VENLO, The Netherlands, August 8 /PRNewswire-FirstCall/ -- - Revenues In-Line - EPS Reached High-End of Guidance - Revenues Exceed $100 Million for First Time QIAGEN N.V. (NASDAQ: QGEN; Frankfurt, Prime Standard: QIA) today announced the results of operations for its second quarter and the six-month period ended June 30, 2005. The reported consolidated net sales and operating income as well as diluted earnings per share were in-line with and on the high-end of the Company's projections for the second quarter 2005 as communicated on February 15 and reiterated on May 3, 2005. The Company reported that consolidated net sales for its second quarter 2005 increased 2% to $100.4 million from $98.6 million for the same period in 2004. Using identical foreign exchange rates as used for the Company's guidance communicated on May 3, 2005, net sales would have increased to $101.9 million. At the end of the second quarter 2004, QIAGEN sold its synthetic DNA business unit. Excluding $9.9 million of net sales related to this former business unit in the second quarter of 2004, consolidated net sales increased 13% from $88.7 million in 2004. Reported operating income for the quarter decreased 6% to $21.6 million from $22.9 million in the same quarter of 2004, and net income for the quarter increased 57% to $13.8 million from $8.8 million in the same quarter of 2004. Diluted earnings per share for the second quarter increased 50% to $0.09 in 2005 from $0.06 in 2004. Operating income in both periods includes acquisition-related amortization and charges. The impact of these costs and charges during the second quarter 2005 totaled $3.8 million ($2.7 million net of tax). In the second quarter of 2004, amortization on acquired intangibles and expenses related to the Company's relocation and restructuring efforts, primarily the relocation of QIAGEN's North American marketing and sales operations from Valencia, California to Germantown, Maryland, totaled $2.1 million ($1.4 million net of tax), and charges related to the sale of QIAGEN's synthetic DNA business unit totaled $9.8 million ($4.7 million net of tax). Excluding these charges, adjusted second quarter operating income increased 2% to $25.4 million in 2005 from $25.0 million in 2004, and second quarter 2005 adjusted net income increased 11% to $16.4 million from $14.9 million. Adjusted diluted earnings per share in the second quarter 2005 increased 10% to $0.11 per share, from $0.10 per share in the second quarter 2004. For the six-month period ended June 30, 2005, net sales remained essentially unchanged at $195.4 million compared to $194.7 million in the comparable period of 2004. Excluding $20.3 million of net sales related to the former synthetic DNA business unit sold in the second quarter of 2004, consolidated net sales increased 12% from $174.4 million in the six-month period ended June 30, 2004. Operating income as reported for the first half of 2005 increased 5% to $43.0 million from $41.0 million for the same period in 2004, and net income increased 37% to $27.7 million from $20.2 million in 2004, and diluted earnings per share increased 36% to $0.19 from $0.14. Excluding the effect of acquisition-related costs and charges of which $4.3 million ($3.0 million net of tax) and $3.3 million ($2.2 million net of tax) was expensed in the six month periods ended June 30, 2005 and 2004, respectively, and the effect of charges related to the sale of QIAGEN's synthetic DNA business unit during the second quarter 2004, of $9.8 million ($4.7 million net of tax), operating income for the six-month period ended June 30, 2005 increased 7% to $47.3 million from $44.3 million in 2004, net income increased 14% to $30.8 million in 2005 from $27.1 million in 2004, and diluted earnings per share increased 17% to $0.21 from $0.18 in 2004. QIAGEN's Second Quarter 2005 at constant currencies: 2005 2005 2004 Q2 Q2 Q2 Growth Rates Constant Constant Reported Currency Reported Reported Currency Consumables 88% 89% 87% 15% 12% Instruments 10% 10% 11% 5% 3% Other 2% 1% 2% -17% -20% Total revenues(1) 100% 100% 100% 13% 10% Gross profit 67% 66% 67% 2% -2% Operating income 22% 21% 23% -6% -10% Operating income, adj.(2) 25% 25% 25% 2% -3% Net income 14% 13% 9% 57% 49% Net income, adj. (2) 16% 16% 15% 11% 6% EPS in US$ per share 0.09 0.09 0.06 50% 50% EPS in US$, adj. (2) 0.11 0.11 0.10 10% 10% 1 excluding revenues related to synthetic DNA business unit, sold in Q2 2004 2 excluding acquisition, restructuring and related charges as well as amortization on acquired IP "We are very pleased with the results of the second quarter. We met our financial targets and are experiencing a very dynamic phase of execution on our strategic plan. We are recording strong organic growth and are building an exceptional product pipeline," said Peer M. Schatz, QIAGEN's Chief Executive Officer. "In addition we are also executing well on our strategic plan in terms of external growth opportunities and have initiated several key partnerships and closed a number of transactions, including six acquisitions since April, to leverage our internal capabilities and to further increase our leadership and growth in QIAGEN's area of focus." "QIAGEN experienced a successful second quarter in 2005. Reported revenues were in line with the Company's guidance adjusted for on the January 2005 foreign exchange rates and operating income exceeded the Company's expectations and EPS were on the high end of company's projections for the second quarter 2005," said Roland Sackers, QIAGEN's Chief Financial Officer. "The business environment is comparable to what we expected and we remain committed to our financial and strategic targets set for the second half of 2005." Highlights: - Acquired key assets of LumiCyte, Inc. and SuNyx GmbH: nanotechnology-based "on-chip" sample preparation for MALDI mass spectrometry. - Acquired Nextal Biotechnologies: building leadership in sample preparation for protein crystallization. - Acquired artus GmbH: optimized and synchronized combination of sample preparation and assay solutions and increases QIAGEN's value as a partner to the molecular diagnostic industry. - PreAnalytiX's PAXgeneTM Blood RNA System received 510(k) clearance ("de novo" classification) from the U.S. Food and Drug Administration (FDA), received CE mark for the European markets and the ISO 9001:2000 and EN ISO 13485:2003 certification. - Launched a focused sales initiative targeting pharmacogenomics. - Acquired the RNAture nucleic acid purification ("smart plastics") product portfolio from Hitachi Chemical Research, Inc. - Launched what is believed to be the world's first and largest product portfolio for integrated genome-wide RNAi and SYBR(R) Green-based RT-PCR assays. - Announced the launch of the new GeneChip(R) Globin-Reduction kits for Affymetrix Inc. and associated protocol developed in conjunction with PreAnalytiX - a joint venture between QIAGEN N.V. and BD (Becton, Dickinson and Company). - Extended its distribution agreement with Abbott for QIAGEN's RealArtTM molecular diagnostic tests. - Obtained an exclusive license from Procognia Limited to market and sell Procognia's proprietary "on-chip" protein glycoanalysis technology targeting novel, "guided protein fractionation" solutions. - Entered into a strategic collaboration with Epigenomics to jointly develop and introduce a gold-standard, preanalytical solution portfolio for DNA methylation testing in diagnostics and research. - Entered into a manufacturing and supply agreement with Veridex, LLC, a Johnson & Johnson company, to add QIAGEN preanalytical solutions as a component of the Veridex' diagnostics. - Acquired Beijing-based Tianwei Times, a leading developer, manufacturer and supplier of nucleic acid sample preparation consumables in China. - Opened a subsidiary in Stockholm, Sweden to directly distribute QIAGEN's complete range of products and services to QIAGEN's customers in Scandinavia. - Opened a subsidiary in Vienna, Austria to directly distribute QIAGEN's complete range of products and services to QIAGEN's customers in Austria. Other: - PreAnalytiX Distribution Channel Changes: Following its first 510(k) clearance, PreAnalytiX is expected to continue very rapid growth and to expand its role as a standard in the molecular diagnostic testing market. PreAnalytiX obtained a 510(k) clearance from the FDA of the PAXgeneTM Blood RNA System earlier than expected. The parties of PreAnalytiX GmbH, a joint venture between QIAGEN N.V. and BD (Becton, Dickinson and Company), have therefore decided to change the distribution structure for the PreAnayltiX IVD-labeled products (regulated products, for in vitro diagnostic use). PreAnayltiX products typically consist of a tube component and a nucleic acid purification component. Under the new distribution structure, BD will distribute the newly 510(k) approved PreAnayltiX tube components. QIAGEN will distribute all nucleic acid purification components as well as tubes labelled for research use only (RUO). This distribution solution allows customers requiring an FDA-approved device to purchase PreAnalytiX IVD labeled tube components together with other tube products from BD through their current, highly standardized purchasing channels and is expected to further increase the speed of standardization of all PreAnalytiX products. As a result of this new distribution solution, QIAGEN will recognize approximately 2% less revenue in the second half of 2005 and fiscal year 2006. These changes will not result in a change in earnings per share compared to the current guidance for QIAGEN, as the joint venture's profit will continue to be shared 50/50, regardless of the distribution channel being used. - Contract manufacturing: QIAGEN has a leading presence in DNA purification for gene therapy purposes. The Company's primary strategic interest is to sell consumable purification technologies to such customers. In order to facilitate some customers' move into this field, QIAGEN has marketed plasmid DNA contract manufacturing services. The service was performed by partners under guidance of QIAGEN and with use of QIAGEN purification technology. QIAGEN has decided to modify the format under which such services are offered which will change the accounting for such services and result in QIAGEN no longer recognizing revenue on these service offerings. QIAGEN expects the effect of this change to reduce expected revenues for remainder of 2005 by approximately US$ 2.5 million. QIAGEN expects no impact on expected earnings per share. Detailed information on the Company's business and financial performance will be presented in the Company's conference call on August 9, 2005 at 9:30am EDT. The corresponding presentation slides will be available 60 minutes ahead of the conference call on the Company's website at www.qiagen.com/goto/080905. A webcast of the conference call will be available at www.qiagen.com/goto/080905. About QIAGEN: QIAGEN N.V., a Netherlands holding company with subsidiaries in Germany, the United States, Japan, the United Kingdom, Switzerland, France, Italy, Australia, Norway, Austria, Canada, Sweden, and the Netherlands believes it is the world's leading provider of innovative enabling technologies and products for the separation, purification and handling of nucleic acids and proteins. QIAGEN has developed a comprehensive portfolio of more than 320 proprietary, consumable products for nucleic acid and protein separation, purification and handling, nucleic acid amplification, as well as automated instrumentation, synthetic nucleic acid products and related services. QIAGEN's products are sold in more than 42 countries throughout the world to academic research markets and to leading pharmaceutical and biotechnology companies. In addition, QIAGEN is positioning its products for sale into developing commercial markets, including applied testing markets, clinical research, nucleic acid-based molecular diagnostics, and genetic vaccination and gene therapy. QIAGEN employs more than 1,500 people worldwide. Further information on 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 and the integration of acquisitions of technologies and businesses. 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). Three months ended June 30, 2005 2004 $ 100,354,000 $ 98,637,000 32,811,000 32,494,000 253,000 - Gross profit 67,290,000 66,143,000 Research and development 9,421,000 9,257,000 Sales and marketing 23,495,000 21,402,000 General and administrative 10,006,000 10,789,000 In-process research and development 714,000 - Acquisition and related costs 2,056,000 - Relocation and restructuring costs - 1,805,000 45,692,000 43,253,000 21,598,000 22,890,000 Interest income 1,859,000 496,000 Interest expense (1,533,000) (970,000) Research and development grants 966,000 381,000 Gain (loss) on foreign currency transactions 225,000 (513,000) Loss from equity method investees (649,000) (696,000) Other miscellaneous expense, net (88,000) (9,876,000) 780,000 (11,178,000) Income before provision for income taxes 22,378,000 11,712,000 Provision for income taxes 8,601,000 2,910,000 Net income $ 13,777,000 $ 8,802,000 Weighted average number of diluted common shares 149,460,000 148,544,000 Diluted net income per common share $ 0.09 $ 0.06 Adjusted diluted net income per common share as well as amortization on acquired IP $ 0.11 $ 0.10 QIAGEN N.V. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) Six months ended June 30, 2004 2005 2004 Net sales $ 195,379,000 $ 194,695,000 Cost of sales 63,414,000 65,126,000 Cost of sales-acquisition related 253,000 - Gross profit 131,712,000 129,569,000 Operating Expenses: Research and development 19,474,000 18,629,000 Sales and marketing 45,799,000 45,005,000 General and administrative 20,678,000 22,208,000 Purchased in-process research and development 714,000 - Acquisition and related costs 2,056,000 - Relocation and restructuring costs - 2,746,000 Total operating expenses 88,721,000 88,588,000 Income from operations 42,991,000 40,981,000 Other Income (Expense): Interest income 3,732,000 928,000 Interest expense (3,010,000) (1,992,000) Research and development grants 1,174,000 913,000 Gain (loss) on foreign currency transactions 232,000 (257,000) Loss from equity method investee (1,142,000) (1,193,000) Other miscellaneous income, net 94,000 (9,461,000) Total other income (expense) 1,080,000 (11,062,000) Income before provision for income taxes 44,071,000 29,919,000 Provision for income taxes 16,346,000 9,696,000 Net income $ 27,725,000 $ 20,223,000 Weighted average number of diluted common shares 149,298,000 148,669,000 Diluted net income per common share $ 0.19 $ 0.14 Adjusted diluted net income per common share excluding acquisition, restructuring and related charges as well as amortization on acquired IP $ 0.21 $ 0.18 QIAGEN N.V. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, 2005 2004 Assets (unaudited) Current Assets: Cash and cash equivalents $ 156,995,000 $ 196,375,000 Marketable securities 51,759,000 30,153,000 Notes receivable 3,578,000 4,630,000 Accounts receivable, net 66,593,000 66,098,000 Income taxes receivable 3,606,000 3,551,000 Inventories 49,311,000 60,164,000 Deferred income taxes 9,452,000 11,785,000 Prepaid expenses and other 20,123,000 14,328,000 Total current assets 361,417,000 387,084,000 Long-Term Assets: Property, plant and equipment, net 197,922,000 217,108,000 Goodwill 81,532,000 56,263,000 Intangible assets, net 62,239,000 34,758,000 Deferred income taxes 8,126,000 3,114,000 Other assets 21,803,000 16,272,000 Total long-term assets 371,622,000 327,515,000 Total assets $ 733,039,000 $ 714,599,000 Liabilities and Shareholders' Equity Current Liabilities: Line of credit $ 65,000 $ - Current portion of long-term debt 6,100,000 6,769,000 Current portion of capital lease obligations 1,022,000 1,201,000 Accounts payable 17,417,000 20,157,000 Accrued and other liabilities 53,432,000 46,879,000 Income taxes payable 9,671,000 10,283,000 Deferred income taxes 1,732,000 2,766,000 Total current liabilities 89,439,000 88,055,000 Long-Term Liabilities: Long-term debt, net of current portion 192,344,000 197,383,000 Capital lease obligations, net of current portion 11,822,000 13,737,000 Deferred income taxes 17,814,000 10,372,000 Other 8,668,000 4,676,000 Total long-term liabilities 230,648,000 226,168,000 Commitments and Contingencies Shareholders' Equity: Common shares, EUR .01 par value: Authorized--260,000,000 shares Issued and outstanding-- 147,020,207 shares in 2004 and 146,217,518 shares in 2003 1,505,000 1,495,000 Additional paid-in-capital 152,607,000 146,231,000 Retained earnings 239,700,000 211,975,000 Accumulated other comprehensive income 19,140,000 40,675,000 Total shareholders' equity 412,952,000 400,376,000 Total liabilities and shareholders' equity $ 733,039,000 $ 714,599,000 - -
SOURCE QIAGEN N.V.