pops on the news, unfortunately i never pulled the trigger...alas.
Invitrogen Announces Third Quarter 2007 Results
Tuesday October 30, 4:03 pm ET
Revenue from Continuing Operations $315 Million, 11 Percent Increase over Prior Year
GAAP EPS from Continuing Operations $0.63
Non-GAAP EPS $1.15, 40 Percent Increase over Prior Year
Free Cash Flow $78 Million in the Quarter, $189 Million Year to Date
CARLSBAD, Calif.--(BUSINESS WIRE)--Invitrogen Corporation (Nasdaq:IVGN - News) today announced results for its third quarter ended September 30, 2007. Revenues for the third quarter were $315 million, an increase of 11 percent over the $284 million for 2006, excluding the impact of discontinued operations.
“We’re pleased our work to achieve balanced growth across all products and regions and return margins to historical levels is paying off sooner than expected,” said Greg Lucier, Chairman and Chief Executive Officer of Invitrogen. “Our focus from here is to sustain and expand upon these results by driving further sales penetration in high growth regions, targeted investments in breakthrough technologies and broader implementation of our reagent productivity strategies.”
Third quarter diluted earnings per share from continuing operations was $0.63, which includes $0.13 per share of stock option expense and $0.39 per share for amortization and other items. On a non-GAAP basis, which excludes these items, diluted earnings per share was $1.15, an increase of 40 percent over the same period last year. The following analysis of diluted earnings per share identifies specific items that affect the comparability of results between periods.
Three Months Ending September 30,
2007 2006 % Change
GAAP earnings per share as reported $0.64 ($2.53 ) n/m
Discontinued operations ($0.01 ) $2.83 n/m
GAAP earnings per share from continuing operations $0.63 $0.30 110 %
Amortization of acquisition related expenses $0.36 $0.35 3 %
Stock option expense (FAS123R) $0.13 $0.15 (13 %)
Business integration and other expense $0.03 $0.02 50 %
Non-GAAP earnings per share $1.15 $0.82 40 %
Reconciliations between Invitrogen’s results and non-GAAP results for the periods reported are presented in the attached tables and on the company’s Investor Relations page at www.invitrogen.com.
Through the first nine months of 2007, revenues for the company were $945 million, an 11 percent increase over revenues in the first nine months of 2006, excluding the impact of discontinued operations. Non-GAAP net income for the first nine months of 2007 was $165 million and non-GAAP earnings per share was $3.44, compared with $137 million or $2.53 non-GAAP earnings per share for the same period in 2006.
Analysis of Third Quarter 2007 Results
Third quarter 2007 revenues from continuing operations increased 11 percent over the prior year, driven by solid growth in all businesses and positive currency benefits.
The net effect of foreign currency on revenue growth in the third quarter was a positive 3 percent compared to third quarter 2006.
Gross margin, on a non-GAAP basis, was 64.4 percent compared to 60.8 percent in the third quarter of 2006. The increase was primarily due to improved operational efficiencies, positive price within BioDiscovery and fixed cost leverage.
Non-GAAP operating margin was 24.6 percent, representing a 190 basis point increase over the same period in 2006.
Third quarter 2007 non-GAAP effective tax rate was 30.5 percent.
Weighted shares outstanding were 48.2 million. The company repurchased 0.4 million shares at a cost of $35 million in the quarter. In the first nine months of 2007, the company repurchased 2.7 million shares at a cost of $185 million.
Cash flow from operating activities for the third quarter was at a record $88 million. Third quarter capital expenditures were $10 million and free cash flow was $78 million. For the first nine months of the year, cash flow from operating activities was $225 million, capital expenditures were $36 million and free cash flow was $189 million. The company ended the quarter with $648 million in cash & short-term investments.
Segment and Geographic Highlights
BioDiscovery revenue was $220 million in the third quarter, an increase of 10 percent over the same period the previous year. Revenue growth was driven by the introduction of new products, price, and volume increases in both the molecular biology and cell biology product segments.
Cell Culture Systems revenue was $95 million in the third quarter of 2007, an increase of 12 percent over the same period in the previous year.
Revenue growth by region for the third quarter was 9 percent in the Americas, 14 percent in Europe, and 9 percent in Asia Pacific.
Fourth Quarter 2007 Outlook
Subject to the risk factors detailed in the Safe Harbor Statement section of this release, the company provided revenue expectations for the fourth quarter of mid-single digit growth. Using revised fourth quarter 2006 financials as a base, non-GAAP EPS is expected to grow approximately 3 to 4 times the rate of revenue.
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 pm 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 webcast can be accessed on Invitrogen's website at www.invitrogen.com on the Investor Relations home page. Alternatively, callers may listen to the live conference call by dialing 888.396.2386 (domestic) or 617.847.8712 (international) and use passcode 18285405. A replay of the webcast will be available on the company's website through Tuesday, November 20, 2007.
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 is celebrating 20 years of accelerating scientific discovery. Invitrogen globally employs approximately 4,700 scientists and other professionals and had revenues of approximately $1.15 billion in 2006. For more information, visit 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 non-GAAP 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 non-GAAP measures are limited because they do not reflect the entirety of our business results.
We define our non-GAAP results as our GAAP results excluding the after tax impact of the following:
Acquisition related amortization
In process research and development expenses
Acquisition related gains and losses
Asset impairment charges related to a portfolio review
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
Effect of 2006 convertible subordinated notes
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 non-GAAP 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 non-GAAP disclosures and the reconciliation between these presentations to more fully understand our business. Reconciliations between GAAP results and non-GAAP results are presented on the following pages. |
