QIAGEN Reports Strong First Quarter 2008 Results
May 05 2008

QIAGEN Reports Strong First Quarter 2008 Results

62% Revenue Growth, 10% Organic Growth

79% Adjusted Operating Income Growth

$0.18 Adjusted EPS

Venlo, The Netherlands, May 5, 2008 - QIAGEN N.V. (Nasdaq: QGEN; Frankfurt, Prime Standard: QIA) today announced the results of operations for its first quarter ended on March 31, 2008.

The reported net sales as well as adjusted earnings per share for the first quarter 2008 exceeded the guidance provided by the Company on February 12, 2008.

QIAGEN's first quarter 2008 results include the results of operations of Digene Corporation and eGene, Inc. as well as certain charges related to these acquisitions which occurred after the first quarter of 2007.

First Quarter 2008 Results

The Company reported that consolidated net sales for its first quarter 2008 increased 62% to $207.1 million from $127.9 million for the same quarter in 2007. Reported operating income for the quarter increased 15% to $33.0 million from $28.8 million in the same quarter of 2007, and net income for the quarter increased 2% to $20.3 million from $19.9 million in the same quarter of 2007. Diluted earnings per share for the first quarter decreased to $0.10 in 2008 (based on 205.1 million weighted average shares and share equivalents outstanding) from $0.13 in 2007 (based on 156.2 million weighted average shares and share equivalents outstanding).

On an adjusted basis, first quarter operating income increased 79% to $58.7 million in 2008 from $32.8 million in 2007, and first quarter 2008 adjusted net income increased 63% to $36.9 million from $22.6 million in 2007. Adjusted diluted earnings per share increased to $0.18 in the first quarter 2008 from $0.14 in 2007.

QIAGEN's First Quarter 2008 (in US$ millions, except per share information)

 

Q1 2008

Q1 2007

Growth
Net sales (US$ million) 207.1 127.9 62%
Operating income, adj.1 58.7 32.8 79%
Net income, adj.1 36.9 22.6 63%
EPS, adj.1 (US$) 0.18 0.14 29%

1 excluding acquisition, integration and restructuring related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) as detailed in the table below.

QIAGEN has regularly reported adjusted results to give additional insight into its 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. The Company believes certain items should be excluded from adjusted results when they are either outside of our ongoing core operations or vary significantly from period to period, which affects the comparability of results with the Company's competitors and its own prior periods. Costs and charges excluded from adjusted results include acquisition, integration, and restructuring related costs, acquisition-related amortization, and compensation cost due to equity based compensation in accordance with Statement of Financial Accounting Standards No. 123 (Revised) (SFAS 123R).

QIAGEN's Adjustments to Gross Profit, Operating Income, Net Income and EPS

In US$ millions unless indicated Q1 2008 Q1 2007
     
Gross profit reported 141.2 87.1
Amortization of acquired IP 10.9 1.9
SFAS 123R impact 0.2 0.0
Gross profit, adjusted 152.3 89.0

 

   

Operating income, reported

33.0 28.8

Acquisition and integration related charges (incl. COS)

8.7 0.7
Relocation and restructuring charges
0.5 0.4

Amortization of acquired IP (incl. COS)

14.5 2.6
SFAS 123R Impact (incl. COS) 2.0 0.3

Operating income, adjusted

58.7 32.8
     

Net income, reported

20.3 19.9

Acquisition and integration related charges

5.6 0.5
Relocation and restructuring charges 0.3 0.3

Amortization of acquired IP

9.4 1.7
SFAS 123R Impact 1.3 0.2

Net income, adjusted

36.9 22.6
     

Weighted average number of basic common shares

195,993,000 150,389,000

Weighted average number of diluted common shares

205,126,000 156,199,000

EPS, reported in US$

0.10 0.13

EPS, adjusted in US$

0.18 0.14

"QIAGEN experienced a successful start into 2008," said Peer Schatz, QIAGEN's Chief Executive Officer. "We saw strong revenue and net income growth and exciting momentum in our strategic position. We launched 19 new products in the area of sample and assay technologies and are managing a strong pipeline of new products. Most notably, our new flagship, the QIAsymphony platform, launched in January 2008, has received a very strong reception by our customers across all segments."

"Our financial statements also give evidence to significant value creation from our most recent acquisitions. The integrations of our recently acquired businesses are fully on track to meet their targets in terms of cost synergies, accretion and timelines. In January 2008, QIAGEN launched the QIAxcel system which is based on the capillary electrophoresis technology acquired in the transaction with eGene. QIAGEN also initiated marketing of QIAGEN's new line of digene HC2 tests added in the Digene acquisition through merged laboratory sales channels. In addition, we significantly expanded our clinical sales channel, launched new tactical and marketing campaigns and created access for our products in countries not previously served directly."

"We are very pleased with our financial performance in this first quarter of 2008. Reported revenues and adjusted earnings per share came in very strong and exceeded our expectations. We experienced a strong adjusted operating margin jump to 28% in the first quarter 2008 which corresponds to a growth rate of 79% year over year reflective of the attained cost synergies following the acquisition of Digene," said Roland Sackers, QIAGEN's Chief Financial Officer.

"Revenue growth for the first quarter was 62% and was fueled by a strong organic growth of 10% and a positive contribution of 43% from acquisitions. Our consumable portfolio contributed 68% growth (59% at constant exchange rates). In the wake of new product introductions in QIAGEN's instrumentation business (such as the QIAsymphonySP and QIAxcel) which will mostly start shipping late in the second quarter, this product area recorded a growth rate at constant exchange rates of 3%. Net sales in North America for the first quarter 2008 represented approximately 50% of our overall business and recorded a growth rate of 106% while European sales, which represent approximately 38% of our revenues showed a growth rate of 21% at constant exchange rates. Despite the expiration of a number of third party distribution agreements end of 2007 which we had inherited through previous acquisitions, net sales in Asia remained strong, showing a growth rate of 14% at constant exchange rates."

QIAGEN's First Quarter 2008 at Constant Currencies

 

2008 2008 2007

Growth Rates

As percentage Q1 Q1 Q1

 

 

of net sales,
unless indicated
Reported Constant Currency Reported Reported Constant Currency
Consumables 92% 92% 89% 68% 59%
Instruments 7% 7% 10% 11% 3%
Others 1% 1% 1% 71% 59%
Total revenues 100% 100% 100% 62% 53%
           
Gross margin 68% 69% 68% 62% 55%
Gross margin, adj.1 74% 75% 70% 71% 64%

 

         
Operating income margin 16% 17% 23% 15% 15%
Operating income margin, adj.1 28% 30% 26% 79% 78%

 

         
Net income margin 10% 10% 16% 2% -1%
Net income margin, adj.1 18% 18% 18% 63% 60%
           
EPS in US$ per share 0.10 0.10 0.13 -23% -23%
EPS in US$ per share, adj.1 0.18 0.18 0.14 29% 29%

1excluding acquisition, integration and restructuring related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R) as detailed in the table above.

Detailed information on QIAGEN's business and financial performance will be presented in its conference call on May 6, 2008 at 9:30am ET. The corresponding presentation slides will be available for download on QIAGEN's website at www.qiagen.com/goto/050608. A webcast of the conference call will be available on the same website at www.qiagen.com/goto/050608.

QIAGEN - Sample and Assay Technologies Highlights:

 QIAGEN and BioHelix entered into a non-exclusive worldwide license and supply agreement for BioHelix's proprietary Helicase Dependent Amplification (HDA) technology. Unlike conventional amplification technologies such as polymerase chain reaction (PCR), which requires thermocycling, HDA works at a constant temperature, eliminating the need for complex and costly instrumentation. HDA is compatible with a large range of detection instruments including those incorporated in the QIAsymphony and the QIAensemble platforms. The technology can be the basis to a wide field of singleplex and/or multiplex assays for use in research, pharmaceutical development, applied markets or molecular diagnostics.

QIAGEN launched 19 new products in the area of sample & assay technologies including the QIAxcel for fully automated capillary electrophoresis to separate and analyze DNA, RNA and proteins, the QIAsymphonySP, the first system of a novel modular processing platform which can be integrated to automate entire workflows and the EZ1 Advanced, the next generation of our successful EZ1 for the fully automated low throughput sample preparation with prefilled cartridges, introduced in 2004. In addition QIAGEN launched a number of assay technologies including two tests for the applied testing markets to detect bovine virus diarrhea virus (BVD) in cattle and Taylorella equigenitalis in horses.

QIAGEN opened a new Service Solutions Center in Singapore for the Asia-Pacific region. The facility completes the Company's global Service Solution Network by adding a center in the Asia-Pacific region to its existing centers in the United States (Valencia, CA, and Germantown, MD), Europe (Hilden, Crawley, Paris) and Japan (Tokyo).

QIAGEN and the Center for Molecular Medicine (CMM) established a research collaboration for molecular diagnostic markers for breast cancer and other women's health issues. CMM's privileged access to clinical samples, its molecular analysis capabilities as well as XenoBase, a one-of-a-kind software and database system developed at the Van Andel Research Institute make it a perfect partner to identify clinically actionable associations between diseases, biomarkers and treatments. Based on the result of QIAGEN's initial research, CMM may also provide laboratory-based genomics and proteomics services to assist QIAGEN in the development and validation of new molecular diagnostic tests.

About QIAGEN:

QIAGEN N.V., a Netherlands holding company, is the leading global provider of sample and assay technologies. Sample technologies are used to isolate and process DNA, RNA and proteins from biological samples such as blood or tissue. Assay technologies are used to make such isolated biomolecules visible. QIAGEN has developed and markets more than 500 consumable products as well as automated solutions for such consumables. The company provides its products to molecular diagnostics laboratories, academic researchers, pharmaceutical and biotechnology companies, and applied testing customers for purposes such as forensics, animal or food testing and pharmaceutical process control. QIAGEN's assay technologies include one of the broadest panels of molecular diagnostic tests available worldwide. This panel includes the only FDA-approved test for human papillomavirus (HPV), the primary cause of cervical cancer. QIAGEN employs more than 2,700 people in over 30 locations worldwide. 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, women's health/HPV testing markets, nucleic acid-based molecular diagnostics market, and genetic vaccination and gene therapy markets, changing relationships with customers, suppliers and strategic partners, 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), our ability to obtain regulatory approval of our infectious disease panels, 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 acquired 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).


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