Sho 'Nuff, IVGN beats estimates:
>>SAN DIEGO, July 26 /PRNewswire/ -- Invitrogen Corporation (Nasdaq: IVGN - news) today announced results for its second quarter ended June 30, 2001. Reported results include the contribution from Life Technologies' operations following its acquisition by Invitrogen on September 14, 2000, which was accounted for using the purchase method of accounting. Results for the three and six months ended June 30, 2000 do not include any contribution from Life Technologies except for pro-forma revenue comparisons which are calculated as though the merger of Life Technologies occurred at the beginning of 2000. Otherwise, the use of the term ``pro-forma'' in this release refers to amounts calculated by removing amortization and merger-related charges from reported results.
At the beginning of this year, Invitrogen completed its reorganization into two business segments, Molecular Biology and Cell Culture, and is providing results by segment for 2001. Comparable segment results prior to 2001 are not available, as Invitrogen operated as one segment prior to 2001.
Financial Highlights:
-- Second quarter 2001 revenues were $159.3 million, an increase of
$131.6 million from the second quarter 2000.
-- Pro-forma net income for the second quarter of 2001, excluding
amortization and merger costs, net of tax, was $25.5 million, or
$0.47 per share, compared with $4.9 million, or $0.19 per share for
second quarter of 2000.
-- Earnings before interest, taxes, depreciation, amortization (EBITDA),
and merger costs were $40.3 million for the second quarter of 2001, up
$32.8 million over the $7.5 million reported for the second quarter of
2000.
Revenues
Revenues for the second quarter of 2001 were $159.3 million, up 475% from the $27.7 million recorded for the second quarter of 2000. For the six months ended June 30, 2001, revenues were $320.0 million, up 482% from $55.0 million in the first half of 2000. The increases are primarily due to the contribution from the Life Technologies acquisition.
On a pro-forma basis, assuming that the merger with Life Technologies occurred on January 1, 2000, revenues for second quarter of 2001 increased $17.3 million, or 12%, from pro-forma revenues of $142.1 million in 2000. Changes in foreign exchange rates when comparing the second quarter of 2001 with the second quarter of 2000 reduced dollar-denominated revenues by $5.9 million. Holding foreign exchange rates constant with those during the second quarter of 2000, revenues during the second quarter of 2001 would have been $165.2 million, an increase of 16% from pro-forma 2000 revenues.
On a pro-forma basis, revenues for the six months ended June 30, 2001 increased $37.2 million, or 13%, from pro-forma revenues of $282.8 million in 2000. Changes in foreign exchange rates, when comparing the two periods, have reduced dollar-denominated revenues by $11.5 million to date in 2001. Holding foreign exchange rates constant with those during the first six months of 2000, revenues during the same period in 2001 would have been $331.5 million, an increase of 17% from pro-forma 2000 revenues.
Revenues for the Molecular Biology segment for the second quarter increased $12.5 million, or 14%, from pro-forma segment revenues of $90.7 million in 2000 to $103.2 million in 2001. The $103.2 million of Molecular Biology revenues in 2001 is comprised of $100.3 million of continuing products and $2.9 million of products that were recently discontinued or that Invitrogen plans to discontinue in the near future. On a pro-forma basis, changes in foreign exchange rates reduced dollar-denominated Molecular Biology revenues by $3.3 million when comparing the second quarter of 2001 with pro-forma revenues in the second quarter of 2000. Sales of continuing Molecular Biology products increased 24% from pro-forma 2000 revenues when holding foreign exchange rates constant.
Revenues for the Molecular Biology segment for the six months ended June 30, 2001 increased $29.0 million, or 16%, from pro-forma segment revenues of $181.4 million in 2000 to $210.4 million in 2001. The $210.4 million of Molecular Biology revenues in 2001 is comprised of $201.7 million of continuing products and $8.7 million of discontinued products. On a pro-forma basis, changes in foreign exchange rates during the first six months of 2001 reduced dollar-denominated Molecular Biology revenues by $6.5 million. Holding foreign exchange rates constant with those during the first six months of 2000, revenues for continuing Molecular Biology products for the first six months of 2001 would have been $207.7 million, an increase of 25% from 2000.
Revenues for the Cell Culture segment for the second quarter increased $4.7 million, or 9%, from pro-forma segment revenues of $51.4 million in 2000 to $56.1 million in 2001. On a pro-forma basis, changes in foreign exchange rates reduced dollar-denominated revenues by $2.6 million. Holding foreign exchange rates constant with those during the second quarter of 2000, revenues for Cell Culture products during the second quarter of 2001 would have been $58.7 million, an increase of 14% from 2000.
Revenues for the Cell Culture segment for the six months ended June 30, 2001 increased $8.3 million, or 8%, from pro-forma segment revenues of $101.4 million in 2000 to $109.6 million in 2001. On a pro-forma basis, changes in foreign exchange rates reduced dollar-denominated revenues by $5.0 million. Holding foreign exchange rates constant with those during the first six months of 2000, revenues for cell culture products for the first six months of 2001 would have been $114.6 million, an increase of 13% from 2000.
Gross Margin
The company's gross margin for the second quarter of 2001 was 55% compared with 68% for the same quarter in 2000. For the six months ended June 30, gross margin was 54% for 2001 and 67% for 2000. Reported gross margin for 2001 was reduced primarily by the inclusion of Life Technologies' lower gross margin Cell Culture products. These margins also compare to gross margins for the first quarter 2001 of 54% and fourth quarter 2000 of 51%, which exclude $2.6 million and $12.3 million, respectively, of increased costs of Life Technologies inventory written-up under purchase accounting rules. The percentage point increases in gross margin as a percentage of revenue from the first and fourth quarters have resulted principally from the company's programs to improve margins through higher selling prices and reduced manufacturing and distribution costs.
Gross margin for the Molecular Biology segment for the second quarter of 2001 was 61% and compares to 60% for the first quarter of 2001. Molecular Biology gross margin for the six months ended June 30, 2001 was 60%. Gross margin for the Cell Culture segment for the second quarter of 2001 was 44%, unchanged from 44% for the first quarter of 2001. Cell Culture gross margin for the six months ended June 30, 2001 was also 44%. Segment gross margins for the first quarter of 2001 have been adjusted to reflect a reclassification of intercompany profits and to conform to the current period's presentation. Consolidated results are unaffected for all prior and current periods.
Operating Earnings Excluding Amortization and Merger Costs
Invitrogen's operating earnings, excluding amortization and merger costs, were $36.1 million, or 23% of revenues for the second quarter of 2001, which compares to $6.1 million, or 22% of revenues for the same period in 2000. For the six months ended June 30, operating earnings, excluding amortization and merger costs, were $69.7 million, or 22% of revenues for 2001 compared to $12.4 million, or 23% of revenues for 2000.
Amortization and merger costs totaled $71.2 million and $147.6 million for the three and six months ended June 30, 2001, respectively, the majority of which was related to the acquisition of Life Technologies.
Other income, net
Interest income for the six months ended June 30, 2001 of $10.8 million increased from $5.9 million for the same period in 2000, principally due to higher cash balances during 2001. Interest expense is primarily related to the company's convertible subordinated notes, which were issued in late February 2000. Other income, net, was $1.3 million in the second quarter, which included a gain of $1.0 million on the sale of a facility in the Netherlands. On a year-to-date basis, other income, net, was $2.9 million and includes a $1.3 million gain during the first quarter of 2001 on the sale of an apparatus product line and the $1.0 million gain from the sale of the Netherlands facility.
Taxes
Invitrogen reported an income tax provision of $4.3 million on a pre-tax loss of $69.6 million for the six months ended June 30, 2001. Excluding the impact of amortization and merger costs, the company's effective tax rate was 35.5% in 2001, compared with 35.3% for the full year 2000.
Earnings
Invitrogen posted a net loss for the quarter ended June 30, 2001 of $35.1 million, or $0.67 per share, which compares to a net income of $4.8 million, or $0.19 per share for the same period last year. For the six months ended June 30, the net loss for 2001 was $74.7 million, or $1.43 per share, compared to net income in 2000 of $3.0 million, or $0.12 per share.
Pro-forma net income for the second quarter of 2001, excluding amortization and merger costs, net of tax, was $25.5 million, or $0.47 per share, compared with $4.9 million, or $0.19 per share for 2000. For the six months ended June 30, pro-forma net income for 2001 was $49.6 million, or $0.92 per share, compared to $9.3 million, or $0.37 per share for 2000.
Executive and Board Changes
Invitrogen announced the decision of its Molecular Biology division President, Dr. Anthony F. Martin, to leave the company to pursue other interests. Effective immediately, Dr. Martin's duties will be assumed by Mr. Turner. ``I want to thank Tony for his hard work and dedication to Invitrogen. We wish him well in his new endeavors,'' said Mr. Turner.
Invitrogen also announced the addition of three new members to the company's Board of Directors. Raymond V. Dittamore, who was elected Chair of the Audit Committee, brings to the Board a 35-year career with Ernst & Young, LLP, including 14 years in his most recent position as a Managing Partner in the San Diego office. Mr. Dittamore holds a B.A. Degree from the San Diego State University.
Joining Mr. Dittamore on the Audit Committee is Balakrishnan Iyer, currently the Chief Financial Officer of Conexant Systems / Mindspeed of Newport Beach, CA. Mr. Iyer has more than 30 years of experience in finance and engineering positions in high technology companies. He holds Bachelor's and Master's degrees in Mechanical and Industrial Engineering from the Indian Institute of Technology and U.C. Berkeley, respectively, and an M.B.A. degree in Finance from Wharton.
In addition to the two new appointees, Invitrogen's Audit Committee also includes Thomas H. Adams and Bradley G. Lorimier.
William J. Mercer will also join Invitrogen's Board. Mr. Mercer founded and is a Principal at Avocet Ventures, L.L.C. of San Diego, a private equity investment firm specializing in healthcare and life science investments. Previously, he was President and CEO of both Alaris Medical, Inc. and IVAC Medical Systems of San Diego, CA. Prior to those positions, Mr. Mercer was President and CEO of Mallinckrodt, Inc., a producer of specialty chemicals. He holds a BS degree in Zoology from North Carolina State University, and a Certificate from the Advanced Management Program at Harvard Business School.
Directors Kurt Jaggers and Lewis Shuster have left the company's Board. Mr. Shuster will continue to serve as the President of Invitrogen's Genomics division.
``Invitrogen is now a much larger company than it was only a year ago. With these changes, we have expanded the capabilities of the Board while also reducing the number of inside directors,'' remarked Mr. Turner. ``I want to acknowledge the important contributions to the Board made by Kurt Jaggers and Lew Shuster. They helped guide Invitrogen at a very formative time in the company's development, and we thank them for their contributions.''
Financial Outlook for 2001
The company will provide detailed guidance concerning its third and fourth quarter 2001 financial expectations on its conference call today.
Conference Call
Invitrogen will host a conference call to discuss its second quarter 2001 results today, July 26, at 5:00 pm Eastern Standard Time. Interested parties can participate in the call by dialing (973) 633-6740 after 4:50 pm EST. A replay of the call will be available until August 2, 2001 by dialing (973) 341-3080. Access code 2682777 must be used for the replay.<<
snip
Estimates for earnings net of Amortization and Merger-related costs averaged 38 cents; 47 cents crushes that. Revenues came at estimates, so apparently IVGN did a good job with expenses (or analysts didn't). More when I can get to it.
Cheers, Tuck |
