MDS reports. They are breaking out more numbers wrt segment revenues, etc., so this is a long one. Profits are a bit off, but sales are solid . . .
>>TORONTO, Dec. 13 /PRNewswire/ - MDS Inc. (TSE: MDS, NYSE: MDZ) today reported its operating results for the quarter ended October 31, 2001. For the fourth quarter, revenues increased 7% to $428 million from $401 million in the same quarter last year. Operating income from core businesses (before MDS Proteomics and non-recurring items) was up 27% over the prior year. Earnings for the quarter from core businesses were 19 cents per share before goodwill amortization.
Earnings per share reported in the fourth quarter of 2000 included a number of unusual items, as noted below:
Fourth Quarter Full Year
2001 2000 2001 2000
-------------------------------------------------------------------------
Earnings per share from core businesses $0.19 $0.20 $0.70 $0.75
Adjustments for the following items:
Business integration activities (0.11) (0.03) (0.11)
Gain from issue of shares by
MDS Proteomics 0.29 0.33 0.29
Capital gains - 0.01 - 0.13
Impact of MDS Proteomics operations (0.04) (0.03) (0.17) (0.05)
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Earnings per share $0.15 $0.36 $0.83 $1.01
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``Fiscal 2001 has been a transition year for MDS where the cost of growth ventures overshadowed the performance of our core businesses. While these initiatives had a significant impact on our results in 2001, they position us well to take advantage of the many exciting opportunities in the growing global healthcare business in which we operate.'' said John Rogers, President and CEO of MDS Inc.
Consolidated revenues for fiscal year 2001 rose 14% to $1.6 billion from $1.4 billion in the prior year. Operating income for the year decreased by 13% to $154 million compared to $178 million last year. Earnings per share were $0.83 compared to $1.01 in fiscal 2000.
Life Sciences Segment
For the quarter, revenues in the Life Sciences Segment grew from $229 million in the same period in 2000 to $249 million; an increase of 9%. While all business units showed revenue growth the most significant contributor was MDS Sciex with a 34% increase.
Overall isotope revenues grew by 6%, an improvement over prior quarter growth of 1%. In the fourth quarter, we completed the loading of further cobalt-59 materials as part of the cobalt supply expansion plan that will increase available supplies of cobalt for 2003. Revenue growth in the analytical instrument business improved as the recently launched API 4000 began to gain some traction in the market. The API 4000 offers a ten-fold enhancement in sensitivity over the API 3000 and other triple quad products in the market. Demand is continuing to build for the API 4000, and we are seeing continuing demand for the API 3000 as well.
The MDS Pharma Services business showed more positive results with a 4% growth in revenues in the fourth quarter, as the teams focused on executing our business strategies.
The operating margin in the Life Sciences businesses is trending positively at 17% for the fourth quarter, up from 16% in the third quarter and up from 11% in the same quarter in 2000.
Health Segment
In the Health Segment, revenues increased to $178 million from $171 million, an increase of 4% over the fourth quarter last year. Quarterly operating income in this segment was down slightly over the prior year, reflecting the one time impact of the laboratory fee reallocation in the fourth quarter of 2000. Despite this small drop, operating income from Health businesses grew by 52% in 2001 as a result of new laboratory fee agreements, improved profitability in the US lab business and continued enhancements in profitability at Source Medical.
Proteomics
Throughout 2001, MDS continued to invest in MDS Proteomics as the company implemented its development plan. Operating costs for the fourth quarter were $15 million, an increase of $8 million over the same period in 2000. After the quarter, MDS Proteomics officially opened its new Toronto facility, creating one of the most advanced proteomics research facilities in the world.
Outlook
``Over the last year we have been focused on a number of initiatives in our businesses targeted on improving the efficiency and effectiveness of our operations. Given that much of this work is now complete, we expect to see the positive impact of these efforts in the coming year.'' said John Rogers, President and CEO, MDS Inc.
In keeping with changes to Securities Regulations regarding interim financial statements our release includes an expanded Management Discussion & Analysis. The MD&A can be accessed at mdsintl.com
MDS will be holding a conference call today at 11:00 am. This call will be webcast live at, www.mdsintl.com , and will also be available in archived format at www.mdsintl.com/df_audio.html after the call.
MDS Inc. (TSE: MDS - news; NYSE: MDZ - news) is an international health and life sciences company. In many of its products and services, it is among the largest and most respected companies in the world. MDS's focus is on advancing health through science. It does this by providing: laboratory testing, imaging agents for nuclear medicine testing, sterilization systems for medical and consumer products, research services to speed discovery and development of new drugs, therapy systems for planning and delivery of cancer treatment, analytical instruments to assist in the development of new drugs, and medical/surgical supplies. MDS employs more than 10,000 highly skilled people at its global operations on five continents. Detailed information about the company is available at the MDS Web site at www.mdsintl.com or by calling 1- 888-MDS-7222, 24 hours a day.
This document contains forward-looking statements. Some forward looking statements may be identified by words like ``expects'', ``anticipates'', ``plans'', ``intends'', ``indicates'' or similar expressions. The statements are not a guarantee of future performance and are inherently subject to risks and uncertainties. The Company's actual results could differ materially from those currently anticipated due to a number of factors, including, but not limited to, general economic conditions, successful integration of structural changes, including restructuring plans, acquisitions, technical or manufacturing or distribution issues, the competitive environment for the Company's products, the degree of market penetration of the Company's products, and other factors set forth in reports and other documents filed by the Company with Canadian and U.S. securities regulatory authorities from time to time.
MDS INC.
Consolidated Statements of Income
(millions of dollars)
Three months to Year Ended
October 31, October 31,
----------------- 2001 2000 2001 2000
--------------------------------------------------------------------------------
Net revenues $ 428 $ 401 $ 1,636 $ 1,435
Direct costs (283) (252) (1,067) (953)
Depreciation and amortization (24) (18) (78) (59)
Other operating costs (81) (94) (342) (265)
Restructuring activities, net - (14) 2 (14)
Equity earnings and investment gains 1 10 3 34
-------- -------- -------- --------
Operating Income 41 33 154 178
Gain on issue of shares by
MDS Proteomics - 37 54 37
-------- -------- -------- --------
41 70 208 215
Interest expense - Long term (4) (5) (19) (20)
- Other - - (1) (2)
Dividend and interest income 2 3 12 11
Minority interest 1 (2) (2) (9)
-------- -------- -------- --------
Income before income taxes 40 66 198 195
Income taxes (19) (17) (82) (67)
-------- -------- -------- --------
Income before amortization
of goodwill 21 49 116 128
Amortization of goodwill
(net of tax) (16) (6) (43) (18)
-------- -------- -------- --------
Net Income 5 43 73 110
-------- -------- -------- --------
-------- -------- -------- --------
Earnings per share $ 0.04 $ 0.33 $ 0.52 $ 0.86
-------- -------- -------- --------
-------- -------- -------- --------
Earnings per share before
amortization of goodwill $ 0.15 $ 0.36 $ 0.83 $ 1.01
-------- -------- -------- --------
-------- -------- -------- --------
-------------------------------------------------------------------------
MDS INC.
Consolidated Statements of Retained Earnings
(millions of dollars)
Three months to Year Ended
October 31, October 31,
----------------- -----------------
2001 2000 2001 2000
-------------------------------------------------------------------------
Retained earnings, beginning
of period $ 460 $ 374 $ 405 $ 324
Net income 5 43 73 110
Repurchase of shares and options (2) (6) (9) (19)
Dividends - cash (5) (5) (10) (8)
- stock (1) (1) (2) (2)
-------- -------- -------- --------
Retained earnings, end of period $ 457 $ 405 $ 457 $ 405
-------- -------- -------- --------
-------- -------- -------- --------
MDS INC.
Consolidated Statements of Financial Position
As at October 31
(millions of dollars)
2001 2000
-------------------------------------------------------------------------
Assets
Current
Cash and short-term investments $ 183 $ 331
Accounts receivable 299 282
Inventories 162 138
Income taxes recoverable 8 11
Prepaid expenses 24 12
Future tax assets 5 4
------- -------
681 778
Capital assets 661 598
Future tax assets 72 28
Long-term investments and other (note 2) 192 185
Goodwill and other intangibles 796 783
------- -------
Total assets $ 2,402 $ 2,372
------- -------
------- -------
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness $ 12 $ 33
Accounts payable and accrued liabilities 320 303
Deferred income 89 68
Income taxes payable 22 52
Current portion of long-term debt 17 10
------- -------
460 466
Long-term debt 536 541
Deferred income and other 81 155
Future tax liabilities 21 6
Minority interest 61 19
------- -------
1,159 1,187
------- -------
Shareholders' Equity
Share Capital (note 3) 789 782
Retained earnings 457 405
Cumulative translation adjustment (3) (2)
------- -------
1,243 1,185
------- -------
Total liabilities and shareholders' equity $ 2,402 $ 2,372
------- -------
------- -------
MDS INC.
Consolidated Statements of Cash Flows
(millions of dollars)
Three months to Year Ended
October 31, October 31,
----------------- -----------------
2001 2000 2001 2000
-------------------------------------------------------------------------
Operating Activities
Net income $ 5 $ 43 $ 73 $ 110
Add (deduct) items not
affecting cash:
Items not affecting current
cash flow (note 4) 36 (8) 79 59
-------- -------- -------- --------
Cash flow from operations 41 35 152 169
Changes in non-cash working
capital balances relating to
operations (note 4) (20) 17 (75) (40)
-------- -------- -------- --------
21 52 77 129
-------- -------- -------- --------
Investing Activities
-------- -------- -------- --------
Acquisitions - (4) (15) (214)
Purchase of capital assets (24) (38) (115) (135)
Other 9 (1) 5 (36)
-------- -------- -------- --------
(15) (43) (125) (385)
Financing Activities
Long-term debt issued 31 22 212 320
Long-term debt repayments - (55) (228) (64)
Increase(decrease) in
deferred income and other 3 2 (75) 93
Payment of cash dividends (5) (5) (10) (8)
Issuance of shares 1 188 5 206
Repurchase of shares and options (3) (7) (11) (20)
Issuance of shares of
subsidiary for cash - - 38 -
Minority interest distributions - (4) (7) (9)
Cash effects of translation of
foreign subsidiaries (1) - (3) 1
-------- -------- -------- --------
26 141 (79) 519
Increase (decrease) in cash
during the period 32 150 (127) 263
Cash position, beginning of period 139 148 298 35
-------- -------- -------- --------
Cash position, end of period $ 171 $ 298 $ 171 $ 298
-------- -------- -------- --------
-------- -------- -------- --------
Note: Cash position comprises cash and short-term investments less bank
indebtedness.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All tabular amounts in millions of Canadian dollars, except where noted)
-------------------------------------------------------------------------
October 31, 2001
1. ACCOUNTING POLICIES
These financial statement have been prepared on a basis consistent
with the company's annual financial statements for the year ended
October 31, 2001, and should be read in conjunction with the
accounting policies and other disclosures in those annual
financial statements. These financial statements do not include
all of the disclosures required by generally accepted accounting
principles applicable to annual financial statements.
2. LONG-TERM INVESTMENTS
Operating income for the period includes $1 million (2000 - $2) as
the Company's share of earnings of significantly influenced
companies and partnerships.
3. SHARE CAPITAL
Basic earnings per share have been calculated using the weighted
average number of Common shares outstanding during the period. The
weighted average number of shares outstanding for the quarter
ended October 31 was 139.6 million (2000 - 128.0).
4. SUPPLEMENTARY CASH FLOW INFORMATION
Non-cash flow items affecting net income comprise:
Three Months to Year Ended
October 31 October 31
-------------------------------------------------------------------------
2001 2000 2001 2000
$ $ $ $
-------------------------------------------------------------------------
Depreciation and amortization 24 18 78 59
Amortization of goodwill 17 7 45 21
Deferred income - (1) - (5)
Minority interest (1) 3 2 9
Future income taxes (4) (4) (10) 6
Equity earnings
(net of distributions) - - (1) -
Restructuring activities - 14 19 14
Gain on issuance of shares
by a subsidiary - (45) (54) (45)
-------------------------------------------------------------------------
36 (8) 79 59
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Changes in non-cash working capital balances relating to operations
include:
Three Months to Year Ended
October 31 October 31
-------------------------------------------------------------------------
2001 2000 2001 2000
$ $ $ $
-------------------------------------------------------------------------
Accounts receivable 4 3 (17) (17)
Inventories 2 3 (24) (11)
Accounts payable and deferred income 6 - 25 (49)
Income taxes (31) 7 (47) 28
Foreign exchange and other (1) 4 (12) 9
-------------------------------------------------------------------------
(20) 17 (75) (40)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
5. SEGMENTED INFORMATION
Three Months to Three Months to
--------------------------------------------------------------
October 31, 2001 October 31, 2000
--------------------------------------------------------------
Life Health Proteomics Total Life Health Proteomics Total
Sciences Sciences
--------------------------------------------------------------
Net revenues 249 178 1 428 229 171 1 401
Operating
income 43 13 (15) 41 26 14 (7) 33
Revenues by
products and
services
Medical
isotopes 89 84
Analytical
equipment 43 32
Pharmaceutical
research
services 117 113
Clinical
laboratory
services 121 119
Distribution
and other 57 52
Proteomics 1 1
Year Ended Year Ended
--------------------------------------------------------------
October 31, 2001 October 31, 2000
--------------------------------------------------------------
Life Health Proteomics Total Life Health Proteomics Total
Sciences Sciences
--------------------------------------------------------------
Net revenues 933 700 3 1,636 806 627 2 1,435
Operating
income 143 64 (53) 154 148 42 (12) 178
Revenues by
products and
services
Medical
isotopes 343 333
Analytical
equipment 160 143
Pharmaceutical
research
services 430 330
Clinical
laboratory
services 480 426
Distribution
and other 220 201
Proteomics 3 2
Total assets
at Oct 31, 1,773 431 198 2,402 1,831 402 139 2,372
6. COMPARATIVE FIGURES
Certain figures for the previous period have been reclassified to
conform with the current period's financial statement
presentation.<<
snip
Cheers, Tuck |
