QIAGEN Reports Strong Fourth Quarter and Fiscal 2004 Year-End Results
VENLO, The Netherlands, February 14, 2005 - QIAGEN N.V. (Nasdaq: QGENF ; Frankfurt, Prime Standard: QIA) today announced the results of operations for its fourth quarter and fiscal year ended December 31, 2004. The reported net sales and earnings per share for the fourth quarter 2004 exceeded the guidance given by the Company on August 3, 2004 and reconfirmed on October 26, 2004.
The Company reported that net sales for its fourth quarter increased to $95.5 million from $95.1 million for the same period in 2003. In the second quarter of 2004, QIAGEN sold its synthetic DNA business unit. Excluding the financial impact of this business unit, consolidated net sales increased 13% from $84.9 million in the fourth quarter of 2003 to $95.5 million in the fourth quarter of 2004. Reported operating income for the fourth quarter of 2004 increased 38% to $22.3 million from $16.2 million in the same quarter in 2003, net income increased 76% to $15.8 million from $9.0 million in 2003 and diluted earnings per share increased 83% to $0.11 (based on 148.6 million average shares and share equivalents outstanding) from $0.06 (based on 148.1 million average shares and share equivalents outstanding) in the same quarter in 2003.
Reported figures for the fourth quarter include relocation and restructuring expenses. The charges in the fourth quarters of 2004 and 2003 include expenses related to the relocation of QIAGEN's North American marketing and sales operations from Valencia, California to Germantown, Maryland. The relocation and restructuring costs in the fourth quarter of 2004 consisted of a charge of $0.3 million, $0.2 million net of tax, primarily related to the relocation, and $0.4 million of additional taxes due in connection with the restructuring activities. The relocation and restructuring costs in the fourth quarter of 2003 consisted of a charge of $3.6 million ($2.7 million net of tax) in cost of sales related to discontinued products and a charge of $1.5 million ($1.1 million net of tax) in operating expense primarily related to the relocation and $0.2 million of additional taxes due in connection with the restructuring activities. Excluding the effect of these charges, operating income for the fourth quarter of 2004 increased 6% to $22.6 million from $21.3 million in the same quarter in 2003, and net income increased 26% to $16.4 million from $13.0 million in the same quarter of 2003, and diluted earnings per share increased 22% to $0.11 from $0.09 in 2003.
For the year ended December 31, 2004, net sales increased 8% to $380.6 million from $351.4 million in 2003. Excluding revenues related to the synthetic DNA business unit which the Company sold in Q2 2004, consolidated net sales would have increased 17% to $360.3 million from $309.2 million in the year ended December 31, 2003. Operating income as reported for fiscal 2004 increased 22% to $84.1 million from $68.9 million for the same period in 2003, and net income increased 14% to $48.7 million from $42.9 million in 2003, and diluted earnings per share increased 14% to $0.33 (based on 148.5 million average shares and share equivalents outstanding) from $0.29 (based on 147.2 million average shares and share equivalents outstanding).
Excluding the effect of relocation and restructuring expenses of $3.8 million, $2.6 million net of tax, in 2004, and excluding charges of $9.3 million, $4.9 million net of tax, related to the buyout by certain former members of the management of QIAGEN's synthetic DNA business unit during the second quarter 2004, and excluding the effect of $2.0 million, $1.2 million net of tax, of charges related to the acquisition of key assets of Molecular Staging, Inc. during fiscal 2004, as well as relocation and restructuring charges of $6.7 million, $3.6 million net of tax, in fiscal 2003, operating income for the year ended December 31, 2004 increased 19% to $90.0 million from $75.6 million in 2003, net income increased 23% to $57.3 million in 2004 from $46.4 million in 2003, and diluted earnings per share increased 22% to $0.39 from $0.32 in 2003.
Relocation and restructuring charges for fiscal 2004 of $3.8 million were in line with the Company's guidance and included expenses related to the continued relocation of QIAGEN's North American marketing and sales operations from Valencia, California to Germantown, Maryland. Acquisition related charges in 2004 included a $1.5 million write-down of inventories which will be replaced with products integrating newly acquired technologies, and $572,000 related to the impairment of other assets as a result of the acquisition. In 2003, relocation and restructuring costs consisted of a charge of $1.5 million related to the closing of QIAGEN's Seattle facility, a charge of $3.6 million related to the write-off of inventories of discontinued products, and a charge of $1.5 million primarily related to the restructuring of QIAGEN's North American operations.
"2004 was a fantastic and very important year for QIAGEN. The Company significantly increased its strategic and operational strength and put itself in a great position to address exciting opportunities in research, clinical research, molecular diagnostics and applied markets", said Peer Schatz, QIAGEN's Chief Executive Officer. "In 2004 we created extensive strategic and operational plans and initiated their execution. Our focus on the great opportunities for our leadership in the market for preanalytical solutions is evidenced by our product launches, technology initiatives and transactions in this year. We are now looking forward to taking this Company into the future. QIAGEN's focused profile, our unrivaled innovation in our core focus area and our lean operations are enormous assets for this task. QIAGEN is today the clear leader in preanalytical sample preparation. In 2004, we once again expanded our market and technology leadership. We added over 290 patents, numerous licenses and 30 products to our portfolio. Our focus on the markets trends will be further demonstrated by an exciting product pipeline in 2005 as well. Our products and technologies are setting standards in all fields of life sciences - including academic and clinical research, molecular diagnostics and applied testing. We are looking forward to great 2005."
"QIAGEN experienced a successful fourth quarter in 2004. Both reported revenues and earnings per share exceeded our projections," said Roland Sackers, QIAGEN's Chief Financial Officer. "Revenue growth for the full year, adjusted for the management buy-out of our synthetic DNA business unit, was over 17%, organic and driven by a strong demand for our products for separation, purification and handling of nucleic acids. Our consumable business showed a solid 18% revenue growth rate fueled by a strong demand from the pharmaceutical industry and molecular diagnostics markets. QIAGEN experienced a great year in its instrumentation business. The BioRobot product line grew by approximately 30% compared to 2003 and has a tremendous pipeline going into 2005. In 2004, certain of our partners in molecular diagnostics moved product introductions into 2005 which is reflected in some of the OEM instrumentation sales. North America sales, which represent approximately 48% of our overall business, showed a very strong 18% growth rate fueled by an increasing demand coming from customers in clinical research and molecular diagnostics. As expected, European sales showed a growth rate of approximately 15% with significant differences in growth rates within the different countries and Japanese sales showed a growth rate of 14% in 2004."
- Setting standards in proteins: QIAGEN launched a strategically important new product line for protein sample preparation which positions QIAGEN as a leading provider for proteomic sample fractionation kits. This Qproteome product line is believed to represent one of the broadest, most comprehensive and technologically most advanced solution portfolios for the fractionation and depletion of proteins. The Qproteome product line can be used in parallel to and in combination with nucleic acid sample preparations and analysis products.
- Setting standards in regulated products: QIAGEN launched the worldwide first CE-marked stand alone automated sample preparation system for viral nucleic acids. The BioRobot MDx DSP instrument and the QIAamp DSP 96 Virus MDx Kit are the first of their kind in the molecular diagnostics marketplace.
- Expanding portfolio in core: QIAGEN launched a suite of instruments and consumables based on its exclusive agreement to co-market and co-promote Thermo Electron's (NYSE: TMO ) KingFisher(R) instrumentation technology together with QIAGEN's magnetic bead based nucleic acid separation and purification technologies for use in nucleic acid-based applications.
- Expanding portfolio in core: QIAGEN launched the BioRobot Gene Expression - GeneChip(R)Target Prep System which is a complete automated solution for preparing labeled cRNA targets for use with Affymetrix GeneChip arrays. By automating the steps from first-strand cDNA synthesis to fragmentation of cRNA, the system both saves hands-on time and standardizes the preparation of cRNA targets, enabling more precise GeneChip array results.
- Expanding portfolio in core: QIAGEN launched over 30 products in 2004. The most recent such launch, for example, was a solution for the purification of micro RNA from total RNA, cultured cells, soft tissues, animal or plant tissue.
- Broadening technology portfolio: QIAGEN licensed a novel technology developed by Princeton University and Generation Biotech for Haplotype Specific Extraction (HSE) of DNA. HSE allows the separation of maternal from paternal alleles for a precise determination of mutations on the same chromosome or on different chromosomes. This is of highest importance in the clinical prognosis of diseases, HLA typing with transplantations, pharmacogenomics or oncology testing.
- Broadening leadership in diagnostics: QIAGEN and Roche Molecular Systems entered into a manufacturing and supply agreement to provide Roche with QIAGEN's media sample preparation kits which will be market under Roche's AmpliLute trademark.
- Leveraging an external partnership in automation: QIAGEN expanded its successful strategic alliance with Protedyne Corporation to exclusively co-market Protedyne's BioCube System in conjunction with QIAGEN's QIAamp nucleic acid purification products as an integrated fully automated ultra-high throughput sample preparation platform for high throughput research and molecular diagnostics markets.
- Global partnership: QIAGEN and Novartis Pharma AG entered into a global supply agreement. QIAGEN will act as a global supplier to Novartis Pharma AG for consumables products for nucleic acid stabilization, separation, purification and handling as well as automated instrumentation, synthetic nucleic acid products and services.
- Global partnership: QIAGEN entered into a supply agreement with AstraZeneca targeting the field of siRNA. QIAGEN will act as the preferred supplier to AstraZeneca for RNAi based silencing experiments.
- Supporting the emerging diagnostics market: QIAGEN joined the Personalized Medicine Coalition (PMC) a non-governmental, non-profit group established to foster discussions and advance the understanding and adoption of personalized medicine concepts and approaches for the ultimate benefit of patients.
QIAGEN restructured and expanded:
- Reflecting global presence: Effective February 15, 2005 QIAGEN will change its current NASDAQ symbol for its common shares (QGENF) and will be traded on the NASDAQ stock exchange under its new stock symbol QGEN. Last year NASDAQ decided that non-US companies no longer need to carry an additional "F" for "foreign" in their symbol. QIAGEN believes the change of its symbol to a normal four letter symbol to be an important step to further increase trading convenience.
- Acquired in core focus: QIAGEN acquired the technology and product portfolio of Molecular Staging, Inc. (MSI) based on Multiple Displacement Amplification (MDA). The key application of MDA is Whole Genome Amplification (WGA) to eliminate limitations created by the scarce quantities of DNA samples.
- Sold non-core asset: QIAGEN completed a management buyout of its synthetic DNA business unit. QIAGEN retained a 16% minority stake in the new company and will keep its siRNA business as well as preferred access to synthetic nucleic acid supply.
- Expanded direct presence: QIAGEN opened a new subsidiary in The Netherlands which directly supplies QIAGEN's complete range of integrated solutions, services, technical support, and online ordering facilities to molecular biologists in the Benelux region.
- Refinanced and created strong balance sheet: QIAGEN completed the placement of $150.0 million of 1.5% Senior Convertible Notes due in 2024. QIAGEN used a portion of the proceeds to repay short-term debt with higher interest rates and to finance the acquisition of MSI. QIAGEN intends to keep an optimized balance sheet structure and a strong cash position to allow it to act aggressively as exciting acquisition opportunities arise.
Detailed information on the Company's business and financial performance as well as guidance on the Company's outlook for 2005 will be presented in the Company's conference call on February 15, 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/021505. A webcast of the conference call will be available on the same website at http://www.qiagen.com/goto/021505.
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, 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 DNA sequencing and genomics, nucleic acid-based molecular diagnostics, and genetic vaccination and gene therapy. QIAGEN employs approximately 1,400 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 DNA sequencing, genomics 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 seasonal fluctuations), 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, market acceptance of QIAGEN's new products and the integration of acquisitions of technologies and businesses. For further information, refer to the discussion in reports that QIAGEN has filed with or furnished to the U.S. Securities and Exchange Commission.
The Company has been informed of the guidance relating to stabilization provided by the Financial Services Authority of the United Kingdom, in particular in the section MAR 2 Annex 2G of the Financial Services Handbook, and has not taken or omitted to take any action and will not take any action or omit to take any action (such as issuing any press release relating to any Shares and any associated securities (as defined in the Financial Services Handbook) without the stabilization legend contained in the Offering Circular) which may result in the loss by any of the Purchasers of the ability to rely on any stabilization safe harbor provided by the Financial Services Authority under the Financial Services and Markets Act 2000 ("FSMA").
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