QIAGEN Reports Strong Fourth Quarter and Fiscal 2005 Year-End Results
Revenues Exceed Guidance - 16% Constant Currency Growth in Consumables Adjusted EPS US$ 0.13
Venlo , The Netherlands , February 13, 2006 - QIAGEN N.V. (Nasdaq: QGEN; Frankfurt , Prime Standard: QIA) today announced the results of operations for its fourth quarter and fiscal year ended December 31, 2005.
The reported net sales for the fourth quarter 2005 and fiscal year 2005 exceeded guidance and earnings per share were in line with the guidance given by the Company on November 8, 2005.
The Company reported that net sales for its fourth quarter increased to $104.3 million from $95.5 million for the same period in 2004. Reported operating income for the fourth quarter of 2005 increased 17% to $26.0 million from $22.3 million in the same quarter in 2004, net income increased 6% to $16.9 million from $15.8 million in 2004 and diluted earnings per share remained unchanged at $0.11 (based on 149.7 million average shares and share equivalents outstanding) compared to $0.11 (based on 148.6 million average shares and share equivalents outstanding) in the same quarter in 2004. Excluding acquisition and integration related costs and charges in both periods, diluted earnings per share increased 18% to $0.13 per share in 2005, from $0.11 in 2004.
Operating income in both periods includes acquisition-related amortization, and acquisition and integration related costs. The impact of these costs and charges during the fourth quarter 2005 totaled $4.8 million ($3.0 million net of tax). In the fourth quarter of 2004, amortization on acquired intangibles, acquisition costs and expenses related to the Company's relocation and restructuring efforts totaled $0.9 million ($0.6 million net of tax), and $0.4 million of additional taxes due in connection with 2004 restructuring activities. Adjusting for these costs and charges, for the fourth quarter 2005 as compared to the same period in 2004, operating income increased 33% to $30.8 million from $23.1 million, net income increased 18% to $19.9 million from $16.8 million, and diluted earnings per share increased 18% to $0.13 per share, from $0.11.
For the year ended December 31, 2005, net sales increased 5% to $398.4 million from $380.6 million in 2004. Excluding revenues related to the synthetic DNA business unit which the Company sold in Q2 2004, consolidated net sales would have increased 11% to $398.4 million from $360.3 million in the year ended December 31, 2004. Operating income as reported for fiscal 2005 increased 13% to $94.8 million from $84.1 million for the same period in 2004, and net income increased 28% to $62.2 million from $48.7 million in 2004, and diluted earnings per share increased 24% to $0.41 (based on 150.2 million average shares and share equivalents outstanding) from $0.33 (based on 148.5 million average shares and share equivalents outstanding). Excluding acquisition and integration related costs and charges in both periods, diluted earnings per share increased 15% to $0.45 per share in 2005, from $0.39 in 2004.
Adjusting for the effect of acquisition-related costs and charges, including acquisition-related amortization, of which $10.6 million ($7.0 million net of tax) and $7.3 million ($5.0 million net of tax) expensed in the years ended December 31, 2005 and 2004, respectively, and the effect of costs and charges related to the sale of QIAGEN's synthetic DNA business unit during the second quarter 2004, of $9.3 million ($4.9 million net of tax), operating income for the year ended December 31, 2005 increased 15% to $105.4 million from $91.4 million in 2004, net income increased 18% to $69.2 million in 2005 from $58.5 million in 2004, and diluted earnings per share increased 18% to $0.46 from $0.39 in 2004.
Guidance for 2006:
QIAGEN expects to record a revenue growth rate in 2006 between 13 - 16% and adjusted diluted earnings per share between $0.52 - $0.55, in each case excluding foreign exchange translation effects. These foreign exchange translation effects are expected to reduce the revenue growth by 2% but have no significant impact on earnings per share. The Company will provide detailed guidance in the Company's conference call on February 14, 2006.
"2005 was an exciting and important year for QIAGEN and provides a great basis for our success in 2006. Our Company executed well on our strategy and we further increased our technology and market leadership. We are demonstrating significant success in innovating, partnering and acquiring and are in a strong position to address attractive opportunities in research, clinical research, molecular diagnostics and applied markets", said Peer Schatz, QIAGEN's Chief Executive Officer. "2005 was a very innovative year for QIAGEN. As a result of a fundamental change in our innovation process in 2004, we were able to successfully launch more than 50 new products which contributed a record 4% to 2005 net sales and also have a strong pipeline of new products for 2006 and 2007. We also successfully built a very promising leadership position in protein sample preparation and significantly expanded our presence in China . Our internal development programs, the management of our partnerships and the integrations of the acquired businesses are well on track."
"One of the key accomplishments of 2005 was that we, through a combination of innovation, partnerships and acquisitions, developed QIAGEN in to what is today one of the largest molecular diagnostic companies in the world."
"QIAGEN experienced a strong fourth quarter 2005 and fiscal year 2005. Our fourth quarter net sales exceeded our guidance and our operating income and EPS guidance were in-line," said Roland Sackers, QIAGEN's Chief Financial Officer. "Revenue growth for the full year, adjusted for the 2004 management buy-out of our synthetic DNA business unit, was over 11%. Adjusted for the divestiture of our contract manufacturing business, the shift of revenue recognition for our IVD-cleared PAXgene Blood RNA product line to our joint venture partner Beckton, Dickinson and Company (both announced in August 2005) our growth rate was 13%. Growth was significantly driven by very successful new product introductions. Our consumable business showed a solid 13% revenue growth rate with an exciting constant currency growth rate of 16% in the fourth quarter which was fueled by a strong demand from the pharmaceutical industry and molecular diagnostics markets. QIAGEN experienced a good year in terms of sales of instrumentation products through our own sales channels. These QIAGEN BioRobot-branded product lines showed solid growth and the pipelines are strong for 2006. Net sales for the fiscal year 2005 recorded in North America represented approximately 46% of our overall business and recorded a growth rate of 6% whereby European sales, which represent approximately 43% of our revenues showed a growth rate of approximately 18%, fueled by an increasing demand coming from customers in academic research and molecular diagnostics. Japanese sales showed a growth rate of approximately 2% in 2005 with an improving outlook for 2006 and 4% growth during the fourth quarter 2005."
Launched more than 50 new products for preanalytical sample management.
Validated and launched testing solutions for avian flu (H5N1) virus surveillance.
Launched the Qproteome TM product line which is believed to represent one of the broadest, most comprehensive and technologically most advanced solution portfolios for the preanalytical processing (fractionation and depletion) of proteins.
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.
Received 510(k) clearance ("de novo" classification) from the U.S. Food and Drug Administration (FDA) and received CE mark for the European markets and the ISO 9001:2000 and EN ISO 13485:2003 certification for the PreAnalytiX's PAXgene TM Blood RNA System.
Launched the human druggable genome siRNA Set V2.0, enabling highly efficient and effective RNAi studies of 6,992 potential human druggable targets. QIAGEN believes it is the world's market leader for such RNAi solutions.
Announced the launch of the new GeneChip® Globin-Reduction kits for Affymetrix Inc.
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.
Formed a strategic alliance with Eppendorf AG to co-develop and co-market complementary and optimized products.
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.
Entered into a manufacturing and supply agreement with Roche Molecular Systems, Pleasanton , California , a unit of Roche Diagnostics Basel, Switzerland, who will market QIAGEN's media sample preparation kits under their AmpliLute trademark.
Extended its distribution agreement with Abbott for the distribution of QIAGEN's RealArt TM molecular diagnostic tests.
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 co-marketing agreement with Xantos Biomedicine for the co-marketing of QIAGEN's genome-wide RNAi library with Xantos' high-content, automated cell-based screening platform XantoScreen TM .
Entered into a number of collaborations in the area of RNAi, including Xantos and the Insitute Curie.
In preanalytical sample management:
Acquired Eppendorf's reagent business which includes the Eppendorf "5-Prime" nucleic acid sample preparation and PCR reagent product lines and related intellectual property.
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 the RNAture nucleic acid purification ("smart plastics") product portfolio from Hitachi Chemical Research, Inc.
A cquired Beijing-based Tianwei Times, a leading developer, manufacturer and supplier of nucleic acid sample preparation consumables in China .
In molecular diagnostics:
Acquired artus GmbH which contributed a broad portfolio of molecular testing solutions and IP and thereby increased QIAGEN's value as a partner to the molecular diagnostic industry.
Agreed to acquire China-based Shenzen PG Biotech Co. Ltd., a molecular diagnostics leader in China .
Recognized with an award for being one of the Top 10 "Best Companies to Work For". This prestigious recognition was awarded by the Corporate Research Foundation (CRF) and Geva Institute.
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 .
Detailed information on the Company's business and financial performance as well as guidance on the Company's outlook for 2006 will be presented in the Company's conference call on February 14, 2006 at 9:30am EST. The corresponding presentation slides will be available 60 minutes ahead of the conference call on the Company's website at www.qiagen.com/goto/021406. A webcast of the conference call will be available on the same website at www.qiagen.com/goto/021406.
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, China, Malaysia, Sweden, and the Netherlands believes it is the world ' s leading provider of innovative enabling technologies and products for molecular diagnostics solutions and preanalytical sample preparation 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 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, the integration of acquisitions of technologies and businesses, and the timing of product introductions by our commercial partners. 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).