QIAGEN Reports Third Quarter 2004 Results
Venlo, The Netherlands, October 25, 2004 - QIAGEN N.V. (Nasdaq: QGENF; Frankfurt , Prime Standard: QIA) today announced the results of operations for its third quarter and nine-month period ended September 30, 2004.
The Company reported that net sales for its third quarter remained unchanged at $90.4 million from $90.4 million for the same period in 2003. Excluding $13.1 million in 2003 revenues related to the synthetic DNA business unit which the Company sold in the second quarter 2004, consolidated net sales would have increased 17% from $77.3 million in the third quarter 2003. Compared to the third quarter 2003, reported operating income for the third quarter of 2004 increased 8% to $20.9 million from $19.3 million , reported n et income increased 7% to $12.6 million from $11.8 million and d iluted earnings per share as reported increased 13% to $0.09 (based on 148.2 million average shares and share equivalents outstanding) from $0.08 (based on 147.7 million average shares and share equivalents outstanding).
Reported figures for the third quarter of 2004 include relocation and restructuring expenses as well as charges related to the recent acquisition of key assets of Molecular Staging, Inc, previously announced on September 27, 2004. Excluding the effect of these charges, compared to the third quarter 2003, operating income for the third quarter 2004 increased 23% to $23.7 million from $19.3 million, net income increased 22% to $14.4 million from $11.8 million, and diluted earnings per share increased 25% to $0.10 from $0.08.
Consolidated net sales were in line with the Company's projections, and operating income and diluted earnings per share were at the high end of the Company's guidance for the third quarter 2004 as communicated on February 18, 2004 and reiterated on August 3, 2004.
For the nine-month period ended September 30, 2004, net sales increased 11% to $285.1 million from $256.3 million in the comparable period of 2003. Excluding revenues related to the synthetic DNA business unit which the Company sold in the second quarter 2004, consolidated net sales would have increased 17% from $243.2 million in the nine-month period 2003. Operating income as reported for the first nine months of 2004 increased 17% to $61.9 million from $52.7 million for the same period in 2003, and reported net income decreased 3% to $32.9 million from $33.9 million in 2003, and diluted earnings per share as reported decreased 4% to $0.22 (based on 148.5 million average shares and share equivalents outstanding) from $0.23 (based on 146.9 million average shares and share equivalents outstanding) for the same period in 2003.
Excluding the effect of relocation and restructuring expenses and charges related to the acquisition of key assets of Molecular Staging, Inc. during the nine-month period ended September 30, 2004, as well as relocation and restructuring charges in the first quarter 2003, operating income for the nine-month period ended September 30, 2004 increased 24% to $67.4 million from $54.3 million in 2003, net income increased 23% to $40.9 million in 2004 from $33.4 million in 2003, and diluted earnings per share increased 22% to $0.28 in 2004 from $0.23 in 2003.
Relocation and restructuring charges in the nine-month period ended September 30, 2004 of $3.5 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 the third quarter of 2004 included a $1.5 million write-down of inventories which will be replaced with products integrating the newly acquired technologies, and $572,000 related to the impairment of other assets as a result of the acquisition. Restructuring and relocation charges in the first quarter of 2003 consisted of a charge of $1.6 million related to the closure and relocation of QIAGEN's Seattle facility.
"QIAGEN experienced a successful third quarter 2004 with revenues being in line with our projections and operating income and net income being on the high end of our expectation", said Peer Schatz, QIAGEN's Chief Executive Officer. "The third quarter revenue growth of 17% adjusted to the management buy-out of our synthetic DNA business was 100% organic and was driven by a strong demand for our products for separation, purification and handling of nucleic acids. Our consumable business showed a solid 15% revenue growth rate and our instrumentation business is growing as expected with 21%. North America sales which represent approximately 49% of our overall business showed a 14% growth rate fueled by an increasing demand coming from customers in clinical research and molecular diagnostics. As expected, we observed an acceleration of our European sales to a growth rate of approximately 22% and Japanese sales rebounded slightly with a growth rate of 7%. While we are seeing signs of recovery in Japan , the growth rate still reflects the change in purchasing procedures in academia."
"In the third quarter QIAGEN acquired key assets of Molecular Staging, Inc. adding a unique and highly synergistic technology to its portfolio of products for nucleic acid handling, separation and purification. With this transaction QIAGEN added a new product and technology dimension which provides valuable customer benefit in the area of pre-analytical sample processing between sample collection and analysis. QIAGEN is today the clear technology leader for whole genome amplification and provides solutions for rapidly emerging needs in fast-growing segments in clinical research and molecular diagnostics."
"QIAGEN significantly increased its strategic strength in the third quarter through the placement of $150.0 million of Senior Convertible Bonds during the third quarter 2004", said Roland Sackers, QIAGEN's Chief Financial Officer. "The placement allowed us to repay a significant amount of long-term debt that we carried prior to the placement. The previous bank loans had short and revolving terms, which were expensive and made long-term financial planning difficult. We are pleased to have raised these new funds on very favorable terms taking advantage of the attractive financing opportunities in the convertible bond market ."
- 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.
- QIAGEN completed the 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‘s intends to keep an optimized balance sheet structure and a strong cash position to allow it to act aggressively as exciting acquisition opportunities arise.
- QIAGEN announced that the declaration of conformity to the IvDD has been signed for the MDx DSP System which targets diagnostics markets and is approved for such marketing under the CE regime. QIAGEN launched the worldwide first CE-marked stand alone automated Sample Preparation System for Viral Nucleic Acids composed of the BioRobot MDx DSP; QIAsoft MDxDSP; the QIAamp DSP 96 Virus MDx Protocols and the QIAamp DSP 96 Virus MDx Kit.
- First results of the ongoing R&D collaboration between QIAGEN and Affymetrix, Inc. on combining QIAGEN's RNAi technology and Affymetrix' GeneChip ® brand array technology were presented on the RNAi Europe Conference. The comprehensive data revealed the complexity of biological networks, and demonstrated that the combination of both technologies in well-defined experimental setups is a unique tool to study gene functions in a genome-wide manner.
Detailed information on the Company's business and financial performance will be presented in the Company's conference call on October 26, 2004 at 9:30am EDT. The corresponding presentation slides will be available 60 minutes ahead of the conference call on the Company's website at www.qiagen.com/goto/102604. A webcast of the conference call will be available on the same website at www.qiagen.com/goto/102604.
Form 6-K for the quarterly period ended September 30, 2004 is available on www.qiagen.com.
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. QIAGEN 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, 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 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 or furnished to the U.S. Securities and Exchange Commission (SEC).
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").