SAN DIEGO, Oct. 28 /PRNewswire-FirstCall/ -- Gen-Probe
Incorporated (Nasdaq: GPRO) today reported financial results for
the third quarter of 2010, highlighted by 19% growth in non-GAAP
earnings per share (EPS) and 8% growth in product sales and total
revenues.
"Gen-Probe's third quarter financial results demonstrate our
ability to generate solid top- and bottom-line growth in the face
of challenging business conditions," said Carl Hull, the Company's president and chief
executive officer. "In addition, the major R&D
initiatives that we expect to reinvigorate product sales growth
remain on track, with four US regulatory filings already complete
this year and our APTIMA® HPV submission anticipated in the next
month."
Key financial results for the third quarter of 2010 were ($ in
millions, except EPS):
|
|
|
Non-GAAP
|
|
GAAP
|
|
|
2010
|
2009
|
Change
|
|
2010
|
2009
|
Change
|
|
Product sales
|
$128.3
|
$119.0
|
+8%
|
|
$128.3
|
$119.0
|
+8%
|
|
Total revenues
|
$132.6
|
$122.7
|
+8%
|
|
$132.6
|
$122.7
|
+8%
|
|
Operating profit
|
$38.4
|
$31.3
|
+23%
|
|
$35.4
|
$29.0
|
+22%
|
|
Net income
|
$28.1
|
$23.8
|
+18%
|
|
$27.4
|
$22.2
|
+23%
|
|
EPS
|
$0.57
|
$0.48
|
+19%
|
|
$0.56
|
$0.44
|
+27%
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Detail
"Third quarter product sales were about one percent shy of our
expectations from last quarter, as the cumulative effect of
macroeconomic headwinds finally weighed on overall testing
volumes," Hull said. "At the same time, we continue to
out-grow our domestic and international markets, and our
competitive positions, market shares and pricing are solid."
Clinical diagnostics sales growth in the third quarter of 2010
was driven by the APTIMA Combo 2® assay for detecting
Chlamydia and gonorrhea, and by 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 $0.5 million, or less than 1%.
Blood screening sales grew solidly based on:
- Increased sales of the PROCLEIX® ULTRIO® assay.
- 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.
Compared to the prior year period, foreign exchange fluctuations
reduced blood screening sales by an estimated $1.0 million, or 2%.
Sales of research products and services in the third quarter of
2010 declined mainly due to the divestiture of the BioKits food
testing business late in 2009, and foreign exchange
fluctuations.
Third quarter product sales were ($ in millions):
|
|
|
Three Months
Ended Sept. 30,
|
|
Change
|
|
|
2010
|
2009
|
|
As
Reported
|
Constant
Currency
|
|
Clinical Diagnostics
|
$74.9
|
$69.6
|
|
+8%
|
+8%
|
|
Blood Screening
|
$50.3
|
$45.4
|
|
+11%
|
+13%
|
|
Research Products and
Services
|
$3.1
|
$3.9
|
|
-21%
|
-16%
|
|
Total Product Sales
|
$128.3
|
$119.0
|
|
+8%
|
+9%
|
|
|
|
|
|
|
|
|
|
Collaborative research revenues in the third quarter of 2010
were $3.4 million, compared to
$2.0 million in the prior year
period, an increase of 70% 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 third quarter of 2010 were
$0.8 million, compared to
$1.8 million in the prior year
period, a decrease of 56%. This decrease resulted primarily
from lower royalties received from Novartis.
Expense Detail
Gross margin on product sales in the third quarter of 2010 was
67.2% on a non-GAAP basis, compared to 69.5% 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, and from lower margins in the blood screening and
acquired Tepnel businesses that were caused in part by unfavorable
foreign exchange rates. On a GAAP basis, including
$0.1 million of acquisition-related
depreciation expense, gross margin on product sales was 67.2% in
the third quarter of 2010, compared to 69.4% in the prior year
period.
On a GAAP basis, acquisition-related amortization expenses were
$2.2 million in the third quarter of
2010, compared to $1.1 million in the
prior year period, an increase of 100% that resulted mainly from
the October 2009 acquisition of
Prodesse and its related intangible assets.
Research and development (R&D) expenses in the third quarter
of 2010 were $27.4 million, similar
to $27.5 million in the prior year
period.
Marketing and sales expenses in the third quarter of 2010 were
$13.9 million, compared to
$13.5 million in the prior year
period, an increase of 3% that resulted primarily from European
sales force expansion and market development efforts.
General and administrative (G&A) expenses in the third
quarter of 2010 were $10.8 million on
a non-GAAP basis, compared to $14.2
million in the prior year period, a decrease of 24%.
This decrease resulted primarily from the receipt of a
$2.9 million arbitration award from
Qiagen, which covered attorneys' fees and costs related to the
companies' HPV dispute. On a GAAP basis, including
transaction-related costs, G&A expenses were $11.5 million in the third quarter of 2010,
compared to $15.2 million in the
prior year period, a decrease of 24%.
Total other income in the third quarter of 2010 was $2.9 million on a non-GAAP basis, compared to
$4.3 million in the prior year
period, a decrease of 33% that 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, the acquisition of Prodesse, and
the investment in Pacific Biosciences. On a GAAP basis,
including a $1.5 million non-cash
gain on a change in the fair value of contingent consideration,
total other income was $4.4 million
in the third quarter of 2010.
Income tax expense in the third quarter of 2010 was $13.2 million on a non-GAAP basis, corresponding
to a tax rate of 32%. Income tax expense benefited from an
expired statute of limitations for past tax returns and a true-up
related to the prior year returns. On a GAAP basis, including
adjustments to contingent consideration that largely are not
taxable, income tax expense was $12.4
million in the third quarter of 2010, corresponding to a tax
rate of 31%.
In the third quarter of 2010, Gen-Probe generated net cash of
$44.0 million from operating
activities, and spent $7.5 million on
property, plant and equipment, leading to free cash flow of
$36.5 million. The Company
repurchased approximately 776,300 shares of its stock in the third
quarter for $35.8 million.
Gen-Probe continues to have a strong balance sheet. As of
September 30, 2010, the Company had
$467.5 million of cash, cash
equivalents and marketable securities, and $240.2 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
has been below 0.3%.
Updated 2010 Financial Guidance
|
|
|
Current
Guidance
(non-GAAP)
|
Previous
Guidance
(non-GAAP)
|
Current
Guidance
(GAAP)
|
Previous
Guidance
(GAAP)
|
|
Total revenues
|
$541 to $546
million
|
$545 to $562
million
|
$541 to $546
million
|
$545 to $562
million
|
|
Product gross
margins
|
~
67.5%
|
~
68%
|
~
67.5%
|
~
68%
|
|
Acquisition-related
amortization and other transaction expense
|
N/A
|
N/A
|
$10.5 to
$11.0 million
|
$10.5 to
$11.5 million
|
|
Fair value adjustment of
acquisition-related contingent consideration
|
N/A
|
N/A
|
$7.5
million
|
$5.5
million
|
|
Operating
margin
|
~
27%
|
27% to
28%
|
~
25%
|
25% to
26%
|
|
Tax rate
|
~
33%
|
~
34%
|
~
32%
|
~
35%
|
|
Diluted shares
|
~ 49
million
|
~ 49
million
|
~ 49
million
|
~ 49
million
|
|
EPS
|
$2.12 to
$2.15
|
$2.12 to
$2.25
|
$2.11 to
$2.14
|
$2.07 to
$2.20
|
|
|
|
|
|
|
|
|
Notes on Presentation
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 changed to
conform to the current year presentation under ASC 260.
Estimates of "constant currency" growth exclude currency
fluctuations associated with revenue from Prodesse, which was not
part of Gen-Probe in the third quarter of 2009.
About Non-GAAP Financial Measures
To supplement Gen-Probe's financial results for the third
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.
Webcast Conference Call
A live webcast of Gen-Probe's third 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 866-419-2889 for
domestic callers and 203-369-0767 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.
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.
Contact:
|
|
|
|
Michael Watts
|
|
Vice president, investor
relations and corporate communications
|
|
858-410-8673
|
|
|
Gen-Probe
Incorporated
Consolidated
Balance Sheets - GAAP
(In
thousands, except share and per share data)
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents,
including restricted cash of $20 and $17 at September 30, 2010 and
December 31, 2009, respectively
|
$ 149,060
|
|
$ 82,616
|
|
|
|
|
|
|
Marketable
securities
|
273,503
|
|
402,990
|
|
Trade accounts receivable,
net of allowance for doubtful accounts of $316 and $516 at
September 30, 2010 and December 31, 2009,
respectively
|
57,306
|
|
55,305
|
|
Accounts receivable —
other
|
4,624
|
|
4,707
|
|
Inventories
|
60,826
|
|
61,071
|
|
Deferred income
tax
|
15,615
|
|
13,959
|
|
Prepaid income
tax
|
—
|
|
7,317
|
|
Prepaid
expenses
|
11,667
|
|
14,526
|
|
Other current
assets
|
4,036
|
|
4,708
|
|
Total current assets
|
576,637
|
|
647,199
|
|
|
|
|
|
|
Marketable securities, net of
current portion
|
44,889
|
|
15,472
|
|
Property, plant and equipment,
net
|
157,645
|
|
157,437
|
|
Capitalized software,
net
|
12,690
|
|
12,560
|
|
Goodwill
|
122,500
|
|
122,680
|
|
Purchased intangibles,
net
|
101,257
|
|
108,015
|
|
License, manufacturing access
fees and other assets, net
|
112,686
|
|
64,822
|
|
Total assets
|
$1,128,304
|
|
$1,128,185
|
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts
payable
|
$13,667
|
|
$20,455
|
|
Accrued salaries and
employee benefits
|
20,845
|
|
24,775
|
|
Other accrued
expenses
|
14,224
|
|
24,755
|
|
Income tax
payable
|
2,167
|
|
—
|
|
Short-term
borrowings
|
240,228
|
|
240,127
|
|
Deferred
revenue
|
1,690
|
|
3,527
|
|
Total current
liabilities
|
292,821
|
|
313,639
|
|
|
|
|
|
|
Non-current income tax
payable
|
6,198
|
|
5,958
|
|
Deferred income tax
|
21,042
|
|
23,220
|
|
Deferred revenue, net of current
portion
|
2,219
|
|
1,978
|
|
Other long-term
liabilities
|
6,457
|
|
16,215
|
|
|
|
|
|
|
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, 48,086,123 and
49,143,798 shares issued and outstanding at September 30, 2010
and December 31, 2009, respectively
|
5
|
|
5
|
|
Additional paid-in
capital
|
197,123
|
|
242,615
|
|
Accumulated other comprehensive
income
|
2,801
|
|
4,616
|
|
Retained earnings
|
599,638
|
|
519,939
|
|
Total stockholders'
equity
|
799,567
|
|
767,175
|
|
Total liabilities and
stockholders' equity
|
$1,128,304
|
|
$1,128,185
|
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated
Statements of Income - GAAP
(In
thousands, except per share data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales
|
$
128,313
|
|
$
118,951
|
|
$ 391,616
|
|
$ 348,289
|
|
Collaborative research
revenue
|
3,405
|
|
2,000
|
|
10,810
|
|
5,862
|
|
Royalty and license
revenue
|
847
|
|
1,753
|
|
4,207
|
|
5,281
|
|
Total revenues
|
132,565
|
|
122,704
|
|
406,633
|
|
359,432
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of product sales
(excluding acquisition-related intangible amortization)
|
42,146
|
|
36,345
|
|
129,118
|
|
107,939
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
intangible amortization
|
2,201
|
|
1,136
|
|
6,616
|
|
2,250
|
|
Research and
development
|
27,433
|
|
27,475
|
|
84,218
|
|
78,542
|
|
Marketing and
sales
|
13,872
|
|
13,477
|
|
44,476
|
|
38,547
|
|
General and
administrative
|
11,510
|
|
15,234
|
|
41,208
|
|
46,903
|
|
Total operating
expenses
|
97,162
|
|
93,667
|
|
305,636
|
|
274,181
|
|
Income from
operations
|
35,403
|
|
29,037
|
|
100,997
|
|
85,251
|
|
Other
income/(expense):
|
|
|
|
|
|
|
|
|
Investment and interest
income
|
3,197
|
|
4,676
|
|
10,364
|
|
19,680
|
|
Interest
expense
|
(586)
|
|
(588)
|
|
(1,681)
|
|
(1,465)
|
|
Gain on contingent
consideration
|
1,513
|
|
—
|
|
7,595
|
|
—
|
|
Other income/(expense),
net
|
267
|
|
210
|
|
(82)
|
|
(827)
|
|
Total other income,
net
|
4,391
|
|
4,298
|
|
16,196
|
|
17,388
|
|
Income before income
tax
|
39,794
|
|
33,335
|
|
117,193
|
|
102,639
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
12,398
|
|
11,139
|
|
37,494
|
|
34,881
|
|
Net income
|
$
27,396
|
|
$
22,196
|
|
$ 79,699
|
|
$ 67,758
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.57
|
|
$
0.45
|
|
$
1.63
|
|
$
1.33
|
|
Diluted
|
$
0.56
|
|
$
0.44
|
|
$
1.61
|
|
$
1.31
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
48,254
|
|
49,343
|
|
48,796
|
|
50,848
|
|
Diluted
|
48,679
|
|
49,865
|
|
49,257
|
|
51,482
|
|
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated
Statements of Income – Non-GAAP
(In
thousands, except per share data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
September
30, 2010
|
|
September
30, 2009
|
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales
|
$ 128,313
|
$
—
|
$ 128,313
|
|
$ 118,951
|
$
—
|
$ 118,951
|
|
Collaborative research
revenue
|
3,405
|
—
|
3,405
|
|
2,000
|
—
|
2,000
|
|
Royalty and license
revenue
|
847
|
—
|
847
|
|
1,753
|
—
|
1,753
|
|
Total revenues
|
132,565
|
—
|
132,565
|
|
122,704
|
—
|
122,704
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of product sales
(excluding acquisition-related intangible amortization)
|
42,057
|
89
|
42,146
|
|
36,252
|
93
|
36,345
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
intangible amortization
|
—
|
2,201
|
2,201
|
|
—
|
1,136
|
1,136
|
|
Research and
development
|
27,433
|
—
|
27,433
|
|
27,475
|
—
|
27,475
|
|
Marketing and
sales
|
13,872
|
—
|
13,872
|
|
13,477
|
—
|
13,477
|
|
General and
administrative
|
10,818
|
692
|
11,510
|
|
14,155
|
1,079
|
15,234
|
|
Total operating
expenses
|
94,180
|
2,982
|
97,162
|
|
91,359
|
2,308
|
93,667
|
|
Income from
operations
|
38,385
|
(2,982)
|
35,403
|
|
31,345
|
(2,308)
|
29,037
|
|
Other
income/(expense):
|
|
|
|
|
|
|
|
|
Investment and interest
income
|
3,197
|
—
|
3,197
|
|
4,676
|
—
|
4,676
|
|
Interest
expense
|
(586)
|
—
|
(586)
|
|
(588)
|
—
|
(588)
|
|
Gain on contingent
consideration
|
—
|
1,513
|
1,513
|
|
—
|
|
—
|
|
Other income,
net
|
267
|
—
|
267
|
|
210
|
—
|
210
|
|
Total other income,
net
|
2,878
|
1,513
|
4,391
|
|
4,298
|
—
|
4,298
|
|
Income before income
tax
|
41,263
|
(1,469)
|
39,794
|
|
35,643
|
(2,308)
|
33,335
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
13,189
|
(791)
|
12,398
|
|
11,864
|
(725)
|
11,139
|
|
Net income
|
$
28,074
|
$
(678)
|
$
27,396
|
|
$
23,779
|
$
(1,583)
|
$
22,196
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.58
|
$
(0.01)
|
$
0.57
|
|
$
0.48
|
$
(0.03)
|
$
0.45
|
|
Diluted
|
$
0.57
|
$
(0.01)
|
$
0.56
|
|
$
0.48
|
$
(0.04)
|
$
0.44
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
48,254
|
—
|
48,254
|
|
49,343
|
—
|
49,343
|
|
Diluted
|
48,679
|
—
|
48,679
|
|
49,865
|
—
|
49,865
|
|
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated
Statements of Income – Non-GAAP
(In
thousands, except per share data)
(Unaudited)
|
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30, 2010
|
|
September
30, 2009
|
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales
|
$ 391,616
|
$ —
|
$ 391,616
|
|
$ 348,289
|
$ —
|
$ 348,289
|
|
Collaborative research
revenue
|
10,810
|
—
|
10,810
|
|
5,862
|
—
|
5,862
|
|
Royalty and license
revenue
|
4,207
|
—
|
4,207
|
|
5,281
|
—
|
5,281
|
|
Total revenues
|
406,633
|
—
|
406,633
|
|
359,432
|
—
|
359,432
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of product sales
(excluding acquisition-related intangible amortization)
|
128,848
|
270
|
129,118
|
|
107,756
|
183
|
107,939
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
intangible amortization
|
—
|
6,616
|
6,616
|
|
—
|
2,250
|
2,250
|
|
Research and
development
|
84,218
|
—
|
84,218
|
|
78,542
|
—
|
78,542
|
|
Marketing and
sales
|
44,476
|
—
|
44,476
|
|
38,547
|
—
|
38,547
|
|
General and
administrative
|
39,820
|
1,388
|
41,208
|
|
41,018
|
5,885
|
46,903
|
|
Total operating
expenses
|
297,362
|
8,274
|
305,636
|
|
265,863
|
8,318
|
274,181
|
|
Income from
operations
|
109,271
|
(8,274)
|
100,997
|
|
93,569
|
(8,318)
|
85,251
|
|
Other
income/(expense):
|
|
|
|
|
|
|
|
|
Investment and interest
income
|
10,364
|
—
|
10,364
|
|
19,680
|
—
|
19,680
|
|
Interest
expense
|
(1,681)
|
—
|
(1,681)
|
|
(1,465)
|
—
|
(1,465)
|
|
Gain on contingent
consideration
|
—
|
7,595
|
7,595
|
|
—
|
—
|
—
|
|
Other expense,
net
|
(82)
|
—
|
(82)
|
|
(827)
|
—
|
(827)
|
|
Total other income,
net
|
8,601
|
7,595
|
16,196
|
|
17,388
|
—
|
17,388
|
|
Income before income
tax
|
117,872
|
(679)
|
117,193
|
|
110,957
|
(8,318)
|
102,639
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
39,866
|
(2,372)
|
37,494
|
|
36,934
|
(2,053)
|
34,881
|
|
Net income
|
$
78,006
|
$ 1,693
|
$
79,699
|
|
$
74,023
|
$ (6,265)
|
$
67,758
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
1.59
|
$ 0.04
|
$
1.63
|
|
$
1.45
|
$ (0.12)
|
$
1.33
|
|
Diluted
|
$
1.58
|
$ 0.03
|
$
1.61
|
|
$
1.43
|
$ (0.12)
|
$
1.31
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
48,796
|
—
|
48,796
|
|
50,848
|
—
|
50,848
|
|
Diluted
|
49,257
|
—
|
49,257
|
|
51,482
|
—
|
51,482
|
|
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated
Statements of Cash Flows - GAAP
(In
thousands)
(Unaudited)
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2010
|
|
2009
|
|
Operating
activities:
|
|
|
|
|
Net income
|
$
79,699
|
|
$
67,758
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
|
|
Depreciation and
amortization
|
34,111
|
|
29,468
|
|
Amortization of premiums
on investments, net of accretion of discounts
|
6,819
|
|
4,050
|
|
Stock-based
compensation
|
18,538
|
|
17,743
|
|
Excess tax benefit from
employee stock-based compensation
|
(891)
|
|
(1,186)
|
|
Deferred
revenue
|
(1,528)
|
|
(249)
|
|
Deferred income
tax
|
(3,708)
|
|
(1,318)
|
|
Gain on contingent
consideration
|
(7,595)
|
|
—
|
|
Loss on disposal of
property and equipment
|
603
|
|
82
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade and other accounts
receivable
|
(2,127)
|
|
(4,379)
|
|
Inventories
|
204
|
|
2,325
|
|
Prepaid
expenses
|
2,861
|
|
(1,675)
|
|
Other current
assets
|
877
|
|
2,156
|
|
Goodwill
|
—
|
|
856
|
|
Other long-term
assets
|
(353)
|
|
(3,608)
|
|
Accounts
payable
|
(6,177)
|
|
(2,985)
|
|
Accrued salaries and
employee benefits
|
(3,884)
|
|
1
|
|
Other accrued
expenses
|
(2,230)
|
|
1,672
|
|
Income tax
payable
|
10,863
|
|
(4,718)
|
|
Other long-term
liabilities
|
(268)
|
|
733
|
|
Net cash provided by operating
activities
|
125,814
|
|
106,726
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Proceeds from sales and
maturities of marketable securities
|
404,350
|
|
410,700
|
|
Purchases of marketable
securities
|
(311,450)
|
|
(338,976)
|
|
Proceeds from sale of property,
plant and equipment
|
23
|
|
—
|
|
Purchases of property, plant and
equipment
|
(22,090)
|
|
(22,284)
|
|
Purchase of capitalized
software
|
(2,081)
|
|
(576)
|
|
Purchases of intangible assets,
including licenses and manufacturing access fees
|
(1,639)
|
|
(918)
|
|
Net cash paid for business
combinations
|
—
|
|
(123,713)
|
|
Cash paid for investment in
Pacific Biosciences
|
(50,000)
|
|
—
|
|
Cash paid for investment in
DiagnoCure and related license fees
|
(500)
|
|
(5,500)
|
|
Other
|
(1,007)
|
|
(175)
|
|
Net cash provided by (used in)
investing activities
|
15,606
|
|
(81,442)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Repurchase and retirement of
common stock
|
(88,079)
|
|
(174,847)
|
|
Proceeds from issuance of common
stock and employee stock purchase plan
|
24,699
|
|
5,961
|
|
Payment of contingent
consideration
|
(10,000)
|
|
—
|
|
Repurchase and retirement of
restricted stock for payment of taxes
|
(1,252)
|
|
(923)
|
|
Excess tax benefit from employee
stock-based compensation
|
891
|
|
1,186
|
|
Borrowings, net
|
—
|
|
238,450
|
|
Net cash (used in) provided by
financing activities
|
(73,741)
|
|
69,827
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
(1,235)
|
|
1,506
|
|
Net increase in cash and cash
equivalents
|
66,444
|
|
96,617
|
|
Cash and cash equivalents at the
beginning of period
|
82,616
|
|
60,122
|
|
Cash and cash equivalents at the
end of period
|
$
149,060
|
|
$
156,739
|
|
|
|
|
|
|
|
SOURCE Gen-Probe Incorporated
Copyright . 28 PR Newswire