QIAGEN Reports Third Quarter 2007 Results
50% Revenue Growth
$0.17 Adjusted Diluted EPS
43% Adjusted Operating Income Growth
Increasing Full Year 2007 Adjusted EPS Guidance by $0.03 to $0.61 - $0.62
Venlo, The Netherlands, November 5, 2007 - QIAGEN N.V. (Nasdaq: QGEN; Frankfurt, Prime Standard: QIA) today announced the results of operations for the third quarter and nine months ended September 30, 2007.
QIAGEN's third quarter results include the results of operations of Digene Corp. and eGene, Inc. from the dates of acquisition, as well as one time charges related to these acquisitions.
The Company reported that consolidated net sales for its third quarter 2007 increased 50% to $176.6 million from $117.9 million for the same period in 2006. In the three month period ended September 30, 2007, the Company reported an operating loss of $1.7 million as compared to operating income of $26.7 million reported in the same quarter of 2006, and reported a net loss for the quarter of $7.3 million, as compared to the net income of $19.4 million in the same quarter of 2006. Diluted earnings per share for the third quarter show a loss of $0.04 per share in 2007 from net income per share of $0.13 in 2006.
On an adjusted basis, third quarter operating income increased 43% to $43.7 million in 2007 from $30.6 million in 2006, and third quarter 2007 adjusted net income increased 42% to $31.1 million from $21.9 million in 2006. Adjusted diluted earnings per share in the third quarter 2007 increased 21% to $0.17 per share, from $0.14 per share in the third quarter 2006.
For the nine-month period ended September 30, 2007, reported net sales increased 29% to $439.6 million compared to $339.9 million in the comparable period of 2006. Operating income as reported for the first nine months of 2007 decreased 21% to $58.1 million from $73.7 million for the same period in 2006, net income decreased 31% to $35.1 million from $51.1 million in 2006, and diluted earnings per share decreased 36% to $0.21 from $0.33 in 2006.
On an adjusted basis, operating income for the nine-month period ended September 30, 2007 increased 29% to $112.5 million in 2007 from $87.5 million in 2006, and adjusted net income increased 30% to $79.4 million from $60.9 million. Adjusted diluted earnings per share in the nine months ended September 30, 2007 increased 20% to $0.48 per share from $0.40 per share in the same period of 2006.
QIAGEN has regularly reported adjusted results to give an 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, restructuring and related costs, acquisition-related amortization, and compensation cost due to equity based compensation in accordance with Statement of Financial Accounting Standards No. 123 (SFAS 123R).
"QIAGEN experienced a strong third quarter 2007. We saw revenue and earnings growth which were in line and above our expectations, respectively. Our pipeline of opportunities and products is one of the strongest ever." said Peer Schatz, QIAGEN's Chief Executive Officer.
"Sales of our sample and assay technologies to customers in the Molecular Diagnostics field developed better than expected with a revenue contribution of approx. 42% to the overall business during the third quarter. We are progressing very well with our integration of Digene and can reaffirm our time plans and target cost synergies of between $35 and $45 million in 2008. With approximately 5% of all integration projects already completed and approximately 25% of the defined milestones already achieved."
"Sales of QIAGEN sample and assay technologies to customers in molecular diagnostics associated with Women's Health/HPV showed strong growth. The importance of our franchise was underscored in the last few days and weeks by several studies which were performed using QIAGEN HPV testing solutions. In a landmark publication, the first randomized, controlled study of HPV testing as a primary, stand-alone screen for cervical cancer was performed in North America. This study involved more than 10,000 Canadian women age 30-69 and the study's authors concluded that HPV testing with QIAGEN's HPV test is almost 71% more accurate than traditional cytology (the "Pap smear") in identifying women with advanced cervical disease. These findings together with comparable results published in ten different trials in nine European countries with a total of approximately 190,000 patients provide further impetus to countries that have not yet implemented HPV screening programs to move towards the use of HPV testing as the primary screen - as opposed to its use as an adjunct assay in combination with the Pap Smear as it is currently implemented in the U.S."
Taking into consideration the Company's strong performance during the third quarter, QIAGEN increased its guidance for adjusted diluted EPS (based on an estimated weighted average number of fully diluted shares outstanding of approximately 180 million) for the full year 2007 by $0.03 from the previously announced $0.55-$0.59 to $0.61-$0.62. QIAGEN also reiterated its revenue guidance for the full year 2007 of $614 - $635 million (based on constant exchange rates as of January 31, 2007) previously announced on August 6, 2007.
"We are very pleased with the financial performance for the third quarter of 2007. Reported revenues were in line and adjusted earnings per share came in very strong and exceeded the Company's expectations," said Roland Sackers, QIAGEN's Chief Financial Officer. "We reported revenue growth for the third quarter of 50%, fueled by a strong organic growth of 10% and a positive contribution of 35% from acquisitions. In addition, our consumable portfolio exhibited 50% growth (45% growth at constant currencies). QIAGEN's instrumentation business showed a very strong growth rate of 39% at constant exchange rates. North American net sales for the third quarter represented approximately 52% of our overall business and grew at 70% at constant exchange rates while European sales, which represent approximately 37% of our revenues, exhibited a growth rate of approximately 23% at constant exchange rates. Net sales in Asia which represented approximately 9% of our revenues showed a growth rate of 29% at constant exchange rates driven by strong demand, primarily in China as well as from Singapore and Korea."
Detailed information on the Company's business and financial performance will be presented in the Company's conference call on November 6, 2007 at 9:30am ET. The corresponding presentation slides will be available for download on the Company's website at http://www.qiagen.com/goto/061107. A webcast of the conference call will be available on the same website at http://www.qiagen.com/goto/061107.
QIAGEN - Sample and Assay Technologies Highlights:
QIAGEN's manufacturing site in Shenzhen, which manufactures and markets diagnostic reagents for the in-vitro diagnostic (IVD) market in China submitted the application of "Medical Device Manufacturing Enterprise License" and has been approved by the Medical Device Registration Bureau. This additional, important and rare license follows the recently changed policy ("Administrative Rules on the Registration of In-Vitro-Diagnostic Reagents (On Trial)", enforced on 1st June 2007) which has changed the supervision of IVD reagents from the Drug Registration Bureau to the Medical Device Registration Bureau.
QIAGEN introduced its new call center for customers in all Asia Pacific markets as part of QIAGEN's globally coordinated Service Solutions Centers to support customers around the world 24 hours a day, 7 days a week. This call center includes a state of the art Application Laboratory as well as a Training Center and will support customers from all countries within Asia Pacific incorporating Service Solutions functions such as Technical Service, Customer Care, Training and Field Service for the Asia Pacific region.
The FDA has granted QIAGEN's manufacturing site in Hombrechtikon, Switzerland, which designs and manufactures the instruments for QIAGEN's automation business full cGMP compliance for instruments in clinical use.
QIAGEN N.V., a Netherlands holding company is the leading provider of innovative sample and assay technologies and products. QIAGEN's products are considered standards in areas such pre-analytical sample preparation and assay solutions in research for life sciences, applied testing and molecular diagnostics. QIAGEN has developed a comprehensive portfolio of more than 500 proprietary, consumable products and automated solutions The company's products are sold to academic research markets, to leading pharmaceutical and biotechnology companies, to applied testing customers (such as in forensics, veterinary, biodefense and industrial applications) as well as to molecular diagnostics laboratories. QIAGEN employs more than 2,600 people worldwide. QIAGEN products are sold through a dedicated sales force and a global network of distributors in more than 40 countries. 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).