IVGN results right on the estimates. They also trot out the excuse of impact from the Sept 11 attacks, but note that volume has picked up to compensate afterwards. Will the same happen for QGENF? An anecdotal report from my humble network reports that they may in fact be losing share to Clontech kits, and that most labs keep enough on hand to weather a shortage. So is QGENF blind to this, not telling us, or is the effect in fact temporary? Time will tell. Note, this is just one report from one lab. I will be listening to CCs when I get the chance, perhaps one or two today. But Joshua Tree beckons, and most will have to wait till next week.
>>SAN DIEGO, Oct 25, 2001 /PRNewswire via COMTEX/ -- Invitrogen Corporation (Nasdaq: IVGN chart, msgs) today announced results for its third quarter ended September 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. Included in this press release are pro-forma revenue comparisons that are calculated as though the merger with 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:
-- Third quarter 2001 revenues were $156.0 million, an increase of
$108.0 million from the third quarter of 2000.
-- Pro-forma net income for the third quarter of 2001, excluding
amortization and merger costs, net of tax, was $22.7 million, or
$0.42 per share, compared with $7.8 million, or $0.26 per share for
the third quarter of 2000.
-- Earnings before interest, taxes, depreciation, amortization (EBITDA),
and merger costs were $37.0 million for the third quarter of 2001, up
$25.3 million over the $11.7 million reported for the third quarter of
2000.
September 11 Attacks
The company estimates that the tragic events of September 11 may have reduced third quarter revenues by as much as $4 million. Disruptions in air transportation affected delivery of many of Invitrogen's products for approximately one week, principally in North America. Sales in the final two weeks of September were at or above the levels attained prior to September 11 and remained strong into October.
Sales of Molecular Biology products were affected to a greater extent than were sales of Cell Culture products. Molecular Biology revenues in North America, where transportation disruptions were the greatest, represent a greater proportion of sales than in Europe and Asia, where transportation disruptions were less significant. In addition, a higher proportion of Cell Culture products are normally delivered by surface transportation, whereas Molecular Biology deliveries rely almost exclusively on air transportation.
Revenues
Revenues for the third quarter of 2001 were $156.0 million, up 225% from the $48.0 million recorded for the third quarter of 2000. For the nine months ended September 30, 2001, revenues were $476.0 million, up 362% from $103.0 million in the first nine months of 2000. The increases are due primarily 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 third quarter of 2001 increased $15.1 million, or 11%, from pro-forma revenues of $141.0 million in 2000. Changes in foreign exchange rates when comparing the third quarter of 2001 with the third quarter of 2000 reduced dollar-denominated revenues by $3.4 million. Holding foreign exchange rates constant with those during the third quarter of 2000, revenues during the third quarter of 2001 would have been $159.4 million, an increase of 13% from pro-forma 2000 revenues.
On a pro-forma basis, revenues for the nine months ended September 30, 2001 increased $52.3 million, or 12%, from pro-forma revenues of $423.8 million in 2000. Changes in foreign exchange rates, when comparing the two periods, have reduced dollar-denominated revenues by $14.9 million to date in 2001. Holding foreign exchange rates constant with those during the first nine months of 2000, revenues during the same period in 2001 would have been $490.9 million, an increase of 16% from pro-forma 2000 revenues.
Revenues for the Molecular Biology segment for the third quarter increased $10.1 million, or 11%, from pro-forma segment revenues of $91.5 million in 2000 to $101.6 million in 2001. The $101.6 million of Molecular Biology revenues in 2001 is comprised of $100.0 million of continuing products and $1.6 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 $2.3 million when comparing the third quarter of 2001 with pro-forma revenues in the third quarter of 2000. Sales of continuing Molecular Biology products increased 20% from pro-forma 2000 revenues when holding foreign exchange rates constant.
Revenues for the Molecular Biology segment for the nine months ended September 30, 2001 increased $39.1 million, or 14%, from pro-forma segment revenues of $272.9 million in 2000 to $312.0 million in 2001. The $312.0 million of Molecular Biology revenues in 2001 is comprised of $301.7 million of continuing products and $10.3 million of discontinued products. On a pro-forma basis, changes in foreign exchange rates during the first nine months of 2001 reduced dollar-denominated Molecular Biology revenues by $8.8 million. Holding foreign exchange rates constant with those during the first nine months of 2000, revenues for continuing Molecular Biology products for the first nine months of 2001 would have been $310.0 million, an increase of 24% from 2000.
Revenues for the Cell Culture segment for the third quarter increased $4.9 million, or 10%, from pro-forma segment revenues of $49.5 million in 2000 to $54.4 million in 2001. On a pro-forma basis, changes in foreign exchange rates reduced dollar-denominated revenues by $1.1 million. Holding foreign exchange rates constant with those during the third quarter of 2000, revenues for Cell Culture products during the third quarter of 2001 would have been $55.5 million, an increase of 12% from 2000. Revenues for continuing Cell Culture products increased 19% during the third quarter of 2001 holding foreign exchange rates constant.
Revenues for the Cell Culture segment for the nine months ended September 30, 2001 increased $13.2 million, or 9%, from pro-forma segment revenues of $150.8 million in 2000 to $164.0 million in 2001. On a pro-forma basis, changes in foreign exchange rates reduced dollar-denominated revenues by $6.1 million. Holding foreign exchange rates constant with those during the first nine months of 2000, revenues for cell culture products for the first nine months of 2001 would have been $170.1 million, an increase of 13% from 2000. Revenue for continuing Cell Culture products increased 16% during the first nine months of 2001 holding foreign exchange rates constant.
Gross Margin
Consolidated gross margins for the periods after the merger with Life Technologies have been lower than Invitrogen's consolidated gross margins before the merger principally because of the inclusion of lower margin products from the Life Technologies acquisition. The company has instituted various programs to improve gross margins since the merger, including cost reductions, price adjustments and the discontinuation or sale of lower-margin product lines. Gross margins have improved in each quarter since the fourth quarter of 2000, which was the first full quarter of combined company results. Gross margins in the third quarter of 2001 were 56.2% compared with 54.7% in the second quarter of 2001.
Operating Earnings Excluding Amortization and Merger Costs
Invitrogen's operating earnings, excluding amortization and merger costs, were $32.4 million, or 21% of revenues for the third quarter of 2001, which compares to $9.6 million, or 20% of revenues for the same period in 2000. For the nine months ended September 30, operating earnings, excluding amortization and merger costs, were $102.1 million, or 21% of revenues for 2001 compared to $22.0 million, or 21% of revenues for 2000.
Merger related amortization and costs totaled $70.7 million and $218.3 million for the three and nine months ended September 30, 2001, respectively, the majority of which was related to the acquisition of Life Technologies.
Other income and expense
Interest income for the nine months ended September 30, 2001 of $16.0 million increased from $11.2 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. On a year-to-date basis, other income (expense), net, was $3.3 million and includes $1.9 million of year-to-date income provided by an over-funded pension plan acquired in the Life Technologies / Dexter merger, a $1.3 million gain during the first quarter of 2001 on the sale of a product line and a $1.0 million gain during the second quarter of 2001 from the sale of a facility in the Netherlands.
Taxes
Invitrogen reported an income tax provision of $6.2 million on a pre-tax loss of $104.9 million for the nine months ended September 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 September 30, 2001 of $37.4 million, or $0.71 per share, which compares to a net loss of $5.6 million in 2000, or $0.24 per share for the same period last year. For the nine months ended September 30, the net loss for 2001 was $112.1 million, or $2.14 per share, compared to $2.7 million in 2000, or $0.11 per share.
Pro-forma net income for the third quarter of 2001, excluding amortization and merger costs, net of tax, was $22.7 million, or $0.42 per share, compared with $7.8 million, or $0.26 per share for 2000. For the nine months ended September 30, pro-forma net income for 2001 was $72.2 million, or $1.34 per share, compared to $17.2 million, or $0.63 per share for 2000.
Financial Outlook for 2001
The company will provide detailed guidance concerning its fourth quarter 2001 financial expectations on its conference call today.
Conference Call
Invitrogen will host a conference call to discuss its third quarter 2001 results today, October 25, at 5:00 pm Eastern Standard Time. Interested parties can participate in the call by dialing (973) 633-1010 after 4:50 pm EST. A replay of the call will be available until November 1, 2001 by dialing (973) 341-3080. Access code 2873920 must be used for the replay. The call can also be heard live over the Internet at vcall.com. It will also be archived at that site until November 1.
About Invitrogen
Invitrogen Corporation develops, manufactures and markets research tools in kit form and provides other research products and services to biotechnology and biopharmaceutical researchers and companies worldwide. The company manufactures and markets thousands of products and services that simplify and improve gene cloning, gene expression, and gene analysis techniques for corporate, academic and government entities. The company also engages in technology licensing, research services, large-scale production, and life science technical expertise and support. Founded in 1987, Invitrogen is headquartered in San Diego, California and has operations in more than 20 countries and distributor relationships in 40 more. The company employs approximately 2,800 people at its worldwide locations.
For more information about Invitrogen Corporation, please visit the web site at www.invitrogen.com.
Certain statements contained in this press release are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and it is Invitrogen's intent that such statements be protected by the safe harbor created thereby. Such statements include, but are not limited to, statements relating to 1) Invitrogen's success at making progress with the Life Technologies integration, 2) Invitrogen's ability to continue its growth in its Molecular Biology and Cell Culture segments, 3) Invitrogen's ability to improve its gross margins and operating income through higher prices, manufacturing efficiencies, or other means, and 4) Invitrogen's financial guidance, including but not limited to revenues, earnings and growth rates. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to: a) Invitrogen's ability to realize operational, technological and financial synergies from its integration with Life Technologies; b) whether Invitrogen can manage growth and successfully meet challenges from competitors and emerging technologies; c) whether Invitrogen can continue to identify, develop and license new technology and otherwise manage its business to produce growing financial results; d) the strength of demand for Invitrogen's products and its ability to make its manufacturing operations more efficient; e) whether various businesses and product lines are discontinued and the timing thereof; and f) changes in foreign currency exchange rates, as well as other risks and uncertainties detailed from time to time in the company's Securities and Exchange Commission filings.
INVITROGEN CORPORATION AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except For the Three months For the Nine months
per share data) Ended Ended
(unaudited) September 30, (1) September 30, (1)
2001 2000 2001 2000
Revenues $156,005 $47,989 $476,034 $102,972
Cost of revenues
(includes $0, $4,268,
$2,583 and $4,268,
respectively, of costs
for purchase accounting
inventory revaluation) 68,382 23,852 216,419 41,845
Gross margin 87,623 24,137 259,615 61,127
Operating expenses:
Sales and marketing 27,393 8,816 83,282 19,125
General and administrative 19,416 5,078 49,717 12,106
Research and development 9,081 5,329 29,095 12,695
Goodwill and other
purchased intangibles
amortization 66,015 11,761 204,753 11,777
Merger costs 4,013 385 9,004 6,965
Total operating
expenses 125,918 31,369 375,851 62,668
Loss from operations (38,295) (7,232) (116,236) (1,541)
Other income (expense):
Interest income 5,228 5,322 16,024 11,177
Interest expense (2,625) (2,632) (7,953) (6,317)
Other income
(expense), net 426 (316) 3,298 (19)
Total other income
and expense, net 3,029 2,374 11,369 4,841
Income (loss) before
provision for income
taxes and minority
interest (35,266) (4,858) (104,867) 3,300
Provision for income taxes 1,930 694 6,237 5,893
Minority interest 225 60 980 60
Net loss $(37,421) $(5,612) $(112,084) $(2,653)
Basic loss per
common share $(0.71) $(0.24) $(2.14) $(0.11)
Weighted average
shares used in per
share calculation 52,749 23,828 52,420 23,459
(1) The acquisition of Life Technologies on September 14, 2000 was
accounted for as a purchase and, accordingly, the results of
operations have been included in the financial results from the
acquisition date, which significantly affects the comparability of
the financial information presented.
INVITROGEN CORPORATION AND SUBSIDIARIES
PRO-FORMA NET INCOME AND EBITDA INFORMATION
(in thousands, except For the Three months For the Nine months
per share data) Ended Ended
(unaudited) September 30, (1) September 30, (1)
2001 2000 2001 2000
Pro-forma Net Income
excluding amortization
and merger costs,
net of tax:
Net loss $(37,421) $(5,612) $(112,084) $(2,653)
Add back merger
related costs:
Amortization of
inventory
revaluation costs -- 4,268 2,583 4,268
Amortization of
goodwill and other
purchased intangibles 66,015 11,761 204,753 11,777
Amortization of
deferred compensation 705 415 1,996 505
Merger costs 4,013 385 9,004 6,965
Total merger related
amortization and
costs 70,733 16,829 218,336 23,515
Less related tax benefit (10,661) (3,384) (34,044) (3,709)
Pro-forma net income $22,651 $7,833 $72,208 $17,153
Pro-forma earnings
per share:
Basic $0.43 $0.33 $1.38 $0.73
Diluted $0.42 $0.26 $1.34 $0.63
Weighted average shares
used in pro-forma
diluted earnings
per share calculation 53,804 30,612 53,772 27,114
Earnings Before Interest,
Taxes, Depreciation,
Amortization and
Merger Costs:
Loss from operations $(38,295) $(7,232) $(116,236) $(1,541)
Add back merger related
amortization and costs 70,733 16,829 218,336 23,515
Add back depreciation 4,493 1,939 13,745 4,114
Add back amortization
of all other intangible
assets 93 183 441 543
EBITDA and
merger costs $37,024 $11,719 $116,286 $26,631
(1) The acquisition of Life Technologies on September 14, 2000 was
accounted for as a purchase and, accordingly, the results of
operations have been included in the financial results from the
acquisition date, which significantly affects the comparability of
the financial information presented.
INVITROGEN CORPORATION AND SUBSIDIARIES
BUSINESS SEGMENT HIGHLIGHTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001
Corporate
(in thousands) Molecular Cell And
(unaudited) Biology Culture Unallocated (1) Total
Segment Results
Revenues from
external customers $101,612 $54,393 $-- $156,005
Gross margin 62,859 24,772 (8) 87,623
Gross margin as a
percentage of revenues 62% 46% 56%
Selling, administrative
and R&D 39,811 10,931 5,148 55,890
Merger related
amortization
and costs (2) -- -- 70,028 70,028
Operating
income (loss) 23,048 13,841 (75,184) (38,295)
Add back merger
related amortization
and costs(3) -- -- 70,733 70,733
Pro-forma operating
income (loss) $23,048 $13,841 $(4,451) $32,438
Operating margin as
a percentage of revenues 23% 25% 21%
Pro-Forma Revenue Growth
Revenues for third
quarter 2001 $101,612 $54,393 $156,005
Adjust for effect of
foreign exchange
rates(4) 2,280 1,098 3,378
Currency adjusted
revenues $103,892 $55,491 $159,383
Revenues for third
quarter 2001 $101,612 $54,393 $156,005
Less revenues from
discontinued products (1,607) (6,835) (8,442)
Revenues from
continuing products 100,005 47,558 147,563
Adjust for effect of
foreign exchange rates
on continuing
products(4) 2,220 933 3,153
Currency adjusted
revenues from
continuing products $102,225 $48,491 $150,716
Pro-forma revenues
for third
quarter 2000 $91,495 $49,456 $140,951
Less revenues from
discontinued products (6,588) (8,701) (15,289)
Pro-forma revenues
from continuing
products $84,907 $40,755 $125,662
Revenue growth for
third quarter 2001 11% 10% 11%
Currency adjusted
revenue growth 14% 12% 13%
Revenue growth for
continuing products 18% 17% 17%
Currency adjusted
revenue growth for
continuing products 20% 19% 20%
(1) Unallocated items for the three months ended September 30, 2001
include costs for the amortization of deferred compensation of
$0.7 million and amortization of purchased intangibles of
$66.0 million which are not allocated by management for purposes of
analyzing the operations since they are non-cash items resulting
primarily from purchase accounting.
(2) Excludes deferred compensation of $0.7 million, which is allocated to
operating expenses.
(3) Includes deferred compensation costs.
(4) Changes in foreign exchange rates when compared to the same period in
the prior year affected dollar denominated revenues. These
adjustments are to arrive at dollar denominated revenues assuming
foreign exchange rates that are constant with those during the
comparable period of last year.
INVITROGEN CORPORATION AND SUBSIDIARIES
BUSINESS SEGMENT HIGHLIGHTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
Corporate
(in thousands) Molecular Cell And
(unaudited) Biology Culture Unallocated (1) Total
Segment Results
Revenues from external
customers $312,017 $164,017 $-- $476,034
Gross margin 189,309 72,982 (2,676) 259,615
Gross margin as a
percentage of revenues 61% 45% 55%
Selling,
administrative
and R&D 115,574 33,471 13,049 162,094
Merger related
amortization and
costs(2) -- -- 213,757 213,757
Operating
income (loss) 73,735 39,511 (229,482) (116,236)
Add back merger
related amortization
and costs(3) -- -- 218,336 218,336
Pro-forma operating
income (loss) $73,735 $39,511 $(11,146) $102,100
Operating margin as
a percentage
of revenues 24% 24% 21%
Pro-Forma Revenue Growth
Revenues for first
nine months 2001 $312,017 $164,017 $476,034
Adjust for effect of
foreign exchange
rates(4) 8,790 6,080 14,870
Currency adjusted
revenues $320,807 $170,097 $490,904
Revenues for first
nine months 2001 $312,017 $164,017 $476,034
Less revenues from
discontinued products (10,315) (24,991) (35,306)
Revenues from
continuing products 301,702 139,026 440,728
Adjust for effect of
foreign exchange
rates on continuing
products(4) 8,316 4,852 13,168
Currency adjusted
revenues from
continuing products $310,018 $143,878 $453,896
Pro-forma revenues
for first
nine months 2000 $272,932 $150,827 $423,759
Less revenues from
discontinued products (22,171) (27,093) (49,264)
Pro-forma revenues
from continuing
products $250,761 $123,734 $374,495
Revenue growth for
first nine months 2001 14% 9% 12%
Currency adjusted
revenue growth 18% 13% 16%
Revenue growth for
continuing products 20% 12% 18%
Currency adjusted
revenue growth for
continuing products 24% 16% 21%
(1) Unallocated items for the nine months ended September 30, 2001
include costs for purchase accounting inventory revaluations of
$2.6 million, amortization of deferred compensation of $2.0 million
and amortization of purchased intangibles of $204.8 million which are
not allocated by management for purposes of analyzing the operations
since they are non-cash items resulting primarily from purchase
accounting.
(2) Excludes deferred compensation of $2.0 million, which is allocated to
operating expenses, and purchase accounting inventory revaluation of
$2.6 million, which is included in gross margin.
(3) Includes deferred compensation and purchase accounting inventory
revaluations.
(4) Changes in foreign exchange rates when compared to the same period in
the prior year affected dollar denominated revenues. These
adjustments are to arrive at dollar denominated revenues assuming
foreign exchange rates that are constant with those during the
comparable period of last year.
INVITROGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands) September 30, December 31,
2001 2000
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $563,118 $418,899
Restricted cash and investments 9,785 11,757
Trade accounts receivable,
net of allowance 102,568 87,195
Inventories 86,737 91,664
Deferred income taxes 39,466 28,567
Prepaid and other current assets 13,491 33,667
Total current assets 815,165 671,749
Property and equipment, net 115,329 171,521
Goodwill and other purchased
intangibles, net 1,241,213 1,473,903
Other assets 54,194 52,042
Total assets $2,225,901 $2,369,215
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current notes payable $4,080 $2,154
Accounts payable, accrued expenses
and other current liabilities 104,083 103,939
Income taxes 34,968 46,935
Total current liabilities 143,131 153,028
Long-term obligations and reserves 14,313 15,798
Pension liabilities 12,836 12,614
Deferred taxes 177,458 231,939
5.5% Convertible Subordinated Notes
due March 1, 2007 172,500 172,500
Minority interest 2,455 4,939
Stockholders' equity 1,703,208 1,778,397
Total liabilities and
stockholders' equity $2,225,901 $2,369,215<<
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