VENLO, The Netherlands, August 7 /PRNewswire-FirstCall/ -- QIAGEN N.V. today announced the results of operations for the second quarter and the six-month period ended June 30, 2006.
For the second quarter 2006, reported net sales exceeded and adjusted earnings per share were on the high end of the guidance range provided by the Company on May 9, 2006.
QIAGEN’s second quarter 2006: Constant exchange In US$ millions unless rates on Guidance indicated Guidance Jan 31, 2006 Reported Net sales 108 - 111 112 113 Operating margin, adj.(1) 25% - 27% 26% EPS, adj. (US$)(1) 0.12 - 0.13 0.13 1 excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation
The Company reported that consolidated net sales for its second quarter 2006 increased 13% to $113.2 million from $100.4 million for the same period in 2005. Reported operating income for the quarter increased 1% to $21.7 million from $21.6 million in the same quarter of 2005, and net income for the quarter increased 3% to $14.2 million from $13.8 million in the same quarter of 2005. Diluted earnings per share for the second quarter remained unchanged at $0.09 in 2006 (based on 153.2 million average shares and share equivalents outstanding) from $0.09 in 2005 (based on 149.5 million average shares and share equivalents outstanding).
The Company has regularly 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 (US GAAP), 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).
The impact of these costs and charges during the second quarter 2006 totaled $7.4 million ($5.7 million net of tax). Included in operating income in the second quarter 2006 is the effect of amortization on acquisition-related intangibles of $1.9 million ($1.2 million net of tax), acquisition, integration and related costs of $4.6 million ($3.8 million net of tax), relocation and restructuring costs of $785,000 ($565,000 net of tax) and SFAS 123R compensation cost of $60,000 ($39,000 net of tax). Included in operating income in the second quarter 2005 is the effect of amortization on acquisition-related intangibles of $729,000 ($463,000 net of tax) and acquisition, integration and related costs of $3.0 million ($2.2 million net of tax). Excluding these charges, adjusted second quarter operating income increased 15% to $29.1 million in 2006 from $25.4 million in 2005, and second quarter 2006 adjusted net income increased 21% to $19.8 million from $16.4 million. Adjusted diluted earnings per share in the second quarter 2006 increased 18% to $0.13 per share, from $0.11 per share in the second quarter 2005.
QIAGEN’s adjustments to operating income, net income and EPS: In US$ millions unless indicated Q2 2006 Q2 2005 Operating income, reported 21.72 21.60 Acquisition and integration related 4.63 expenses 3.02 Relocation and restructuring expenses 0.78 - SFAS 123R Impact 0.06 - Amortization on acquired IP 1.89 0.73 Operating income, adjusted 29.08 25.35 Net income, reported 14.15 13.78 Acquisition and integration related 3.84 expenses 2.19 Relocation and restructuring expenses 0.57 - SFAS 123R Impact 0.04 - Amortization on acquired IP 1.22 0.46 Net income, adjusted 19.82 16.43 Weighted average number of diluted common 153,233,000 149,460,000 shares EPS, reported in US$ 0.09 0.09 EPS, adjusted in US$ 0.13 0.11
“QIAGEN experienced a successful second quarter 2006. Our organic growth rate of more than 11% in our consumables business and 10% overall once again was one of the fastest in our industry and the result of a focused, innovation-driven strategy”, said Peer Schatz, QIAGEN’s Chief Executive Officer. “In addition, the businesses we acquired during the last 12 months are performing well and the integrations are progressing well. We further increased our market and technology leadership in QIAGEN’s target markets such as academic and clinical research, molecular diagnostics and applied testing and believe we are well on track to reach our targets set for 2006 and beyond.”
“We are pleased with our financial and operating performance in this second quarter 2006. Net sales exceeded and EPS reached the high end of our guidance range,” said Roland Sackers, QIAGEN’s Chief Financial Officer. “Revenue growth for the second quarter was approximately 13% driven by a strong revenue growth of 14% in our consumables business. Overall growth was also fueled by a strong organic growth of approximately 10% and a positive contribution of 3% from acquisitions. Our growth in consumable product sales was derived from 11% organic growth and from 3% contributions from acquisitions while sales from our instrumentation products achieved 2% organic growth. Growth was observed across all of our customer segments, in particular in the applied testing and molecular diagnostics customer segments. Net sales recorded in North America represented approximately 45% of our overall business and recorded a growth rate of 9% and European sales, which represented approximately 45% of our revenues recorded a growth rate of approximately 14%. Net sales in Asia showed a growth rate of approximately 30% in the second quarter 2006 driven by strong demand, primarily in the Chinese markets.”
For the six-month period ended June 30, 2006, net sales increased 14% to $221.9 million compared to $195.4 million in the comparable period of 2005. Operating income as reported for the first half of 2006 increased 9% to $47.0 million from $43.0 million for the same period in 2005, and net income increased 14% to $31.7 million from $27.7 million in 2005, and diluted earnings per share increased 11% to $0.21 from $0.19.
Included in operating income in the first six months of 2006 is the effect of amortization on acquisition-related intangibles of $3.4 million ($2.2 million net of tax), acquisition, integration and related costs of $5.6 million ($4.5 million net of tax), relocation and restructuring costs of $785,000 ($565,000 net of tax), and SFAS 123R compensation cost of $144,000 ($94,000 net of tax). Included in operating income in the first six months of 2005 is the effect of amortization on acquisition-related intangibles of $1.3 million ($836,000 net of tax) and acquisition, integration and related costs of $3.0 million ($2.2 million net of tax). Excluding these charges, adjusted operating income for the six month period ended June 30, 2006 increased 20% to $56.9 million in 2006 from $47.3 million in 2005, and adjusted net income increased 27% to $39.0 million from $30.8 million. Adjusted diluted earnings per share in the six months ended June 30, 2006 increased 24% to $0.26 per share, from $0.21 per share in the same period of 2005.
Highlights:
- Launched more than 39 new products in the first six months of 2006 in the areas of preanalytical sample processing, assay technologies and molecular diagnostic assays, including a fully validated IVD CMV (cytomegalovirus) PCR assay which achieved a CE marking in compliance with the IVD 98/79/EC regulations for diagnostics.
- Acquired 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 was closed as expected at the end of the second quarter.
- QIAGEN’s common shares were included in the new NASDAQ Global Select Market. The NASDAQ Global Select Market is reported to have the highest initial listing standards of any exchange in the world based on financial and liquidity requirements. Prior to the change, QIAGEN’s shares had been listed on the NASDAQ National Market. QIAGEN’s shares are traded under the ticker QGEN on the NASDAQ Global Select Market and under the ticker QIA and the WKN (security code) 901626 on the Prime Standard segment of the Frankfurt Stock Exchange.
- QIAGEN ASIA was awarded the 2006 Best Practice Award for Competitive Strategy Leadership in Asia by Frost & Sullivan.
- QIAGEN relocated various activities from its Norwegian facility to QIAGEN’s European Headquarter in Hilden, Germany.
- QIAGEN raised $300 million of 3.25% Senior Convertible Notes due 2026. The Company plans to use the proceeds of the offering to optimize the structure of its balance sheet, to finance future acquisitions and for general corporate purposes.
QIAGEN’s Second Quarter 2006 at constant currencies: 2006 2006 2005 Growth Rates As percentage Q2 Q2 Q2 of net sales, Constant unless indicated Reported Constant Reported Reported Currency Currency Consumables 90% 90% 88% 14% 15% Instruments 9% 9% 10% 2% 3% Other 1% 1% 2% -4% -4% Total revenues 100% 100% 100% 13% 13% Operating income margin 19% 19% 22% 1% -2% Operating income margin1 26% 25% 25% 15% 12% Net income margin 12% 12% 14% 3% 0% Net income margin(1) 18% 17% 16% 21% 18% EPS in US$ per share 0.09 0.09 0.09 0% 0% EPS in US$ per share(1) 0.13 0.13 0.11 18% 18% 1 excluding acquisition, integration and relocation related charges as well as amortization of acquired IP and equity-based compensation
Detailed information on the Company’s business and financial performance will be presented in the Company’s conference call on August 8, 2006 at 9:30am EDT. The corresponding presentation slides are available for download on the Company’s website at www.qiagen.com/goto/080806. A webcast of the conference call will be available on the same website at www.qiagen.com/goto/0080806.
About QIAGEN:
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 sample collection, and nucleic acid and protein handling, separation, and purification. QIAGEN also supplies diagnostic kits, tests, and assays for human and veterinary molecular diagnostics. The company’s products are sold to academic research markets, and to leading pharmaceutical and biotechnology companies; as well as to diagnostics laboratories. QIAGEN also provides purification and testing solutions to applied testing markets: such as forensics, animal or food testing, and pharmaceutical process control.
QIAGEN employs more than 1,800 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).
QIAGEN N.V. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three months ended June 30, 2006 2005 Net sales $ 113,233,000 $ 100,354,000 Cost of sales 32,632,000 32,811,000 Cost of sales-acquisition related 1,284,000 253,000 Gross profit 79,317,000 67,290,000 Operating Expenses: Research and development 10,235,000 8,729,000 Sales and marketing 28,762,000 23,458,000 General and administrative 12,581,000 10,006,000 Purchased in-process research and development 100,000 714,000 Acquisition, integration and related costs 3,246,000 2,056,000 Acquisition related intangible amortization 1,893,000 729,000 Relocation and restructuring costs 785,000 - Total operating expenses 57,602,000 45,692,000 Income from operations 21,715,000 21,598,000 Other Income (Expense): Interest income 2,973,000 1,859,000 (Interest expense) (1,934,000) (1,533,000) Research and development grants 222,000 966,000 Gain on foreign currency transactions 9,000 225,000 Gain (loss) from equity method investees 253,000 (649,000) Other miscellaneous income (expense), net 152,000 (88,000) Total other income 1,675,000 780,000 Income before provision for income taxes 23,390,000 22,378,000 Provision for income taxes 9,236,000 8,601,000 Net income $ 14,154,000 $ 13,777,000 Weighted average number of diluted common shares 153,233,000 149,460,000 Diluted net income per common share $ 0.09 $ 0.09 Diluted net income per common share excluding amortization on acquisition related intangibles, acquisition, restructuring and related charges, and SFAS 123R costs $ 0.13 $ 0.11 QIAGEN N.V. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) Six Months ended June 30, 2006 2005 Net sales $ 221,948,000 $ 195,379,000 Cost of sales 65,516,000 63,414,000 Cost of sales-acquisition related 1,745,000 253,000 Gross profit 154,687,000 131,712,000 Operating Expenses: Research and development 20,423,000 18,245,000 Sales and marketing 55,181,000 45,723,000 General and administrative 24,110,000 20,678,000 Purchased in-process research and development 300,000 714,000 Acquisition, integration and related costs 3,530,000 2,056,000 Acquisition related intangible amortization 3,398,000 1,305,000 Relocation and restructuring costs 785,000 - Total operating expenses 107,727,000 88,721,000 Income from operations 46,960,000 42,991,000 Other Income (Expense): Interest income 4,983,000 3,732,000 Interest expense (3,392,000) (3,010,000) Research and development grants 299,000 1,174,000 Gain on foreign currency transactions 292,000 232,000 Gain (loss) from equity method investees 579,000 (1,142,000) Other miscellaneous income, net 247,000 94,000 Total other income 3,008,000 1,080,000 Income before provision for income taxes 49,968,000 44,071,000 Provision for income taxes 18,234,000 16,346,000 Net income $ 31,734,000 $ 27,725,000 Weighted average number of diluted common shares 152,782,000 149,298,000 Diluted net income per common share $ 0.21 $ 0.19 Diluted net income per common share excluding amortization on acquisition related intangibles, acquisition, restructuring and related charges, and SFAS 123R costs $ 0.26 $ 0.21 QIAGEN N.V. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, 2006 2005 Assets (unaudited) Current Assets: Cash and cash equivalents $ 473,457,000 $ 191,700,000 Restricted cash 500,000 - Marketable securities 10,000,000 15,000,000 Notes receivable 3,295,000 4,283,000 Accounts receivable, net 74,725,000 63,538,000 Income taxes receivable 4,345,000 4,161,000 Inventories 58,184,000 53,653,000 Deferred income taxes 11,792,000 11,617,000 Prepaid expenses and other 40,762,000 26,305,000 Total current assets 677,060,000 370,257,000 Long-Term Assets: Property, plant and equipment, net 208,980,000 195,199,000 Goodwill 132,688,000 93,914,000 Intangible assets, net 107,948,000 74,566,000 Deferred income taxes 4,435,000 6,346,000 Other assets 18,520,000 25,016,000 Total long-term assets 472,571,000 395,041,000 Total assets $ 1,149,631,000 $ 765,298,000 Liabilities and Shareholders’ Equity Current Liabilities: Short-term loans $ - $ - Current portion of long-term debt $ 6,404,000 $ 5,921,000 Current portion of capital lease obligations 818,000 995,000 Accounts payable 22,019,000 15,934,000 Accrued and other liabilities 62,446,000 52,707,000 Income taxes payable 13,635,000 14,935,000 Deferred income taxes 2,353,000 1,179,000 Total current liabilities 107,675,000 91,671,000 Long-Term Liabilities: Long-term debt, net of current portion 488,449,000 191,447,000 Capital lease obligations, net of current portion 11,974,000 11,101,000 Deferred income taxes 27,543,000 17,570,000 Other 5,370,000 3,052,000 Total long-term liabilities 533,336,000 223,170,000 Commitments and Contingencies Shareholders’ Equity: Common shares, EUR .01 par value: Authorized--260,000,000 shares Issued and outstanding--149,477,434 shares in 2006 and 148,455,864 shares in 2005 1,526,000 1,513,000 Additional paid-in-capital 167,209,000 157,796,000 Retained earnings 305,934,000 274,200,000 Accumulated other comprehensive income 33,951,000 16,948,000 Total shareholders’ equity 508,620,000 450,457,000 Total liabilities and shareholders’ equity $ 1,149,631,000 $ 765,298,000
Qiagen N V
CONTACT: Contacts: Roland Sackers, Chief Financial Officer, QIAGEN N.V.,e-mail: roland.sackers@QIAGEN.com, Dr. Solveigh Mahler, Director ofInvestor Relations, QIAGEN N.V., +49-2103-29-11710, e-mail:solveigh.maehler@QIAGEN.com
