QIAGEN Reports First Quarter 2011 Results
(Thomson Reuters ONE) -
Qiagen N.V. /
QIAGEN Reports First Quarter 2011 Results
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The issuer is solely responsible for the content of this announcement.
* Net sales of $264.3 million (0%, -2% CER) reflect anticipated soft start to
2011, disruptions in Japan and other markets reduce growth by ~2 percentage
points
* Adjusted EPS rises to $0.21 (+5%) on productivity initiatives that support
investments to drive innovation and growth; free cash flow more than doubles
to $29.0 million
* New pharma co-development agreements reached, expanding Personalized
Healthcare beyond oncology; U.S. submission of KRAS cancer biomarker
advances
* Global rollout of QIAsymphony RGQ automated platform progressing well
* Proposed acquisition of Cellestis to provide novel "pre-molecular" disease
detection technology that highly complements DNA- and RNA-based molecular
diagnostics
* QIAGEN reaffirms expectations: Adjusted earnings expected to grow faster
than net sales in 2011, focus on expansion to further accelerate growth in
2012
Venlo, The Netherlands, April 27, 2011 - QIAGEN N.V. (NASDAQ: QGEN; Frankfurt
Prime Standard: QIA) today announced results of operations for the first quarter
of 2011. Net sales of $264.3 million were largely unchanged compared to the
first quarter of 2010 (-2% at constant exchange rates, or CER), while adjusted
earnings per share rose 5% to $0.21 ($0.20 CER) and free cash flow more than
doubled to $29.0 million from $12.3 million in the first quarter of 2010.
Results in the 2011 first quarter were unexpectedly affected by disruptions in
Japan, Australia/New Zealand and northern Africa, which reduced net sales by
approximately two percentage points.
"We remain on track to deliver on our full-year growth targets despite the
expected softness in the first quarter, which was exacerbated by several factors
including the crisis in Japan. As we position ourselves for sequentially
increasing growth, we are making broad progress to expand our business. The
initiatives we have put in place are set to drive the improving performance
during the course of 2011 and position us to further accelerate growth in
2012," said Peer Schatz, Chief Executive Officer of QIAGEN N.V.
"Several milestones in the first quarter of 2011 show QIAGEN is executing well
on a strategic plan to expand the molecular content available on automated
platforms. The rollout of QIAsymphony RGQ continues to progress well, and
customer feedback is validating the goal of this novel platform to drive
dissemination of molecular diagnostics. Our recent proposal to acquire Cellestis
is expected to add a novel 'pre-molecular' technology and commercial assays that
can be migrated to our automated platforms and highly complements our DNA- and
RNA-based molecular diagnostics portfolio. In addition, we are expanding our
portfolio of companion diagnostic partnerships in oncology and other
indications. One of the new co-development agreements signed in the first
quarter with a major pharmaceutical company added an additional, new and very
large therapeutic area. The U.S. regulatory submission of the KRAS biomarker for
use as a companion diagnostic is advancing toward completion. QIAGEN is well
positioned to achieve the goals set for 2011 and deliver growth in the future at
a faster pace."
First Quarter 2011 Results
+------------------------------------------------------------------------------+
|in $ millions, except per share |
|information Q1 2011 Q1 2010 Change |
+------------------------------------------------------------------------------+
| |
| |
|Net sales 264.3 264.4 0% |
| |
|Operating income, adjusted 70.5 73.6 -4% |
| |
|Net income, adjusted 49.5 49.3 0% |
| |
|EPS, adjusted ($) 0.21 0.20 |
| |
| |
+------------------------------------------------------------------------------+
For information on the adjusted figures, please refer to the
reconciliation table
accompanying this release.
Net sales were largely unchanged at $264.3 million in the first quarter of 2011
compared with $264.4 million in the first quarter of 2010, but declined 2% CER.
Operating income of $38.4 million declined 14% from $44.7 million in the 2010
quarter. Net income fell 15% to $28.0 million in the 2011 quarter from $33.0
million in the year-ago quarter, while diluted earnings per share were $0.12
(based on 240.4 million diluted shares) in the 2011 quarter compared to $0.14 in
the same 2010 quarter (based on 241.9 million diluted shares).
Adjusted operating income in the first quarter of 2011 declined 4% to $70.5
million from $73.6 million in the same 2010 quarter, with an adjusted operating
income margin of 27% of net sales compared to 28% in the same 2010 quarter.
Adjusted net income was largely unchanged at $49.5 million in the 2011 quarter
compared to $49.3 million in the same quarter of 2010. Adjusted diluted earnings
per share rose to $0.21 in the 2011 quarter from $0.20 in the first quarter of
2010.
Reconciliations of reported results in accordance with U.S. generally accepted
accounting principles (GAAP) to adjusted results are included in the tables
accompanying this release.
"Our first-quarter results are not indicative of the full-year performance we
are targeting. We expect to deliver substantially higher growth rates as the
year progresses, with the strongest results anticipated in the second half of
2011 as we expect to benefit from the rollout of QIAsymphony RGQ, geographic
expansion and predictions for improving market conditions," said Roland Sackers,
Chief Financial Officer of QIAGEN N.V. "Adjusted earnings during 2011 should
grow at a faster pace than net sales due to operational excellence initiatives.
Our strong financial position also provides resources to fund the acquisition of
Cellestis while maintaining strategic flexibility to strengthen our businesses
through sustained R&D investments and additional targeted acquisitions."
Business Review
Performance during the first quarter of 2011 was soft across the four customer
classes as net sales were largely unchanged, but declined 2% CER compared to the
year-ago period. The first quarter of 2010 had benefited from the contributions
of exceptionally strong instrument sales and solid demand for HPV screening
tests in the U.S., which then declined sharply during the rest of 2010 due to a
reduction in patient visits to physicians, linked to weak economic conditions.
Additionally, product deliveries in the first quarter of 2011 were disrupted by
natural disasters in Japan and Australia/New Zealand and political unrest in
Egypt, where QIAGEN is a major supplier to the hepatitis C testing programs,
reducing net sales by approximately two percentage points.
Among product categories, consumables and related revenues provided 87% of sales
in the first quarter of 2011, declining 1% CER from the same 2010 period.
Instrumentation contributed 13% of sales and fell 9% CER compared to
exceptionally strong year-ago results, when net sales rose 37% CER.
Among the regions, the Americas (47% of sales) delivered 1% CER growth in net
sales compared to the first quarter of 2010, while Europe / Middle East / Africa
(35% of sales) declined 1% CER and Asia-Pacific/Japan (18% of sales) fell 10%
CER.
Molecular Diagnostics (44% of net sales) declined 2% CER from the first quarter
of 2010 as Profiling and Prevention offset gains in Personalized Healthcare,
which grew on expansion of companion diagnostic sales in Europe and co-
development projects with pharmaceutical companies. Profiling (infectious
disease testing) was adversely affected by sales disruptions in Japan and Egypt.
Prevention was hampered by soft sales of HPV tests in the U.S. However, trends
are becoming more positive in the U.S., providing further support for
expectations of improving sales in the coming quarters. Changes of trends in
patient visits to physicians are typically reflected in sales with a delay of a
few months.
Applied Testing (6% of net sales) faced a challenging year-over-year comparison
as net sales in the first quarter of 2011 fell 13% CER from the same 2010
period, which included exceptionally strong sales of instruments and
overshadowed growth in consumables. Long-term trends in this customer class,
which can have volatile quarterly results, are supported by expansion in human
identification, veterinary testing and food safety.
Pharma (21% of net sales) benefited from sustained demand for advanced molecular
technologies supporting R&D initiatives for new medicines, particularly gene-
based drug development activities. Net sales in the first quarter of 2011 rose
2% CER compared to the same period in 2010.
Academia (29% of net sales) saw cautious purchasing patterns for consumable kits
and instruments in some key markets during the first quarter of 2011, as net
sales declined 2% CER compared to the same period in 2010.
Expanding in 2011 to Further Accelerate Growth in 2012
QIAGEN continues to make progress on strategic initiatives to leverage its
global leadership in Sample & Assay Technologies and strengthen its position in
all customer classes. A key focus is expanding the offering of molecular content
for use on various automated platforms, driven by both internal R&D efforts as
well as targeted acquisitions.
Important to this strategy is the global rollout of QIAsymphony RGQ, a next-
generation automated modular testing platform that addresses customer demands
for a versatile mid-throughput system. Since the launch of the first modular
unit (QIAsymphony SP) in 2008, more than 400 systems have been placed around the
world. The late 2010 launch of QIAsymphony RGQ, which incorporates the Rotor-
Gene Q (RGQ) real-time PCR detection platform, is expected to accelerate
placements, particularly in Molecular Diagnostics. QIAsymphony RGQ is the first
modular system that automates entire laboratory workflows from initial sample
preparation to final result, and allows customers to run commercial assays as
well as to develop and conduct their own tests.
Customer response has been very positive to QIAsymphony RGQ, with an increasing
number of system placements achieved in the first quarter of 2011 for customer
evaluation and validation. QIAGEN expects to significantly increase the number
of system placements during 2011 and 2012, which will help to accelerate growth
in the coming years.
QIAGEN also has made progress on a series of initiatives to add molecular
content - particularly in Molecular Diagnostics - to QIAsymphony RGQ as well as
other automated platforms, which include the next-generation QIAensemble system
in development and point of need testing platforms. More than 20 new products
were launched in the first quarter of 2011, while nearly 40 regulatory
clearances or approvals were received from agencies around the world.
In an important strategic move in early April, QIAGEN announced an agreement to
acquire Cellestis Limited (CST:AU) for approximately A$341 million (US$355
million) in cash, providing access to the QuantiFERON® technology that offers a
new dimension in disease detection not currently possible with other diagnostic
methods. Cellestis has commercialized this technology, which tests whole blood
samples for the presence of systemically amplified molecular analytes that
provide information from the immune system's memory, in tests for latent
tuberculosis (TB) and the life-threatening cytomegalovirus (CMV). Following
completion of the transaction, which is expected in mid-2011, QIAGEN plans to
migrate QuantiFERON® products onto its automated platforms and develop tests
that complement QIAGEN's DNA- and RNA-based molecular diagnostics portfolio.
QIAGEN is considering other targeted acquisitions in line with its focused,
consistent and value-creating strategy.
In Personalized Healthcare, QIAGEN is actively expanding its portfolio of co-
development projects with leading pharmaceutical and biopharmaceutical
companies. Among the new projects is an agreement reached in the first quarter
of 2011 with an undisclosed major pharmaceutical company that added a new and
very large therapeutic area for companion diagnostics. Negotiations are
progressing with other companies on co-development projects, both in oncology as
well as in areas including central nervous system, cardiovascular and other
diseases. QIAGEN is positioned as a global leader in Personalized Healthcare
with more than 15 projects under way to develop companion diagnostics. These
tests provide information to guide treatment decisions, particularly in cancer
patients. In the U.S., the modular submission of the therascreen KRAS assay,
which determines the gene mutation status in patients with metastatic colorectal
cancer, remains on track for completion in the first half of 2011.
In Prevention, momentum is building toward the adoption of molecular diagnostics
for use in screening women at risk of the human papillomavirus (HPV), a cause of
cervical cancer. In the first quarter of 2011, progress was made toward adoption
of HPV testing in almost 10 countries where major pilot projects are expected to
begin in 2011. In the U.S., QIAGEN continues to demonstrate success in its
market conversion initiatives, which are being targeted at integrated healthcare
networks and large physician groups. QIAGEN continues to expect higher sales of
HPV tests in 2011 based on further conversion of the U.S. market, while also
taking into account factors driven by the anticipated entry of competitors
during the second half of 2011.
2011 outlook
(Barring unforeseen events)
QIAGEN reaffirms its expectations to deliver adjusted earnings growth at a
faster pace than net sales. Full-year net sales in 2011 are expected to rise
approximately 5-7% CER, reflecting organic growth and no meaningful
contributions from acquisitions completed in 2010. Adjusted earnings per share
are expected to grow approximately 7-13% CER. Results are expected to move
toward substantially higher growth rates during the course of 2011. These
expectations do not take into account the acquisition of Cellestis (expected to
be completed in mid-2011) or other potential acquisitions that could be
completed during the year, and an improving economic environment, which could
provide additional growth contributions. These expectations also do not take
into account any potential supply disruptions in Japan and northern Africa
during the rest of 2011.
Conference Call and Webcast Details
Information on QIAGEN's business and financial performance will be presented
during a conference call on Thursday, April 28, 2011, at 9:30 ET / 15:30 CET.
The corresponding presentation slides will be available for download shortly
before the conference call at www.qiagen.com/goto/ConferenceCall, and a webcast
is available at this website. A replay will also be made available on this
website.
Use of Adjusted Results
QIAGEN has regularly reported adjusted results, as well as results considered on
a constant exchange rate basis, to give additional insight into its 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 as a substitute. QIAGEN believes certain items
should be excluded from adjusted results when they are outside of its ongoing
core operations, vary significantly from period to period, or affect the
comparability of results with the company's competitors and its own prior
periods. Reconciliations of reported results to adjusted results are included in
the tables accompanying this release. QIAGEN is also reporting free cash flow
results which are calculated as net cash provided by operating activities less
capital expenditures for the purchase of property, plant and equipment.
About QIAGEN
QIAGEN N.V., a Netherlands holding company, is the leading global provider of
Sample & Assay technologies. Sample technologies are used to isolate and process
DNA, RNA and proteins from biological samples such as blood or tissue. Assay
technologies are used to make these isolated biomolecules visible. QIAGEN has
developed and markets more than 500 sample and assay products as well as
automated solutions for such consumables. QIAGEN provides its products to
molecular diagnostics laboratories, academic researchers, pharmaceutical and
biotechnology companies, and applied testing customers for purposes such as
forensics, animal or food testing and pharmaceutical process control. QIAGEN's
assay technologies include one of the broadest panels of molecular diagnostic
tests available worldwide. This panel includes the first FDA-approved test for
human papillomavirus (HPV), the primary cause of cervical cancer. QIAGEN employs
nearly 3,600 people in over 30 locations worldwide. Further information about
QIAGEN can be found at http://www.qiagen.com/.
Certain of the statements contained in this news release may be considered
forward-looking statements within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities
Exchange Act of 1934, as amended. To the extent that any of the statements
contained herein relating to QIAGEN's products, markets, strategy or operating
results, including without limitation its expected operating results, are
forward-looking, such statements are based on current expectations and
assumptions that involve a number of uncertainties and risks. Such uncertainties
and risks include, but are not limited to, risks associated with management of
growth and international operations (including the effects of currency
fluctuations, regulatory processes and dependence on logistics), variability of
operating results and allocations between business segments, the commercial
development of markets for our products in applied testing, personalized
healthcare, clinical research, proteomics, women's health/HPV testing and
nucleic acid-based molecular diagnostics; changing relationships with customers,
suppliers and strategic partners; competition; rapid or unexpected changes in
technologies; fluctuations in demand for QIAGEN's products (including
fluctuations due to general economic conditions, the level and timing of
customers' funding, budgets and other factors); our ability to obtain regulatory
approval of our products; difficulties in successfully adapting QIAGEN's
products to integrated solutions and producing such products; the ability of
QIAGEN to identify and develop new products and to differentiate and protect our
products from competitors' products; market acceptance of QIAGEN's new products
and the integration of acquired technologies and businesses. For further
information, please refer to the discussions in reports that QIAGEN has filed
with, or furnished to, the U.S. Securities and Exchange Commission (SEC).
###
Contacts:
Investor Relations Public Relations
Dr. Solveigh Mähler +49 2103 29 11710 Dr. Thomas Theuringer +49 2103 29 11826
Albert F. Fleury +1 301 944 7028
e-mail: ir(at)qiagen.com e-mail: pr(at)qiagen.com
QIAGEN N.V.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three months
(in $ thousands, except per share data) ended March 31,
-------------------
2011 2010
--------- ---------
Net sales 264,265 264,364
Cost of sales 92,117 91,152
--------- ---------
Gross profit 172,148 173,212
--------- ---------
Operating expenses:
Research and development 32,667 31,597
Sales and marketing 68,414 64,436
General and administrative, integration and other 26,397 26,340
Acquisition-related intangible amortization 6,225 6,158
--------- ---------
Total operating expenses 133,703 128,531
--------- ---------
Income from operations 38,445 44,681
--------- ---------
Other income (expense):
Interest income 1,271 689
Interest expense (6,307) (6,254)
Other income, net 1,878 2,235
--------- ---------
Total other expense (3,158) (3,330)
--------- ---------
Income before provision for income taxes 35,287 41,351
Provision for income taxes 7,306 8,337
--------- ---------
Net income 27,981 33,014
Weighted average number of diluted common shares 240,382 241,924
Diluted net income per common share $ 0.12 $ 0.14
Diluted net income per common share, adjusted $ 0.21 $ 0.20
QIAGEN N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in $ thousands, except par value) March 31, December 31,
2011 2010
------------- -------------
Assets (unaudited)
Current Assets:
Cash and cash equivalents 776,581 828,407
Short-term investments 162,346 106,077
Accounts receivable, net 202,215 197,418
Income taxes receivable 12,647 10,920
Inventories, net 132,752 126,633
Prepaid expenses and other 76,624 64,402
Deferred income taxes 25,094 30,731
------------- -------------
Total current assets 1,388,259 1,364,588
------------- -------------
Long-Term Assets:
Property, plant and equipment, net 369,955 345,664
Goodwill 1,364,183 1,352,281
Intangible assets, net 752,541 753,327
Deferred income taxes 31,045 37,182
Other assets 52,072 60,953
------------- -------------
Total long-term assets 2,569,796 2,549,407
------------- -------------
------------- -------------
Total assets 3,958,055 3,913,995
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable 51,976 47,803
Accrued and other liabilities 197,951 209,054
Income taxes payable 17,821 25,211
Current portion of long-term debt 76,332 75,835
Deferred income taxes 30,809 30,504
------------- -------------
Total current liabilities 374,889 388,407
------------- -------------
Long-Term Liabilities:
Long-term debt, net of current portion 796,865 797,171
Deferred income taxes 191,160 200,667
Other liabilities 58,846 51,397
------------- -------------
Total long-term liabilities 1,046,871 1,049,235
------------- -------------
Shareholders' Equity:
Common shares, EUR .01 par value:
Authorized - 410,000 shares
Issued and outstanding - 233,683 shares
in 2011 and 233,115 shares in 2010 2,732 2,724
Additional paid-in capital 1,659,073 1,648,985
Retained earnings 787,871 759,890
Accumulated other comprehensive income 86,619 64,754
------------- -------------
Total shareholders' equity 2,536,295 2,476,353
------------- -------------
------------- -------------
Total liabilities and shareholders' equity 3,958,055 3,913,995
QIAGEN N.V.
RECONCILIATION OF REPORTED TO ADJUSTED FIGURES
(unaudited)
Three months ended March 31, 2011
(in $ millions, except EPS data)
Net Gross Operating Pre-tax Income Net Diluted
Sales Profit Income Income Tax Income EPS*
---------------------------------------------------------------
Reported results 264.3 172.1 38.4 35.3 (7.3) 28.0 $ 0.12
Adjustments:
Business - 0.1 3.2 3.3 (1.1) 2.2 0.01
integration,
acquisition
related and
restructuring
costs
Purchased - 16.8 23.0 23.0 (7.8) 15.2 0.06
intangibles
amortization
Share-based - 0.3 4.0 4.0 (0.8) 3.2 0.01
compensation
Other non- - 1.6 1.9 1.3 (0.4) 0.9 0.01
recurring
income and
expense
---------------------------------------------------------------
Total - 18.8 32.1 31.6 (10.1) 21.5 0.09
adjustments
---------------------------------------------------------------
Adjusted results 264.3 190.9 70.5 66.9 (17.4) 49.5 $ 0.21
* Using 240.4 M
diluted shares
Three months ended March 31, 2010
(in $ millions, except EPS data)
Net Gross Operating Pre-tax Income Net Diluted
Sales Profit Income Income Tax Income EPS*
---------------------------------------------------------------
Reported results 264.4 173.2 44.7 41.3 (8.3) 33.0 $ 0.14
Adjustments:
Business - 0.8 5.1 5.1 (1.7) 3.4 0.01
integration,
acquisition
related and
restructuring
costs
Purchased - 15.1 21.2 21.2 (10.2) 11.0 0.04
intangibles
amortization
Share-based - 0.1 2.6 2.6 (0.7) 1.9 0.01
compensation
---------------------------------------------------------------
Total - 16.0 28.9 28.9 (12.6) 16.3 0.06
adjustments
---------------------------------------------------------------
Adjusted results 264.4 189.2 73.6 70.2 (20.9) 49.3 $ 0.20
* Using 241.9 M
diluted shares
--- End of Message ---
Qiagen N.V.
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