Exhibit 99.1
Investor and Financial Contacts:
Adam S. Taich
Vice President, Investor Relations
(760) 603-7208
Invitrogen Announces Third Quarter 2004 Results
Record Sales and Pro Forma Earnings Achieved
CARLSBAD, CA, October 28, 2004 — Invitrogen Corporation (Nasdaq: IVGN) today announced results for the quarter ended September 30, 2004. Revenues for the third quarter were $256.3 million, an increase of 30% over the $196.9 million reported for the third quarter of 2003. Net income for the third quarter was $28.2 million versus $13.7 million for the same quarter in 2003, an increase of 106%. Earnings per share for the third quarter of 2004 increased 100% to $0.52 per share, as compared to $0.26 per share reported in the third quarter of 2003.
Revenues for the nine months ended September 30, 2004, were $761.6 million, an increase of 34% over the $570.0 million reported for the comparable period in 2003. Net income for the nine months ended September 30, 2004 increased 23% to $58.4 million versus $47.5 million for the comparable period in 2003.
The Company has regularly reported pro forma results which exclude acquisition related amortization and other similar costs. Third quarter pro forma net income was $43.0 million, or $0.77 per share, compared with pro forma net income in the third quarter of 2003 of $31.0 million, or $0.57 per share. Pro forma net income and pro forma earnings per share increased 39% and 35%, respectively. Reconciliations between Invitrogen’s results and pro forma results for the periods reported are presented in the attached tables with information also presented on the Company’s Investor Relations web page atwww.invitrogen.com.
Highlights
| | • | Grew revenues 30% for the third quarter and 34% for the first nine months of fiscal 2004. |
| | • | Generated $79 million in cash from operating activities for the quarter and $170 million for the first nine months, a record achievement. |
| | • | Announced the acquisition of DNA Research Innovations, Ltd, to position the Company for growth in the nucleic acid purification market. |
Conference Call and Webcast Today at 5:00 PM Eastern
The Company will discuss its third quarter 2004 results on its conference call at 5:00 pm Eastern Time today. Additional details regarding the call and webcast are included later in this release.
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Invitrogen Corporation Announces Third Quarter 2004 Results
Page 2
Third Quarter Review
Greg Lucier, Invitrogen’s Chairman and CEO, commented: “I am pleased with the Company’s performance during the third quarter. Our high-technology BioDiscovery segment delivered at the top end of our expectation in the third quarter with solid organic growth of 5%. This growth is a direct result of new product introductions and enhanced selling effectiveness, and we are encouraged by the acceleration we are seeing in this business. Our BioProduction segment also performed as we expected, including a very solid quarter for our BioReliance business. Our increased investment in research and development continues throughout the Company, and we are confident in our abilities to generate new products that will accelerate scientific research and our future growth.”
Third quarter revenue growth of 30% included approximately 4% from favorable changes in foreign currency exchange rates. Revenue growth of 17% in BioDiscovery was driven by 5% organic growth and the acquisition of Molecular Probes. BioProduction revenues increased approximately 53% in the third quarter principally related to the recently acquired BioReliance business and continuing demand for cell culture products.
Revenues for the nine months ended September 30, 2004, grew 34%, of which 5% resulted from favorable foreign currency exchange rates. Sales of BioDiscovery products increased 22% for the nine months ended September 30, 2004 versus the same period in 2003. For the same period, BioProduction revenues increased 53%.
Third quarter 2004 gross margin was 61%, the same as 61% in the third quarter of 2003. BioDiscovery gross margin increased to 70% in the third quarter of 2004 from 69% last year as product mix has migrated toward higher value product offerings. BioProduction gross margin decreased to 50% from 54% in the comparable quarter of 2003, and reflects the normally lower gross margins associated with the BioReliance services business.
Operating income was 16% of revenues in the third quarter of 2004 versus 10% in the third quarter of 2003. Operating income before acquisition related amortization and other similar costs was 25% of revenues in both the third quarters of 2004 and 2003.
Cash flows from operating activities were $78.6 million in the third quarter of 2004 and $169.5 million for the nine months ended September 30, 2004. Capital expenditures were $8.7 million during the third quarter of 2004 and $19.7 million for the nine months ended September 30, 2004.
During the quarter, the Company repurchased approximately 1.6 million shares of its common stock at an average price of $49.90 for a total of $81.3 million. There is approximately $119 million remaining under the Company’s current repurchase authorization, which expires in July 2005.
2004 Outlook
The Company reaffirms its previous revenue guidance and raises its earnings guidance for the year. The Company projects that revenue for fiscal 2004 will be in a range of approximately $1,017 million to $1,022 million. Pro forma earnings per share are expected to range from $0.75 to $0.77 for the fourth quarter and $2.89 or greater for the fiscal year. The Company will provide further detail on its business outlook on the conference call today.
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Invitrogen Corporation Announces Third Quarter 2004 Results
Page 3
Conference Call and Webcast Details
The Company will discuss its financial and business results as well as its business outlook on its conference call at 5:00 pm Eastern Time today. This conference call will contain forward-looking information. The conference call will include a discussion of “non-GAAP financial measures” as that term is defined in Regulation G. For actual results, the most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the company’s financial results determined in accordance with GAAP, as well as other material financial and statistical information to be discussed on the conference call will be posted at the Company’s Investor Relations website atwww.invitrogen.com.
The conference call will be webcast live over the Company’s investor relations website atwww.invitrogen.com and will be archived at the site for one month.
To listen to the live conference call, please dial (888) 396-2298 (domestic) or (617) 847-8708 (international) and use passcode 12329017. A replay of the call will be available for one week by dialing (888) 286-8010 (domestic) and (617) 801-6888 (international). The passcode for the replay is 78365714.
About Invitrogen
Invitrogen Corporation (Nasdaq: IVGN) provides products and services that support academic and government research institutions and pharmaceutical and biotech companies worldwide in their efforts to improve the human condition. The company provides essential life science technologies for disease research, drug discovery, and commercial bioproduction. Invitrogen’s own research and development efforts are focused on breakthrough innovation in all major areas of biological discovery including functional genomics, proteomics, bioinformatics and cell biology — placing Invitrogen’s products in nearly every major laboratory in the world. Founded in 1987, Invitrogen is headquartered in Carlsbad, California and conducts business in more than 70 countries around the world. The company globally employs approximately 4,000 scientists and other professionals. For more information about Invitrogen, visit the company’s web site at www.invitrogen.com.
Statement Regarding Use of Non-GAAP Measures
We regularly have reported pro forma results for net income and earnings per share in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Our financial results under GAAP include substantial non-cash charges and tax benefits related to acquired businesses. Our pro forma calculations of net income and earnings per share, excluding acquisition related amortization and other similar costs, are limited because they do not reflect the entirety of our business costs. However, management believes that the pro forma presentation is a useful supplemental disclosure to investors as it provides an indication of the profitability and cash flows of the combined businesses apart from the initial, sunk cost of the acquisition. Management believes that this information is therefore useful to investors in analyzing and assessing our past and future operating performance.
In addition to the non-cash charges above, we exclude from our pro forma results the costs to integrate our acquired businesses or significant costs to restructure existing businesses as well as related tax benefits. Management views these costs as not indicative of the profitability or cash flows of its ongoing or future operations and excludes these costs as a supplemental disclosure to assist investors in evaluating and assessing our past and future operational performance.
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Invitrogen Corporation Announces Third Quarter 2004 Results
Page 4
We encourage investors to carefully consider our results under GAAP, as well as our pro forma disclosures and the reconciliation between these presentations to more fully understand our business. Reconciliations between GAAP results and pro forma results are presented on the following pages.
Safe Harbor Statement
Certain statements contained in this press release and in today’s conference call are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and it is Invitrogen’s intent that such statements be protected by the safe harbor created thereby. Such statements include, but are not limited to statements regarding Invitrogen’s: 1) financial projections, including revenue and pro forma earnings per share; 2) momentum in 2004; 3) ability to generate new products that will accelerate scientific research and our future growth; 4) integration of acquired businesses; and 5) ability to combine technologies of acquired businesses. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited a) the Company’s ability to identify promising technology, new product development opportunities; b) the Company’s ability to identify and implement measures to effect cost savings and efficiency improvements; and c) the Company’s ability to identify acquisitions and organic growth opportunities that will position it to serve growing markets, as well as other risks and uncertainties detailed from time to time in Invitrogen’s Securities and Exchange Commission filings.
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Invitrogen Corporation Announces Third Quarter 2004 Results
Page 5
INVITROGEN CORPORATION
INTERIM CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | | | | | | |
| | | For the Three Months
Ended September 30,
| | | For the Nine Months
Ended September 30,
| |
| (in thousands, except per share data)(unaudited) | | 2004
| | | 2003
| | | 2004
| | | 2003
| |
Revenues | | $ | 256,328 | | | $ | 196,939 | | | $ | 761,616 | | | $ | 569,968 | |
Cost of revenues | | | 99,123 | | | | 77,159 | | | | 316,393 | | | | 222,122 | |
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Gross profit | | | 157,205 | | | | 119,780 | | | | 445,223 | | | | 347,846 | |
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Operating expenses: | | | | | | | | | | | | | | | | |
Sales and marketing | | | 45,614 | | | | 38,457 | | | | 134,329 | | | | 113,325 | |
General and administrative | | | 27,596 | | | | 22,722 | | | | 80,825 | | | | 65,383 | |
Research and development | | | 19,214 | | | | 15,354 | | | | 53,116 | | | | 38,543 | |
Purchased intangibles amortization | | | 25,004 | | | | 20,736 | | | | 81,539 | | | | 56,243 | |
Purchased in-process research and development | | | — | | | | 1,410 | | | | 728 | | | | 1,410 | |
Business integration costs | | | — | | | | 925 | | | | — | | | | 1,318 | |
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Total operating expenses | | | 117,428 | | | | 99,604 | | | | 350,537 | | | | 276,222 | |
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Operating income | | | 39,777 | | | | 20,176 | | | | 94,686 | | | | 71,624 | |
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Other income (expense): | | | | | | | | | | | | | | | | |
Interest income | | | 6,417 | | | | 5,939 | | | | 17,837 | | | | 17,973 | |
Interest expense | | | (7,401 | ) | | | (7,547 | ) | | | (24,602 | ) | | | (20,249 | ) |
Loss on early retirement of debt | | | — | | | | — | | | | (6,775 | ) | | | — | |
Other income (expense), net | | | (315 | ) | | | (103 | ) | | | (315 | ) | | | 233 | |
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Total other income and expense, net | | | (1,299 | ) | | | (1,711 | ) | | | (13,855 | ) | | | (2,043 | ) |
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Income before provision for income taxes and minority interest | | | 38,478 | | | | 18,465 | | | | 80,831 | | | | 69,581 | |
Income tax provision | | | (10,315 | ) | | | (4,767 | ) | | | (22,470 | ) | | | (21,431 | ) |
Minority interest | | | — | | | | — | | | | — | | | | (609 | ) |
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Net income | | $ | 28,163 | | | $ | 13,698 | | | $ | 58,361 | | | $ | 47,541 | |
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Net income per common share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.54 | | | $ | 0.27 | | | $ | 1.13 | | | $ | 0.95 | |
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Diluted | | $ | 0.52 | | | $ | 0.26 | | | $ | 1.09 | | | $ | 0.94 | |
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Weighted average shares used in per share calculation: | | | | | | | | | | | | | | | | |
Basic | | | 51,748 | | | | 50,298 | | | | 51,876 | | | | 50,118 | |
Diluted | | | 58,694 | | | | 51,762 | | | | 59,403 | | | | 50,822 | |
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Invitrogen Corporation Announces Third Quarter 2004 Results
Page 6
INVITROGEN CORPORATION
RECONCILIATION OF GAAP TO PRO FORMA STATEMENT OF OPERATIONS(1)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended September 30, 2004
| | | For the Three Months Ended September 30, 2003
| |
(in thousands, except per share data) (unaudited) | | GAAP
| | | Adjustments
| | | Pro Forma
| | | GAAP
| | | Adjustments
| | | Pro Forma
| |
Revenues | | $ | 256,328 | | | $ | — | | | $ | 256,328 | | | $ | 196,939 | | | $ | — | | | $ | 196,939 | |
Cost of revenues | | | 99,123 | | | | (78 | )(3) | | | 99,045 | | | | 77,159 | | | | (5,171 | )(2)(3) | | | 71,988 | |
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Gross profit | | | 157,205 | | | | 78 | | | | 157,283 | | | | 119,780 | | | | 5,171 | | | | 124,951 | |
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Gross margin as a percentage of revenues | | | 61 | % | | | | | | | 61 | % | | | 61 | % | | | | | | | 63 | % |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing | | | 45,614 | | | | (61 | )(3) | | | 45,553 | | | | 38,457 | | | | (37 | )(3) | | | 38,420 | |
General and administrative | | | 27,596 | | | | (17 | )(3) | | | 27,579 | | | | 22,722 | | | | (183 | )(3) | | | 22,539 | |
Research and development | | | 19,214 | | | | (199 | )(3) | | | 19,015 | | | | 15,354 | | | | (109 | )(3) | | | 15,245 | |
Purchased intangibles amortization | | | 25,004 | | | | (25,004 | )(4) | | | — | | | | 20,736 | | | | (20,736 | )(4) | | | — | |
Purchased in-process research and development | | | — | | | | — | | | | — | | | | 1,410 | | | | (1,410 | )(5) | | | — | |
Business integration costs | | | — | | | | — | | | | — | | | | 925 | | | | (925 | )(6) | | | — | |
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Total operating expenses | | | 117,428 | | | | (25,281 | ) | | | 92,147 | | | | 99,604 | | | | (23,400 | ) | | | 76,204 | |
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Operating income | | | 39,777 | | | | 25,359 | | | | 65,136 | | | | 20,176 | | | | 28,571 | | | | 48,747 | |
Operating income as a percentage of revenues | | | 16 | % | | | | | | | 25 | % | | | 10 | % | | | | | | | 25 | % |
Total other income and expense, net | | | (1,299 | ) | | | — | | | | (1,299 | ) | | | (1,711 | ) | | | — | | | | (1,711 | ) |
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Income before provision for income taxes and minority interest | | | 38,478 | | | | 25,359 | | | | 63,837 | | | | 18,465 | | | | 28,571 | | | | 47,036 | |
Income tax provision | | | (10,315 | ) | | | (10,480 | )(7) | | | (20,795 | ) | | | (4,767 | ) | | | (11,252 | )(7) | | | (16,019 | ) |
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Net income | | $ | 28,163 | | | $ | 14,879 | | | $ | 43,042 | | | $ | 13,698 | | | $ | 17,319 | | | $ | 31,017 | |
Add back interest expense subordinated debt, net of tax | | | 2,094 | | | | — | | | | 2,094 | | | | — | | | | 2,082 | (8) | | | 2,082 | |
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Numerator for diluted earnings per share | | $ | 30,257 | | | $ | 14,879 | | | $ | 45,136 | | | $ | 13,698 | | | $ | 19,401 | | | $ | 33,099 | |
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Net income per common share: | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.54 | | | | | | | $ | 0.83 | | | $ | 0.27 | | | | | | | $ | 0.62 | |
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Diluted | | $ | 0.52 | | | | | | | $ | 0.77 | | | $ | 0.26 | | | | | | | $ | 0.57 | |
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Weighted average shares used in per share calculation: | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | 51,748 | | | | — | | | | 51,748 | | | | 50,298 | | | | — | | | | 50,298 | |
Diluted | | | 58,694 | | | | — | | | | 58,694 | | | | 51,762 | | | | 5,807 | (8) | | | 57,569 | |
| (1) | The Company has regularly reported pro forma results which exclude the amortization of purchased intangibles, amortization of inventory revaluation costs on products sold that were previously written-up under purchase accounting rules, purchased in-process research and development costs and business integration costs to provide a supplemental comparison of results of operations. |
| (2) | Add back costs for purchase accounting inventory revaluations of $0 and $5,139,000 for the three months ended September 30, 2004 and 2003, respectively. |
| (3) | Add back deferred compensation amortization totaling $355,000 and $361,000 for the three months ended September 30, 2004 and 2003, respectively, related to stock option plans assumed in business combinations. |
| (4) | Add back amortization of purchased intangibles. |
| (5) | Add back purchased in-process research and development costs. |
| (6) | Add back business integration costs. |
| (7) | The Company’s effective income tax rate used in the calculation of pro forma net income differs from the effective income tax rate applied for GAAP purposes. The effective income tax rate on GAAP pre-tax income is lower because the expenses included in GAAP pre-tax income, but excluded from pro forma pre-tax income, produce a tax benefit in a taxing jurisdiction having a higher tax rate than the Company’s overall average income tax rate. |
| (8) | Pro forma diluted earnings per share includes the potential dilution from the 2006 Convertible Subordinate Debt, and, using the as-if-converted method, which assumes that the debt was converted at the beginning of the period presented with related interest expense, net of tax, added back to the numerator and shares from the assumed conversion of the debt added to the denominator. |
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Invitrogen Corporation Announces Third Quarter 2004 Results
Page 7
INVITROGEN CORPORATION
RECONCILIATION OF GAAP TO PRO FORMA STATEMENT OF OPERATIONS(1)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the Nine Months Ended September 30, 2004
| | | For the Nine Months Ended September 30, 2003
| |
(in thousands, except per share data) (unaudited) | | GAAP
| | | Adjustments
| | | Pro Forma
| | | GAAP
| | | Adjustments
| | | Pro Forma
| |
Revenues | | $ | 761,616 | | | $ | — | | | $ | 761,616 | | | $ | 569,968 | | | $ | — | | | $ | 569,968 | |
Cost of revenues | | | 316,393 | | | | (17,833 | )(2)(3) | | | 298,560 | | | | 222,122 | | | | (6,827 | )(2)(3) | | | 215,295 | |
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Gross profit | | | 445,223 | | | | 17,833 | | | | 463,056 | | | | 347,846 | | | | 6,827 | | | | 354,673 | |
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Gross margin as a percentage of revenues | | | 58 | % | | | | | | | 61 | % | | | 61 | % | | | | | | | 62 | % |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing | | | 134,329 | | | | (184 | )(3) | | | 134,145 | | | | 113,325 | | | | (37 | )(3) | | | 113,288 | |
General and administrative | | | 80,825 | | | | (40 | )(3) | | | 80,785 | | | | 65,383 | | | | (183 | )(3) | | | 65,200 | |
Research and development | | | 53,116 | | | | (643 | )(3) | | | 52,473 | | | | 38,543 | | | | (109 | )(3) | | | 38,434 | |
Purchased intangibles amortization | | | 81,539 | | | | (81,539 | )(4) | | | — | | | | 56,243 | | | | (56,243 | )(4) | | | — | |
Purchased in-process research and development | | | 728 | | | | (728 | )(5) | | | — | | | | 1,410 | | | | (1,410 | )(5) | | | — | |
Business integration costs | | | — | | | | — | | | | — | | | | 1,318 | | | | (1,318 | )(6) | | | — | |
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Total operating expenses | | | 350,537 | | | | (83,134 | ) | | | 267,403 | | | | 276,222 | | | | (59,300 | ) | | | 216,922 | |
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Operating income | | | 94,686 | | | | 100,967 | | | | 195,653 | | | | 71,624 | | | | 66,127 | | | | 137,751 | |
Operating income as a percentage of revenues | | | 12 | % | | | | | | | 26 | % | | | 13 | % | | | | | | | 24 | % |
Total other income and expense, net | | | (13,855 | ) | | | — | | | | (13,855 | ) | | | (2,043 | ) | | | — | | | | (2,043 | ) |
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Income before provision for income taxes and minority interest | | | 80,831 | | | | 100,967 | | | | 181,798 | | | | 69,581 | | | | 66,127 | | | | 135,708 | |
Income tax provision | | | (22,470 | ) | | | (38,432 | )(7) | | | (60,902 | ) | | | (21,431 | ) | | | (26,067 | )(7) | | | (47,498 | ) |
Minority interest | | | — | | | | — | | | | — | | | | (609 | ) | | | — | | | | (609 | ) |
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Net income | | $ | 58,361 | | | $ | 62,535 | | | $ | 120,896 | | | $ | 47,541 | | | $ | 40,060 | | | $ | 87,601 | |
Add back interest expense subordinated debt, net of tax | | | 6,273 | | | | — | | | | 6,273 | | | | — | | | | 6,240 | (8) | | | 6,240 | |
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Numerator for diluted earnings per share | | $ | 64,634 | | | $ | 62,535 | | | $ | 127,169 | | | $ | 47,541 | | | $ | 46,300 | | | $ | 93,841 | |
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Net income per common share: | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 1.13 | | | | | | | $ | 2.33 | | | $ | 0.95 | | | | | | | $ | 1.75 | |
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Diluted | | $ | 1.09 | | | | | | | $ | 2.14 | | | $ | 0.94 | | | | | | | $ | 1.66 | |
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Weighted average shares used in per share calculation: | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | 51,876 | | | | — | | | | 51,876 | | | | 50,118 | | | | — | | | | 50,118 | |
Diluted | | | 59,403 | | | | — | | | | 59,403 | | | | 50,822 | | | | 5,807 | (8) | | | 56,629 | |
| (1) | The Company has regularly reported pro forma results which exclude the amortization of purchased intangibles, amortization of inventory revaluation costs on products sold that were previously written-up under purchase accounting rules, purchased in-process research and development costs and business integration costs to provide a supplemental comparison of results of operations. |
| (2) | Add back costs for purchase accounting inventory revaluations of $17,595,000 and $6,795,000 for the nine months ended September 30, 2004 and 2003, respectively. |
| (3) | Add back deferred compensation amortization totaling $1,105,000 and $361,000 for the nine months ended September 30, 2004 and 2003, respectively, related to stock option plans assumed in business combinations. |
| (4) | Add back amortization of purchased intangibles. |
| (5) | Add back purchased in-process research and development costs. |
| (6) | Add back business integration costs. |
| (7) | The Company’s effective income tax rate used in the calculation of pro forma net income differs from the effective income tax rate applied for GAAP purposes. The effective income tax rate on GAAP pre-tax income is lower because the expenses included in GAAP pre-tax income, but excluded from pro forma pre-tax income, produce a tax benefit in a taxing jurisdiction having a higher tax rate than the Company’s overall average income tax rate. |
| (8) | Pro forma diluted earnings per share includes the potential dilution from the 2006 Convertible Subordinate Debt, and, using the as-if-converted method, which assumes that the debt was converted at the beginning of the period presented with related interest expense, net of tax, added back to the numerator and shares from the assumed conversion of the debt added to the denominator. |
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Invitrogen Corporation Announces Third Quarter 2004 Results
Page 8
INVITROGEN CORPORATION
EBITDA INFORMATION
| | | | | | | | | | | | |
| | | For the Three Months
Ended September 30,
| | For the Nine Months
Ended September 30,
|
| (in thousands, except per share data)(unaudited) | | 2004
| | 2003
| | 2004
| | 2003
|
Operating income reported under GAAP | | $ | 39,777 | | $ | 20,176 | | $ | 94,686 | | $ | 71,624 |
Add back business integration costs and merger-related amortization | | | 25,359 | | | 28,571 | | | 100,967 | | | 66,127 |
Add back depreciation | | | 8,680 | | | 7,654 | | | 27,254 | | | 19,900 |
Add back amortization of non merger-related deferred compensation | | | 922 | | | 211 | | | 2,101 | | | 271 |
Add back amortization of all other intangible assets | | | 1,037 | | | 741 | | | 2,468 | | | 2,326 |
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EBITDA and business integration costs | | $ | 75,775 | | $ | 57,353 | | $ | 227,476 | | $ | 160,248 |
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Invitrogen Corporation Announces Third Quarter 2004 Results
Page 9
INVITROGEN CORPORATION
BUSINESS SEGMENT HIGHLIGHTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
| | | | | | | | | | | | | | | | |
(dollars in thousands)(unaudited) | | Bio- Discovery
(formerly
Molecular
Biology)
| | | Bio- Production
(formerly Cell Culture)
| | | Unallocated(1)
| | | Total
| |
Segment Results for the Three Months Ended September 30, 2004 | | | | | | | | | | | | | | | | |
Revenues from external customers | | $ | 146,742 | | | $ | 109,586 | | | $ | — | | | $ | 256,328 | |
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Gross profit | | | 102,886 | | | | 54,397 | | | | (78 | ) | | | 157,205 | |
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Gross margin as a percentage of revenues | | | 70 | % | | | 50 | % | | | | | | | 61 | % |
Selling and administrative | | | 49,299 | | | | 23,833 | | | | 78 | | | | 73,210 | |
Research and development | | | 16,577 | | | | 2,438 | | | | 199 | | | | 19,214 | |
Business integration costs and merger-related amortization(2) | | | — | | | | — | | | | 25,004 | | | | 25,004 | |
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Operating income (loss) | | | 37,010 | | | | 28,126 | | | | (25,359 | ) | | | 39,777 | |
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Operating margin as a percentage of revenues | | | 25 | % | | | 26 | % | | | | | | | 16 | % |
| | | | |
Segment Results for the Three Months Ended September 30, 2003(3) | | | | | | | | | | | | | | | | |
Revenues from external customers | | $ | 125,356 | | | $ | 71,583 | | | $ | — | | | $ | 196,939 | |
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Gross profit | | | 86,058 | | | | 38,893 | | | | (5,171 | ) | | | 119,780 | |
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Gross margin as a percentage of revenues | | | 69 | % | | | 54 | % | | | | | | | 61 | % |
Selling and administrative | | | 45,918 | | | | 15,041 | | | | 220 | | | | 61,179 | |
Research and development | | | 13,393 | | | | 1,852 | | | | 109 | | | | 15,354 | |
Business integration costs and merger-related amortization(2) | | | — | | | | — | | | | 23,071 | | | | 23,071 | |
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Operating income (loss) | | | 26,747 | | | | 22,000 | | | | (28,571 | ) | | | 20,176 | |
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Operating margin as a percentage of revenues | | | 21 | % | | | 31 | % | | | | | | | 10 | % |
| (1) | Unallocated items for the three months ended September 30, 2004 and 2003, include costs for purchase accounting inventory revaluations of $0 and $5.1 million, amortization of purchased intangibles of $25.0 million and $20.7 million, amortization of deferred compensation of $0.4 million and $0.4 million, purchased in-process research and development costs of $0 and $1.4 million, and business integration costs of $0 and $0.9 million, respectively, which are not allocated by management for purposes of analyzing the operations, since they are principally non-cash or other costs resulting primarily from business restructuring or purchase accounting that are separate from ongoing operations. |
| (2) | Excludes deferred compensation for the three months ended September 30, 2004 and 2003, of $0.4 million and $0.4 million, respectively, which is allocated to operating expenses. |
| (3) | 2004 presentation of 2003 selling, administrative and R&D costs by segment reflects reclassifications of general and administrative costs from the Corporate and Unallocated segment to the BioDiscovery and BioProduction segments to conform to our corporate expense allocation methodology applied in 2004. Refer to our website at www.invitrogen.com for reclassifications of segment results for 2002 and 2003 by quarter. |
- more -
Invitrogen Corporation Announces Third Quarter 2004 Results
Page 10
INVITROGEN CORPORATION
BUSINESS SEGMENT HIGHLIGHTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
| | | | | | | | | | | | | | | | |
(dollars in thousands)(unaudited) | | Bio- Discovery
(formerly
Molecular
Biology)
| | | Bio- Production
(formerly Cell
Culture)
| | | Unallocated(1)
| | | Total
| |
Segment Results for the Nine Months Ended September 30, 2004 | | | | | | | | | | | | | | | | |
Revenues from external customers | | $ | 442,415 | | | $ | 319,201 | | | $ | — | | | $ | 761,616 | |
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Gross profit | | | 310,803 | | | | 152,253 | | | | (17,833 | ) | | | 445,223 | |
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Gross margin as a percentage of revenues | | | 70 | % | | | 48 | % | | | | | | | 58 | % |
Selling and administrative | | | 146,268 | | | | 68,662 | | | | 224 | | | | 215,154 | |
Research and development | | | 45,539 | | | | 6,934 | | | | 643 | | | | 53,116 | |
Business integration costs and merger-related amortization(2) | | | — | | | | — | | | | 82,267 | | | | 82,267 | |
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Operating income (loss) | | | 118,996 | | | | 76,657 | | | | (100,967 | ) | | | 94,686 | |
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Operating margin as a percentage of revenues | | | 27 | % | | | 24 | % | | | | | | | 12 | % |
| | | | |
Segment Results for the Nine Months Ended September 30, 2003(3) | | | | | | | | | | | | | | | | |
Revenues from external customers | | $ | 361,507 | | | $ | 208,461 | | | $ | — | | | $ | 569,968 | |
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Gross profit | | | 244,468 | | | | 110,205 | | | | (6,827 | ) | | | 347,846 | |
| | |
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Gross margin as a percentage of revenues | | | 68 | % | | | 53 | % | | | | | | | 61 | % |
Selling and administrative | | | 133,296 | | | | 45,192 | | | | 220 | | | | 178,708 | |
Research and development | | | 32,855 | | | | 5,579 | | | | 109 | | | | 38,543 | |
Business integration costs and merger-related amortization(2) | | | — | | | | — | | | | 58,971 | | | | 58,971 | |
| | |
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|
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|
|
| |
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|
| |
|
|
|
Operating income (loss) | | | 78,317 | | | | 59,434 | | | | (66,127 | ) | | | 71,624 | |
| | |
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|
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|
| |
|
|
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Operating margin as a percentage of revenues | | | 22 | % | | | 29 | % | | | | | | | 13 | % |
| (1) | Unallocated items for the nine months ended September 30, 2004 and 2003, include costs for purchase accounting inventory revaluations of $17.6 million and $6.8 million, amortization of purchased intangibles of $81.5 million and $56.2 million, amortization of deferred compensation of $1.1 million and $0.4 million, purchased in-process research and development costs of $0.7 million and $1.4 million, and business integration costs of $0 and $1.3 million, respectively, which are not allocated by management for purposes of analyzing the operations, since they are principally non-cash or other costs resulting primarily from business restructuring or purchase accounting that are separate from ongoing operations. |
| (2) | Excludes deferred compensation for the nine months ended September 30, 2004 and 2003, of $1.1 million and $0.4 million, respectively, which is allocated to operating expenses. |
| (3) | 2004 presentation of 2003 selling, administrative and R&D costs by segment reflects reclassifications of general and administrative costs from the Corporate and Unallocated segment to the BioDiscovery and BioProduction segments to conform to our corporate expense allocation methodology applied in 2004. Refer to our website at www.invitrogen.com for reclassifications of segment results for 2002 and 2003 by quarter. |
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Invitrogen Corporation Announces Third Quarter 2004 Results
Page 11
INVITROGEN CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
| | | | | | |
| (in thousands) | | September 30, 2004
| | December 31, 2003
|
| | | (unaudited) | | |
| ASSETS | | | | | | |
Current assets: | | | | | | |
Cash and investments | | $ | 939,765 | | $ | 998,737 |
Trade accounts receivable, net of allowance for doubtful accounts | | | 162,588 | | | 117,095 |
Inventories | | | 117,885 | | | 126,707 |
Deferred income taxes | | | 28,141 | | | 19,310 |
Prepaid expenses and other current assets | | | 42,397 | | | 25,495 |
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|
|
Total current assets | | | 1,290,776 | | | 1,287,344 |
Property and equipment, net | | | 209,266 | | | 186,231 |
Goodwill | | | 1,420,655 | | | 983,407 |
Intangible assets, net | | | 428,969 | | | 464,659 |
Long-term investments | | | 126,282 | | | 177,070 |
Other assets | | | 70,775 | | | 66,978 |
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| |
|
|
Total assets | | $ | 3,546,723 | | $ | 3,165,689 |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
Current liabilities: | | | | | | |
Current portion of long-term obligations | | $ | 18,385 | | $ | 1,784 |
Accounts payable, accrued expenses and other current liabilities | | | 151,280 | | | 121,151 |
Income taxes | | | 13,586 | | | 2,758 |
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|
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|
|
Total current liabilities | | | 183,251 | | | 125,693 |
Long-term obligations and reserves | | | 36,098 | | | 32,069 |
Pension liabilities | | | 17,416 | | | 17,249 |
Deferred income tax liability | | | 159,601 | | | 161,331 |
Convertible debentures | | | 1,300,000 | | | 1,022,500 |
Stockholders’ equity | | | 1,850,357 | | | 1,806,847 |
| | |
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|
Total liabilities and stockholders’ equity | | $ | 3,546,723 | | $ | 3,165,689 |
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# # #
