QIAGEN Reports Second Quarter 2008 Results
61% Revenue Growth, 11% Organic Growth
68% Adjusted Operating Income Growth
$0.20 Adjusted EPS
Venlo, The Netherlands, August 4, 2008 - QIAGEN N.V. (Nasdaq: QGEN; Frankfurt, Prime Standard: QIA) today announced the results of operations for the second quarter and the six-month period ended June 30, 2008.
The reported net sales for the second quarter 2008 were in line with and adjusted earnings per share exceeded the guidance provided by the Company on May 6, 2008.
QIAGEN's second 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 second quarter of 2007.
Second Quarter and First Six-Month Period 2008 Results
The Company reported that consolidated net sales for its second quarter 2008 increased 61% to $217.9 million from $135.0 million for the same quarter in 2007. Reported operating income for the quarter increased 10% to $34.0 million from $31.0 million in the second quarter of 2007, and net income for the second quarter 2008 increased slightly to $23.2 million from $22.6 million in the same quarter of 2007. Diluted earnings per share for the second quarter decreased to $0.11 in 2008 (based on 205.5 million weighted average shares and share equivalents outstanding) from $0.14 in 2007 (based on 156.9 million weighted average shares and share equivalents outstanding).
On an adjusted basis, second quarter operating income increased 68% to $60.6 million in 2008 from $36.0 million in 2007, and second quarter adjusted net income increased 57% to $40.4 million in 2008 from $25.8 million in 2007. Adjusted diluted earnings per share increased to $0.20 in the second quarter 2008 from $0.16 in 2007.
|QIAGEN's Second Quarter 2008 (in US$ millions, except per share information)|
|Q2 2008||Q2 2007||Growth|
|Operating income, adj.||60.6||36.0||68%|
|Net income, adj.||40.4||25.8||57%|
|EPS, adj. (US$)||0.20||0.16||25%|
|Adjusted figures 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.|
For the six-month period ended June 30, 2008, net sales increased 62% to $425.0 million compared to $262.9 million in the comparable period of 2007. Operating income as reported for the first half of 2008 increased 12% to $67.0 million from $59.8 million for the same period in 2007, net income increased 3% to $43.6 million from $42.5 million in 2007, and diluted earnings per share decreased to $0.21 in 2008 from $0.27 in 2007.
On an adjusted basis, operating income for the six-month period ended June 30, 2008 increased 73% to $119.2 million in 2008 from $68.8 million in 2007, and adjusted net income increased 60% to $77.3 million from $48.4 million. Adjusted diluted earnings per share in the six months ended June 30, 2008 increased 23% to $0.38 per share from $0.31 per share in the same period of 2007.
QIAGEN has regularly reported adjusted results to give additional insight into its financial performance. Adjusted results should be considered in addition to the reported results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute. The Company believes certain items should be excluded from adjusted results when they are either outside of our ongoing core operations or vary significantly from period to period, which affects the comparability of results with the Company's competitors and its own prior periods. Costs and charges excluded from adjusted results include acquisition, integration, and restructuring-related costs, acquisition-related amortization, and equity based compensation in accordance with Statement of Financial Accounting Standards No. 123 (Revised) (SFAS 123R).
|QIAGEN's Adjustments to Gross Profit, Operating Income, Net Income and EPS|
|in US$ millions unless indicated||Q2 2008||Q2 2007||6M 2008||6M 2007|
|Gross profit reported||148.1||91.5||289.3||178.6|
|Amortization of acquired IP||11.9||2.0||22.8||3.9|
|SFAS 123R impact||0.3||-||0.5||-|
|Gross profit, adjusted||160.3||93.5||312.6||182.5|
|Operating income, reported||34.0||31.0||67.0||59.8|
|Acquisition and integration related charges||9.3||1.3||18.1||2.0|
|Relocation and restructuring charges||0.1||0.1||0.5||0.5|
|Amortization of acquired IP (incl. COS)||14.8||2.7||29.2||5.3|
|SFAS 123R impact (incl. COS)||2.4||0.9||4.4||1.2|
|Operating income, adjusted||60.6||36.0||119.2||68.8|
|Net income, reported||23.2||22.6||43.6||42.5|
|Acquisition and integration related charges||6.1||0.9||11.7||1.3|
|Relocation and restructuring charges||-||-||0.3||0.4|
|Amortization of acquired IP||9.5||1.7||18.8||3.4|
|SFAS 123R impact||1.6||0.6||2.9||0.8|
|Net income, adjusted||40.4||25.8||77.3||48.4|
|Weighted average number of diluted common shares||205,475,000||156,902,000||205,300,000||156,550,000|
|EPS, reported in US$||0.11||0.14||0.21||0.27|
|EPS, adjusted in US$||0.20||0.16||0.38||0.31|
"QIAGEN experienced a successful second quarter 2008," said Peer Schatz, QIAGEN's Chief Executive Officer. "We saw strong revenue and net income growth and continue to expand our leadership and strategic position. We launched 19 new products in the area of sample and assay technologies with a focus on gene and protein function analysis and in June also started shipping of our new flagship platform, the QIAsymphony which was launched in January 2008 and already received significant interest from our customers across all segments. In line with our projected timelines, in July we transitioned the few remaining projects related to the Digene integration to the line functions in the organization and concluded the Digene integration project in time and above target in terms of planned cost synergies."
"We further expanded our market and technology leadership in molecular diagnostics by adding two important products to QIAGEN's instrumentation platform through the acquisition of Corbett Life Science in July this year. Both products, the Rotor-Gene real-time PCR cycler and the CAS instrument, a reaction set-up system, can be seamlessly combined with QIAGEN's sample and assay technologies portfolio. In addition, the cycler technology can easily be integrated into the QIAsymphony platform to complete an automated system which covers the whole workflow from sample preparation to result measurement in all key areas of PCR-based assay analysis."
"We are very pleased with our financial performance in this second quarter of 2008. Reported revenues were in line with and adjusted earnings per share exceeded our expectations. We experienced a strong adjusted operating margin increase to 28% in the second quarter 2008 which corresponds to a growth rate of 68% year over year reflecting the achievement of cost synergies following the acquisition of Digene," said Roland Sackers, QIAGEN's Chief Financial Officer.
"Revenue growth for the second quarter was 61% and was fueled by a strong organic growth of 11% and a positive contribution of 41% at constant currencies from acquisitions. Our sample and assay portfolio contributed 64% growth (55% at constant exchange rates). QIAGEN's instrumentation business recorded a growth rate of 39% (30% at constant exchange rates) based on the new instruments (QIAsymphonySP and QIAxcel) which started shipping during the second quarter. Net sales in the Americas for the second quarter 2008 represented 49% of our overall business and recorded a growth rate of 96% (95% at constant currencies) while European sales, which represent 40% of our revenues, showed a growth rate of 38% (22% at constant exchange rates). Net sales in Asia remained strong, showing a growth rate of 35% (24% at constant exchange rates)."
Update on Guidance for Fiscal 2008
Based on the first six months and reflecting the revenue contribution of approximately $14 million and the dilution of approximately $0.02 to adjusted earnings per share related to the acquisition of Corbett Life Science, QIAGEN updated its guidance for the full year 2008. QIAGEN adjusted its revenue guidance for fiscal 2008 to $889 - $919 million and increased its guidance for adjusted earnings per share from adjusted $0.74 - $0.78 to $0.79 - $0.80.
|QIAGEN's Second Quarter 2008 at Constant Currencies|
|of net sales,||Constant||Constant|
|Gross margin, adj.||74%||74%||69%||72%||63%|
|Operating income margin||16%||16%||23%||10%||8%|
|Operating income margin, adj.||28%||29%||27%||68%||66%|
|Net income margin||11%||11%||17%||3%||2%|
|Net income margin, adj.||19%||19%||19%||57%||55%|
|EPS in US$ per share||0.11||0.11||0.14||-21%||-21%|
|EPS in US$ per share, adj.||0.20||0.19||0.16||25%||19%|
|Adjusted figures 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 above.|
Detailed information on QIAGEN's business and financial performance will be presented in its conference call on August 5, 2008 at 9:30am ET. The corresponding presentation slides will be available for download on QIAGEN's website at www.qiagen.com/goto/050808. A webcast of the conference call will be available on the same website at http://www.qiagen.com//goto/050808.
QIAGEN - Sample and Assay Technologies Highlights:
QIAGEN acquired Corbett Life Science Pty. Ltd., a privately-held developer, manufacturer, and distributor of life sciences instrumentation headquartered in Sydney, Australia on July 1. Corbett is best known for the world's first rotary real-time PCR cycler system - the Rotor-GeneTM - a system used to detect and measure real-time polymerase chain reaction (PCR) reactions. The addition of this proprietary PCR detection technology extends QIAGEN's molecular testing solution portfolio and enhances QIAGEN's options to offer sample and assay technology solutions spanning from sample to result. The Corbett Rotor-Gene real-time PCR cycler is an excellent complement to QIAGEN's portfolio of current and future molecular testing solutions, including its modular processing platform QIAsymphony. Shortly prior to the acquisition of Corbett by QIAGEN, Corbett acquired a license for certain Idaho Technologies patents related to real-time PCR instrumentation and applications.
QIAGEN launched 19 new products in the area of sample & assay technologies including a series of innovative products for micro RNA (miRNA) and epigenetic processing and analysis. In addition, QIAGEN launched a number of assay technologies including two CE-marked tests (HIV-1 and borrelia) as well as tests for the applied testing markets (bovine virus diarrhea virus (BVD) in cattle and Taylorella equigenitalis in horses).
The German Association of Gynaecology and Obstetrics (Deutsche Gesellschaft für Gynäkologie und Geburtshilfe, DGGG) announced clinical guidelines "S-2-guidelines for the prevention, diagnostic and therapy of HPV infections and pre-invasive lesions of female genitals" and recommend the implementation of an HPV test in conjunction with the Pap Smear test for routine screening of women age 30 and above in Germany. The reimbursement and the implementation of the HPV test with routine screening "will help to identify pre-stages of cervical cancer that are treatable and at the same time will avoid more significant surgeries with patients when presenting late-stage symptoms of cervical cancer."
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 sample and assay 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 2,800 people in over 30 locations worldwide. Further information about 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, 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).