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bioMerieux, Inc. Announces 2004 Results

10/19/2005 5:13:07 PM

MARCY-L'ETOILE, France, March 25 /PRNewswire/ -- The Board of Directors of bioMerieux met on Friday, March 18 to approve the consolidated financial statements for the year ended December 31, 2004. The meeting was chaired by Alain Merieux and attended by the Statutory Auditors.

Consolidated data (in millions of euros) 2004 2003 % Change ------------------------------------------------------------------------ Net sales 930.6 914.5 +1.8%(1) ------------------------------------------------------------------------ Gross profit 497.4 474.5 +4.8% ------------------------------------------------------------------------ Operating income 132.2 102.1 +29.6% ------------------------------------------------------------------------ Net income 75.7 55.1 +37.4% ------------------------------------------------------------------------ (1) 5.2% on the basis of constant scope of consolidation and exchange rates.

In commenting on the results, Chairman of the Board Alain Merieux noted that "in 2004, bioMerieux expanded its international network, production capacity and research capabilities, all while sharply reducing debt and preparing for the future."

Operating Highlights - Net sales totaled 931 million euros for the year, an increase of 5.2% like-for-like (excluding changes in scope of consolidation and exchange rates). Reported growth was 1.8%, due to the euro's continued strength against the dollar and most other currencies. In all, growth was led by reagent sales, which rose 6% excluding the currency effect, while 3,500 new instrument systems were installed on customer premises. - Sales rose in all the operating regions, in local currencies and Sales of clinical applications rose 4.7%, while industrial applications gained 8.9%, both at constant exchange rates. - New product launches * Several new instruments were launched during the year, The VITEK(R)2 Compact automated bacterial identification and susceptibility testing system, The MiniMag(TM) extraction system in the area of molecular biology and the TEMPO(R) industrial applications platform was introduced on January 31, 2005. * Capital expenditure To support development and prepare for new platform launches, the Company pursued its capital spending program during the year. Outlays totaled 79.4 million euros, in line with previous years. - Inspections in progress In 2004, the US Food and Drug Administration (FDA) inspected three bioMerieux facilities. The inspection of the St. Louis, Missouri plant in April was concluded with a satisfactory outcome, while at two other facilities, at Boxtel, the Netherlands and Durham, North Carolina in the United States, action plans have been prepared in response to observations and submitted to the FDA. Both plans are proceeding in a timely manner. Financial Data * Statement of income - Gross profit totalled 497.4 million euros, representing 53.5% of sales, compared with 474.5 million euros and 51.9% in 2003. The increase was driven by higher sales, the larger proportion of reagents in the revenue stream, savings from the restructuring programs carried out in 2003 and ongoing measures to improve productivity. Higher raw materials prices had only a slight impact on unit production costs. - Selling, general and administrative expenses rose by 3.9% to 246.4 million euros, reflecting the increased organizational resources deployed to prepare for the launch of new platforms and support international expansion. - Research and development expenses amounted to 126.8 million euros, or 13.6% of sales. This was 3.3% less than in 2003, when these expenses included particularly high licensing fees. Their amount reflects the extensive programs undertaken to develop new platforms and reagent menus. - The company continued to capture the value of its patent portfolio in 2004, when net received royalties rose to 8.9 million euros from 7.4 million euros the year before thanks to agreements signed with Bayer (Boom(R) Technology) and Gen-Probe (coagulation markers). - Restructuring costs declined sharply to 0.9 million euros from 11.7 million euros in 2003. Restructuring programs decided during the year concerned the consolidation of the French molecular biology teams in Grenoble and the closure of the laboratory in Saitama, Japan.

As a result, operating income improved by 30% to 132.2 million euros, and represented 14.2% of sales versus 11.2% in 2003. While weighing on sales, changes in currency rates had little effect on operating income thanks to their favorable impact on operating expenses.

- Despite the decline in average debt and interest rates, net financial expenses rose due to other non-recurring financial costs. - Net exceptional expenses increased to 3.7 million euros from 0.3 million euros in 2003. It primarily included the Company's share of IPO costs (5.2 million euros), partially offset by the capital gain on the disposal of a building in Spain. - Income tax amounted to 33.1% of pretax income, versus 36.2% the year before. The decrease resulted from major tax credits or refunds and the reduced impact of unprofitable companies.

In conclusion, net income rose by 37% to 75.7 million euros or 8.1% of sales, after amortization of 4.4 million euros in goodwill. Earnings per share came to 1.93 euros, up 37% on 2003.

* Statement of changes in net indebtedness and balance sheet - In 2004, the increase in income and the disciplined management of capital expenditure and working capital helped to generate free cash flow of 73 million euros. - Net debt amounted to 109.2 million at December 31, 2004, when it represented 28% of shareholders' equity, compared with 51% a year earlier. * Dividend

The Board of Directors will recommend that shareholders at the Annual Meeting on June 9 approve a dividend of 0.40 euros per share, corresponding to the payout of 20% of net income for the year, as previously indicated.

Outlook for 2005

Over the full year, sales are expected to experience like-for-like growth similar to 2004, although expansion will be relatively weaker in the first quarter due to high prior-year comparatives.

As planned, 2005 should see the sustained implementation of programs underway to develop and introduce new platforms. Operating margin will reflect the full-year impact of higher raw materials prices and the increase in selected organizational resources (quality control, sales force and administrative staff). However, bioMerieux expects to attenuate some of the impact by continuing to optimize costs.

"We are satisfied with the 30% growth in earnings in 2004," concluded Executive Vice President Benoit Adelus. "It was driven by the robust development of our business and the constant dedication of our teams to improving productivity. These results strengthen our position, even as we undertake an intensive cycle of new product introductions."

Upcoming Events - April 20, 2005: First-quarter sales - June 9, 2005: Annual Meeting of Shareholders About bioMerieux

bioMerieux is a leading international diagnostics group that specializes in the field of in vitro diagnostics for clinical and industrial applications. bioMerieux designs, develops, manufactures and markets systems (i.e. reagents, instruments and software) used in:

Clinical applications: the diagnosis of infectious diseases such as hepatitis, HIV, tuberculosis and respiratory illnesses, as well as pathologies such as certain cardiovascular diseases and certain cancers, based on the analysis of biological samples (such as blood, saliva or urine); and

Industrial applications: the microbiological analysis of food, environments (such as water and air), surfaces and pharmaceutical and cosmetic products, based on product or environmental samples. bioMerieux is listed on the Premier Marche of Euronext Paris (symbol "BIM", ISIN code: FR0010096479).


The present release contains information, assumptions and estimates that were used to determine the targets herein. They are subject to change or modification due to economic, financial and competitive uncertainties in France or in other countries. Further information regarding these assumptions, risks and estimates are described in the documents registered with the "Autorite des Marches Financiers". The forward-looking statements contained in the present release should only apply as of today's date. Accordingly, the company cannot give any assurance as to whether it will achieve the targets described in this release, and makes no commitment or undertaking to update or otherwise revise such information.


CONTACT: Press Contact, Christelle Chabert, +33 (0)4 78 87 52 01, , or Investor Relations, DominiqueTakisawa, or Herve Laurent, +33 (0)4 78 87 22, , all of bioMerieux

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