QIAGEN Reports Second Quarter 2005 Results
Revenues In-Line - EPS Reached High-End of Guidance Revenues Exceed $100 Million for First Time
Venlo , The Netherlands , August 8, 2005 - 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:
"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. "
- 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 PAXgene TM 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® Green-based RT-PCR assays.
- Announced the launch of the new GeneChip® 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 RealArt TM 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 .
- 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 PAXgene TM 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 http://www.qiagen.com/goto/080905. A webcast of the conference call will be available at www.qiagen.com /goto/080905.
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 http://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).
IR QIAGEN N.V.
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