QIAGEN Reports Strong First Quarter 2006 Results
biz.yahoo.com
Monday May 8, 4:33 pm ET
Revenues and EPS Exceeded Guidance
22% Constant Currency Growth and 15% Organic Growth in Consumables
VENLO, The Netherlands, May 8 /PRNewswire-FirstCall/ -- 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.
QIAGEN's First Quarter 2006:
In US$ millions unless
indicated Guidance Reported
Net sales 101-104 108.7
Operating margin, adj.[1] 23-25% 26%
EPS, adj. (US$)1 0.11-0.12 0.13
[1] excluding acquisition and integration related charges
as well as amortization of acquired IP and equity-based compensation
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 BioRobot(TM) 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:
Contribution
Constant Organic from
Reported currency growth acquisitions
Consumables 16% 22% 15% 7%
Instruments 1% 7% 7%
Total 14% 20% 13% 7%
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:
In US$ millions unless indicated Q1 2006 Q1 2005
Operating income, reported 25.25 21.39
Acquisition and integration related 0.95
expenses
SFAS 123R Impact 0.08
Amortization on acquired IP 1.51 0.58
Operating income, adjusted 27.79 21.97
Net income, reported 17.58 13.95
Acquisition and integration related 0.64
expenses
SFAS 123R Impact 0.06
Amortization on acquired IP 0.95 0.37
Net income, adjusted 19.22* 14.32
Weighted average number of diluted common 152,278,000 149,055,000
shares
EPS, reported in US$ 0.12 0.09
EPS, adjusted in US$ 0.13 0.10
*variation due to rounding
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.
Highlights:
QIAGEN developed:
- 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.
QIAGEN partners:
- 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.
QIAGEN acquired:
- 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.
Other:
- 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.
QIAGEN's First Quarter 2006 at constant currencies:
2006 2006 2005 Growth Rates
As percentage Q1 Q1 Q1
of net sales, Constant
unless indicated Reported Constant Reported Reported Currency
Currency
Consumables 91% 90% 89% 16% 22%
Instruments 8% 9% 10% 1% 7%
Other 1% 1% 1% -15% -7%
Total revenues 100% 100% 100% 14% 20%
Operating income margin 23% 25% 23% 18% 33%
Operating income
margin1 26% 27% 23% 26% 41%
Net income margin 16% 17% 15% 26% 40%
Net income margin[1] 18% 19% 15% 34% 48%
EPS in US$ per share 0.12 0.13 0.09 33% 44%
EPS in US$ per share1 0.13 0.14 0.10 30% 40%
[1] excluding acquisition and integration 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 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. |
