QIAGEN Reports Third Quarter 2003 Results VENLO, Netherlands, Oct.
27 /PRNewswire-FirstCall/ -- QIAGEN N.V. (Nasdaq: QGENF; Frankfurt,
Prime Standard: QIA) today announced its results of operations for
the third quarter and nine-month period ended September 30, 2003.
The Company reported that net sales for its third quarter increased
18% to $90.4 million from $76.9 million for the same period in
2002. Reported operating income for the third quarter of 2003
increased 49% to $19.3 million from $12.9 million in the comparable
period in 2002, and net income increased 61% to $11.8 million from
$7.3 million in 2002. Diluted earnings per share increased 60% to
$0.08 (based on 147.7 million average shares and share equivalents
outstanding) from $0.05 (based on 146.0 million average shares and
share equivalents outstanding) in the comparable period in 2002.
The reported consolidated net sales and diluted earnings per share
exceeded or met the Company's projections as communicated in the
Company's guidance for the third quarter 2003 on August 5, 2003.
For the nine-month period ended September 30, 2003, net sales
increased 16% to $256.3 million from $220.2 million in the
comparable period of 2002. Operating income as reported for the
first nine months of 2003 increased 39% to $52.7 million from $38.0
million for the same period in 2002, net income increased 58% to
$33.9 million from $21.4 million in 2002. Diluted earnings per
share increased 53% to $0.23 (based on 146.9 million average shares
and share equivalents outstanding) from $0.15 (based on 145.8
million average shares and share equivalents outstanding). QIAGEN's
third quarter at constant currencies: 2003 2003 2002 Q3 Q3 Q3
Growth Rates Constant Constant Reported Currency Reported Reported
Currency Total Revenues in USD 90,446,000 85,919,000 76,882,000 18%
12% Consumables 72% 72% 72% 17% 12% Instruments 10% 10% 10% 14% 9%
Oligos 11% 11% 13% 2% -1% Other 7% 7% 5% 65% 50% Total Revenues
100% 100% 100% 18% 12% Total Revenues excl QIAGEN Genomics 19% 13%
Gross Margin 65% 67% 66% 17% 13% Operating Income 21% 23% 17% 49%
53% Net income 13% 14% 9% 61% 62% EPS 0.08 0.08 0.05 60% 60% "We
are very pleased to report these financial results of our
successful third quarter," said QIAGEN's Chief Executive Officer
Dr. Metin Colpan. "We are seeing positive momentum in many market
segments. With an ongoing shift in focus of academic and industrial
R&D to functional genomics and clinical research, and with the
emergence of new and more complex applications, QIAGEN's core
competencies in sample collection, stabilization, purification and
selected down-stream applications like Q-PCR and gene silencing are
increasingly demanded. Our focus on our core competencies fuels our
strength in addressing customer needs with state-of-the-art and
proprietary enabling solutions. In addition, the recently observed
increases in pharmaceutical and biotech research spending allow us
to look optimistically into 2004." QIAGEN's Third Quarter 2003
Highlights: -- QIAGEN and Thermo Electron entered into an alliance
in which Thermo Electron will co-promote Thermo's Kingfisher
technology for exclusive use with QIAGEN Magnetic Bead consumable
technologies for medium to high-throughput nucleic acid-based
applications in research and molecular diagnostics. -- Frost &
Sullivan recognizes QIAGEN for superior product innovation in the
nucleic acid isolation market. A comprehensive end-user study
conducted by Frost & Sullivan entitled "U.S. Nucleic Acid
Isolation Markets" identified QIAGEN as the market-leading provider
of innovative and cost-effective products for the purification of
nucleic acids. In an analysis entitled The World Robotics in
Biology: Liquid Handling Markets, Frost & Sullivan identified
QIAGEN as the undisputed leader in product innovation in this area
and highlighted QIAGEN for product innovation in various automation
solutions targeting molecular diagnostics and research. -- QIAGEN
and Novartis AG finalized the development of a novel algorithm for
the selection of highly functional target sequences for RNA
interference. In the largest project of its kind to date, 3000
randomly designed synthetic siRNA duplexes, targeting 30 genes were
analyzed for functionality. Based on this database an automated
target selection algorithm was developed which has demonstrated a
significant performance improvement over existing design methods in
extensive evaluation. QIAGEN and Novartis are also engaged in a
successful supply relationship pursuant to which QIAGEN will supply
siRNA products to Novartis. -- QIAGEN sale of technology portfolio
to Merial Limited, one of the world's leading animal health
companies. The technology portfolio of the Pecura division included
the veterinary rights to a novel class of drugs that are based on
immunstimulatory cytosine-phosphodiester- guanine (CpG)
dinucleotides, presented in synthetic oligodeoxynucleotides
(CpG-ODN), which are believed to have promising potential in
veterinary applications for livestock and companion animals. While
QIAGEN believes that the assets have significant potential as
veterinary therapeutics, they were not core to QIAGEN's strategic
direction and were therefore not actively being pursued. Detailed
information on the Company's business and financial performance
will be presented in the Company's conference call on October 28,
2003 at 9:30 a.m. EST. The corresponding presentation slides will
be available 60 minutes ahead of the conference call on the
Company's website at http://www.qiagen.com/goto/102803. A webcast
of the conference call will be available at
http://www.videonewswire.com/QIAGEN/102803. QIAGEN also announced
today management changes and a new management structure which will
take effect January 1, 2004 and are designed to provide continued
strong leadership to address QIAGEN's exciting opportunities in the
months and years ahead. Dr. Metin Colpan, 48, Managing Director and
Chief Executive Officer, will transition his role to Senior
Technology Advisor to QIAGEN advising on technology projects. Dr.
Colpan, a co-founder, will also join QIAGEN's Supervisory Board.
Peer M. Schatz, 38, Managing Director and Chief Financial Officer
for the past 11 years, has been nominated as QIAGEN's Chief
Executive Officer as well as Chairman of both the Management Board
and the newly created Executive Committee. The transition will take
place over the coming two-month period to ensure a smooth transfer
of responsibilities and continuity in all key areas of the
company's operations. As of today, Dr. Metin Colpan and Peer M.
Schatz were the sole members of the Managing Board and have jointly
led the Company. QIAGEN also created an Executive Committee which
will be led by Mr. Schatz. The Executive Committee is comprised of
the Company's most senior executives responsible for core functions
on a global basis. The Committee will be the management group which
continues to chart QIAGEN's strategic and operational direction.
Please review the additional press release for further information.
An interview with the newly introduced Executive Committee can be
found on QIAGEN's webpage under http://www.qiagen.com/. QIAGEN
N.V., a Netherlands holding company with subsidiaries in Germany,
the United States, Japan, the United Kingdom, Switzerland, France,
Italy, Australia, Norway, Austria and Canada, believes it is the
world's leading provider of innovative enabling technologies and
products for the separation, purification and handling of nucleic
acids. The Company has developed a comprehensive portfolio of more
than 320 proprietary, consumable products for nucleic acid
separation, purification and handling, nucleic acid amplification,
as well as automated instrumentation, synthetic nucleic acid
products and related services. QIAGEN's products are sold in more
than 42 countries throughout the world to academic research markets
and to leading pharmaceutical and biotechnology companies. In
addition, the Company is positioning its products for sale into
developing commercial markets, including DNA sequencing and
genomics, nucleic acid-based molecular diagnostics, and genetic
vaccination and gene therapy. QIAGEN employs approximately 1,600
people worldwide. Further information on QIAGEN can be found at
http://www.qiagen.com/. Certain of the statements contained in this
news release may be considered forward-looking statements within
the meaning of Section 27A of the U.S. Securities Act of 1933, as
amended, and Section 21E of the U.S. Securities Exchange Act of
1934, as amended. To the extent that any of the statements
contained herein relating to QIAGEN's products and markets and
operating results are forward-looking, such statements are based on
current expectations that involve a number of uncertainties and
risks. Such uncertainties and risks include, but are not limited
to, risks associated with management of growth and international
operations (including the effects of currency fluctuations and
risks of dependency on logistics), variability of operating
results, the commercial development of the DNA sequencing, genomics
and synthetic nucleic acid-related markets, nucleic acid-based
molecular diagnostics market, and genetic vaccination and gene
therapy markets, competition, rapid or unexpected changes in
technologies, fluctuations in demand for QIAGEN's, products
(including seasonal fluctuations), difficulties in successfully
adapting QIAGEN's products to integrated solutions and producing
such products, the ability of QIAGEN to identify and develop new
products and to differentiate its products from competitors, and
the integration of acquisitions of technologies and businesses. For
further information, refer to the discussion in reports that QIAGEN
has filed with the U.S. Securities and Exchange Commission (SEC).
QIAGEN N.V. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three months ended September 30, 2003 2002 Net sales $ 90,446,000 $
76,882,000 Cost of sales 31,389,000 26,453,000 Gross profit
59,057,000 50,429,000 Operating Expenses: Research and development
7,538,000 7,310,000 Sales and marketing 20,784,000 19,003,000
General and administrative 11,425,000 11,171,000 Total operating
expenses 39,747,000 37,484,000 Income from operations 19,310,000
12,945,000 Other Income (Expense): Interest income 227,000 171,000
Interest expense (972,000) (577,000) Research and development
grants 984,000 133,000 Gain (loss) on foreign currency transactions
8,000 (353,000) Loss from equity method investee (597,000)
(267,000) Other miscellaneous expense, net 63,000 (63,000) Total
other expense (287,000) (956,000) Income before provision for
income taxes 19,023,000 11,989,000 Provision for income taxes
7,258,000 4,700,000 Minority interest - - Net income $ 11,765,000 $
7,289,000 Weighted average number of diluted common shares
147,706,000 145,976,000 Diluted net income per common share $ 0.08
$ 0.05 QIAGEN N.V. CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited) Nine months ended September 30, 2003 2002 Net sales
$256,283,000 $220,159,000 Cost of sales 87,097,000 71,853,000 Gross
profit 169,186,000 148,306,000 Operating Expenses: Research and
development 22,670,000 20,489,000 Sales and marketing 60,609,000
55,849,000 General and administrative 31,619,000 31,111,000
In-process research and development - 1,200,000 Acquisition and
related costs - 1,648,000 Closure and related costs 1,567,000 -
Total operating expenses 116,465,000 110,297,000 Income from
operations 52,721,000 38,009,000 Other Income (Expense): Interest
income 667,000 828,000 Interest expense (3,082,000) (1,748,000)
Research and development grants 1,681,000 470,000 Gain (loss) on
foreign currency transactions 798,000 (1,756,000) Loss from equity
method investee (1,264,000) (844,000) Other miscellaneous expense,
net 59,000 (83,000) Total other expense (1,141,000) (3,133,000)
Income before provision for income taxes 51,580,000 34,876,000
Provision for income taxes 17,717,000 13,512,000 Minority interest
- (5,000) Net income $ 33,863,000 $ 21,369,000 Weighted average
number of diluted common shares 146,867,000 145,767,000 Diluted net
income per common share $ 0.23 $ 0.15 Diluted net income per common
share excluding acquisition and closure and related costs $ 0.23 $
0.16 QIAGEN N.V. CONDENSED CONSOLIDATED BALANCE SHEETS September
30, December 31, 2003 2002 Assets (unaudited) Current Assets: Cash
and cash equivalents $ 75,261,000 $ 44,893,000 Marketable
securities 11,528,000 11,530,000 Notes receivable 4,285,000
4,337,000 Accounts receivable, net 54,260,000 51,451,000 Income
taxes receivable 457,000 1,901,000 Inventories 63,650,000
56,113,000 Deferred income taxes 6,838,000 11,629,000 Prepaid
expenses and other 11,709,000 11,188,000 Total current assets
227,988,000 193,042,000 Long-Term Assets: Property, plant and
equipment, net 223,620,000 211,913,000 Long-term marketable
securities 516,000 735,000 Goodwill 28,678,000 25,569,000
Intangible assets, net 14,192,000 12,750,000 Deferred income taxes
5,296,000 3,026,000 Other assets 11,294,000 7,476,000 Total
long-term assets 283,596,000 261,469,000 Total assets $511,584,000
$454,511,000 Liabilities and Shareholders' Equity Current
Liabilities: Lines of credit $ - $ 935,000 Current portion of
long-term debt 1,489,000 1,340,000 Current portion of capital lease
obligations 1,127,000 999,000 Accounts payable 17,047,000
23,661,000 Accrued liabilities 30,576,000 28,031,000 Income taxes
payable 23,817,000 20,487,000 Deferred income taxes 8,231,000
6,035,000 Total current liabilities 82,287,000 81,488,000 Long-Term
Liabilities: Long-term debt, net of current portion 101,986,000
95,733,000 Capital lease obligations, net of current portion
11,592,000 11,107,000 Other 3,052,000 3,152,000 Total long-term
liabilities 116,630,000 109,992,000 Commitments and Contingencies
Shareholders' Equity: Common shares, EUR .01 par value:
Authorized--260,000,000 shares Issued and outstanding-- 146,118,793
shares in 2003 and 145,533,589 shares in 2002 1,484,000 1,478,000
Additional paid-in-capital 139,392,000 134,547,000 Retained
earnings 154,283,000 120,420,000 Accumulated other comprehensive
income 17,508,000 6,586,000 Total shareholders' equity 312,667,000
263,031,000 Total liabilities and shareholders' equity $511,584,000
$454,511,000 DATASOURCE: QIAGEN N.V. CONTACT: Peer M. Schatz, Chief
Financial Officer, +49-2103-29-11702, , or Dr. Solveigh Mahler,
Investor Relations, +49-2103-29-11710, , both of QIAGEN N.V. Web
site: http://www.qiagen.com/
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