SAN DIEGO, July 29 /PRNewswire-FirstCall/ -- Gen-Probe
Incorporated (Nasdaq: GPRO) today reported financial results for
the second quarter of 2010, highlighted by 14% growth in product
sales, 15% growth in total revenues, and 16% growth in non-GAAP
earnings per share (EPS).
"Gen-Probe's second quarter financial results demonstrate our
ability to drive growth and execute on our financial goals in a
challenging business environment," said Carl Hull, the Company's president and chief
executive officer. "At the same time, we made important
progress on four US regulatory filings and three European product
launches that we expect to create an important new product cycle
over the balance of this year and into 2011."
Key financial results for the second quarter of 2010 were ($ in
millions, except EPS):
|
|
|
Non-GAAP
|
|
GAAP
|
|
|
2010
|
2009
|
Change
|
|
2010
|
2009
|
Change
|
|
Product sales
|
$132.7
|
$116.8
|
+14%
|
|
$132.7
|
$116.8
|
+14%
|
|
Total revenues
|
$138.6
|
$120.5
|
+15%
|
|
$138.6
|
$120.5
|
+15%
|
|
Operating profit
|
$37.2
|
$27.7
|
+34%
|
|
$34.2
|
$23.2
|
+47%
|
|
Net income
|
$26.0
|
$23.2(4)
|
+12%
|
|
$28.1
|
$19.8(4)
|
+42%
|
|
EPS
|
$0.52
|
$0.45
|
+16%
|
|
$0.57
|
$0.38
|
+50%
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Detail
Clinical diagnostics sales growth in the second quarter of 2010
was driven by the APTIMA Combo 2® assay for detecting
Chlamydia and gonorrhea, and Prodesse products, which were
not part of Gen-Probe in the prior year period. Compared to
the prior year period, foreign exchange fluctuations reduced
clinical diagnostics sales by an estimated $0.1 million, or less than 1%.
In the second quarter, blood screening sales increased based
on:
- Higher shipments of PROCLEIX® ULTRIO® and West Nile virus
assays, especially in comparison to lower-than-average ordering in
the prior year period.
- Increased sales of TIGRIS® instruments to Novartis, the
Company's blood screening collaboration partner.
- The contractual increase in the share of revenues Gen-Probe
receives under its collaboration with Novartis.
- Foreign exchange fluctuations, which added an estimated
$0.5 million, or 1%, to blood
screening sales.
Sales of research products and services in the second quarter of
2010 were $3.2 million, compared to
$3.6 million in the prior year
period, a decrease of 11% that resulted mainly from the divestiture
of the BioKits food testing business late in 2009, and foreign
exchange fluctuations.
Second quarter product sales were ($ in millions):
|
|
|
Three Months Ended June
30,
|
|
Change
|
|
|
2010
|
2009
|
|
As
Reported
|
Constant
Currency(5)
|
|
Clinical Diagnostics
|
$73.9
|
$67.4
|
|
+10%
|
+10%
|
|
Blood Screening
|
$55.7
|
$45.8
|
|
+22%
|
+20%
|
|
Research Products and
Services
|
$3.2
|
$3.6
|
|
-11%
|
-8%
|
|
Total Product Sales
|
$132.7
|
$116.8
|
|
+14%
|
+13%
|
|
|
|
|
|
|
|
|
|
Collaborative research revenues in the second quarter of 2010
were $4.1 million, compared to
$2.2 million in the prior year
period, an increase of 86% that resulted primarily from increased
funding from Novartis associated with the development of the fully
automated PANTHER™ instrument for the blood screening market.
Royalty and license revenues in the second quarter of 2010 were
$1.8 million, compared to
$1.5 million in the prior year
period, an increase of 20%.
Expense Detail
Gross margin on product sales in the second quarter of 2010 was
66.7% on a non-GAAP basis, compared to 67.3% in the prior year
period. This decrease resulted mainly from increased sales of
low-margin instruments, which are generally a precursor to future
assay sales. On a GAAP basis, including $0.1 million of acquisition-related depreciation
expense, gross margin on product sales was 66.6% in the second
quarter of 2010, compared to 67.2% in the prior year period.
On a GAAP basis, acquisition-related amortization expenses were
$2.2 million in the second quarter of
2010, compared to $1.1 million in the
prior year period, an increase of 100% that resulted primarily from
the October 2009 acquisition of
Prodesse and its related intangible assets.
Research and development (R&D) expenses in the second
quarter of 2010 were $27.1 million,
compared to $26.1 million in the
prior year period, an increase of 4% that resulted primarily from
expenses associated with the Company's development programs for its
PANTHER instrument and PCA3 and trichomonas assays, and from the
addition of Prodesse's R&D activities.
Marketing and sales expenses in the second quarter of 2010 were
$15.8 million, compared to
$14.0 million in the prior year
period, an increase of 13% that resulted primarily from European
sales force expansion and market development efforts.
General and administrative (G&A) expenses in the second
quarter of 2010 were $14.3 million on
a non-GAAP basis, compared to $14.6
million in the prior year period, a decrease of 2% that
resulted primarily from cost-containment efforts. On a GAAP
basis, including transaction-related costs, G&A expenses were
$15.0 million in the second quarter
of 2010, compared to $17.8 million in
the prior year period, a decrease of 16% that resulted mainly from
fees associated with the acquisition of Tepnel in the prior year
period.
Total other income in the second quarter of 2010 was
$2.5 million on a non-GAAP basis,
compared to $8.5 million in the prior
year period. This significant decrease resulted primarily
from lower realized gains from the sale of marketable securities,
lower yields on the Company's municipal bond portfolio, and lower
investment balances due to share repurchases and the acquisition of
Prodesse. On a GAAP basis, including a $4.3 million non-cash gain on a change in the
fair value of potential contingent payments, total other income was
$6.9 million in the second quarter of
2010.
In the second quarter of 2010, Gen-Probe generated net cash of
$41.1 million from operating
activities, and spent $6.7 million on
property, plant and equipment in the quarter, leading to free cash
flow of $34.4 million. The
Company repurchased approximately 910,500 shares of its stock in
the second quarter for $41.3
million.
Gen-Probe continues to have a strong balance sheet. As of
June 30, 2010, the Company had
$474.8 million of cash, cash
equivalents and marketable securities, and $240.8 million of short-term debt. The
Company pays interest on substantially all this debt at a rate 0.6%
above the one-month London Interbank Offered Rate (LIBOR), which
was recently below 0.4%.
Updated 2010 Financial
Guidance
|
|
|
Current
Guidance
(non-GAAP)
|
Previous
Guidance
(non-GAAP)
|
Current
Guidance
(GAAP)
|
Previous
Guidance
(GAAP)
|
|
Total
revenues
|
$545 to $562 million
|
$545 to $565 million
|
$545 to $562 million
|
$545 to $565 million
|
|
Product
gross margins
|
~ 68%
|
68% to 69%
|
~ 68%
|
68% to 69%
|
|
Acquisition-related amortization
and
transaction expense
|
N/A
|
N/A
|
$10.5 to $11.5
million
|
$9 to $10 million
|
|
Fair value
adjustment of acquisition-
related contingent
consideration
|
N/A
|
N/A
|
$5.5 million
|
($1 million)
|
|
Operating
margin
|
27% to 28%
|
27% to 28%
|
25% to 26%
|
24.5% to 25.5%
|
|
Tax
rate
|
~ 34%
|
34% to 35%
|
~ 35%
|
34% to 35%
|
|
Diluted
shares
|
~ 49 million
|
~ 50 million
|
~ 49 million
|
~ 50 million
|
|
EPS
|
$2.12 to $2.25
|
$2.12 to $2.25
|
$2.07 to $2.20
|
$1.99 to $2.12
|
|
|
|
|
|
|
|
|
Webcast Conference Call
A live webcast of Gen-Probe's second quarter 2010 conference
call for investors can be accessed at http://www.gen-probe.com
beginning at 4:30 p.m. Eastern Time
today. The webcast will be archived for at least 90 days. A
telephone replay of the call also will be available for
approximately 24 hours. The replay number is 866-457-5716 for
domestic callers and 203-369-1294 for international callers.
About Gen-Probe
Gen-Probe Incorporated is a global leader in the development,
manufacture and marketing of rapid, accurate and cost-effective
molecular diagnostic products and services that are used primarily
to diagnose human diseases, screen donated human blood, and ensure
transplant compatibility. Gen-Probe has approximately 27
years of expertise in nucleic acid testing (NAT), and received the
2004 National Medal of Technology, America's highest honor for
technological innovation, for developing NAT assays for blood
screening. Gen-Probe is headquartered in San Diego and employs approximately 1,300
people. For more information, go to www.gen-probe.com.
About Non-GAAP Financial Measures
To supplement Gen-Probe's financial results for the second
quarter of 2010 and its updated 2010 financial guidance, in each
case presented in accordance with GAAP, Gen-Probe uses the
following financial measures defined as non-GAAP by the SEC:
non-GAAP net income, non-GAAP gross margin, non-GAAP marketing and
sales expenses, non-GAAP G&A expenses, non-GAAP operating
margin, non-GAAP income tax rate, and non-GAAP EPS.
Gen-Probe's management does not, nor does it suggest that
investors should, consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information
prepared and presented in accordance with GAAP. Gen-Probe's
management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding the Company's
performance by excluding certain expenses and adjustments that may
not be indicative of core business results. Gen-Probe
believes that both management and investors benefit from referring
to these non-GAAP financial measures in assessing Gen-Probe's
performance and when planning, forecasting and analyzing future
periods. These non-GAAP financial measures also facilitate
management's internal comparisons to Gen-Probe's historical
performance and our competitors' operating results. Gen-Probe
believes these non-GAAP financial measures are useful to investors
in allowing for greater transparency with respect to supplemental
information used by management in its financial and operational
decision making. Further, our reconciliations of non-GAAP to
GAAP operating results, which are included on the attached tables,
are presented in the format of consolidated statements of income
solely to assist a reader in understanding the impact of the
various adjustments to our GAAP operating results, individually and
in the aggregate, and are not intended to place any undue
prominence on our non-GAAP operating results.
Trademarks
APTIMA, APTIMA COMBO 2, TIGRIS and PANTHER are trademarks of
Gen-Probe. All other trademarks are the property of their
owners.
Caution Regarding Forward-Looking Statements
Any statements in this news release about our expectations,
beliefs, plans, objectives, assumptions or future events or
performance, including those under the heading "Updated 2010
Financial Guidance," are not historical facts and are
forward-looking statements. These statements are often, but
not always, made through the use of words or phrases such as
believe, will, expect, anticipate, estimate, intend, plan and
would. For example, statements concerning Gen-Probe's
financial condition, possible or expected results of operations,
regulatory approvals, future milestones, growth opportunities, and
plans of management are all forward-looking statements.
Forward-looking statements are not guarantees of performance.
They involve known and unknown risks, uncertainties and
assumptions that may cause actual results, levels of activity,
performance or achievements to differ materially from those
expressed or implied. Some of these risks, uncertainties and
assumptions include but are not limited to: (i) the risk that we
may not achieve our expected 2010 financial targets, (ii) the risk
that we may not integrate acquisitions, such as Tepnel and
Prodesse, successfully, (iii) the possibility that the market for
the sale of our new products, such as our PANTHER instrument system
and PROGENSA PCA3, APTIMA HPV and APTIMA trichomonas assays, may
not develop as expected, (iv) the enhancement of existing products
and the development of new products may not proceed as planned, (v)
the risk that investigational products, including those now in US
clinical trials, may not be approved by regulatory authorities or
become commercially available in the time frame we anticipate, or
at all, (vi) the risk that we may not be able to compete
effectively, (vii) the risk that we may not be able to maintain our
current corporate collaborations and enter into new corporate
collaborations or customer contracts, (viii) our dependence on
Novartis and other third parties for the distribution of some of
our products, (ix) our dependence on a small number of customers,
contract manufacturers and single source suppliers of raw
materials, (x) changes in third-party reimbursement policies
regarding our products could adversely affect sales, (xi) changes
in government regulation or tax policy affecting our diagnostic
products could harm our sales, increase our development costs or
increase our taxes, (xii) the risk that our intellectual property
may be infringed by third parties or invalidated, and (xiii) our
involvement in patent and other intellectual property and
commercial litigation could be expensive and could divert
management's attention. This list includes some, but not all,
of the factors that could affect our ability to achieve results
described in any forward-looking statements. For additional
information about risks and uncertainties we face and a discussion
of our financial statements and footnotes, see documents we file
with the SEC, including our most recent annual report on Form 10-K
and all subsequent periodic reports. We assume no obligation
and expressly disclaim any duty to update forward-looking
statements to reflect events or circumstances after the date of
this news release or to reflect the occurrence of subsequent
events.
(1) In this press release, all per share amounts are
calculated on a fully diluted basis. Some totals may not foot
due to rounding. Certain prior year amounts have been
reclassified to conform to the current year presentation.
(2) Non-GAAP EPS for the second quarter of 2010 excludes
$3.0 million of transaction-related
operating expense, and a $4.3 million
gain on contingent consideration associated with the Prodesse
acquisition.
(3) Cash from operations less purchases of property, plant
and equipment.
(4) In the prior year period, net income benefited from
$10.1 million of investment and
interest income, compared to $3.3
million in the second quarter of 2010.
(5) In this press release, estimates of "constant currency"
growth exclude currency fluctuations associated with revenues from
Prodesse, which was not part of Gen-Probe in the second quarter of
2009.
Gen-Probe
Incorporated
Consolidated Balance
Sheets - GAAP
(In thousands, except share and
per share data)
|
|
|
June 30,
|
|
Dec. 31,
|
|
|
2010
|
|
2009
|
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and
cash equivalents, including restricted cash of $15 and $17 at June
30, 2010
and December 31, 2009,
respectively
|
$ 174,922
|
|
$ 82,616
|
|
Marketable
securities
|
288,718
|
|
402,990
|
|
Trade
accounts receivable, net of allowance for doubtful accounts of $339
and $516 at
June 30, 2010 and
December 31, 2009, respectively
|
55,415
|
|
55,305
|
|
Accounts
receivable — other
|
5,776
|
|
4,707
|
|
Inventories
|
57,754
|
|
61,071
|
|
Deferred
income tax
|
14,466
|
|
13,959
|
|
Prepaid
income tax
|
1,433
|
|
7,317
|
|
Prepaid
expenses
|
12,794
|
|
14,747
|
|
Other
current assets
|
3,758
|
|
4,708
|
|
Total current assets
|
615,036
|
|
647,420
|
|
|
|
|
|
|
Marketable securities, net of
current portion
|
11,130
|
|
15,472
|
|
Property, plant and equipment,
net
|
157,782
|
|
157,437
|
|
Capitalized software,
net
|
12,711
|
|
12,560
|
|
Goodwill
|
121,942
|
|
122,680
|
|
Purchased intangibles,
net
|
102,813
|
|
108,015
|
|
License,
manufacturing access fees and other assets, net
|
113,001
|
|
64,601
|
|
Total assets
|
$1,134,415
|
|
$1,128,185
|
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
$ 18,850
|
|
$ 26,750
|
|
Accrued salaries and employee
benefits
|
22,594
|
|
27,093
|
|
Other accrued
expenses
|
19,561
|
|
18,460
|
|
Income tax payable
|
1,372
|
|
–
|
|
Short-term borrowings
|
240,796
|
|
240,841
|
|
Deferred revenue
|
2,616
|
|
3,527
|
|
Total current
liabilities
|
305,789
|
|
316,671
|
|
|
|
|
|
|
Non-current income tax
payable
|
6,287
|
|
5,958
|
|
Deferred income tax
|
21,899
|
|
23,220
|
|
Deferred revenue, net of current
portion
|
1,532
|
|
1,978
|
|
Other long-term
liabilities
|
3,944
|
|
13,183
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Preferred
stock, $0.0001 par value per share; 20,000,000 shares
authorized, none
issued and
outstanding
|
–
|
|
–
|
|
Common
stock, $0.0001 par value per share; 200,000,000 shares
authorized,
48,710,930 and
49,143,798 shares issued and outstanding at June 30, 2010
and
December 31, 2009,
respectively
|
5
|
|
5
|
|
Additional paid-in
capital
|
223,452
|
|
242,615
|
|
Accumulated other comprehensive
income (loss)
|
(733)
|
|
4,616
|
|
Retained earnings
|
572,240
|
|
519,939
|
|
Total stockholders'
equity
|
794,964
|
|
767,175
|
|
Total liabilities and
stockholders' equity
|
$1,134,415
|
|
$1,128,185
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated Statements of
Income - GAAP
(In thousands, except
per share data)
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
Revenues:
|
|
|
|
|
|
|
Product sales
|
$
132,734
|
$
116,816
|
|
$
263,303
|
$ 229,338
|
|
Collaborative research
revenue
|
4,141
|
2,187
|
|
7,405
|
3,862
|
|
Royalty and license
revenue
|
1,774
|
1,542
|
|
3,360
|
3,528
|
|
Total revenues
|
138,649
|
120,545
|
|
274,068
|
236,728
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Cost of
product sales (excluding acquisition-
related intangible
amortization)
|
44,311
|
38,280
|
|
86,972
|
71,594
|
|
Acquisition-related intangible
amortization
|
2,199
|
1,114
|
|
4,415
|
1,114
|
|
Research and
development
|
27,104
|
26,069
|
|
56,785
|
51,067
|
|
Marketing
and sales
|
15,824
|
14,015
|
|
30,605
|
25,070
|
|
General and
administrative
|
15,018
|
17,823
|
|
29,697
|
31,670
|
|
Total operating
expenses
|
104,456
|
97,301
|
|
208,474
|
180,515
|
|
Income from
operations
|
34,193
|
23,244
|
|
65,594
|
56,213
|
|
Other
income/(expense):
|
|
|
|
|
|
|
Investment and interest
income
|
3,269
|
10,122
|
|
7,167
|
15,004
|
|
Interest expense
|
(549)
|
(726)
|
|
(1,095)
|
(877)
|
|
Gain on contingent
consideration
|
4,337
|
–
|
|
6,082
|
–
|
|
Other expense, net
|
(190)
|
(895)
|
|
(349)
|
(1,037)
|
|
Total other income,
net
|
6,867
|
8,501
|
|
11,805
|
13,090
|
|
Income before income
tax
|
41,060
|
31,745
|
|
77,399
|
69,303
|
|
|
|
|
|
|
|
|
Income tax expense
|
12,950
|
11,930
|
|
25,096
|
23,741
|
|
Net income
|
$
28,110
|
$
19,815
|
|
$
52,303
|
$
45,562
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
Basic
|
$
0.57
|
$
0.39
|
|
$
1.06
|
$
0.88
|
|
Diluted
|
$
0.57
|
$
0.38
|
|
$
1.05
|
$
0.87
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
Basic
|
48,902
|
51,034
|
|
49,066
|
51,600
|
|
Diluted
|
49,366
|
51,739
|
|
49,549
|
52,291
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated Statements of
Income
(In thousands, except per share
data)
(unaudited)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30, 2010
|
|
June 30, 2009
|
|
|
Non–GAAP
|
Adjustments
|
GAAP
|
|
Non–GAAP
|
Adjustments
|
GAAP
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales
|
$ 132,734
|
$ –
|
$132,734
|
|
$116,816
|
$ –
|
$116,816
|
|
Collaborative research
revenue
|
4,141
|
–
|
4,141
|
|
2,187
|
–
|
2,187
|
|
Royalty and license
revenue
|
1,774
|
–
|
1,774
|
|
1,542
|
–
|
1,542
|
|
Total revenues
|
138,649
|
–
|
138,649
|
|
120,545
|
–
|
120,545
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of product sales
(excluding
acquisition-related
intangible
amortization)
|
44,221
|
90
|
44,311
|
|
38,190
|
90
|
38,280
|
|
Acquisition-related
intangible
amortization
|
–
|
2,199
|
2,199
|
|
–
|
1,114
|
1,114
|
|
Research and
development
|
27,104
|
–
|
27,104
|
|
26,069
|
–
|
26,069
|
|
Marketing and sales
|
15,824
|
–
|
15,824
|
|
14,015
|
–
|
14,015
|
|
General and
administrative
|
14,349
|
669
|
15,018
|
|
14,619
|
3,204
|
17,823
|
|
Total operating
expenses
|
101,498
|
2,958
|
104,456
|
|
92,893
|
4,408
|
97,301
|
|
Income from
operations
|
37,151
|
(2,958)
|
34,193
|
|
27,652
|
(4,408)
|
23,244
|
|
Other
income/(expense):
|
|
|
|
|
|
|
|
|
Investment and interest
income
|
3,269
|
–
|
3,269
|
|
10,122
|
–
|
10,122
|
|
Interest expense
|
(549)
|
–
|
(549)
|
|
(726)
|
–
|
(726)
|
|
Gain on contingent
consideration
|
–
|
4,337
|
4,337
|
|
–
|
–
|
–
|
|
Other expense, net
|
(190)
|
–
|
(190)
|
|
(895)
|
–
|
(895)
|
|
Total other income,
net
|
2,530
|
4,337
|
6,867
|
|
8,501
|
–
|
8,501
|
|
Income before income
tax
|
39,681
|
1,379
|
41,060
|
|
36,153
|
(4,408)
|
31,745
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
13,720
|
(770)
|
12,950
|
|
12,951
|
(1,021)
|
11,930
|
|
Net income
|
$ 25,961
|
$ 2,149
|
$ 28,110
|
|
$ 23,202
|
$(3,387)
|
$ 19,815
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
$ 0.53
|
$ 0.04
|
$ 0.57
|
|
$ 0.45
|
$ (0.06)
|
$ 0.39
|
|
Diluted
|
$ 0.52
|
$ 0.05
|
$ 0.57
|
|
$ 0.45
|
$ (0.07)
|
$ 0.38
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
48,902
|
–
|
48,902
|
|
51,034
|
–
|
51,034
|
|
Diluted
|
49,366
|
–
|
49,366
|
|
51,739
|
–
|
51,739
|
|
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated Statements of
Income
(In thousands, except per share
data)
(unaudited)
|
|
|
Six Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2010
|
|
June 30, 2009
|
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales
|
$
263,303
|
$
–
|
$
263,303
|
|
$
229,338
|
$
–
|
$
229,338
|
|
Collaborative research
revenue
|
7,405
|
–
|
7,405
|
|
3,862
|
–
|
3,862
|
|
Royalty and license
revenue
|
3,360
|
–
|
3,360
|
|
3,528
|
–
|
3,528
|
|
Total revenues
|
274,068
|
–
|
274,068
|
|
236,728
|
–
|
236,728
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of
product sales (excluding
acquisition-related
intangible
amortization)
|
86,791
|
181
|
86,972
|
|
71,504
|
90
|
71,594
|
|
Acquisition-related intangible
amortization
|
–
|
4,415
|
4,415
|
|
–
|
1,114
|
1,114
|
|
Research and
development
|
56,785
|
–
|
56,785
|
|
51,067
|
–
|
51,067
|
|
Marketing and sales
|
30,605
|
–
|
30,605
|
|
25,070
|
–
|
25,070
|
|
General and
administrative
|
29,001
|
696
|
29,697
|
|
26,864
|
4,806
|
31,670
|
|
Total operating
expenses
|
203,182
|
5,292
|
208,474
|
|
174,505
|
6,010
|
180,515
|
|
Income from
operations
|
70,886
|
(5,292)
|
65,594
|
|
62,223
|
(6,010)
|
56,213
|
|
Other
income/(expense):
|
|
|
|
|
|
|
|
|
Investment and interest
income
|
7,167
|
–
|
7,167
|
|
15,004
|
–
|
15,004
|
|
Interest expense
|
(1,095)
|
–
|
(1,095)
|
|
(877)
|
–
|
(877)
|
|
Gain on contingent
consideration
|
–
|
6,082
|
6,082
|
|
–
|
–
|
–
|
|
Other expense, net
|
(349)
|
–
|
(349)
|
|
(1,037)
|
–
|
(1,037)
|
|
Total other income,
net
|
5,723
|
6,082
|
11,805
|
|
13,090
|
–
|
13,090
|
|
Income before income
tax
|
76,609
|
790
|
77,399
|
|
75,313
|
(6,010)
|
69,303
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
26,677
|
(1,581)
|
25,096
|
|
25,069
|
(1,328)
|
23,741
|
|
Net income
|
$
49,932
|
$
2,371
|
$
52,303
|
|
$
50,244
|
$
(4,682)
|
$
45,562
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
1.01
|
$
0.05
|
$
1.06
|
|
$
0.97
|
$
(0.09)
|
$
0.88
|
|
Diluted
|
$
1.00
|
$
0.05
|
$
1.05
|
|
$
0.96
|
$
(0.09)
|
$
0.87
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
49,066
|
–
|
49,066
|
|
51,600
|
–
|
51,600
|
|
Diluted
|
49,549
|
–
|
49,549
|
|
52,291
|
–
|
52,291
|
|
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated Statements of Cash
Flows - GAAP
(In thousands)
(unaudited)
|
|
|
Six Months Ended
|
|
|
June 30,
|
|
|
2010
|
2009
|
|
Operating
activities:
|
|
|
|
Net
income
|
$
52,303
|
$
45,562
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
and amortization
|
22,628
|
19,463
|
|
Amortization
of premiums on investments, net of accretion of
discounts
|
4,523
|
2,720
|
|
Stock-based
compensation
|
12,338
|
11,405
|
|
Stock-based
compensation income tax benefits
|
2,096
|
310
|
|
Excess tax
benefit from employee stock-based compensation
|
(919)
|
(702)
|
|
Deferred
revenue
|
(1,241)
|
(255)
|
|
Deferred
income tax
|
(1,930)
|
(1,134)
|
|
Gain on
contingent consideration
|
(6,082)
|
–
|
|
Loss on
disposal of property and equipment
|
143
|
69
|
|
Changes in
assets and liabilities:
|
|
|
|
Trade and other accounts
receivable
|
(1,494)
|
1,372
|
|
Inventories
|
2,998
|
3,890
|
|
Prepaid expenses
|
1,907
|
2,835
|
|
Other current assets
|
918
|
2,081
|
|
Other long-term
assets
|
390
|
(2,486)
|
|
Accounts payable
|
(7,082)
|
(2,218)
|
|
Accrued salaries and employee
benefits
|
(4,336)
|
(7,272)
|
|
Other accrued
expenses
|
(1,086)
|
1,337
|
|
Income tax payable
|
6,434
|
(3,704)
|
|
Other long-term
liabilities
|
(684)
|
335
|
|
Net cash provided by operating
activities
|
81,824
|
73,608
|
|
|
|
|
|
Investing
activities:
|
|
|
|
Proceeds
from sales and maturities of marketable securities
|
279,853
|
293,504
|
|
Purchases of
marketable securities
|
(166,290)
|
(189,091)
|
|
Purchases of
property, plant and equipment
|
(14,567)
|
(14,666)
|
|
Purchases of
capitalized software
|
(1,457)
|
(288)
|
|
Purchases of
intangible assets, including licenses and manufacturing access
fees
|
(1,365)
|
(811)
|
|
Net cash
paid for business combinations
|
–
|
(123,816)
|
|
Cash paid
for investment in Pacific Biosciences
|
(50,000)
|
–
|
|
Cash paid
for investment in DiagnoCure and related license fees
|
(500)
|
(5,250)
|
|
Other
|
(1,967)
|
(289)
|
|
Net cash
provided by (used in) investing activities
|
43,707
|
(40,707)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
Repurchase and retirement of
common stock
|
(52,299)
|
(105,577)
|
|
Proceeds from issuance of common
stock and ESPP
|
20,062
|
3,777
|
|
Repurchase and retirement of
restricted stock for payment of taxes
|
(43)
|
(38)
|
|
Excess tax benefit from
stock-based compensation
|
919
|
702
|
|
Borrowings under credit
facility
|
–
|
238,450
|
|
Net cash (used in) provided by
financing activities
|
(31,361)
|
137,314
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
(1,864)
|
1,918
|
|
Net increase in cash and cash
equivalents
|
92,306
|
172,133
|
|
Cash and cash equivalents at the
beginning of period
|
82,616
|
60,122
|
|
Cash and cash equivalents at the
end of period
|
$
174,922
|
$
232,255
|
|
|
|
|
|
|
Contact:
|
|
|
|
Michael Watts
|
|
Vice president, investor
relations and corporate communications
|
|
858-410-8673
|
|
|
SOURCE Gen-Probe Incorporated