QIAGEN Reports Strong Second Quarter 2007 Results
Aug 06 2007

QIAGEN Reports Strong Second Quarter 2007 Results

19% Revenue Growth, 15% Constant Currency and 11% Organic Growth

30% Adjusted Net Income Growth

$0.16 Adjusted EPS

Venlo, The Netherlands, August 6, 2007 - QIAGEN N.V. (Nasdaq: QGEN; Frankfurt, Prime Standard: QIA) today announced the results of operations for the quarter ended June 30, 2007.  

QIAGEN's Second Quarter: 

Q2 2007

Q2 2006

Growth

Net sales (US$ m)

135.0

113.2

19%

Operating margin, adj.*

27%

26%

 

Net income, adj. (US$) * 25.8 19.8 30%

EPS, adj. (US$) *

0.16

0.13

23%

* excluding acquisition, integration and restructuring related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R)

The Company reported that consolidated net sales for its second quarter 2007 increased 19% to $135.0 million from $113.2 million for the same period in 2006. Reported operating income for the quarter increased 43% to $31.0 million from $21.7 million in the same quarter of 2006, and net income for the quarter increased 60% to $22.6 million from $14.2 million in the same quarter of 2006. Diluted earnings per share for the second quarter increased 56% to $0.14 in 2007 (based on 156.9 million weighted average shares and share equivalents outstanding) from $0.09 in 2006 (based on 153.2 million weighted average shares and share equivalents outstanding).

On an adjusted basis, second quarter operating income increased 24% to $36.0 million in 2007 from $29.1 million in 2006, and second quarter 2007 adjusted net income increased 30% to $25.8 million from $19.8 million in 2006. Adjusted diluted earnings per share in the second quarter 2007 increased 23% to $0.16 per share, from $0.13 per share in the second quarter 2006.

 

QIAGEN's Second Quarter 2007 at Constant Currencies:

 

2007

2007

2006

Growth Rates

As percentage

Q2

Q2

Q2

 

 

 

of net sales,
unless indicated

Reported

Constant Currency

Reported

Reported

Constant Currency

Consumables

89%

89%

90%

19%

15%

Instruments

10%

10%

9%

32%

29%

Others

1%

1%

1%

-19%

-23%

Total revenues

100%

100%

100%

19%

15%

Operating income margin

23%

23%

19%

43%

41%

Operating income margin, adj. *

27%

27%

26%

24%

22%

Net income margin

17%

17%

12%

60%

59%

Net income margin, adj. *

19%

20%

18%

30%

30%

EPS in US$ per share

0.14

0.14

0.09

56%

56%

EPS in US$ per share, adj. *

0.16

0.16

0.13

23%

23%

* excluding acquisition, integration and restructuring related charges as well as amortization of acquired IP and equity-based compensation (SFAS 123R)

For the six-month period ended June 30, 2007, net sales increased 18% to $262.9 million compared to $221.9 million in the comparable period of 2006. Operating income as reported for the first half of 2007 increased 27% to $59.8 million from $47.0 million for the same period in 2006, net income increased 34% to $42.5 million from $31.7 million in 2006, and diluted earnings per share increased 29% to $0.27 from $0.21.

On an adjusted basis, operating income for the six-month period ended June 30, 2007 increased 21% to $68.8 million in 2007 from $56.9 million in 2006, and adjusted net income increased 24% to $48.4 million from $39.0 million. Adjusted diluted earnings per share in the six months ended June 30, 2007 increased 19% to $0.31 per share from $0.26 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's Adjustments to Operating Income, Net Income and EPS:

In US$ millions unless indicated

Q2 2007 Q2 2006

6M 2007

6M 2006

Operating income, reported

31.04 21.72 59.83 46.96

Acquisition and integration related charges

1.34 4.63 2.04 5.58
Relocation and restructuring charges 0.07 0.78 0.48 0.78

SFAS 123R Impact

0.89 0.06 1.22 0.14

Amortization of acquired IP

2.66 1.89 5.25 3.40

Operating income, adjusted

36.00 29.08 68.82 56.86
         

Net income, reported

22.58 14.15 42.45 31.73

Acquisition and integration related charges

0.86 3.84 1.32 4.48
Relocation and restructuring charges 0.04 0.57 0.36 0.57

SFAS 123R Impact

0.59 0.04 0.80 0.09

Amortization of acquired IP

1.74 1.22 3.44 2.17

Net income, adjusted

25.81 19.82 48.37 39.04

 

   

 

 

Weighted average number of diluted common shares

156,902,000 153,233,000 156,550,000 152,782,000

EPS, reported in US$

0.14 0.09 0.27 0.21

EPS, adjusted in US$

0.16 0.13 0.31 0.26

"QIAGEN experienced a very strong second quarter 2007. We saw strong revenue and earnings growth which exceeded our expectations. In addition, we see exciting momentum in our focused, strategic position," said Peer Schatz, QIAGEN's Chief Executive Officer.

"The financial results reported today do not yet include any contributions from the financial results of Digene Corporation. In the second quarter we announced our agreement to acquire Digene and completed the acquisition on July 30. In the three months ended June 30, 2007, Digene's revenues grew approximately 31% to $56.8 million from $43.3 million in the same quarter of 2006 - exceeding Digene's guidance for this quarter."

"This transaction is an exciting and important step for QIAGEN. It creates instantaneous market and technology leadership in molecular diagnostics - one of the most exciting areas of today's life sciences and healthcare. In addition, it catalyzes many opportunities to drive top-line and bottom-line growth. We look forward to leveraging our core capabilities to drive future growth and to delivering the significant benefits of the combination to all of our shareholders."

Taking into consideration the Company's strong performance for the first two quarters, QIAGEN increases its guidance for adjusted diluted EPS for the full year 2007 from the previously announced $0.60-$0.63 to $0.62-$0.64 before the impact of QIAGEN's recently concluded acquisitions of Digene and eGene.

Based on the previously communicated impact of the Digene and eGene acquisitions during the second half of 2007, QIAGEN forecasts revenues to increase for fiscal 2007 from the previously announced $518-$535 million (based on constant exchange rates as of January 31, 2007) to $614-$635 million. QIAGEN expects adjusted diluted EPS (based on an estimated weighted average number of fully diluted shares outstanding of approximately 180 million) for the full year 2007 to be in the range of $0.55 - $059.

"We are pleased with our financial performance in this second quarter of 2007. Reported revenues and adjusted earnings per share came in very strong and exceeded the Company's expectations," said Roland Sackers, QIAGEN's Chief Financial Officer. "Revenue growth for the second quarter was 19% and was fueled by a strong organic growth of 11% and a positive contribution of 4% from acquisitions. Our consumable portfolio contributed 19% growth (15% growth at constant currencies). QIAGEN's instrumentation business showed a very strong growth rate at constant exchange rates of 29%. Net sales for the second quarter 2007 recorded in North America represented approximately 40% of our overall business and recorded a growth rate of 6% while European sales, which represent approximately 47% of our revenues showed a growth rate of approximately 18% at constant exchange rates. Net sales in Asia showed a very strong growth rate of 53% 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 August 7, 2007 at 9:30am EST. The corresponding presentation slides will be available for download on the Company's website at www.qiagen.com/goto/070807. A webcast of the conference call will be available on the same website at www.qiagen.com/goto/070807.

QIAGEN - Sample and Assay Technologies Highlights:

 QIAGEN developed and launched 22 new products based on innovative sample and assay technologies during the second quarter 2007 for research in the areas including gene expression, micro RNA, proteomics and molecular diagnostics.

QIAGEN significantly expanded its portfolio for sample stabilization and biobanking technologies through strategic partnerships with Whatman and Biomatrica. The technologies add to QIAGEN's leading sample stabilization portfolio which includes products such as PreAnalytix' PAXgene products Whatman's FTA technologies and Biomatrica's technology target specific needs in the stabilization and storage of DNA for a wide range of biological samples and further increase QIAGEN's leadership in complete solutions for biological sample storage and sample management.

QIAGEN closed the acquisition of Digene Corporation, a leader in molecular diagnostics with a strong leadership position in HPV (human papillomavirus) molecular diagnostic testing. Digene's primary product, the Digene® HPV Test, screens for the presence of high-risk types of the virus that have been shown to be the cause of cervical cancer. The Digene® HPV Test is the only test that is both FDA-approved and CE-marked for HPV testing. This franchise addresses one of the largest and most rapidly expanding market segments in women's health and molecular diagnostics. QIAGEN completed the acquisition through a tender offer and subsequent merger of Digene with and into a wholly owned subsidiary of QIAGEN. The transaction was completed in 57 days from the time of the announcement until the closing of the merger.

QIAGEN closed the acquisition of eGene, Inc., a company that has developed and is commercializing a patented sample separation and analysis technology based on capillary electrophoresis. eGene's HDA system together with its consumables provide quality control capabilities following our customers' use of our sample technologies as well as a readout system for our assay technologies in one platform. The system can be used as a readout platform for a number of research and other applications including Human Leukocyte Antigen (HLA) testing market, genetic testing including microsatellite analyses, DNA post-PCR separation and analysis at different resolutions, and RNA integrity quality control.

About QIAGEN:

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 for sample collection, nucleic acid and protein handling, separation, and purification and open and target specific assays. 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. In this press release QIAGEN is using the term molecular diagnostics. The use of this term is in reference to certain countries, such as the United States, limited to products subject to regulatory requirements. Current QIAGEN molecular diagnostics products are one FDA approved product, four products with 510k clearance from the FDA, 38 EU CE IVD assays, six EU CE IVD sample preparation products, nine China SFDA IVD assays and 98 general purpose reagents. 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, changing relationships with customers, suppliers and strategic partners, 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), 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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