QIAGEN Reports Strong Second Quarter 2004 Results
Venlo , The Netherlands , August 2, 2004 - QIAGEN N.V. (Nasdaq: QGENF; Frankfurt , Prime Standard: QIA) today announced the results of operations for its second quarter and six-month period ended June 30, 2004.
The Company reported that net sales for its second quarter increased 14% to $98.6 million from $86.3 million for the same period in 2003. Reported operating income for the second quarter 2004 increased 32% to $22.9 million from $17.3 million in the comparable period in 2003 , net income decreased 21% to $8.8 million from $11.1 million in 2003 and diluted earnings per share decreased 25% to $0.06 (based on 148.5 million average shares and share equivalents outstanding) from $0.08 (based on 146.7 million average shares and share equivalents outstanding) in the comparable period in 2003. Reported figures for the second quarter of 2004 include relocation and restructuring expenses as well as charges related to the buyout by certain former members of the management of QIAGEN's synthetic DNA business unit during the second quarter 2004. Excluding the effect of these charges, operating income for the second quarter of 2004 increased 43% to $24.7 million from $17.3 million in the comparable period in 2003, and net income increased 31% to $14.6 million from $11.1 million in the same quarter of 2003, and diluted earnings per share increased 25% to $0.10 from $0.08 in 2003.
Consolidated net sales and operating income exceeded the Company's projections, and diluted earnings per share were at the high end of the Company's guidance for the second quarter 2004 as communicated on February 18, 2004 and reiterated on May 4, 2004.
For the six-month period ended June 30, 2004, net sales increased 17% to $194.7 million from $165.8 million in the comparable period of 2003. Operating income as reported for the first half of 2004 increased 23% to $41.0 million from $33.4 million for the same period in 2003, and net income decreased 8% to $20.2 million from $22.1 million in 2003, and diluted earnings per share decreased 7% to $0.14 (based on 148.7 million average shares and share equivalents outstanding) from $0.15 (based on 146.4 million average shares and share equivalents outstanding). Excluding the effect of relocation and restructuring expenses, of which $0.9 million was expensed in the first quarter of 2004, and the effect of charges related to the management buyout (MBO) of QIAGEN's synthetic DNA business unit during the second quarter 2004, as well as relocation and restructuring charges in the first quarter 2003, operating income for the six-month period ended June 30, 2004 increased 25% to $43.7 million from $35.0 million in 2003, net income increased 23% to $26.6 million in 2004 from $21.6 million in 2003, and diluted earnings per share increased 20% to $0.18 from $0.15 in 2003.
The relocation and restructuring charges in the six-month period ended June 30, 2004 of $2.7 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. 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.
As QIAGEN exceeded its targets for the second quarter of 2004, the Company hereby increases its forecasts as follows: revenues for the full year 2004 are expected to reach between $376 and $381 million compared to the previous guidance of between $373 and $380 million for the full year 2004. Operating margins for the year 2004 are now expected to reach approximately 24% compared to 23% excluding charges as previously expected and the EPS range is now forecasted between $0.36 and $0.38 excluding charges from between $0.35 and $0.38.
"QIAGEN experienced a successful second quarter 2004 in which we exceeded our revenue and operating income projections," said Peer M. Schatz, QIAGEN's Chief Executive Officer. "The growth in revenues in the second quarter 2004 was 100% organic and was driven by a strong growth of 16% in our consumables business. We observed an ongoing acceleration in sales in North America which represents approximately 51% of our revenues to a growth rate of 19% which was significantly fueled by increasing demand for our products from our customers in the pharmaceutical and diagnostics industries. We exceeded our targets despite only limited growth in Japan based on the transition of purchasing procedures in academia which had what we believe to be temporary influence."
"QIAGEN is significantly increasing its strategic strength through the focus on preanalytical solutions. This focus is based on and leveraged by our strong innovation engine. Our universe of opportunities in our core markets is very exciting. We have clearly defined our mission and are executing it. The management buyout (MBO) of our synthetic DNA business unit further strengthens our position and reflects our commitment to a sharp focus on innovation-driven growth in our markets for preanalytical solutions. This commitment underpins our expanding market and technology leadership in the life science research and diagnostic markets."
Second Quarter 2004 Highlights:
- QIAGEN and Novartis Pharma AG entered into a global supply agreement. QIAGEN will act as a global supplier to Novartis Pharma AG for consumables products for nucleic acid stabilization, separation, purification and handling as well as automated instrumentation, synthetic nucleic acid products and services.
- QIAGEN completed a management buyout of its synthetic DNA business unit. QIAGEN retained a 16% minority stake in the new company and will keep its siRNA business as well as preferred access to synthetic nucleic acid supply.
- QIAGEN entered into a supply agreement with AstraZeneca targeting the field of siRNA. QIAGEN will act as the preferred supplier to AstraZeneca for RNAi based silencing experiments.
- QIAGEN Benelux B.V. opened on 15 May 2004 with direct service and support for Benelux scientists and directly supplies its unparalleled range of integrated solutions, services, technical support, and online ordering facilities to molecular biologists in Belgium , The Netherlands, and Luxembourg .
- Based on authorizations granted by shareholders, QIAGEN has entered into an option agreement with Stichting Preferente Aandelen QIAGEN, which under certain conditions allows this foundation to purchase preference shares issued by QIAGEN with the purpose to preserve the Company's present ability to serve the interests of all QIAGEN shareholders.
- QIAGEN launched a series of new consumables and instrumentation products in its core areas stabilization, separation, purification and handling of nucleic acids including several novel preanalytical consumable solutions for automated sample preparation on the BioRobot EZ1 system and the BioRobot M48 workstation.
Detailed information on the Company's business and financial performance will be presented in the Company's conference call on August 3, 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 http://www.qiagen.com/goto/080304. A webcast of the conference call will be available on the same website at http://www.qiagen.com/goto/080304.
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 the U.S. Securities and Exchange Commission (SEC).