RNS No 1856v
PERSTORP AB
18 October 1999
PERBIO SCIENCE AB (PUBL). - INTERIM REPORT AND FIRST DAY OF TRADING
Today, Monday 18 October 1999, Perbio Science is listed on the O-list of the OM
Stockholm Exchange. Perstorp AB has distributed all shares in Perbio Science AB
to the shareholders of Perstorp. Today Perbio Science also presents the first
interim report as a listed company.
Perbio Science is a biotech company with strong growth and good profitability.
Perbio Science supports bioscience researchers and biopharmaceutical companies
with tools, systems and consumables. It also supplies health care providers
with implants and rehabilitation devices for their patients. The Company
focuses on supplying these groups with easy-to-use and cost-effective products
based on the use of break-through technologies.
INTERIM REPORT: APRIL 1 - SEPTEMBER 30, 1999
Increased net sales
Net sales for the period of April-September amounted to SEK 569 million (353),
an increase of 61 per-cent. The increase was 19 percent, excluding acquisitions.
Net sales for the third quarter were SEK 293 million (181), with growth of 62
per cent, or 17 percent excluding acquisitions. Net sales rose between January -
September by 55 per cent (pro forma) to SEK 817 million (527).
Higher income after financial items
Perbio Science's income after financial items for April-September was SEK 53
million (34). The corresponding figure for the third quarter was SEK 26 million
(18). Income after financial items for January-September (pro forma) rose to SEK
80 million (51).
Additional Information about PERBIO SCIENCE
For further information:
please call CEO Mats Fischier at +46 (0) 42-26 90 91
or +46 (0) 70-595 18 21.
or Finance Director Claes Wenthzel at +46 (0) 42-26 90 92
or +46 (0) 70-862 01 22.
Additional information about Perbio Science may be found in the prospectus
prepared prior to listing on the 0-List of the OM Stockholm Stock Exchange.
The prospectus may be downloaded from our home page at www.perbio.com.
Interim report
April 1-September 30, 1999
Increased net sales
Net sales for the period of April-September amounted to SEK 569 million (353),
an increase of 61 percent. The increase was 19 percent, excluding acquisitions.
Net sales for the third quarter were SEK 293 million (181), with growth of 62
percent, or 17 percent excluding acquisitions. Net sales rose between
January-September by 55 percent (pro forma) to SEK 817 million (527).
Higher income after financial items
Perbio Science's income after financial items for April-September was SEK 53
million (34). The corresponding figure for the third quarter was SEK 26 million
(18). Income after financial items for January-September (pro forma) rose to
SEK 80 million (51).
Listing on the OM Stockholm Stock Exchange
Perbio Science will be listed on the O List of the OM Stockholm Stock Exchange
on October 18, 1999.
Acquisition of Endogen completed
As planned, the acquisition of Endogen Inc. was completed on July 1, 1999.
Vision
Modern bioscience will continue to change much of the world that we know today.
New knowledge is generated for applications primarily in health care but is also
cascading into other applications. Aggressive research and development by
companies will bring an increasing number of new products to a wide variety of
markets. As a supplier of enabling tools and consumables for research and
production to these companies, Perbio Science is an intergral part of this
revolution. With its technology base and customer relations, Perbio Science is
well positioned to take advantage of the accelerating growth.
Mission
Perbio Science supports bioscience researchers and biopharmaceutical companies
with tools, systems and consumables. It also supplies health care providers
with implants and rehabilitation devices for their patients. The Company
focuses on supplying these groups with easy-to-use and cost effective products
based on the use of break-through technologies.
Objectives
Perbio Science aims to enhance its position and create value by:
* Being a leader in its selected market segments
* Having a strong technology base and a broad range of products
* Growing faster than the market
* Taking advantage of emerging technologies and developing new business
* Generating cash flow for organic growth
Strategies
Perbio Science's strategies address the following:
* Fast product development through innovative and dedicated people
* Licensing and acquiring products and technologies
* Close relations and partnerships with customers and suppliers
* Maximizing the potential customer base
* Growth in international markets
Operations
Perbio Science is a stong niche player in its selected markets. As the biggest
markets for biotechnology are in the US, the majority of Perbio Science's
operations are conducted within and from the US. Operations are managed in
three divisions:
* Bioresearch Products
* Cell Culture Products
* Medical Devices
The formal report period is April 1-September 30, 1999
Pro forma information is included in this report solely for comparative
purposes. Such information applies to all periods prior to formation of the
Group on April 1, 1999. The report also contains certain information about the
nine-months period from January-September because this is a natural report
period, since the financial year is the same as the calendar year.
More detailed financial information could be found in the prospectus for Perbio
Science AB's listing on the O List of the OM Stockholm Stock Exchange on October
18, 1999. The prospectus also states the prerequisites for pro forma financial
statements. Interested parties are also cordially invited to visit Perbio
Science's home page at www.perbio.com.
General business information
Perbio Science will be listed on the O List of the Stockholm Stock Exchange on
October 18 and is now reporting its first interim report as a listed company
after the distribution from Perstop AB. With the listing on the Stockholm Stock
Exchange, it is now possible to invest directly in Perbio Science's business.
The listing will facilitate the company's need of resources, with respect to
both financing and personnel. This will improve the possibilities for growth
and profitability and be a base for long-term value creation for Perbio
Science's present and future shareholders.
Perbio Science is active within the rapidly growing markets for biotechnology
and medical devices. We conduct business in three divisions: Bioresearch
Products, Cell Culture Products and Medical Devices. Perbio Science's strategy
calls for the company to be the leader in selected market niches. The objective
is to demonstrate organic growth above the industry average, which is according
to our assessment presently an average of about 10 percent annually.
The strong underlying forces driving continued progress within biotechnology and
medical devices remain, and therewith the need for our products. Our strong
positions within selected niches, as well as good opportunities to increase
market shares from low levels outside North America, provide the prerequisites
to grow organically faster than the rest of the market. In addition, Perbio
Science shall grow through acquisitions.
The interim results reported here are consistent with our expectations. Net
sales increased by 62 percent during the third quarter, and by 17 percent
adjusted for acquisitions, compared with the corresponding period in 1998.
Income after financial items for the corresponding period amounted to SEK 26
million (18). Net sales for the period of April-September rose by 61 percent to
SEK 569 million. Adjusted for acquisitions, the increase was 19 percent, which
meets our objective quite well. Income after financial items rose to SEK 53
million (34).
Integration of the two acquired companies, Pierce Milwaukee from Amersham
Pharmacia Biotech, and Endogen Inc., has proceeded according to plan. Pierce
Milwaukee made a positive contribution during the period to earnings per share
for Perbio Science. The integration of Endogen Inc., acquired in July, is
proceeding according to plan. The objective is for the company to provide a
positive contribution to earnings per share for Perbio Science beginning next
year.
During the report period, we achieved stated objectives regarding growth,
operating margin and equity/assets ratio. Return on equity, at 9 percent, is
below the Group objective. Strong growth during the period has, naturally, been
an encumbrance on cash flow. The acquisitions will contribute positively to the
Group's cash flow over the long term.
Perbio Science, target figures Objective Outcome, April-Sept
Operating margin before amortization
of consolidated goodwill 12-15% 12.5%
Return of equity * > 12% 9%
Equity/assets ratio > 40% 50%
* Moving average 12 months
Acquisitions
Pierce Milwaukee
In December 1998, the Company acquired the Milwaukee, Wisconsin manufacturing
operations of Amersham Pharmacia Biotech. This acquisition strengthened the
Company's manufacturing capability, particularly for molecular biology products,
and substantially increased the size of the Bioresearch Products Division's
workforce. In conjunction with this acquisition, the division signed a supply
agreement for continued supply of products from the plant to Amersham Pharmacia
Biotech.
In conjunction with this acquisition, Perbio Science and APB entered a supply
agreement under which the Company agreed to continue to manufacture certain
products for sale to APB until 2003. The supply agreement provides for certain
minimum annual purchases by APB, including its total requirements of certain
products from the Milwaukee facility. When entering the agreement, Perbio
Science estimated its sales to APB to approximately SEK 160 million in 1999.
APB is therefore expected to be the largest customer of the Company and accounts
for a substantial proportion of Group sales. The minimum purchases by APB in
subsequent years of the agreement are substantially lower than in 1999.
Endogen
In May 1999, a tender offer was made for the NASDAQ listed company Endogen,
Inc. for a transaction value of approximately SEK 115 million. The acquisition
was completed in July 1999. Endogen reported sales of SEK 80 million, with
operating income after amortization of SEK 4 million in 1998. The acquisition
gives rise to goodwill of SEK 89 million bringing total goodwill in the Perbio
Science Group to SEK 281 million pro forma per September 30, 1999. The
acquisition of Endogen increased the Group's interest-bearing net debt as of
September 30, 1999 to SEK 489 million, whereupon the equity/assets ratio decline
to 50 percent.
Net sales and income
Three months (July 1 - September 30)
Net sales during the period of July-September 1999 were SEK 293 million (181),
an increase of 62 percent. Of total net sales, 45 percent is attributable to
acquisitions, 13 percent to increased volumes and 4 percent to exchange rate
fluctuations and price changes.
Net Sales and Growth* 1999
----------------------------------------------
Jul-Sept
----------------------------------------------
Net sales, SEK m 293
Increase, SEK m 112
Increase, % 62
Of which:
Volume, % 13
Acquisitions, % 45
Exchange rate/prices, % 4
* Growth compares with the corresponding period in 1998, pro forma.
Perbio Science's operating income before amortization of consolidated goodwill
for the quarter reached SEK 37 million (25), with an operating margin of 12.6
percent (13.8). The slight decline in margin during the third quarter is
primarily due to costs of SEK 5 million stemming from the stock exchange
listing. Income after financial items was SEK 26 million (18). The financial
net was SEK -7 million (-4). The lower financial net is attributable to higher
indebtedness following the acquisitions of Piercve Milwaukee and Endogen.
Earnings per share were SEK 0.39 (0.28) for the period.
Pierce Milwaukee contributed positively during the period to earnings per share
for Perbio Science. Operations, earnings trends and the integration of Endogen
are proceeding entirely accroding to plan. However, Endogen has had a negative
effect on profit after financial items. The objective, unchanged since the date
of acquisition, is that the company shall contribute to the group's earnings per
share beginning next year.
Fluctuations in exchange rates have had only a marginal effect on income
compared with the corresponding period in 1998.
Taxes amounted to SEK 12 million (8), corresponding to a tax rate of 46 percent
(44).
Net sales and growth by market
July-Sept 1999 1998 Growth Growth Growth %**
SEK m SEK m SEK m* %* Excl. acquisitions
--------------------------------------------------------------------------------
North America 189 110 79 72 24
Europe 87 55 32 58 10
Rest of the world 17 16 1 6 13
Total 293 181 112 62 17
* Growth compared with corresponding period in 1998, pro forma. ** Growth
compared with corresponding period period in 1998, pro forma, excluding
acquisitions.
6 months (April 1 - September 30)
Perbio Science's net sales for the period of April-September amounted to SEK 569
million (353), corresponding to an increase of 61 percent. The newly acquired
units Pierce Milwaukee (December, 1998) and Endogen (July, 1999) accounted for
the majority of growth in volume. Of the increase, 42 percent was attributable
to acquisitions, 14 percent to volume and 5 percent to exchange rates and
prices. The increase, excluding acquisitions, was distributed among the
divisions as follows: Bioresearch Products 15 percent. Cell Culture Products
20 percent and Medical Devices 33 percent.
Operating income before amortization of consolidated goodwill was SEK 71 million
(47), corresponding to an operating margin of 12.5 percent (13.3). The
operating income was encumbered by about SEK 16 million in costs related to the
stock exchange listing. The financial net was SEK - 12 million (-8). Income
after financial items reached SEK 53 million (34), which entails an increase of
56 percent. Taxes amounted to SEK 26 million (16). Earnings per share for the
six months period were SEK 0.75 (0.51).
The operating margin before amortization of consolidated good will was 12.5
percent for the period. This should be compared with Perbio Science's long-term
objective calling for an operating margin of 12-15 percent. The primary
explanation for the rising margin trend may be found in higher volumes and
positive contributions from acquisitions.
Net sales and growth* April-Sept 1999.
------------------------------------------------
Net sales, SEK m 569
------------------------------------------------
Increase, SEK m 216
Increase, % 61
Of which:
Volume, % 14
Acquisitions, % 42
Exchange rate/prices, % 5
* Growth compared with the corresponding period in 1998 pro forma.
Income statement, SEK m 3 months 6 months 9 months 12months
July-Sept April-Sept Jan-Sept Jan-Dec
1999 1998 1999 1998 1999 1998 1998
pro- pro- pro- pro- pro-
forma forma forma forma forma
-
Net sales 293 181 569 353 817 527 706
Cost of goods sold -163 -104 -313 -196 -452 -293 -397
Gross income 130 77 255 157 365 234 309
Selling expenses -37 -21 -66 -49 -92 -75 -97
General and
administrative expenses -39 -24 -79 -47 -115 -69 -94
Research and development
expenses -19 -8 -32 -15 -44 -22 -32
Other operating revenues
and expenses 2 1 -7 1 -7 1 1
Operating income before
amortization of goodwill 37 25 71 47 107 69 87
Amortization of goodwill -4 -3 -6 -5 -9 -7 -10
Operating Income 33 22 65 42 98 62 77
Financial net -7 -4 -12 -8 -18 -11 -15
Income after financial items 26 18 53 34 80 51 62
Taxes -12 -8 -26 -16 -37 -23 -29
Net income for the period 14 10 27 18 43 28 33
The divisions
Quarterly net sales and growth per division:
Net sales per division, SEK m 3 months 6 months
July-Sept April-Sept
1999 1998 1999 1998
pro forma pro forma
Bioresearch Products 141 53 270 106
Cell Culture Products 130 113 259 217
Medical Devices 22 15 40 30
Total 293 181 569 353
Growth per division 3 months 6 months
July-Sept 1999 April-Sept 1999
SEKm % %* Mkr % %*
Excl Excl
Acquisitions Acquisitions
Bioresearch Products 88 166 11 164 155 15
Cell Culture Products 17 15 15 42 19 19
Medical Devices 7 47 47 10 33 33
Total 112 62 17 216 61 19
* Growth compared with 1998, pro forma, excluding acquisitions
Biroesearch Products
Net sales increased strongly during the third quarter. Adjusted for the
acquisitons of Pierce Milwaukee and Endogen Inc., the increase was 11 percent,
which exceeds the Group's objective for organic growth. Organic growth for the
period of April-September was 15 percent. Prices were stable.
Cell Culture products
Net sales for Cell Culture Products amounted to SEK 130 million (113) during
the third quarter. This is an increase of SEK 17 million, or 15 percent,
compared with the corresponding period in 1998. Demand has remained good in
both main markets, the USA and Europe. The division has increased its market
shares both for serum and bioprocess containers. Prices for the division's
products have been stable.
Medical Devices
Demand has continued to develop very positively for the Medical Devices
division. Growth has been good across the product line and it seems
increasingly clear that acceptance of voice prostheses is still rising
considerably. Net sales during the third quarter were SEK 22 million (15), an
increase of 47 percent. This is a sharper upturn than the 33 percent reported
during the period of April-September.
Financial position
Balance sheet, SEK m
1 April 1999 30 Sept 1999
Consolidated goodwill 198 281
Other intangible assets 40 39
Tangible assets 263 296
Inventory 390 413
Other operating assets 159 207
Financial assets 0 3
Total assets 1 050 1 239
Shareholders' equity 600 621
Provisions 3 1
Financial liabilities 330 489
Operating liabilities 117 128
Total shareholders' equity
and liabilities 1 050 1 239
Pledged assets
Contingent liabilities 72 72
Investments
Capital expenditures amounted to SEK 28 million (54) for the period of April -
September and depreciation to SEK 22 million (13). The corresponding figures
for the period of July - September were SEK 15 million (46) and SEK 12 million
(7) respectively. Investments during the period of January - September were SEK
40 million (60) excluding the acquisition of Endogen, with depreciation of SEK
40 million (27)
Cash flow
The Group's net cash flow for April- September was SEK 3 million, and SEK -41
million for the most recent quarter.
Cash flow analysis, SEK m
July - Sept 1999 April - Sept 1999
Income after financial items 26 53
Non-cash items
Amortization of consolidated
goodwill 4 5
Depreciation 12 22
Tax paid -6 -61
Change in working capital
Inventory -17 -6
Other operating assets -24 -20
Operating liabilities 18 -3
Cash flow from operating activities 13 -9
Investment activities
Capital expenditures -15 -28
Acquisition of businesses -119 -119
Financing activities 80 159
Net cash flow for the period -41 3
Cash at beginning of the year 44 0
Cash at end of the period 3 3
Cash position
Perbio Science's interest-bearing net debt was SEK 487 million at the end of the
period. The equity/assets ratio was 50 percent and there were 35,792,170
shares. The Group's objective is that the equity/assets ratio shall not fall
below 40 percent.
Key ratios July-Sept April-Sept Jan-Sept 1998
1999 1999 1999 pro forma
pro forma
Net sales growth,
compared with
pro forma 61,9% 61,2% 55,0% 28,6%
Gross margin 44,4% 44,8% 44,6% 43,8%
Operating margin
before amortization
of goodwill 12,6% 12,5% 13,1% 12,3%
Operating margin 11,3% 11,4% 12,1% 10,9%
Net margin 4,8% 4,7% 5,3% 4,7%
Earnings per share,
SEK 0,39 0,75 1,20 0,92
Working capital,
SEK m 491 491 491 419
Capital employed
SEK m 1 107 1 107 1 107 931
Net debt, SEK m 486 486 486 358
Debt/equity ratio 0,78 0,78 0,78 0,62
Equity/assets ratio 50% 50% 50% 55%
Equity per share 17,35 17,35 17,35 16
Number of shares 35 792 170 35 792 170 35 792 170 35 792 170
Return on capital
employed 12,6% 12,4% 11,5% 9.5%
Return on equity 9,0% 8,9% 9,5% 6,0%
Operational interest
coverage ratio 4,7x 5,4x 5,4x 5,1x
Internal financing
ratio 0,9x neg - 0,7x
R&D expenses as
percentage of sales 6,5% 5,6% 5,3% 4,5%
Capital expenditures
SEK m 15 28 40 76
Number of employees
end of the period 901 901 901 691
INCOME STATEMENT, SEK m
Q1 1998 Q2 1998 Q3 1998 Q1 1999 Q2 1999 Q3 1999
pro forma pro forma pro forma pro forma
Net Sales 175 172 181 248 276 293
Cost of goods
sold -98 -92 -104 -139 -150 -163
Gross income 77 80 77 109 126 130
Selling expenses -25 -28 -21 -26 -29 -37
General and
administrative
expenses -22 -22 -24 -35 -41 -39
Research and
development
expenses -7 -7 -8 -12 -13 -19
Other operating
revenues and
expenses 0 0 1 0 -9 2
Operating income
before amortization
of goodwill 23 22 25 36 34 37
Amortization of
consolidated
goodwill -3 -3 -3 -2 -3 -4
Operating income 20 19 22 34 31 33
Financial net -3 -4 -4 -6 -5 -7
Income after
financial items 17 15 18 28 26 26
Taxes -8 -7 -8 -12 -13 -12
Net income for
the period 9 8 10 15 13 14
THE PARENT COMPANY
Net sales for the parent company for April-September amounted to SEK 0.5
million. Income after financial items was SEK 0 million. Liquid funds at the end
of the period were SEK 65 million. There were investments in office furniture
and equipment during the period to a value of SEK 0.5 million. There were four
employees.
PERSONNEL
There were 901 employees as of September 30, to be compared with 596 on the
corresponding date in 1998. The acquisitions of Pierce Milwaukee and Endogen
have increased the number of employees by 190. The increase, excluding the
acquisitions, is due to increased employment for production within Medical
Devices, as well as seasonal fluctuations within Cell Culture Products.
Y2K
As part of Perstorp AB, Perbio Science was included in Perstorp's Y2K compliance
program. The program includes a complete inventory of all administrative and
embedded systems, risk analyses, planning of limits and action plans
(contingency and catastrophe plans) in order to overcome possible problems.
Perbio has complied with and implemented this program.
This interim report has not been reviewed by the company's auditors.
FINANCIAL INFORMATION
Year-end report for 1999 February 15
Annual report 1999 End of March
Annual General Meeting April 13
ADDITIONAL INFORMATION ABOUT PERBIO SCIENCE
For further information, please call CEO Mats Fischler at +46(0) 42-26 90 91 or
+46 (0) 70-595 18 21, or Finance Director Claes Wenthzel at +46 (0) 42-26 90 92
or +46 (0)70-862 01 22. Additional information about Perbio Science may be found
in the prospectus prepared prior to listing on the O List of the OM Stockholm
Stock Exchange. The prospectus may be downloaded from our home page at
www.perbio.com.
END
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