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QIAGEN Reports Strong Fourth Quarter and Fiscal 2009 Results
Fiscal 2009 Net Sales Exceed $1 Billion
The reported net sales for the fourth quarter 2009 exceeded the guidance and reported net sales and adjusted earnings per share for fiscal year 2009 were at the high end of company's expectations provided by the Company on November 9, 2009. Reported net sales for fiscal 2009 exceeded US$1 billion for the first time in the Company's history.
Fourth Quarter 2009 Results
For information on the adjusted figures, please refer to the reconciliation table accompanying this release.
The Company reported that consolidated net sales for its fourth quarter 2009 increased 22% to $289.1 million from $237.2 million in the same quarter of 2008. Excluding the favorable impact from foreign currency exchange rates, net sales for the fourth quarter 2009 would have increased 15% from the fourth quarter 2008. Reported operating income for the quarter increased 6% to $42.9 million from $40.4 million in the same quarter of 2008, and net income for the quarter increased 80% to $44.5 million from $24.7 million in the same quarter of 2008. Diluted earnings per share for the fourth quarter increased 50% to $0.18 in 2009 (based on 241.0 million weighted average shares and share equivalents outstanding) from $0.12 in 2008 (based on 202.0 million weighted average shares and share equivalents outstanding).
On an adjusted basis, fourth quarter operating income increased 25% to $83.4 million in 2009 from $66.6 million in 2008, and fourth quarter 2009 adjusted net income increased 32% to $57.6 million from $43.7 million in 2008. Adjusted diluted earnings per share increased to $0.24 in the fourth quarter 2009 from $0.22 in 2008.
Fiscal Year 2009 Results
For information on the adjusted figures, please refer to the reconciliation table accompanying this release.
For the year ended December 31, 2009, net sales increased 13% to $1,009.8 million compared to $893.0 million in 2008. Excluding the unfavorable impact from foreign currency exchange rates, net sales for the fiscal year 2009 would have increased 16%. Operating income as reported for fiscal 2009 increased 24% to $180.2 million from $145.7 million in 2008. Net income increased 55% to $137.8 million from $89.0 million in 2008, and diluted earnings per share increased 45% to $0.64 in 2009 (based on 213.6 million weighted average shares and share equivalents outstanding) from $0.44 in 2008 (based on 204.3 million weighted average shares and share equivalents outstanding).
On an adjusted basis, operating income for the year ended December 31, 2009 increased 17% to $296.1 million in 2009 from $252.7 million in 2008, and adjusted net income increased 22% to $199.6 million from $163.3 million. Adjusted diluted earnings per share in fiscal 2009 increased 16% to $0.93 per share from $0.80 per share in 2008.
QIAGEN's fourth quarter and fiscal year 2009 results include the results of operations from the Company's recent acquisitions, the most significant of which were SABiosciences Corporation, acquired in December 2009, DxS Ltd., acquired in September 2009, and Corbett Life Sciences, acquired in July 2008. Reconciliations of reported results determined in accordance with generally accepted accounting principles (GAAP) to adjusted results are included in the tables accompanying this release.
"2009 was a very successful year for QIAGEN," said Peer Schatz, QIAGEN's Chief Executive Officer. "Net sales and adjusted net income demonstrated significant growth. Net sales grew 22% - significantly faster than the overall market growth. Strong growth in net sales and adjusted net income as well as an organic growth rate of 13% define the most successful year in the company's history and drove revenues to surpass the $1 billion mark. The solid foundation of innovationdriven, organic growth also allows us to plan for strong growth in 2010 and beyond.
The largest revenue share we recorded for fiscal 2009 was in sales to customers in molecular diagnostics (approximately 47% of total revenues) followed by sales to customers in academia (approximately 26% of total revenues), in pharma (approximately 21% of total revenues) and in applied testing (approximately 6% of total revenues). Growth of our sales to customers in molecular diagnostics was fueled by strong sales of our profiling solutions (including our influenza and other infectious disease assays) as well as products addressing prevention (such as HPV screening and genotyping) and personalized healthcare testing. Sales to customers in the pharmaceutical and biotech industry conducting clinical development continued to experience solid growth during the fourth quarter, academic research markets continued to perform solidly and we are looking forward to the effect of the stimulus programs which are expected for 2010 and into 2011.
Our acquisition strategy remains focused, consistent and valuecreating, providing complementary technologies, new commercial capabilities and geographic reach. For example, during 2009 we further strengthened our strong content engine for research and molecular diagnostics assays. In December 2009 we acquired SABiosciences and added a portfolio of PCRbased, pathwayfocused panels that represent highly efficient solutions for pathway- and diseasebiomarker discovery and development and diagnostics development. The acquisition of DxS Ltd. in September 2009 combined two leadership positions in companion diagnostics to create a very powerful leader in a transformational area of healthcare: personalized healthcare.
In addition we formed a very promising position in point of need testing. The acquisition of ESE GmbH in January 2010 added to QIAGEN's instrumentation platform a portable, battery operated, "ultrafast time to result", analysis system. This platform can run QIAGEN assay technologies in formats suitable for point of need testing in healthcare and applied testing (e.g. veterinary, food, environmental, biodefense testing), and in all other settings, where a laboratory infrastructure is not accessible and lowthroughput molecular testing and fast turnaround is required.
All three transactions contribute to key elements of our strategy to lead in molecular diagnosticsbased prevention, profiling, personalized healthcare and point of need testing. With different platform technologies that address all needs in terms of throughput, flexibility in assay technologies, convenience in handling and efficiency in performance, an industry leading assays portfolio and a pipeline that provides us with an ongoing stream of new assays to launch, we are excellently positioned not only to participate from but also to shape current and future trends in molecular based testing and life science research."
"QIAGEN experienced a successful fiscal year 2009 with reported revenues and adjusted earnings per share at the high end of our expectations," said Roland Sackers, QIAGEN's Chief Financial Officer. "Assuming constant exchange rates for both fiscal years revenue growth was 16% and was fueled by a strong organic growth of 13%, adjusted for the divesture of certain assets related to our activities in HLA diagnostics (transplantation diagnostics) in July 2009.
Our consumable products portfolio contributed 10% growth (13% at constant exchange rates) in fiscal year 2009 and our sales of instrumentation products recorded a growth rate of 37% (42% at constant exchange rates). Net sales in the Americas for fiscal year 2009 represented approximately 49% of our overall business and recorded a growth rate of 10% (12% at constant exchange rates) and European sales, which represent approximately 36% of our revenues, showed a growth rate of 11% (19% at constant exchange rates). Net sales in Asia remained strong, showing a growth rate of 39% (36% at constant exchange rates)."
Fiscal Year 2010 Guidance
Based on foreign currency exchange rates as of January 31, 2010, QIAGEN expects revenues between $1,120 and $1,170 million in 2010 with a growth rate of 11% to 16% when compared to 2009 and adjusted diluted earnings per share between $0.90 and $0.96 including a diluting effect of $0.02 following the DxS acquisition in September 2009. Based on foreign currency exchange rates as of November 9, 2009 (the date of the Company's third quarter 2009 earnings conference call), revenue guidance for 2010 would have been approximately $35 million higher.
QIAGEN - Sample and Assay Technologies Highlights
- QIAGEN established the QIAGENcares program to support regions in need for effective diagnostic testing solutions and announced the first two programs under this Corporate Social Responsibility program:
- QIAGEN and the Chittaranjan National Cancer Institute (CNCI) formed a collaboration to establish the first largescale cervical cancer screening program for women in Kolkata, India. The initiative will be conducted over 5 years and is expected to reach 50,000 women.
- QIAGEN agreed to donate one million HPV tests over the run of this cancer screening program.
- QIAGEN entered into an agreement to supply molecular sample and assay technologies for a new national, PCRbased blood screening program for HIV and Hepatitis C (HCV) in Brazil. QIAGEN will provide Bio-Manguinhos, the main provider of vaccines and diagnostics to the Brazilian Ministry of Health, with a significant volume of molecular testing solutions - sample and assay technologies, related instrumentation, operational knowhow and training. The agreement is expected to run for five years and contains options for subsequent extensions.
- QIAGEN significantly expanded its strategic position in molecular diagnostics:
- QIAGEN acquired Explera s.r.l., a leading supplier in molecular diagnostics and personalized medicine in Italy. With this acquisition QIAGEN is doubling the size of its molecular diagnostics sales channel in Italy and is adding several activities in the area of personalized medicine and access to a suite of CE-IVD pyrosequencing assays.
- QIAGEN acquired DxS Ltd., a developer and manufacturer of companion diagnostic products (CDx) for Personalized Healthcare (PHC). With this acquisition, QIAGEN has added to its own activities in CDx and taken a strong leadership position in the new era of PHC.
- QIAGEN acquired SABiosciences. This transaction added to QIAGEN's product offering a leading portfolio of PCRbased, disease and pathwaybased panels that play key roles in biomedical research and the development of future drugs and diagnostics.
- QIAGEN acquired ESE GmbH, a developer and manufacturer of portable, battery operated, "ultrafast time to result", multiplex UV and fluorescence optical measurement devices which enable lowthroughput molecular testing in practices, emergency rooms, remote field areas, and other settings where a laboratory infrastructure is not accessible and fast turnaround is required.
- QIAGEN launched 79 new products in the area of Sample & Assay Technologies including the PAXgene Blood miRNA kit for use in cancer, biomarker and miRNA research and the QIAamp Circulating Nucleic Acid kit for sample preparation in prenatal or other circulating nucleic acid research. In addition QIAGEN launched a number of assay technologies including two multiplexed, PCRbased CEmarked digene HPV Genotyping Tests, a next generation CE marked mutation profiling KRAS test as well as a BRAF test for use in cancer treatments and assay technologies for epigenetic methylation analysis based on pyrosequencing technology.
- QIAGEN and Pfizer entered into an agreement to develop a companion diagnostic assay for PF-04948568 (CDX-110), an immunotherapy vaccine in development for the treatment of glioblastoma multiforme (GBM). Glioblastoma multiforme is the most common malignant primary brain tumor in adults and occurs in around 25,000 patients worldwide each year. Pfizer's investigational drug PF-04948568 (CDX-110) is a peptide vaccine which targets the tumorspecific Epidermal Growth Factor Receptor variant III (EGFRvIII), a mutated form of the epidermal growth factor receptor that is only present in cancer cells and occurs in 25-40 percent of GBM tumors. The QIAGEN assay is designed to identify those patients whose tumors express the EGFRvIII mutation, allowing for the possibility of more targeted and personalized treatment.
- QIAGEN acquired a global and exclusive license for biomarker PI3K from John Hopkins University and intends to develop PCR and real time-PCR assays for companion diagnostic use with certain cancer treatments. A number of studies suggest that mutations in the PI3K oncogene are indicative for successful antibody treatment of patients suffering from lung, breast and other cancers. The license includes all countries and allows QIAGEN to enter partnerships with pharmaceutical companies to develop and market tests for new cancer drug candidates.
Conference Call and Webcast Details
Detailed information on QIAGEN's business and financial performance will be presented during its conference call on February 9, 2010 at 9:30am ET. The corresponding presentation slides will be available for download on the Company's website at www.qiagen.com/goto/ConferenceCall. A webcast of the conference call will also be available at www.qiagen.com/goto/ConferenceCall.
Use of Adjusted Results
QIAGEN has regularly reported adjusted results to give additional insight into its financial performance as well as considered results on a constant currencies basis. Adjusted results should be considered in addition to the reported results prepared in accordance with generally accepted accounting principles, but should not be considered as a substitute. The Company believes certain items should be excluded from adjusted results when they are outside of its ongoing core operations, vary significantly from period to period, or affect the comparability of results with the Company's competitors and its own prior periods. Reconciliations of reported results to adjusted results are included in the tables accompanying this release.
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