Trickle's very first holding, MDS reported this morning. Weak pharma services caused a miss. Will listen to the call later:
>>TORONTO, June 14 /PRNewswire/ - MDS Inc. (TSE: MDS, NYSE: MDZ) today reported its operating results for the quarter ended April 30, 2001. Revenues increased 25% to $407 million from $325 million in the same quarter last year. Net income for the quarter from core operations was 13 cents per share, an increase over the 10 cents per share earned in the same period last year. Net income for the quarter, after MDS Proteomics and goodwill, was $5.8 million and earnings per share were 5 cents.
Consolidated revenues for the first six months rose to $801 million from $636 million in the prior year. Operating income for the first half of the year was $107.8 million compared to $90.9 million in the same period last year. Earnings per share year to date were 40 cents compared to 35 cents in the same period last year. ``With the exception of MDS Pharma Services our businesses are performing as we expected and we are continuing to make investments for the future,'' said John Rogers, MDS President and CEO.
Results by reportable segment for the quarter were (amounts in $Cdn millions):
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Quarter ended April 30, 2001 Quarter ended April 30, 2000
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Life Life
Segment Sciences Health Total Sciences Health Total
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Revenues 233.2 173.9 407.1 174.4 150.5 324.9
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Operating
income 17.8 14.6 32.4 38.1 7.9 46.0
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Assets 1,843.4 483.5 2,326.9 1,858.2 408.5 2,266.7
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The following table summarizes earnings per share for the quarter:
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Second Quarter Six Months
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2001 2000 2001 2000
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Earnings per share from core operations $0.13 $0.10 $0.27 $0.26
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Adjustments:
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- Gain from issue of shares by subsidiary - - 0.26 -
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- Capital gains - 0.08 - 0.10
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- Impact of MDS Proteomics (0.08) (0.01) (0.13) (0.01)
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Basic earnings per share $0.05 $0.17 $0.40 $0.35
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Life Sciences Segment
For the quarter, revenues in the Life Sciences Segment increased to $233.1 million from $174.4 million for the same period in 2000, an increase of 34%. Operating income before considering spending related to Proteomics was $32.4 million.
Revenues from isotopes grew by 9%, however sales growth is limited by on- going supply constraints that are affecting the availability of cobalt. Steps being taken now to increase our available supply of cobalt are expected to lead to increased growth in isotope revenues in fiscal 2003. Revenues in the analytical instrument business grew by 13%, an improvement over the prior quarter. In the quarter MDS Sciex introduced the API 4000, the latest in the API line of triple-quad mass spectrometers. The API 4000 offers a ten-fold enhancement in sensitivity over the API 3000 and other triple-quad products in the market. The first API 4000 was shipped during May.
The MDS Pharma Services business continues to be challenging, as the work of the integration teams continue. Revenues grew from $61.4 million to $108.2 million, but our operations generated lower than expected operating income. ``While the Pharma results are below where we want them to be, there is strength in the large pharma and biotech segments of our business. The weakest market for us at this time is in the generics business, a business primarily focused in Montreal,'' said Doug Squires, newly-appointed President of MDS Pharma Services.
In the past few weeks, initiatives to address this situation have been
undertaken, including:
- Realigning our businesses to more closely reflect the service needs and
purchase decision patterns of our customers;
- Simplifying our structure to enable more effective and efficient
decision-making and to improve our response rate for quoting on
contracts; and,
- Restructuring our MDS Pharma Services management team to put a greater
focus on operational effectiveness and business development activities.
``These new initiatives should help us address our challenges and get our results back in line with the positive potential of the CRO sector,'' Doug Squires added.
Investment in MDS Proteomics continued in the last quarter with $18.6 million cash expended in capital and operating expenses. In the quarter, MDS Inc. also increased its ownership in MDS Proteomics to 89% through the repurchase of a majority of the special warrants which expired on March 30, 2001. The anticipated MDS Proteomics initial public offering has been postponed pending more favourable market conditions.
Health Segment
For the quarter, revenues in the Health Segment increased to $173.9 million from $150.5 million, an increase of 16% over the same period last year. Operating income in this Segment increased to $14.6 million compared to $7.9 million in the same period in 2000.
Operating income from Health businesses improved substantially over the prior year, largely as a result of increased laboratory revenue and continued enhancements in profitability at Source Medical. In addition, efforts made to optimize our US laboratory joint ventures have resulted in improved profitability in the latest quarter.
Outlook
``Not withstanding the current challenges in a portion of our MDS Pharma Services business, we continue to believe strongly in the long-term growth of our core businesses. We recognize that the execution of business strategies in MDS Pharma Services needs to be improved and we are taking the necessary steps to address this issue,'' said John Rogers. ``In addition, we are continuing to invest in longer-term opportunities like MDS Proteomics. We recognize that while investing in opportunities like proteomics has a short-term negative impact on earnings, strategic investments are important if we are to build an enduring company,'' he said.
In keeping with recent 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.<<
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