VENLO, The Netherlands, May 8 /PRNewswire-FirstCall/ -- QIAGEN N.V. today announced the results of operations for the three-month period ended March 31, 2006.
QIAGEN significantly exceeded its guidance on net sales, earnings per share and operating income margin which the Company had provided on February 14, 2006.
QIAGEN’s First Quarter 2006: In US$ millions unless indicated Guidance Reported Net sales 101-104 108.7 Operating margin, adj.[1] 23-25% 26% EPS, adj. (US$)1 0.11-0.12 0.13 [1] excluding acquisition and integration related charges as well as amortization of acquired IP and equity-based compensation
The Company reported that consolidated net sales for its first quarter 2006 increased 14% to $108.7 million from $95.0 million for the same period in 2005. Reported operating income for the quarter increased 18% to $25.2 million from $21.4 million in the same quarter of 2005, and net income for the quarter increased 26% to $17.6 million from $13.9 million in the same quarter of 2005. Diluted earnings per share for the first quarter increased 33% to $0.12 in 2006 (based on 152.2 million average shares and share equivalents outstanding) from $0.09 in 2005 (based on 149.1 million average shares and share equivalents outstanding).
“QIAGEN showed an excellent start into what we expect to be a successful 2006. Our strong innovation engine and our focused, strategic and operational strength fueled an organic growth rate of more than 15% in our consumables business and 13% overall”, said Peer Schatz, QIAGEN’s Chief Executive Officer. “In addition, the businesses we acquired in 2005 are performing very well and contributed approximately 7% of our overall reported sales. We continue to have a positive outlook and are raising our financial guidance for 2006.”
Following this strong performance in the first quarter 2006 and its agreement to acquire Gentra Systems (subject to approval by Gentra’s shareholders and other customary closing conditions), QIAGEN is increasing its revenue guidance for the full year 2006 given February 14, 2006 from previously US$439-451 million to US$453-462 million and adjusted EPS guidance from previously US$0.52-0.55 to US$0.52-0.56 for the full year 2006. The Company will provide detailed information on increased guidance in the Company’s conference call on May 9, 2006.
“QIAGEN experienced a very successful first quarter 2006 with net sales exceeding our guidance by nearly US$5 million. In addition, we exceeded our guidance in terms of operating income and EPS,” said Roland Sackers, QIAGEN’s Chief Financial Officer. “Revenue growth for the first quarter was approximately 14%. Using identical exchange rates for both quarters QIAGEN’s revenue growth calculates to approximately 20%. In the first quarter, our consumable business recorded a strong 16% revenue growth rate with a constant currency growth rate of 22%. Growth was fueled by a strong organic growth rate of overall more than 13% and a 7% positive contribution from acquisitions and reduced by 6% due to currency effects. Our consumables recorded 15% organic growth and 7% contribution from acquisitions and our instrumentation business recorded 7% organic growth. We evidenced growth across all of our customer segments, in particular in the pharmaceutical, the applied testing and the molecular diagnostics customer segments. We also recorded good results and growth with our QIAGEN BioRobot(TM) instrumentation products and have built a good pipeline of prospects. Net sales recorded in North America represented approximately 44% of our overall business and recorded a growth rate of 13% and European sales, which represented approximately 43% of our revenues recorded a growth rate of approximately 18%. Net sales in Japan showed a growth rate of approximately 6% on a constant currencies base in the first quarter 2006 and we are seeing a further improving outlook for the rest of the year.”
QIAGEN’s reflection on growth: Contribution Constant Organic from Reported currency growth acquisitions Consumables 16% 22% 15% 7% Instruments 1% 7% 7% Total 14% 20% 13% 7%
The Company has regularly reviewed and reported adjusted results to give an additional insight into the Company’s financial performance. Adjusted results should be considered in addition to the reported results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute. Costs and charges excluded from adjusted results include acquisition, integration, restructuring and related costs, acquisition-related amortization, and beginning in the first quarter of 2006, compensation cost due to equity based compensation in accordance with the adoption of revised Statement of Financial Accounting Standards No. 123 (SFAS 123R).
QIAGEN’s adjustments on operating income, net income and earnings per share:
In US$ millions unless indicated Q1 2006 Q1 2005 Operating income, reported 25.25 21.39 Acquisition and integration related 0.95 expenses SFAS 123R Impact 0.08 Amortization on acquired IP 1.51 0.58 Operating income, adjusted 27.79 21.97 Net income, reported 17.58 13.95 Acquisition and integration related 0.64 expenses SFAS 123R Impact 0.06 Amortization on acquired IP 0.95 0.37 Net income, adjusted 19.22* 14.32 Weighted average number of diluted common 152,278,000 149,055,000 shares EPS, reported in US$ 0.12 0.09 EPS, adjusted in US$ 0.13 0.10 *variation due to rounding
The impact of these costs and charges during the first quarter 2006 totaled $2.5 million ($1.6 million net of tax). Included in operating income in the first quarter 2006 is amortization on acquisition-related intangibles of $1.5 million ($948,000 net of tax), acquisition, integration and related costs of $945,000 ($636,000 net of tax), and SFAS 123R compensation cost of $84,000 ($55,000 net of tax). Included in operating income in the first quarter 2005 is amortization on acquisition-related intangibles of $576,000 ($373,000 net of tax). Excluding these charges, adjusted first quarter operating income increased 26% to $27.8 million in 2006 from $22.0 million in 2005, and first quarter 2006 adjusted net income increased 34% to $19.2 million from $14.3 million. Adjusted diluted earnings per share in the first quarter 2006 increased 30% to $0.13 per share, from $0.10 per share in the first quarter 2005.
Highlights:
QIAGEN developed:
- Launched more than 15 new products in preanalytical sample processing, assay technologies and molecular diagnostic assays.
- Launched EpiTect Bisulfite Kit, the first product to streamline the preanalytical process for DNA methylation analysis - dramatically simplifying the use of epigenetics and targeted towards research, and molecular diagnostics.
- QIAGEN’s standardized sample preparation products and PCR-based assays are key elements of avian flu surveillance initiatives throughout the world. QIAGEN’s avian flu (H5) assays for virus detection as well as other QIAGEN components have demonstrated exceptional performance in various validations and routine use.
QIAGEN partners:
- Entered into a co-marketing agreement with ActiveSight for QIAGEN’s preanalytical solutions for protein crystallography targeting research and drug discovery.
- Formed an alliance with Eppendorf AG to co-develop and co-market complementary and optimized products.
QIAGEN acquired:
- Acquired Eppendorf’s reagent business which includes the Eppendorf “5-Prime” nucleic acid sample preparation and PCR reagent product lines and related intellectual property.
- Entered into an agreement to acquire Gentra Systems, Inc., a leading provider of nucleic acid sample preparation products with a strong brand value in well-defined market niches, including biobanking and DNA archiving. The transaction is subject to the approval of Gentra’s shareholders and other customary closing conditions.
Other:
- Recognized with an award for being one of the Top 10 “Best Companies to Work For”. This prestigious recognition was awarded by the Corporate Research Foundation (CRF) and Geva Institute.
- QIAGEN ASIA awarded 2006 Best Practice Award for Competitive Strategy Leadership in Asia by Frost & Sullivan.
- QIAGEN plans to relocate various activities from its Norwegian facility to QIAGEN’s European Headquarter in Hilden, Germany. The closure and relocation is intended to be completed in the second quarter of 2006 and is expected to result in an increase in QIAGEN’s future profitability. QIAGEN expects to incur one time charges related to the relocation of QIAGEN A.S. of approximately US$1.0 million (US$ 0.7 million net of tax) in the second quarter 2006.
QIAGEN’s First Quarter 2006 at constant currencies: 2006 2006 2005 Growth Rates As percentage Q1 Q1 Q1 of net sales, Constant unless indicated Reported Constant Reported Reported Currency Currency Consumables 91% 90% 89% 16% 22% Instruments 8% 9% 10% 1% 7% Other 1% 1% 1% -15% -7% Total revenues 100% 100% 100% 14% 20% Operating income margin 23% 25% 23% 18% 33% Operating income margin1 26% 27% 23% 26% 41% Net income margin 16% 17% 15% 26% 40% Net income margin[1] 18% 19% 15% 34% 48% EPS in US$ per share 0.12 0.13 0.09 33% 44% EPS in US$ per share1 0.13 0.14 0.10 30% 40% [1] excluding acquisition and integration related charges as well as amortization of acquired IP and equity-based compensation
Detailed information on the Company’s business and financial performance will be presented in the Company’s conference call on May 9, 2006 at 9:30am EDT. The corresponding presentation slides are available for download on the Company’s website at www.qiagen.com/goto/090506. A webcast of the conference call will be available on the same website at www.qiagen.com/goto/090506.
About QIAGEN:
QIAGEN N.V., a Netherlands holding company, is a leading provider of innovative technologies and products for pre-analytical sample preparation and molecular diagnostics solutions. QIAGEN has developed a comprehensive portfolio of more than 500 proprietary, consumable products and automated solutions for the preanalytical processing of samples, which includes collection, and nucleic acid and protein handling, separation, purification and processing. QIAGEN also supplies diagnostic kits, tests, and assays for human, veterinary and other molecular diagnostics. The company’s products are sold to customers in academia, the pharmaceutical, biotechnology and the diagnostics industries. QIAGEN also provides preanalytical and testing solutions to applied testing markets such as forensics, animal or food testing, and pharmaceutical process control.
QIAGEN employs more than 1,600 people worldwide. QIAGEN products are sold through a dedicated sales force and a global network of distributors in more than 40 countries.
Further information about QIAGEN can be found at www.qiagen.com.
Certain of the statements contained in this news release may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN’s products, markets, strategy or operating results are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations and risks of dependency on logistics), variability of operating results, the commercial development of the applied testing markets, clinical research markets and proteomics markets, nucleic acid-based molecular diagnostics market, and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN’s, products (including fluctuations due to the level and timing of customers’ funding, budgets, and other factors), difficulties in successfully adapting QIAGEN’s products to integrated solutions and producing such products, the ability of QIAGEN to identify and develop new products and to differentiate its products from competitors’ products, market acceptance of QIAGEN’s new products, the integration of acquisitions of technologies and businesses, and the timing of product introductions by our commercial partners. For further information, refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).
QIAGEN N.V. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three months Three months ended March 31 ended March 31 2006 2005 Net sales $ 108,715,000 $ 95,025,000 Cost of sales 32,884,000 30,603,000 Cost of sales-acquisition related 461,000 - Gross profit 75,370,000 64,422,000 Operating Expenses: Research and development 10,188,000 9,516,000 Sales and marketing 26,419,000 22,265,000 General and administrative 11,529,000 10,672,000 Purchased in-process research and developme 200,000 - Acquisition, integration and related costs 284,000 - Acquisition related intangible amortization 1,505,000 576,000 Total operating expenses 50,125,000 43,029,000 Income from operations 25,245,000 21,393,000 Other Income (Expense): Interest income 2,010,000 1,873,000 Interest expense (1,458,000) (1,477,000) Research and development grants 77,000 208,000 Gain on foreign currency transactions 283,000 7,000 Gain (loss) from equity method investee 326,000 (493,000) Other miscellaneous income, net 95,000 182,000 Total other income 1,333,000 300,000 Income before provision for income taxes 26,578,000 21,693,000 Provision for income taxes 8,998,000 7,745,000 Net income $ 17,580,000 $ 13,948,000 Weighted average number of diluted common shares 152,278,000 149,055,000 Diluted net income per common share $ 0.12 $ 0.09 Diluted net income per common share excluding acquisition and related costs, amortization on acquisition related intangibles, and equity based compensation $ 0.13 $ 0.10 QIAGEN N.V. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 2006 2005 Assets (unaudited) Current Assets: Cash and cash equivalents $ 197,738,000 $ 191,700,000 Marketable securit 15,000,000 15,000,000 Notes receivable 4,553,000 4,283,000 Accounts receivable, net 70,740,000 63,538,000 Income taxes receivable 4,296,000 4,161,000 Inventories 54,527,000 53,653,000 Deferred income taxes 9,901,000 11,617,000 Prepaid expenses and other 25,974,000 26,305,000 Total current assets 382,729,000 370,257,000 Long-Term Assets: Property, plant and equipment, net 200,211,000 195,199,000 Goodwill 100,743,000 93,914,000 Intangible assets, net 84,414,000 74,566,000 Deferred income taxes 6,403,000 6,346,000 Other assets 25,408,000 25,016,000 Total long-term assets 417,179,000 395,041,000 $ 799,908,000 $ 765,298,000 Liabilities and Shareholders’ Equity Current Liabilities: Short-term loans $ 3,118,000 $ - Current portion of long-term debt 6,069,000 5,921,000 Current portion of capital lease obligations 723,000 995,000 Accounts payable 16,639,000 15,934,000 Accrued and other liabilities 49,597,000 52,707,000 Income taxes payable 15,144,000 14,935,000 Deferred income taxes 1,315,000 1,179,000 Total current liabilities 92,605,000 91,671,000 Long-Term Liabilities: Long-term debt, net of current portion 192,486,000 191,447,000 Capital lease obligations, net of current portion 11,483,000 11,101,000 Deferred income taxes 19,131,000 17,570,000 Other 3,538,000 3,052,000 Total long-term liabilities 226,638,000 223,170,000 Commitments and Contingencies Shareholders’ Equity: Common shares, EUR .01 par value: 1,523,000 1,513,000 165,207,000 157,796,000 291,780,000 274,200,000 22,155,000 16,948,000 Total shareholders’ equity 480,665,000 450,457,000 $ 799,908,000 $ 765,298,000
Qiagen N.V.
CONTACT: Contacts: Roland Sackers, Chief Financial Officer, QIAGEN N.V.,e-mail: roland.sackers@QIAGEN.com. Dr. Solveigh Mahler, Director ofInvestor Relations, QIAGEN N.V., +49-2103-29-11710, e-mail:solveigh.maehler@QIAGEN.com
