Invitrogen Announces First Quarter 2006 Results
Thursday April 27, 4:05 pm ET
CARLSBAD, Calif.--(BUSINESS WIRE)--April 27, 2006--Invitrogen Corporation (Nasdaq:IVGN - News) today announced results for its first quarter ended March 31, 2006. Revenues for the first quarter were $309.0 million, an increase of 12% over the $277.1 million reported for the first quarter of 2005. Net income for the first quarter was $19.2 million versus $47.1 million for the same quarter in 2005. Earnings per share for the first quarter of 2006 were $0.35 per share, as compared to $0.82 per share reported in the first quarter of 2005. Earnings per share in 2005 included $0.21 per share of income related to currency gains associated with the Dynal acquisition and stock sale gains that did not occur in 2006. Earnings per share in 2006 includes $0.23 per share of higher costs associated with acquisition related amortization and costs, business integration and the implementation of revised Statement of Financial Accounting Standards No. 123, Share-Based Payment (FAS123R).
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Invitrogen reports pro forma results which exclude certain items primarily related to acquisitions and stock option expensing. The Company reports these pro forma results to better enable financial statement users to assess our historical performance and project our future earnings and cash flows. First quarter pro forma net income of 2006 was $49.1 million, or $0.90 per share, compared with pro forma net income in the first quarter of 2005 of $50.9 million, or $0.88 per share.
Reconciliations between Invitrogen's results and pro forma results for the periods reported are presented in the attached tables and on the Company's Investor Relations web page at www.invitrogen.com.
First Quarter Review
Greg Lucier, Invitrogen's Chairman and CEO, commented: "We are pleased with the Company's results in Europe, the US Research and Emerging Markets performance during the first quarter. While we're disappointed with our revenue performance in US Bioproduction and Japan, we are confident that specific actions are in place to impact the growth trajectory for these areas."
First quarter revenue growth of 12% included impact from acquisitions and changes in foreign currency exchange rates. Acquisitions positively impacted results by 13% and currency negatively impacted growth by 3%. Organic growth rate was 2% in total, with strong organic growth of 7% in BioDiscovery being offset by organic revenue change of negative 5% in BioProduction.
First quarter 2006 pro forma gross margin was 62.3%, compared to 61.8% in the first quarter of 2005, due primarily to positive impact from mix between segments and lower royalty expense. The royalty expense benefit of 1 percentage point in the quarter resulted from retroactive changes to certain licensing agreements. These favorable affects were offset by lower margin products from businesses acquired in the last twelve months. BioDiscovery gross margin decreased to 69.3% in the first quarter of 2006 from 71.5% last year, primarily due to the absorption of new acquisitions. BioProduction gross margin increased to 48.8% from 48.1% in the comparable quarter of 2005.
Operating margin was 9% of revenues in the first quarter of 2006 versus 16% in the first quarter of 2005. Pro forma operating margin was 24% of revenues in the first quarter of 2006 versus 26% of revenues in the first quarter of 2005. The Company will provide further detail on margin performance during the conference call today.
Cash flows from operating activities were $33 million in the first quarter of 2006. Capital expenditures were $14 million during the first quarter of 2006. Free cash flow, defined as cash from operating activities less capital expenditures, was $19 million for the first quarter of 2006. This was lower than the prior year primarily due to one-time gains associated with currency fluctuations and an investment sale included in first quarter of 2005.
Conference Call and Webcast Details
The Company will discuss its financial and business results as well as its business outlook on its conference call at 5 p.m. Eastern Time today. This conference call will contain forward-looking information. The conference call will include a discussion of "non-GAAP financial measures" as that term is defined in Regulation G. For actual results, the most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the Company's financial results determined in accordance with GAAP, as well as other material financial and statistical information to be discussed on the conference call will be posted at the Company's Investor Relations website at www.invitrogen.com.
The conference call will be webcast live over the Company's investor relations website at www.invitrogen.com and will be archived at the site for one month.
To listen to the live conference call, please dial 866-202-3109 (domestic) or 617-213-8844 (international) and use passcode 72377218. A replay of the call will be available for one week by dialing 888-286-8010 (domestic) and 617-801-6888 (international). The passcode for the replay is 55982310.
About Invitrogen
Invitrogen Corporation (Nasdaq:IVGN - News) provides products and services that support academic and government research institutions and pharmaceutical and biotech companies worldwide in their efforts to improve the human condition. The Company provides essential life science technologies for disease research, drug discovery, and commercial bioproduction. Invitrogen's own research and development efforts are focused on breakthrough innovation in all major areas of biological discovery including functional genomics, proteomics, bioinformatics and cell biology -- placing Invitrogen's products in nearly every major laboratory in the world. Founded in 1987, Invitrogen is headquartered in Carlsbad, California, and conducts business in more than 70 countries around the world. The Company globally employs approximately 4,800 scientists and other professionals and had revenues of $1.2 billion in 2005. For more information about Invitrogen, visit the Company's web site at www.invitrogen.com.
Statement Regarding Use of Non-GAAP Measures
We regularly have reported non-GAAP measures for net income and earnings per share as pro forma results. These measures are provided as supplementary information and are not a substitute for, or superior to, financial measures calculated in accordance with GAAP. These pro forma measures are limited because they do not reflect the entirety of our business results.
We define our pro forma results as our GAAP results excluding the after tax impact of the following items:
Acquisition related amortization
In process research and development expenses
Acquisition related gains and losses
Business consolidation costs required to realize cost synergies from combining our acquired entities with our existing operations
Certain significant one-time events that are unlikely to recur
Share based payment expenses as a result of adoption of FAS123R
Management views these excluded items as not indicative of the operating results or cash flows of its operations and excludes these items as a supplemental disclosure to assist investors in evaluating and assessing our past and future operational performance. This presentation of our pro forma results is consistent with how management internally evaluates the performance of its operations.
We encourage investors to carefully consider our results under GAAP, as well as our pro forma disclosures and the reconciliation between these presentations to more fully understand our business. Reconciliations between GAAP results and pro forma results are presented on the following pages. |
