswell has been appointed to act as Inspector of Elections to examine and tabulate proxies and ballots at the meeting. I will now turn the meeting over to him to cover the procedural portion of the meeting. Chuck?

Thank you, Francis. To begin, I'd like to mention that if any stockholder present who intends to vote but has not yet done so, you may vote online where indicated through the webcast portal for this meeting. You will need the control number provided with your proxy materials in order to vote. You may vote until the adjournment with the formal portion of the Annual Meeting, at which time, the polls will be closed. We have a list of registered stockholders of the company as of March 31, 2021, which shows that as of March 31, 2021, 145,982,666 shares of common stock were entitled to vote at the meeting. On or about April 16, 2021, the notice of the Annual Meeting of stockholders was mailed to all stockholders of record as of March 31, 2021. The list of stockholders will remain available for inspection by the stockholders through the webcast portal during the meeting. After the meeting, that will be filed with the records of the company. A preliminary count of the shares represented in person or by proxy at this meeting indicates that the holders of the majority of the outstanding shares of common stock of the company as of the record date, are present at the meeting in person or by proxy, thus constituting a quorum. The meeting is, therefore, duly convened and open for business. As stated in the notice of this meeting, there are 3 items to be considered and voted upon by the stockholders: first, to elect 6 director nominees named in the proxy, each of whom will serve for 1 year; second, to ratify the appointment of Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending January 2, 2022; and third, to hold an advisory vote to approve the compensation paid to the company's named executive officers as disclosed in the proxy. To expedite the flow of business at this meeting, we intend to adhere to the following order of business. Each of the matters to be acted upon by the stockholders at this meeting will be presented in the order reflected in the proxy statement. The first item is election of Directors. At this meeting, Ms. Caroline Dorsa; Dr. Robert Epstein, Dr. Scott Gottlieb; Dr. Gary Guthart; Mr. Phil Schiller; Mr. John Thompson, have been nominated for election to serve as directors until the 2022 Annual Stockholders Meeting. Each of our director nominees currently serves on the Board of Directors. Our bylaws require that a director nominee be elected only if he or she receives a majority of the votes cast with respect to his or her individual and uncontested election. If a nominee who currently serves as a director is not reelected, Delaware law provides that the director would continue to serve on the Board of Directors as a holdover Director. Under our corporate governance guidelines, each director submits in advance a contingent, irrevocable resignation that the Board may, at its discretion, accept or reject if stockholders do not reelect the director. In that situation, our Governance Committee would make a recommendation to the Board on whether to accept or reject the resignation or to take other action. The second item to be voted upon is the ratification of Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending January 2, 2022. The vote of a majority of the shares present and entitled to vote at this meeting is required to approve this item. The third item is to hold an advisory vote to approve the compensation paid to the company's named executive officers as disclosed in the proxy statement. The vote of a majority of the shares present and entitled to vote at this meeting is required to approve this item. We will now turn to the preliminary results of voting. Based on the preliminary examination of the proxies reviewed and the online votes received, the proposed slate of directors has received sufficient votes to elect each of the nominees to the Board of Directors. The proposal to ratify Ernst & Young as the company's independent registered public accounting firm has also received sufficient votes to be approved. And the proposal to approve, on an advisory basis, the compensation paid to the company's named executive officers as disclosed in the proxy statement, has been approved. I hereby direct the results -- the final results of the voting to be incorporated into the minutes of this meeting. The final voting results will be disclosed on Form 8-K to be filed with the Securities and Exchange Commission within the next 4 business days. Francis, back to you.

Thank you, Chuck. Because no other stockholder gave notice of an intent to nominate directors or to propose other business at this meeting, in each case pursuant to the company's bylaws, this concludes the time for presentation of nominations and proposals. Accordingly, the meeting is adjourned. Before we address questions or comments that relate to the business of the company, let me first qualify any remarks by emphasizing that during the course of this discussion, we may make forward-looking statements regarding future events or the performance -- or the future performance of the company. Actual events or results could, of course, differ materially. We are not undertaking any obligation to provide updates in the future. We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's most recent forms 10-K and 10-Q and other reports filed with the SEC. These documents contain and identify important factors that could cause actual results to differ materially from those contained in any forward-looking statements.

At this time, we will spend up to 15 minutes to address questions and comments that relate to the business of the company. If time doesn't permit us to answer all of the submitted questions, we intend to answer them in writing on our Investor Relations website at www.investor.illumina.com. after the meeting. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

Our first question from a shareholder is, do you plan -- do you have plans to offer a dividend?

Yes. So this is Sam Samad. I can take the question. Thank you for the question, first of all. We have a balanced and disciplined capital allocation philosophy. At this point, we do not intend to offer a dividend.

The second question is, can you comment on the outlook for the GRAIL merger, especially given the challenges by several nations' regulatory bodies?

Thank you for that question. This is Francis. At this point, we are engaged with the FTC in a legal review and expect to go to District Court regarding their injunction against that deal. We are also engaged in a review with the European Commission of the deal. We feel that this deal is in the best interest of patients, is pro-competitive and will result in accelerated access to the multi-cancer early detection test going forward. And so we continue to be committed to pursuing this deal.

Thank you. There are no more questions.

Thank you. Illumina, Inc.'s Annual Meeting of Stockholders has now come to an end. Thank you for attending. You may now leave the virtual meeting.