QIAGEN Reports Strong First Quarter 2006 Results
Revenues and EPS Exceeded Guidance 22% Constant Currency Growth and 15% Organic Growth in Consumables
Venlo, The Netherlands, May 8, 2006 - QIAGEN N.V. (Nasdaq: QGEN; Frankfurt , Prime Standard: QIA) today announced the results of operations for the three-month period ended March 31, 2006.
QIAGEN significantly exceeded its guidance on net sales, earnings per share and operating income margin which the Company had provided on February 14, 2006.
The Company reported that consolidated net sales for its first quarter 2006 increased 14% to $108.7 million from $95.0 million for the same period in 2005. Reported operating income for the quarter increased 18% to $25.2 million from $21.4 million in the same quarter of 2005, and net income for the quarter increased 26% to $17.6 million from $13.9 million in the same quarter of 2005. Diluted earnings per share for the first quarter increased 33% to $0.12 in 2006 (based on 152.2 million average shares and share equivalents outstanding) from $0.09 in 2005 (based on 149.1 million average shares and share equivalents outstanding).
"QIAGEN showed an excellent start into what we expect to be a successful 2006. Our strong innovation engine and our focused, strategic and operational strength fueled an organic growth rate of more than 15% in our consumables business and 13% overall", said Peer Schatz, QIAGEN's Chief Executive Officer. " In addition, the businesses we acquired in 2005 are performing very well and contributed approximately 7% of our overall reported sales. We continue to have a positive outlook and are raising our financial guidance for 2006."
Following this strong performance in the first quarter 2006 and its agreement to acquire Gentra Systems (subject to approval by Gentra's shareholders and other customary closing conditions), QIAGEN is increasing its revenue guidance for the full year 2006 given February 14, 2006 from previously US$439-451 million to US$453-462 million and adjusted EPS guidance from previously US$0.52-0.55 to US$0.52-0.56 for the full year 2006. The Company will provide detailed information on increased guidance in the Company's conference call on May 9, 2006.
"QIAGEN experienced a very successful first quarter 2006 with net sales exceeding our guidance by nearly US$5 million. In addition, we exceeded our guidance in terms of operating income and EPS," said Roland Sackers, QIAGEN's Chief Financial Officer. "Revenue growth for the first quarter was approximately 14%. Using identical exchange rates for both quarters QIAGEN's revenue growth calculates to approximately 20%. In the first quarter, our consumable business recorded a strong 16% revenue growth rate with a constant currency growth rate of 22%. Growth was fueled by a strong organic growth rate of overall more than 13% and a 7% positive contribution from acquisitions and reduced by 6% due to currency effects. Our consumables recorded 15% organic growth and 7% contribution from acquisitions and our instrumentation business recorded 7% organic growth. We evidenced growth across all of our customer segments, in particular in the pharmaceutical, the applied testing and the molecular diagnostics customer segments. We also recorded good results and growth with our QIAGEN BioRobotTM instrumentation products and have built a good pipeline of prospects. Net sales recorded in North America represented approximately 44% of our overall business and recorded a growth rate of 13% and European sales, which represented approximately 43% of our revenues recorded a growth rate of approximately 18%. Net sales in Japan showed a growth rate of approximately 6% on a constant currencies base in the first quarter 2006 and we are seeing a further improving outlook for the rest of the year."
QIAGEN's reflection on growth:
The Company has regularly reviewed and reported adjusted results to give an additional insight into the Company's 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. Costs and charges excluded from adjusted results include acquisition, integration, restructuring and related costs, acquisition-related amortization, and beginning in the first quarter of 2006, compensation cost due to equity based compensation in accordance with the adoption of revised Statement of Financial Accounting Standards No. 123 (SFAS 123R).
QIAGEN's adjustments on operating income, net income and earnings per share:
The impact of these costs and charges during the first quarter 2006 totaled $2.5 million ($1.6 million net of tax). Included in operating income in the first quarter 2006 is amortization on acquisition-related intangibles of $1.5 million ($948,000 net of tax), acquisition, integration and related costs of $945,000 ($636,000 net of tax), and SFAS 123R compensation cost of $84,000 ($55,000 net of tax). Included in operating income in the first quarter 2005 is amortization on acquisition-related intangibles of $576,000 ($373,000 net of tax). Excluding these charges, adjusted first quarter operating income increased 26% to $27.8 million in 2006 from $22.0 million in 2005, and first quarter 2006 adjusted net income increased 34% to $19.2 million from $14.3 million. Adjusted diluted earnings per share in the first quarter 2006 increased 30% to $0.13 per share, from $0.10 per share in the first quarter 2005.
Launched more than 15 new products in preanalytical sample processing, assay technologies and molecular diagnostic assays.
Launched EpiTect Bisulfite Kit, the first product to streamline the preanalytical process for DNA methylation analysis - dramatically simplifying the use of epigenetics and targeted towards research, and molecular diagnostics.
QIAGEN's standardized sample preparation products and PCR-based assays are key elements of avian flu surveillance initiatives throughout the world. QIAGEN's avian flu (H5) assays for virus detection as well as other QIAGEN components have demonstrated exceptional performance in various validations and routine use.
Entered into a co-marketing agreement with ActiveSight for QIAGEN's preanalytical solutions for protein crystallography targeting research and drug discovery.
Formed an alliance with Eppendorf AG to co-develop and co-market complementary and optimized products.
Acquired Eppendorf's reagent business which includes the Eppendorf "5-Prime" nucleic acid sample preparation and PCR reagent product lines and related intellectual property.
Entered into an agreement to acquire Gentra Systems, Inc., a leading provider of nucleic acid sample preparation products with a strong brand value in well-defined market niches, including biobanking and DNA archiving . The transaction is subject to the approval of Gentra's shareholders and other customary closing conditions.
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.
QIAGEN ASIA awarded 2006 Best Practice Award for Competitive Strategy Leadership in Asia by Frost & Sullivan.
QIAGEN plans to relocate various activities from its Norwegian facility to QIAGEN's European Headquarter in Hilden , Germany . The closure and relocation is intended to be completed in the second quarter of 2006 and is expected to result in an increase in QIAGEN's future profitability. QIAGEN expects to incur one time charges related to the relocation of QIAGEN A.S. of approximately US$1.0 million (US$ 0.7 million net of tax) in the second quarter 2006.
Detailed information on the Company's business and financial performance will be presented in the Company's conference call on May 9, 2006 at 9:30am EDT. The corresponding presentation slides are available for download on the Company's website at www.qiagen.com/goto/090506. A webcast of the conference call will be available on the same website at www.qiagen.com/goto/090506.
QIAGEN N.V., a Netherlands holding company, is a leading provider of innovative technologies and products for pre-analytical sample preparation and molecular diagnostics solutions. QIAGEN has developed a comprehensive portfolio of more than 500 proprietary, consumable products and automated solutions for the preanalytical processing of samples, which includes collection, and nucleic acid and protein handling, separation, purification and processing. QIAGEN also supplies diagnostic kits, tests, and assays for human, veterinary and other molecular diagnostics. The company's products are sold to customers in academia, the pharmaceutical, biotechnology and the diagnostics industries. QIAGEN also provides preanalytical and testing solutions to applied testing markets such as forensics, animal or food testing, and pharmaceutical process control. QIAGEN employs more than 1,600 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, 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).