SAN DIEGO, Nov. 2, 2011 /PRNewswire/ -- Gen-Probe
Incorporated (NASDAQ: GPRO) today reported financial results for
the third quarter of 2011, with total revenues of $139.1 million and non-GAAP earnings per share
(EPS) of $0.57.
"Gen-Probe's non-GAAP financial results in the third quarter of
2011 were in line with our expectations," said Carl Hull, the Company's president and chief
executive officer. "In addition, we are pleased with the
progress of our two ongoing new product introductions, and excited
that we are already launching our APTIMA HPV assay, which was just
approved by the FDA."
On a GAAP basis, Gen-Probe reported a loss of ($0.33) per share in the third quarter, caused by
a $39.5 million other-than-temporary
impairment loss in the value of the Company's equity investment in
Pacific Biosciences of California,
Inc. Gen-Probe recognized this loss because the trading price
of Pacific Biosciences' stock may remain below the Company's cost
basis for an extended period of time. In June 2010, Gen-Probe made a $50 million investment in Pacific Biosciences and
the firms began working together to develop third-generation
sequencing systems for the diagnostics market. That
collaboration remains active.
Key financial results for the third quarter of 2011 were ($ in
millions, except EPS):
|
|
|
Non-GAAP
|
|
GAAP
|
|
|
2011
|
2010
|
Change
|
|
2011
|
2010
|
Change
|
|
Product sales
|
$136.4
|
$128.3
|
+6%
|
|
$136.4
|
$128.3
|
+6%
|
|
Total revenues
|
$139.1
|
$132.6
|
+5%
|
|
$139.1
|
$132.6
|
+5%
|
|
Operating profit
|
$37.1
|
$38.4
|
-3%
|
|
$32.4
|
$35.4
|
-8%
|
|
Net income (loss)
|
$27.4
|
$28.1
|
-2%
|
|
($15.4)
|
$27.4
|
-156%
|
|
EPS
|
$0.57
|
$0.57
|
--
|
|
($0.33)
|
$0.56
|
-159%
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Detail
In the third quarter of 2011, clinical diagnostics product sales
grew by 16% compared to the prior year period. This increase
was driven primarily by domestic and international growth of the
APTIMA Combo 2® assay for detecting Chlamydia and gonorrhea,
and by the inclusion of product sales by GTI Diagnostics (GTI),
which was not part of Gen-Probe in the prior year period.
Foreign currency fluctuations increased clinical
diagnostics sales by an estimated $0.7
million compared to the prior year period.
In blood screening, sales declined by 6% compared to the prior
year period, as expected, mainly due to lower shipments of
instruments to Novartis, the Company's blood screening partner.
Foreign currency fluctuations increased blood screening sales
by an estimated $1.7 million compared
to the prior year period.
Sales of research products and services in the third quarter of
2011 were $2.4 million, down 23%
compared to the prior year period.
Third quarter product sales were ($ in millions):
|
|
|
Three Months
Ended Sept. 30,
|
|
Change
|
|
|
2011
|
2010
|
|
As
Reported
|
Constant
Currency
|
|
Clinical Diagnostics
|
$86.6
|
$74.9
|
|
+16%
|
+15%
|
|
Blood Screening
|
$47.4
|
$50.3
|
|
-6%
|
-9%
|
|
Research Products and
Services
|
$2.4
|
$3.1
|
|
-23%
|
-23%
|
|
Total Product Sales
|
$136.4
|
$128.3
|
|
+6%
|
+4%
|
|
|
|
|
|
|
|
|
|
Collaborative research revenues in the third quarter of 2011
were $1.1 million, compared to
$3.4 million in the prior year
period, a decrease of 68% that resulted primarily from an expected
decrease in funding from Novartis associated with the development
of the fully automated PANTHER instrument for the blood screening
market. The PANTHER system remains on track to be launched
into international blood screening markets next year.
Royalty and license revenues in the third quarter of 2011 were
$1.6 million, compared to
$0.8 million in the prior year
period, an increase of 100% that resulted mainly from increased
royalties received from Novartis related to the plasma testing
market.
GAAP Income Statement Details
Gross margin on product sales was 70.3% in the third quarter of
2011, compared to 67.2% in the prior year period. This
increase resulted mainly from a favorable product sales mix, with
higher sales of APTIMA products and lower sales of instrumentation
to Novartis.
Acquisition-related amortization expenses were $2.8 million in the third quarter of 2011,
compared to $2.2 million in the prior
year period, an increase of 27% that resulted mainly from the
acquisition of GTI in December of 2010.
Research and development (R&D) expenses were $27.9 million in the third quarter of 2011,
compared to $27.4 million in the
prior year period, an increase of 2% that resulted primarily from
the addition of GTI's R&D programs.
Marketing and sales expenses were $17.3
million in the third quarter of 2011, compared to
$13.9 million in the prior year
period, an increase of 24% that resulted primarily from the
addition of GTI's cost structure and ongoing European commercial
expansion.
General and administrative (G&A) expenses were $18.3 million in the third quarter of 2011,
compared to $11.5 million in the
prior year period, an increase of 59% that resulted mainly from
increased legal expenses, the addition of GTI's cost structure, and
higher stock-based compensation charges. G&A expenses
also were unusually low in the prior year period due to the receipt
of a $2.9 million arbitration award
from Qiagen, which was recorded as a credit to G&A expense.
Total other expense, net, was $37.7
million in the third quarter of 2011, compared to other
income, net, of $4.4 million in the
prior year period. As previously discussed, in the third
quarter of 2011 the Company recognized a $39.5 million loss related to its investment in
Pacific Biosciences. In addition, in the prior year period,
the Company recorded a $1.5 million
non-cash gain on a change in the fair value of contingent
consideration in connection with the acquisition of PRODESSE.
Income tax expense was $10.0
million in the third quarter of 2011, as the
other-than-temporary impairment loss was not tax-deductible.
Non-GAAP Income Statement Details
In the third quarter of 2011, non-GAAP gross margin on product
sales, R&D expenses, and marketing and sales expenses were
similar to the corresponding GAAP results.
Excluding transaction-related expenses, restructuring costs and
non-recurring legal fees, non-GAAP G&A expenses were
$16.5 million in the third quarter of
2011, compared to $10.8 million in
the prior year period, an increase of 53%.
Total other income, net, was $1.8
million in the third quarter of 2011, compared to total
other income, net, of $2.9 million in
the prior year period, a decrease of 38%.
Non-GAAP income tax expense was $11.5
million in the third quarter of 2011, leading to an
effective tax rate of 30%.
Cash Flows and Balance Sheet
In the third quarter of 2011, Gen-Probe generated net cash of
$42.3 million from operating
activities, and spent $11.2 million
on property, plant and equipment, leading to free cash flow of
$31.1 million.
Gen-Probe continues to have a strong balance sheet. As of
September 30, 2011, the Company had
$426.3 million of cash, cash
equivalents and marketable securities, and $248.0 million of short-term debt. The
Company pays interest on this debt at a rate 0.6% above the
one-month London Interbank Offered Rate (LIBOR), which was recently
below 0.3%.
During the third quarter of 2011, Gen-Probe repurchased more
than 1.7 million shares of Company stock for $102 million, at an average purchase price of
$58.49 per share. This
completed the $150 million repurchase
plan that was authorized by Gen-Probe's board of directors in
February of 2011.
New Stock Repurchase Plan
Gen-Probe's board of directors has authorized the repurchase of
up to an additional $100 million of
the Company's stock through June of 2012. Repurchases may
occur from time to time and at the Company's discretion, depending
on market conditions and other factors. Shares may be
purchased on the open market or through private transactions,
pursuant to Rule 10b5-1 trading plans or other available means.
Updated 2011 Financial Guidance
Gen-Probe's updated 2011 financial guidance is provided
below:
|
|
|
Current
Guidance
(non-GAAP)
|
Previous
Guidance
(non-GAAP)
|
Current
Guidance
(GAAP)
|
Previous
Guidance
(GAAP)
|
|
Total revenues
|
$575 to $580
million
|
$575 to $590
million
|
$575 to $580
million
|
$575 to $590
million
|
|
Product gross
margins
|
69% to
70%
|
69% to
70%
|
69% to
70%
|
69% to
70%
|
|
Acquisition-related
amortization, other transaction expense, and non-recurring legal
fees
|
N/A
|
N/A
|
~ $16
million
|
$15
million
|
|
Operating
margin
|
~
27%
|
27% to
29%
|
~
24%
|
24.5% to
26.5%
|
|
Other-than-temporary
impairment loss
|
N/A
|
N/A
|
$39.5
million
|
N/A
|
|
Tax rate
|
31% to
32%
|
32% to
33%
|
43% to
44%
|
32% to
33%
|
|
Diluted shares
|
~ 48.5
million
|
49
million
|
~ 48.5
million
|
49
million
|
|
EPS
|
$2.28 to
$2.32
|
$2.28 to
$2.37
|
$1.22 to
$1.26
|
$2.06 to
$2.15
|
|
|
|
|
|
|
|
|
|
|
|
About Non-GAAP Financial Measures
Gen-Probe's management believes that non-GAAP financial measures
provide meaningful supplemental information regarding the Company's
performance by excluding certain expenses and other items that may
not be indicative of core business results. To supplement the
Company's financial results for the third quarter of 2011 and its
updated 2011 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 research and development expense,
non-GAAP marketing and sales expenses, non-GAAP G&A expenses,
non-GAAP operating profit, 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
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.
Notes on Presentation
In this news release, all per share amounts are calculated on a
diluted basis. Some totals may not foot due to rounding.
Certain prior year amounts have been reclassified to conform
to the current year presentation. Estimates of constant
currency results exclude currency fluctuations associated with
revenue from GTI, which was not part of Gen-Probe in the third
quarter of 2010.
Webcast Conference Call
A live webcast of Gen-Probe's third quarter 2011 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. Call 866-346-2384 (domestic) or
203-369-0005 (international).
About Gen-Probe
Gen-Probe 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 is headquartered in
San Diego and employs
approximately 1,400 people. For more information, go to
www.gen-probe.com.
Trademarks
APTIMA, APTIMA COMBO 2, PANTHER and PRODESSE 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 2011
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,
the development and commercialization of new products, regulatory
approvals, future milestones, growth opportunities, market trends,
and management plans are 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 2011 financial targets, (ii) the risk
that we may not integrate acquisitions, such as Tepnel, PRODESSE
and GTI, successfully, (iii) the possibility that the market for
the sale of our new products, such as our PANTHER 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 or enter into new ones, (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 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
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,
|
|
|
2011
|
|
2010
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 142,079
|
|
$ 59,690
|
|
Marketable
securities
|
160,305
|
|
170,648
|
|
Trade accounts receivable,
net of allowance for doubtful accounts of $352 and $355 at
September 30, 2011 and December 31, 2010,
respectively
|
55,956
|
|
54,739
|
|
|
|
|
|
|
Accounts receivable —
other
|
2,243
|
|
5,493
|
|
Inventories
|
76,529
|
|
66,416
|
|
Deferred income
tax
|
12,109
|
|
13,634
|
|
Prepaid income
tax
|
375
|
|
2,993
|
|
Prepaid
expenses
|
16,745
|
|
11,672
|
|
Other current
assets
|
3,250
|
|
5,148
|
|
Total current assets
|
469,591
|
|
390,433
|
|
Marketable securities, net of
current portion
|
123,946
|
|
259,317
|
|
Property, plant and equipment,
net
|
170,306
|
|
160,863
|
|
Capitalized software,
net
|
16,740
|
|
13,981
|
|
Patents, net
|
11,968
|
|
12,450
|
|
Goodwill
|
149,189
|
|
150,308
|
|
Purchased intangibles,
net
|
113,110
|
|
120,270
|
|
License, manufacturing access
fees and other assets, net
|
62,717
|
|
60,175
|
|
Total assets
|
$1,117,567
|
|
$1,167,797
|
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts
payable
|
$12,034
|
|
$14,614
|
|
Accrued salaries and
employee benefits
|
24,668
|
|
26,825
|
|
Other accrued
expenses
|
13,092
|
|
13,935
|
|
Income tax
payable
|
4,486
|
|
634
|
|
Short-term
borrowings
|
248,000
|
|
240,000
|
|
Deferred
revenue
|
935
|
|
1,166
|
|
Total current
liabilities
|
303,215
|
|
297,174
|
|
Non-current income tax
payable
|
9,571
|
|
8,315
|
|
Deferred income
tax
|
26,408
|
|
29,775
|
|
Deferred revenue, net of
current portion
|
2,610
|
|
2,500
|
|
Other long-term
liabilities
|
6,937
|
|
6,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 46,507,028 and
47,966,156 shares issued and outstanding at September 30, 2011
and December 31, 2010, respectively
|
5
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in
capital
|
111,106
|
|
195,820
|
|
Accumulated other comprehensive
income
|
574
|
|
678
|
|
Retained earnings
|
657,141
|
|
626,876
|
|
Total stockholders'
equity
|
768,826
|
|
823,379
|
|
Total liabilities and
stockholders' equity
|
$1,117,567
|
|
$1,167,797
|
|
|
|
|
|
|
|
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,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales
|
$136,393
|
|
$128,313
|
|
$407,426
|
|
$391,616
|
|
Collaborative research
revenue
|
1,128
|
|
3,405
|
|
6,313
|
|
10,810
|
|
Royalty and license
revenue
|
1,602
|
|
847
|
|
4,320
|
|
4,207
|
|
Total revenues
|
139,123
|
|
132,565
|
|
418,059
|
|
406,633
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of
product sales (excluding acquisition-related intangible
amortization)
|
40,529
|
|
42,146
|
|
121,903
|
|
129,118
|
|
Acquisition-related intangible
amortization
|
2,767
|
|
2,201
|
|
8,301
|
|
6,616
|
|
Research and
development
|
27,864
|
|
27,433
|
|
84,540
|
|
84,218
|
|
Marketing and
sales
|
17,308
|
|
13,872
|
|
51,340
|
|
44,476
|
|
General and
administrative
|
18,298
|
|
11,510
|
|
55,154
|
|
41,208
|
|
Total operating
expenses
|
106,766
|
|
97,162
|
|
321,238
|
|
305,636
|
|
Income from
operations
|
32,357
|
|
35,403
|
|
96,821
|
|
100,997
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Investment and interest
income
|
3,706
|
|
3,197
|
|
7,378
|
|
10,364
|
|
Interest
expense
|
(524)
|
|
(586)
|
|
(1,524)
|
|
(1,681)
|
|
Gain on contingent
consideration
|
—
|
|
1,513
|
|
—
|
|
7,595
|
|
Other-than-temporary
impairment loss on equity investment
|
(39,482)
|
|
—
|
|
(39,482)
|
|
—
|
|
Other income (expense),
net
|
(1,364)
|
|
267
|
|
128
|
|
(82)
|
|
Total other income (expense),
net
|
(37,664)
|
|
4,391
|
|
(33,500)
|
|
16,196
|
|
Income (loss) before income
tax
|
(5,307)
|
|
39,794
|
|
63,321
|
|
117,193
|
|
Income tax expense
|
10,049
|
|
12,398
|
|
33,056
|
|
37,494
|
|
Net income (loss)
|
$(15,356)
|
|
$ 27,396
|
|
$ 30,265
|
|
$ 79,699
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$ (0.33)
|
|
$ 0.57
|
|
$ 0.63
|
|
$ 1.63
|
|
Diluted
|
$ (0.33)
|
|
$ 0.56
|
|
$ 0.62
|
|
$ 1.61
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
47,092
|
|
48,254
|
|
47,613
|
|
48,796
|
|
Diluted
|
47,092
|
|
48,679
|
|
48,813
|
|
49,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated
Statements of Income – Non-GAAP Reconciliations
(In
thousands, except per share data)
(Unaudited)
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
September 30, 2011
|
|
September 30, 2010
|
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales
|
$136,393
|
$ —
|
$136,393
|
|
$128,313
|
$ —
|
$128,313
|
|
Collaborative research
revenue
|
1,128
|
—
|
1,128
|
|
3,405
|
—
|
3,405
|
|
Royalty and license
revenue
|
1,602
|
—
|
1,602
|
|
847
|
—
|
847
|
|
Total revenues
|
139,123
|
—
|
139,123
|
|
132,565
|
—
|
132,565
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of
product sales (excluding acquisition- related intangible
amortization)
|
40,409
|
120
|
40,529
|
|
42,057
|
89
|
42,146
|
|
Acquisition-related intangible
amortization
|
—
|
2,767
|
2,767
|
|
—
|
2,201
|
2,201
|
|
Research and
development
|
27,814
|
50
|
27,864
|
|
27,433
|
—
|
27,433
|
|
Marketing and
sales
|
17,291
|
17
|
17,308
|
|
13,872
|
—
|
13,872
|
|
General and
administrative
|
16,492
|
1,806
|
18,298
|
|
10,818
|
692
|
11,510
|
|
Total operating
expenses
|
102,006
|
4,760
|
106,766
|
|
94,180
|
2,982
|
97,162
|
|
Income from
operations
|
37,117
|
(4,760)
|
32,357
|
|
38,385
|
(2,982)
|
35,403
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Investment and interest
income
|
3,706
|
—
|
3,706
|
|
3,197
|
—
|
3,197
|
|
Interest
expense
|
(524)
|
—
|
(524)
|
|
(586)
|
—
|
(586)
|
|
Gain on contingent
consideration
|
—
|
—
|
—
|
|
—
|
1,513
|
1,513
|
|
Other-than-temporary
impairment loss on equity investment
|
—
|
(39,482)
|
(39,482)
|
|
—
|
—
|
—
|
|
Other income (expense),
net
|
(1,364)
|
—
|
(1,364)
|
|
267
|
—
|
267
|
|
Total other
income (expense), net
|
1,818
|
(39,482)
|
(37,664)
|
|
2,878
|
1,513
|
4,391
|
|
Income (loss) before income
tax
|
38,935
|
(44,242)
|
(5,307)
|
|
41,263
|
(1,469)
|
39,794
|
|
Income tax expense
|
11,508
|
(1,459)
|
10,049
|
|
13,189
|
(791)
|
12,398
|
|
Net income (loss)
|
$ 27,427
|
$(42,783)
|
$ (15,356)
|
|
$ 28,074
|
$ (678)
|
$ 27,396
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$ 0.58
|
$ (0.91)
|
$ (0.33)
|
|
$ 0.58
|
$ (0.01)
|
$ 0.57
|
|
Diluted
|
$ 0.57
|
$ (0.90)
|
$ (0.33)
|
|
$ 0.57
|
$ (0.01)
|
$ 0.56
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
47,092
|
—
|
47,092
|
|
48,254
|
—
|
48,254
|
|
Diluted
|
48,008
|
—
|
47,092
|
|
48,679
|
—
|
48,679
|
|
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated
Statements of Income – Non-GAAP Reconciliations
(In
thousands, except per share data)
(Unaudited)
|
|
|
Nine Months Ended
|
|
Nine Months Ended
|
|
|
September 30, 2011
|
|
September 30, 2010
|
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Non-GAAP
|
Adjustments
|
GAAP
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales
|
$407,426
|
$ —
|
$407,426
|
|
$391,616
|
$ —
|
$391,616
|
|
Collaborative research
revenue
|
6,313
|
—
|
6,313
|
|
10,810
|
—
|
10,810
|
|
Royalty and license
revenue
|
4,320
|
—
|
4,320
|
|
4,207
|
—
|
4,207
|
|
Total revenues
|
418,059
|
—
|
418,059
|
|
406,633
|
—
|
406,633
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of product sales
(excluding acquisition- related intangible amortization)
|
121,590
|
313
|
121,903
|
|
128,848
|
270
|
129,118
|
|
Acquisition-related
intangible amortization
|
—
|
8,301
|
8,301
|
|
—
|
6,616
|
6,616
|
|
Research and
development
|
84,473
|
67
|
84,540
|
|
84,218
|
—
|
84,218
|
|
Marketing and
sales
|
51,317
|
23
|
51,340
|
|
44,476
|
—
|
44,476
|
|
General and
administrative
|
50,600
|
4,554
|
55,154
|
|
39,820
|
1,388
|
41,208
|
|
Total operating
expenses
|
307,980
|
13,258
|
321,238
|
|
297,362
|
8,274
|
305,636
|
|
Income from
operations
|
110,079
|
(13,258)
|
96,821
|
|
109,271
|
(8,274)
|
100,997
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Investment
and interest income
|
7,378
|
—
|
7,378
|
|
10,364
|
—
|
10,364
|
|
Interest
expense
|
(1,524)
|
—
|
(1,524)
|
|
(1,681)
|
—
|
(1,681)
|
|
Gain on
contingent consideration
|
—
|
—
|
—
|
|
—
|
7,595
|
7,595
|
|
Other-than-temporary impairment
loss on equity investment
|
—
|
(39,482)
|
(39,482)
|
|
—
|
—
|
—
|
|
Other income
(expense), net
|
128
|
—
|
128
|
|
(82)
|
—
|
(82)
|
|
Total other
income (expense), net
|
5,982
|
(39,482)
|
(33,500)
|
|
8,601
|
7,595
|
16,196
|
|
Income before income
tax
|
116,061
|
(52,740)
|
63,321
|
|
117,872
|
(679)
|
117,193
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
36,785
|
(3,729)
|
33,056
|
|
39,866
|
(2,372)
|
37,494
|
|
Net income
|
$ 79,276
|
$(49,011)
|
$ 30,265
|
|
$ 78,006
|
$ 1,693
|
$ 79,699
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
$ 1.66
|
$ (1.03)
|
$ 0.63
|
|
$ 1.59
|
$ 0.04
|
$ 1.63
|
|
Diluted
|
$ 1.62
|
$ (1.00)
|
$ 0.62
|
|
$ 1.58
|
$ 0.03
|
$ 1.61
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
47,613
|
—
|
47,613
|
|
48,796
|
—
|
48,796
|
|
Diluted
|
48,813
|
—
|
48,813
|
|
49,257
|
—
|
49,257
|
|
|
|
|
|
|
|
|
|
|
|
Gen-Probe
Incorporated
Consolidated
Statements of Cash Flows - GAAP
(In
thousands)
(Unaudited)
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2011
|
|
2010
|
|
Operating
activities:
|
|
|
|
|
Net income
|
$ 30,265
|
|
$ 79,699
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
|
|
Depreciation and
amortization
|
34,952
|
|
34,111
|
|
Amortization of premiums
on investments, net of accretion of discounts
|
7,301
|
|
6,796
|
|
Stock-based
compensation
|
19,226
|
|
18,538
|
|
Excess tax benefit from
employee stock-based compensation
|
(4,418)
|
|
(891)
|
|
Deferred
revenue
|
(91)
|
|
(1,528)
|
|
Deferred income
tax
|
(1,601)
|
|
(3,708)
|
|
Gain on contingent
consideration
|
—
|
|
(7,595)
|
|
Other-than-temporary
impairment loss on equity investment
|
39,482
|
|
—
|
|
Loss on disposal of
property and equipment
|
251
|
|
603
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade and other accounts
receivable
|
2,031
|
|
(2,127)
|
|
Inventories
|
(4,327)
|
|
204
|
|
Prepaid
expenses
|
(5,072)
|
|
2,861
|
|
Other current
assets
|
1,909
|
|
685
|
|
Other long-term
assets
|
952
|
|
(353)
|
|
Accounts
payable
|
(2,589)
|
|
(6,177)
|
|
Accrued salaries and
employee benefits
|
(1,181)
|
|
(3,884)
|
|
Other accrued
expenses
|
(873)
|
|
(2,230)
|
|
Income tax
payable
|
11,303
|
|
10,863
|
|
Other long-term
liabilities
|
300
|
|
(268)
|
|
Net cash provided by operating
activities
|
127,820
|
|
125,599
|
|
Investing
activities:
|
|
|
|
|
Proceeds from sales and
maturities of marketable securities
|
416,211
|
|
405,688
|
|
Purchases of marketable
securities
|
(316,625)
|
|
(313,475)
|
|
Purchases of property, plant and
equipment
|
(34,446)
|
|
(22,090)
|
|
Purchases of capitalized
software
|
(5,032)
|
|
(2,081)
|
|
Purchases of intangible assets,
including licenses and manufacturing access fees
|
(4,980)
|
|
(2,139)
|
|
Cash paid for investment in
Pacific Biosciences
|
—
|
|
(50,000)
|
|
Cash paid for investment in Roka
Bioscience
|
(3,980)
|
|
—
|
|
Other
|
(225)
|
|
(83)
|
|
Net cash provided by investing
activities
|
50,923
|
|
15,820
|
|
Financing
activities:
|
|
|
|
|
Repurchase and retirement of
common stock
|
(150,000)
|
|
(88,079)
|
|
Proceeds from issuance of common
stock and employee stock purchase plan
|
43,435
|
|
24,699
|
|
Payment of contingent
consideration
|
—
|
|
(10,000)
|
|
Repurchase and retirement of
restricted stock for payment of taxes
|
(1,614)
|
|
(1,252)
|
|
Excess tax benefit from employee
stock-based compensation
|
4,418
|
|
891
|
|
Borrowings, net
|
8,000
|
|
—
|
|
Net cash used in financing
activities
|
(95,761)
|
|
(73,741)
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
(593)
|
|
(1,234)
|
|
Net increase in cash and cash
equivalents
|
82,389
|
|
66,444
|
|
Cash and cash equivalents at the
beginning of period
|
59,690
|
|
82,616
|
|
Cash and cash equivalents at the
end of period
|
$142,079
|
|
$ 149,060
|
|
|
|
|
|
|
|
SOURCE Gen-Probe Incorporated