NORCROSS, Ga., Nov. 10 /PRNewswire-FirstCall/ -- Immucor, Inc.
(NASDAQ:BLUDE), the global leader in providing automated
instrument-reagent systems to the blood transfusion industry, today
reported financial results for the fiscal first quarter ended
August 31, 2005, and revised its previous guidance for the fiscal
year ending May 31, 2006. Revenue for the fiscal first quarter was
a record $42.4 million, up 32.2% from $32.1 million in the same
period last year. The $10.3 million increase in revenues was
primarily the result of price increases. Gross margin improved
during the quarter to 62.9% up from 57.0% in the prior year
quarter. Net income for the first quarter was $8.0 million, up
61.8% from $4.9 million for the same quarter last year. Diluted
earnings per share totaled $0.17 on 47.7 million weighted average
shares outstanding, up from $0.10 on 47.6 million weighted average
shares outstanding for the same period last year. All share and per
share amounts have been adjusted to reflect the 3-for- 2 stock
split which was effective for shareholders of record as of November
22, 2004. Net income for the first quarter was adversely impacted
by an increase of $1.5 million in audit and Sarbanes-Oxley
compliance costs and by an increase of $0.7 million in legal fees
as compared to the same period last year. Sales of instruments were
$2.1 million in the first quarter of fiscal 2006, a decrease from
$2.8 million in the fiscal 2005 first quarter. Most instrument
sales in the United States are now being recognized over the life
of the underlying reagent contract, which is normally 5 years. In
the quarter ended August 31, 2005 approximately $3.0 million of
instrument sales were deferred in this manner. As of August 31,
2005, deferred instrument revenues, including deferred warranty
revenues, totaled $11.3 million. Reagent gross margin grew to 71.3%
during the first quarter of fiscal 2006 compared to 62.0% in the
same period last year. The previously mentioned price increases and
improved manufacturing efficiencies were responsible for this
improvement. Research and development expenses were $1.3 million in
the first quarter, up 15.3% from $1.1 million in the prior year
quarter. Spending on the development of the Galileo Echo(TM)
(formerly referred to as the "G3") -- our new third generation
instrument targeted for the small to medium-sized hospital market
-- was $310 thousand in the first quarter, a decrease of $111
thousand from the same period last year. "We are very proud of the
job our employees have done in controlling manufacturing costs
while we continue to experience above average growth in revenues,"
said Edward L. Gallup, Chairman and Chief Executive Officer. "The
decision to close our Houston facility that was announced on
November 3, 2005 represents a key element of our strategic plan to
lower costs and increase margins. The Company anticipates a
significant reduction in costs from this consolidation of
approximately $4.0 million to $5.0 million per year by fiscal 2009.
The impact of this consolidation plan, when complete, on gross
margin percentage will be approximately 200 basis points and it is
a significant part of our plan to improve gross margin to over 70%
within three years." Dr. Gioacchino De Chirico, President said, "We
are planning to launch the Echo(TM) in Europe in the summer of 2006
and in the USA in the fall of 2006. The customer reaction to our
presentation of the Echo(TM) at the recent AABB meeting in Seattle
was extremely positive. We believe we are well positioned to
achieve market share gain and revenue growth through continued
Galileo placements and the launch of the Echo(TM). On August 31,
2005 there were 265 Galileo placements worldwide: 197 in Europe, 66
in North America and 2 in Japan." Commenting further, Dr. De
Chirico stated, "As of August 31, 2005, 213 of the 265 placed
Galileo instruments were generating reagent revenues. Although we
are quite pleased with the number of Galileo instruments placed to
date, we are still disappointed in the length of time our customers
are taking to validate these instruments." Selected Highlights -
Sales of traditional reagent products, i.e., products not utilizing
the Company's patented Capture technology, increased $9.2 million,
or 42.0%, from $22.1 million in the first quarter of 2005 to $31.3
million in the first quarter of 2006. Sales of Capture(R) products
increased approximately $1.5 million to $7.9 million, a 22.8%
increase over the prior year quarter. Human collagen sales
increased approximately $0.3 million to $1.1 million, a 35.1%
increase over the prior year quarter. Sales of traditional reagent
products were adversely affected by the timing of the establishment
of the joint venture with our Japanese distributor Kainos. Since
the terms of the agreement specify that the joint venture will
subsequently acquire the unsold inventory of Kainos, from the time
of the signing of the letter of intent until the agreement was
finalized in July, sales to Kainos were not recognized as revenue,
resulting in the elimination of sales totaling $0.8 million and
gross profit totaling $0.5 million. - The gross margin on
traditional reagents was 69.2% for the current quarter, compared
with 57.4% in the prior year quarter. The increase in gross margin
is primarily due to price increases. The gross margin on Capture
products was 79.7% for the current quarter, compared with 77.8% in
the prior year quarter. The gross margin on human collagen sales
was 28.3% during the quarter, compared with 29.8% in the prior year
quarter. - Sales of instruments were $2.1 million in the first
quarter of 2006 compared to $2.8 million in the first quarter of
2005. The gross margin on instruments, including the impact of the
cost of providing service, was a negative 74.9% for the current
quarter, compared to a positive 13.9% for the same quarter last
year. Instrument gross margin in the current quarter was impacted
by our application of EITF 00-21 as $3.0 million of revenue from
instrument sales were deferred in the quarter while the entire cost
of sales of $1.9 million on those instrument sales was expensed in
the quarter. - The effect on revenues of the change in the Euro
exchange rate was a decrease of $25 thousand for the first quarter
of 2006. The effect on net income of the change in the Euro
exchange rate for this same period was insignificant for the
quarter ended August 31, 2005. - Distribution expenses decreased by
$0.1 million for the first quarter of 2006 as compared to the prior
year quarter. Selling and marketing expenses increased by $1.1
million. General and administrative expenses increased by $2.8
million for the first quarter of 2006 as compared to the prior year
quarter, due primarily to higher legal and audit fees associated
with the finalization of the internal investigation relating to
events in Italy and additional audit fees associated with the
additional procedures required to complete the Annual Report on
Form 10-K. Our new Japanese joint venture was responsible for $0.5
million of the increase in selling and marketing expenses and $0.2
million of the increase in general and administration expenses. -
Operations continue to generate strong cash flow. Cash, cash
equivalents and marketable securities totaled $49.8 million at the
end of the current quarter compared to $13.1 million at the end of
the prior year quarter and $39.1 million at May 31, 2005. 2006
Revised Guidance The following guidance reflects Immucor's
expectations as of November 10, 2005 and is being provided so that
the Company can discuss its future outlook during its upcoming
conference call with investors, potential investors, the media,
financial analysts and others. These forward-looking statements are
subject to the cautionary paragraph at the end of this press
release and assume that the factors mentioned in that paragraph
will not have a material impact on expected results. Investors are
cautioned against attributing undue certainty to management's
assessment of the future and that actual results could differ. The
Company does not intend to update its outlook until its second
quarter earnings announcement, which is tentatively planned for
mid- January 2006. The Company now expects revenues for the fiscal
year ending May 31, 2006 to range from $180.0 million to $190.0
million, compared with the Company's previous guidance of $190.0
million to $204.0 million. Gross margin is expected to be in the
range of 65.0% to 66.0%, equal to the Company's previous estimate.
Net income is expected to be in the range of $36.3 million to $40.6
million, compared with the Company's previous guidance of $45.2
million to $50.0 million. We now expect to generate earnings per
diluted share in the range of $0.76 to $0.85 for the fiscal year
compared with the Company's previous estimate of $0.95 to $1.05.
The impact of the planned Houston plant closure accounted for
approximately $0.04 to $0.05 of the reduction in forecast diluted
earnings per share. The revised guidance now projects 2006 revenues
to increase approximately 24% to 31% over fiscal 2005 revenues and
2006 net income to increase approximately 52% to 70% over fiscal
2005 net income. The primary reasons for the reduction in expected
revenue are the lack of improvement in the length of time our
customers are taking to validate their instruments and the length
of time it has taken to see a significant impact from our price
differentiation strategy. Delays by our customers in validating
their Galileo instruments are having a significant impact on the
reagent trail associated with these placements. We also expected to
generate significant new business by offering to committed
customers lower pricing than our major competitor. As the cost of
reagents is a very small component of the budget of a typical blood
bank, some customers seem to be unwilling or unable to devote the
time and resources necessary to validate our reagents in a timely
manner even when offered a price incentive. We are now beginning to
see some success from our strategy but the impact has been delayed
and the amount of new business is smaller than previously
anticipated. As a result of the continuing deferral of instrument
revenues, we expect to end the 2006 fiscal year with total deferred
instrument revenues, including deferred warranty revenues, of
between $15.0 million and $19.0 million, an increase from the
previous year-end of between $7.4 million and $11.4 million. The
primary reasons for the reduction in expected net income are the
previously mentioned lower than expected revenues, the previously
announced charge to earnings related to the planned closure of the
Houston manufacturing facility, increased audit and legal fees, and
higher than expected start up costs in Japan. Audit and legal fees
are now expected to be higher as a result of the additional
procedures and delays involved in finalizing the fiscal 2005 audit.
In addition, Sarbanes-Oxley compliance costs and associated audit
expenses are not expected to decline in fiscal year 2006 as
previously forecast. Start up costs in Japan will be higher than
originally forecast as the Company focuses on making the joint
venture Sarbanes-Oxley 404 compliant by the end of this fiscal
year. We base our projections on our history of operations and
experience, the recurring nature of our revenues, including
contractually committed purchases from large customers, and the
predictability of our expenses through the fiscal year. In making
this projection, management has made the following assumptions:
With respect to revenues, the Company has extrapolated recent past
results and assumed the Company will generate additional revenues
from the renewal of customer contracts at higher prices, the
continuing sales of the Galileo instrument in Europe, Japan and the
United States; the associated reagent growth associated with these
instrument placements; the continuing sales of the human collagen
product; and sales of products by Immucor-Kainos, Inc. With respect
to the operations of its foreign subsidiaries, the Company has
assumed that there will be no significant change in foreign
exchange conversion rates. With respect to diluted earnings per
share, the Company's projection assumes that there will not be
additional capital stock issued. Immucor, Inc. will host a
conference call November 11, 2005 at 8:30 a.m. (EST) to review the
results. Investors are invited to participate in this conference
call with Edward L. Gallup, Chairman and Chief Executive Officer;
Dr. Gioacchino De Chirico, President; and Patrick Waddy, Interim
Chief Financial Officer. The call will focus on the results for the
first quarter, general business trends, and the Company's outlook
for fiscal 2006. This earnings release will be posted on Immucor's
website, as well as any financial information that may be discussed
by Messrs. Gallup, De Chirico or Waddy during this call that is not
contained in the earnings release. Both this earnings release and
the additional financial information, if any, will be posted as
soon as practicable after the call on the investor news section of
Immucor's website. To access this information once posted, go to
Immucor's website at http://www.immucor.com/ and click on "Investor
News." To participate in the telephone conference call, dial
1-888-889-2036, password BLUD. Replays of the conference call will
be available for one week beginning at 12:00 PM on November 11 by
calling 1-866-448-7644. Beginning November 18, 2005, audio of the
conference call or a transcript of the audio will be available on
the "Investor News" page of the Immucor website. Founded in 1982,
Immucor manufactures and sells a complete line of reagents and
systems used by hospitals, reference laboratories and donor centers
to detect and identify certain properties of the cell and serum
components of blood prior to transfusion. Immucor markets a
complete family of automated instrumentation for all of its market
segments. For more information on Immucor, please visit our website
at http://www.immucor.com/. Statements contained in this press
release that are not statements of historical fact are
"forward-looking statements" as that term is defined under federal
securities laws, including, without limitation, all statements
concerning Immucor's expectations, beliefs, intentions or
strategies for the future. Forward-looking statements may be
identified by words such as "plans," "expects," "believes,"
"anticipates," "estimates," "projects," "will," "should" and other
words of similar meaning used in conjunction with, among other
things, discussions of future operations, financial performance,
product development and new product launches, FDA and other
regulatory applications and approvals, market position and
expenditures. Factors that could cause actual results to differ
materially from those expressed in any forward-looking statement
include the following: the decision of customers to defer capital
spending, increased competition in the sale of instruments and
reagents, product development or regulatory obstacles, changes in
interest rates, fluctuations in foreign currency conversion rates,
changes in demand for the Company's human collagen product, the
outcome of any legal claims known or unknown, delays in regulatory
approvals required to move Houston manufacturing to another Company
facility, other currently unforeseen events that could delay the
move, higher than expected closure costs, higher than expected
manufacturing consolidation costs, the unexpected application of
different accounting rules, and general economic conditions.
Further risks are detailed in the Company's filings with the
Securities and Exchange Commission. Investors are cautioned not to
place undue reliance on any forward-looking statements. Immucor
assumes no obligation to update any forward-looking statements.
IMMUCOR, INC. Condensed Consolidated Statements of Income
(Unaudited) Three Months Ended August 31 August 31 2005 2004 Net
sales $42,434,493 $32,102,211 Cost of sales 15,739,190 13,789,739
Gross profit 26,695,303 18,312,472 Research and development
1,255,431 1,088,806 Selling and marketing 5,214,661 4,066,386
Distribution 1,851,320 1,939,017 General and administrative
5,822,256 3,016,932 Amortization expense 70,497 96,063 Total
operating expenses 14,214,165 10,207,204 Income from operations
12,481,138 8,105,268 Interest income 182,975 136,627 Interest
expense (158,983) (106,332) Other 82,428 (295,204) Total other
106,420 (264,909) Income before income taxes 12,587,558 7,840,359
Income taxes 4,581,882 2,891,406 Net income $8,005,676 $4,948,953
Earnings per share: Per common share $0.18 $0.11 Per common share
-- assuming dilution $0.17 $0.10 Weighted average shares
outstanding: Basic 45,541,734 45,105,638 Diluted 47,737,982
47,558,852 IMMUCOR, INC. Selected Consolidated Balance Sheet Items
(Unaudited) August 31, 2005 August 31, 2004 Cash & Cash
Equivalents $46,803,350 $13,148,628 Accounts Receivable - trade
34,948,522 27,773,765 Inventory 21,109,425 20,738,053 Total Current
Assets 110,782,988 66,883,388 Property and Equipment - net
24,007,055 22,576,816 Total Assets 178,858,667 122,403,192 Current
Portion - Long-Term Debt and Capital Leases 4,549,283 4,903,922
Accounts Payable 8,693,148 8,522,114 Total Current Liabilities
35,742,851 21,678,943 Long-Term Debt and Other Liabilities
17,007,793 9,980,169 Shareholders' Equity 126,108,023 90,744,080
DATASOURCE: Immucor, Inc. CONTACT: Edward Gallup of Immucor, Inc.,
+1-770-441-2051 Web site: http://www.immucor.com/
Copyright
Immucor (NASDAQ:BLUDE)
Historical Stock Chart
From Jul 2024 to Aug 2024
Immucor (NASDAQ:BLUDE)
Historical Stock Chart
From Aug 2023 to Aug 2024