QIAGEN Reports Fourth-Quarter and Fiscal 2003 Year-End Results
Feb 17 2004

QIAGEN Reports Fourth-Quarter and Fiscal 2003 Year-End Results

Venlo, The Netherlands, February 17, 2004 - 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, 2003.

The Company reported that consolidated net sales for its fourth quarter 2003 increased 21% to $95.1 million, from $78.4 million for the same period in 2002. Operating income for the quarter, including relocation and restructuring charges and related effects increased 212% to $16.2 million from $5.2 million in the comparable period in 2002, and net income for the quarter increased 407% to $9.0 million from $1.8 million in the same quarter of 2002. Diluted earnings per share increased 500% to $0.06 (based on 148.1 million average shares and share equivalents outstanding) compared to $0.01 (based on 146.1 million average shares and share equivalents outstanding) in 2002. Excluding the effect of relocation and restructuring costs, operating income increased 33% to $21.3 million from $15.9 million in the comparable period in 2002. Net income excluding these items increased 34% to $13.0 million from $9.7 million and diluted earnings per share increased 29% to $0.09 compared to $0.07 in 2002.

The Company's revenue growth was attributed to organic growth fueled by QIAGEN's innovation and marketing power and did not include growth due to acquisitions. Compared to the Company's guidance for the fourth quarter 2003 as communicated on October 28, 2003, the reported consolidated net sales were higher and diluted earnings per share were in line with the Company's projections.

The charges in the fourth quarter 2003 included expenses related to the relocation of QIAGEN's North American marketing and sales operations from Valencia, California to Germantown, Maryland in order to utilize the capacity of its newly constructed North American Headquarters. Additional charges were incurred due to the write-down of investments and inventories, related to discontinued products. These relocation and restructuring costs in the fourth quarter of 2003 consisted of a charge of $3.6 million included in cost of sales related to discontinued products and a charge of $1.5 million primarily related to relocation. Relocation and restructuring costs in the fourth quarter of 2002 consisted of a charge of $10.8 million related to the closure and relocation of QIAGEN's Seattle facility.

For fiscal 2003, net sales increased 18% to $351.4 million from $298.6 million in fiscal 2002. Including relocation and restructuring costs and related effects, operating income increased 60% to $68.9 million from $43.2 million in 2002, net income increased 85% to $42.9 million from $23.1 million in 2002, and diluted earnings per share increased 81% to $0.29 (based on 147.2 million average shares and share equivalents) from $0.16 (based on 145.8 million average shares and share equivalents) in 2002. Excluding the effects of relocation and restructuring costs, operating income for fiscal 2003 increased 33% to $75.6 million from $56.8 million in 2002. 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. In 2002, relocation and restructuring costs consist of a $2.8 million charge related to the acquisition of GenoVision A.S. and subsidiaries, and a charge of $10.8 million related to the closing of QIAGEN's Seattle facility. Excluding these charges net income increased 39% to $46.4 million in 2003 from $33.3 million in 2002 and diluted earnings per share increased 39% to $0.32 from $0.23 in 2002.

QIAGEN's Fourth Quarter 2003 at constant currencies:

  2003
Q4

2003
Q4

2002
Q4

GrowthRates
Reported Constant
Currency
Reported Reported Constant
Currency
Total Revenues in USD 95.121.000 87.547.000 78.448.000 21% 12%
           
Consumables 71% 71% 71% 22% 13%
Instruments 10% 10% 14% -9% -16%
Oligos 15% 15% 12% 42% 34%
Other 4% 4% 3% 47% 26%
Total Revenues 100% 100% 100% 21% 12%
           
Gross margin 63% 65% 69% 11% 5%
Gross margin (excl. restructuring costs) 67% 68% 69% 18% 11%
           
Operating income 17% 19% 7% 212% 224%
Operating income
(excl. restructuring and relocation costs)
22% 25% 20% 33% 35%
           
Net income 9% 11% 2% 407% 419%
Net income
(excl. restructuring and relocation costs)
14% 15% 12% 34% 30%
           
EPS 0,06 0,06 0,01 500% 500%
EPS
(excl. restructuring and relocation costs)
0,09 0,09 0,07 29% 29%

 

"We are very pleased to report another successful year for QIAGEN in terms of financial results and in terms of the expansion of the company's strategic position," said Peer M. Schatz, QIAGEN's Chief Executive Officer. "We are moving into 2004 with a positive outlook as the preclinical and clinical research budgets in the biotechnology and the pharmaceutical industry are accelerating. In the fourth quarter our products for nucleic acid handling, separation and purification again showed strong growth rates of 21% driven by strong demand in Europe and Japan. We are also pleased to report strong growth of 42% in our oligonucleotide business carried by newly introduced genome sets (AROS) and our siRNA product line. With our refined focus providing additional strategic power, QIAGEN is superbly positioned as a leading provider of innovative technologies and products for pre-analytical solutions and is more than ever dedicated to meeting our customer's needs. Our mission is to provide an outstanding contribution to our customers' success by providing innovative products and technologies wherever this expertise is needed. As a direct result of our focused commitment to our customers' needs, we expect to strongly benefit from the exciting growth opportunities in all fields of life science research and diagnostics."

Highlights:

QIAGEN partnered:

  • QIAGEN licensed a novel algorithm developed by Novartis Pharma AG for the selection of potent siRNA sequences for gene silencing applications.
  • QIAGEN and Thermo Electron entered into an alliance to co-market and co-promote Thermo‘s Kingfisher technology for exclusive use with QIAGEN magnetic bead consumable technologies for medium to high-throughput nucleic acid based applications in research and molecular diagnostics.
  • QIAGEN and Agilent Technologies agreed to co-market lab-on-a-chip solutions for molecular biology in life science markets
  • QIAGEN and Intradigm initiated a collaboration targeting siRNA applications
  • QIAGEN and amaxa biosystems GmbH entered into an agreement to co-market amaxa's NucleofectorTM technology and QIAGEN's TOM-amidites based HPP grade siRNA. The combined solution has significant advantages for siRNA mediated gene silencing in primary cells.
  • QIAGEN and artus GmbH entered into a supply agreement to provide sample preparation kit for use with artus‘ diagnostic products
  • QIAGEN and Affymetrix collaborate on siRNA research using GeneChip® technology
  • PreAnalytiX (a QIAGEN joint venture) and Affymetrix collaborate to improve gene expression results from whole blood RNA samples

QIAGEN launched:

  • QIAGEN launched the world's first CE-marked nucleic acid purification solution for molecular diagnostics.
  • QIAGEN launched custom HPP grade siRNA products based on its proprietary TOM amidite chemistry for high throughput RNAi experiments and launched a new siRNA Design Resource.
  • QIAGEN launched QIAGEN 4-for-siLENCING siRNA, sets of four custom HPP Grade siRNA duplexes with performances guaranteed for efficient gene silencing.
  • QIAGEN launched latest version of Array-Ready Oligo Sets (AROS) for the Human and Mouse Genomes - Version 3.0. The human AROS V3.0 contains 34,580 70mer (long-mer) probes representing 24,650 genes and 37,123 gene transcripts. The mouse AROS V3.0 contains 31,769 70mer probes representing 24,878 genes and 32,829 gene transcripts.
  • About 34 products were launched related to nucleic acid sample handling, separation and purification as well as related applications.
  • Broadened its intellectual property and technology portfolio by adding 5 applied and issued patents as well as 8 licenses.

QIAGEN streamlined its organization and operations

  • QIAGEN introduced a new management structure starting January 01, 2004 based on a senior management Executive Committee
  • QIAGEN created two new management positions and appointed Noel Thomas Doheny as Vice President Solutions for Molecular Diagnostics and Dr. Thomas Schweins as Vice President Corporate Strategy who both also will be members of QIAGEN's Executive Committee
  • QIAGEN closed its Bothell, Washington facility and moved its North American Sales and Marketing operations to Germantown, Maryland to utilize the capacity of its newly constructed North American Headquarters to increase future profitability

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, 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. The Company has developed a comprehensive portfolio of more than 320 proprietary, consumable products for
nucleic acid 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, the Company 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 1,600 people worldwide. Further information on QIAGEN can be found at www.qiagen.com.

QIAGEN will host an analyst meeting and a conference call at 9:30 am EST on February 18, 2004. A webcast of the conference call will be available at http://www.videonewswire.com/QIAGEN/021804.

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 synthetic nucleic acid-related 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, and the integration of acquisitions of technologies and businesses. For further information, refer to the discussion in reports that QIAGEN has filed with the U.S. Securities and Exchange Commission (SEC).

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