NORCROSS, Ga., July 26 /PRNewswire-FirstCall/ -- Immucor, Inc. , the global leader in providing automated instrument-reagent systems to the blood transfusion industry, today reported financial results for the fiscal fourth quarter and year ended May 31, 2006.
Revenue for the fiscal fourth quarter was a record $50.0 million, up 19% from $42.1 million in the same period last year. Of the $7.9 million total increase in revenues, approximately $6.0 million came from price increases, approximately $1.4 million came from our direct presence in Japan, approximately $0.9 million came from volume increases, and the effect of the change in the Euro exchange rate reduced sales by $0.4 million. Gross margin improved during the quarter to a record 68.4% up from 63.6% in the prior year quarter.
Net income for the fourth quarter was a record $12.1 million, up 41% from $8.5 million for the same quarter last year. Diluted earnings per share totaled $0.17 on 70.7 million weighted average shares outstanding, up from $0.12 on 71.6 million weighted average shares outstanding for the same period last year. Prior year share and per share amounts have been adjusted to reflect the 3-for-2 stock split affected in the form of a 50% stock dividend which was distributed on May 15, 2006.
Sales of instruments were $3.8 million in the fourth quarter of fiscal 2006, an increase from $2.6 million in the fiscal 2005 fourth quarter. Most instrument sales in the United States are recognized over the life of the underlying reagent contract, which is usually 5 years. In the quarter ended May 31, 2006 approximately $2.4 million of instrument sales were deferred in this manner. As of May 31, 2006, deferred instrument revenues, including deferred service revenues, totaled $16.1 million.
Reagent gross margin grew to 77.5% during the fourth quarter of fiscal 2006 compared to 73.0% in the same period last year. The previously mentioned price increases and improved manufacturing efficiencies were responsible for this improvement.
For the year ended May 31, 2006, revenues totaled a record $183.5 million, a 27% increase over the prior year. Net income was $39.8 million, a $15.9 million increase over the prior year. Diluted earnings per share totaled $0.56 on 71.4 million weighted average shares outstanding for the year ended May 31, 2006 as compared to diluted earnings per share of $0.34 on 71.4 million weighted average shares outstanding for the prior year.
“We are extremely pleased with both our quarterly and annual results,” said Edward L. Gallup, Chairman and Chief Executive Officer. “All-time highs were achieved in revenues, gross margin, and net income for both the three- month period and the year ended May 31, 2006. This quarter marked the tenth consecutive quarter of record revenues.”
Dr. Gioacchino De Chirico, President said, “Our strategies to grow our business in terms of both revenues and gross margins have been very successful. We are especially pleased that our gross margin of 66.2% for the 2006 fiscal year exceeded our target of 65% to 66%. Execution of our plan has once again enabled us to increase margins while generating record quarterly revenues. We remain focused on our three year plan to increase gross margin to over 70%.”
Commenting further, Dr. De Chirico stated, “Based on the very positive customer reaction to our expected launch of the Galileo Echo(TM) in the United States and Europe in the third quarter of fiscal 2007 we believe we can achieve market share gains and revenue growth through continued Galileo placements and the launch of the Galileo Echo(TM). This expected launch date is dependent on FDA clearance in the United States and we are forecasting clearance to take approximately 90 days after the submission is received by the FDA. As of May 31, 2006 the Company had received purchase orders for a total of 367 Galileo instruments worldwide (an increase of 28 in the quarter), including 233 in Europe, 132 in North America and 2 in Japan, and 294 of these instruments were generating reagent revenues, an increase of 31 in the quarter.”
Selected Highlights
- Sales of traditional reagent products, i.e., products not using the Company’s patented Capture(R) technology, increased $6.1 million, or 21%, from $29.8 million in the fourth quarter of 2005 to $35.9 million in the fourth quarter of 2006. Sales of Capture products increased approximately $0.8 million to $9.4 million, a 10% increase over the prior year quarter. Human collagen sales decreased approximately $0.2 million to $0.9 million, a 21% decrease from the prior year quarter.
- For the current fiscal year, sales of traditional reagent products were $132.7 million compared with $99.2 million in the prior year period, an increase of 34%. Capture(R) product sales increased approximately $4.7 million to $34.3 million, an increase of 16% over the prior year. Human collagen sales were $3.9 million for the twelve months ended May 31, 2006, an increase of $0.5 million compared to the prior year period.
- The gross margin on traditional reagents was 76.6% for the current quarter, compared with 70.8% in the prior year quarter. The increase in gross margin is primarily due to price increases in the United States. The gross margin on Capture(R) products was 80.9% for the current quarter, compared with 80.5% in the prior year quarter. The gross margin on human collagen sales was 43.3% during the quarter, compared with 56.4% in the prior year quarter.
- Sales of instruments were $3.8 million in the fourth quarter of 2006 compared to $2.6 million in the fourth quarter of 2005. The gross margin on instruments, including the impact of the cost of providing service, was a negative 33.9% for the current quarter, compared to a negative 76.7% for the same quarter last year. Instrument gross margin in the current quarter was adversely impacted as $2.4 million of revenues from 18 instrument sales were deferred in the quarter while the entire cost of sales of $1.4 million relating to those 18 instruments was expensed in the quarter.
- The effect on revenues of the change in the Euro exchange rate was a decrease of $433 thousand for the fourth quarter of 2006 as compared with the prior year quarter. The effect on net income of the change in the Euro exchange rate was a decrease of $32 thousand in the current quarter ended May 31, 2006.
- Distribution expenses increased by $0.2 million in the fourth quarter and selling and marketing expenses increased by $0.4 million as compared to the prior year quarter. Our new Japanese joint venture was responsible for a $0.9 million increase in selling and marketing expenses partially offset by a $0.4 million decrease in management bonus expense allocated to sales and marketing. General and administrative expenses increased by $0.7 million for the fourth quarter of 2006 as compared to the prior year quarter, due to higher legal, audit and SOX fees in the United States of $0.7 million and $0.4 million associated with our Japanese joint venture, partially offset by a $0.3 million decrease in management bonus expense allocated to general and administration.
- Research and development expenses were $1.2 million in the fourth quarter, an increase of 9% from the prior year quarter. Spending on the development of the Galileo Echo(TM), our new third generation instrument targeted for the small to medium-sized hospital market was $109 thousand in the fourth quarter, a decrease of $246 thousand from the same period last year.
- Operations continue to generate strong cash flow. Cash, cash equivalents and marketable securities totaled $55.7 million at the end of the current quarter compared to $40.6 million at the end of the prior quarter and $39.1 million at May 31, 2005. During the quarter the Company repurchased 150,000 shares of its Common Stock at a total cost of $2.6 million under its stock repurchase program.
The Company also confirmed that its guidance for the fiscal year ending May 31, 2007 remains consistent with the forecast provided in its press release of May 22, 2006.
Immucor, Inc. will host a conference call July 27, 2006 at 8:30 a.m. (EDT) to review these results. Investors are invited to participate in this conference call with Edward L. Gallup, Chairman and Chief Executive Officer; Dr. Gioacchino De Chirico, President; and Patrick Waddy, Chief Financial Officer. The call will focus on the results for the fourth quarter and general business trends. This earnings release will be posted on Immucor’s website, as well as any material financial information that may be discussed by Messrs. Gallup, De Chirico or Waddy during this call that is not contained in the earnings release. Both this earnings release and the additional financial information, if any, will be posted as soon as practicable after the call on the investor news section of Immucor’s website. To access this information once posted, go to Immucor’s website at www.immucor.com and click on “About Us - Press Releases.”
To participate in the telephone conference call, dial 1-888-913-9968, pass code BLUD. Replays of the conference call will be available for one week beginning at 12:00 PM on July 27, 2006 by calling 1-800-666-0517. Beginning August 3, 2006, audio of the conference call or a transcript of the audio will be available on the “About Us - Press Releases” page of the Immucor website.
Founded in 1982, Immucor manufactures and sells a complete line of reagents and systems used by hospitals, reference laboratories and donor centers to detect and identify certain properties of the cell and serum components of blood prior to transfusion. Immucor markets a complete family of automated instrumentation for all of its market segments.
For more information on Immucor, please visit our website at www.immucor.com.
Statements contained in this press release that are not statements of historical fact are “forward-looking statements” as that term is defined under federal securities laws, including, without limitation, all statements concerning Immucor’s expectations, beliefs, intentions or strategies for the future. Forward-looking statements may be identified by words such as “plans,” “expects,” “believes,” “anticipates,” “estimates,” “projects,” “will,” “should” and other words of similar meaning used in conjunction with, among other things, discussions of future operations, financial performance, product development and new product launches, FDA and other regulatory applications and approvals, market position and expenditures. Factors that could cause actual results to differ materially from those expressed in any forward-looking statement include the following: the decision of customers to defer capital spending; the inability of customers to efficiently integrate our instruments into their blood banking operations; increased competition in the sale of instruments and reagents; product development or regulatory obstacles including delays in completing the development of the Galileo Echo(TM); the ability to hire and retain key managers; changes in interest rates; fluctuations in foreign currency conversion rates; changes in demand for the Company’s human collagen product; the ability of the Company’s Japanese subsidiary to attain expected revenue, gross margin and net income levels; the outcome of any legal claims known or unknown; delays in regulatory approvals required to move Houston manufacturing to another Company facility; other currently unforeseen events that could delay the move; higher than expected Houston closure costs; higher than expected manufacturing consolidation costs; the unexpected application of different accounting rules; and general economic conditions. Further risks are detailed in the Company’s filings with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on any forward-looking statements. Immucor assumes no obligation to update any forward-looking statements.
IMMUCOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands except per share data) Three Months Ended Twelve Months Ended May 31, May 31, May 31, May 31, 2006 2005 2006 2005 NET SALES $49,957 $42,062 $183,506 $144,786 COST OF SALES 15,790 15,316 61,969 57,541 GROSS PROFIT 34,167 26,746 121,537 87,245 OPERATING EXPENSES Research and development 1,222 1,118 4,623 4,463 Selling and marketing 5,326 4,929 20,877 18,228 Distribution 2,252 2,025 8,004 8,044 General and administrative 6,456 5,730 21,963 18,559 Restructuring expenses 110 - 2,689 - Amortization expense and other 87 103 341 699 Total operating expenses 15,453 13,905 58,497 49,993 INCOME FROM OPERATIONS 18,714 12,841 63,040 37,252 OTHER INCOME (EXPENSE) Interest income 379 225 978 624 Interest expense (81) (148) (516) (662) Other income (loss) 8 139 (342) 767 Total other 306 216 120 729 INCOME BEFORE INCOME TAXES 19,020 13,057 63,160 37,981 PROVISION FOR INCOME TAX 6,959 4,529 23,317 14,071 NET INCOME $12,061 $8,528 $39,843 $23,910 Earnings per share: Per common share $0.18 $0.13 $0.59 $0.35 Per common share - assuming dilution $0.17 $0.12 $0.56 $0.34 IMMUCOR, INC. Selected Consolidated Balance Sheet Items (Amounts in thousands) May 31, 2006 May 31, 2005 Cash $54,103 $37,108 Accounts receivable - trade 37,199 34,630 Inventory 20,651 21,836 Total current assets 121,292 100,882 Property and equipment - net 25,684 23,035 Total assets 192,187 157,613 Current portion - long-term debt, capital leases and lines of credit - 4,617 Accounts payable 7,272 8,028 Total current liabilities 28,409 29,937 Long-term debt, capital leases and lines of credit - 2,991 Other liabilities 19,907 7,253 Shareholders’ equity 143,871 117,432
Immucor, Inc.
CONTACT: Edward Gallup of Immucor, Inc., +1-770-441-2051
Web site: http://www.immucor.com//
