Exhibit 99.1
Investor and Financial Contacts:
Adam S. Taich
Vice President, Investor Relations
(760) 603-7208
Invitrogen Announces Fourth Quarter and Full Year 2004 Results
Record Sales and Pro Forma Earnings Achieved
CARLSBAD, CA, February 17, 2005 — Invitrogen Corporation (Nasdaq: IVGN) today announced results for its fourth quarter and full-year ended December 31, 2004. Revenues for the fourth quarter were $262.2 million, an increase of 26% over the $207.8 million reported for the fourth quarter of 2003. Net income for the fourth quarter was $30.5 million versus $12.6 million for the same quarter in 2003, an increase of 142%. Earnings per share for the fourth quarter of 2004 increased 129% to $0.55 per share, as compared to $0.24 per share reported in the fourth quarter of 2003.
Revenues for the full-year 2004 were $1,023.9 million, an increase of 32% over the $777.7 million reported for 2003. Net income for the year increased 48% to $88.8 million versus $60.1 million for 2003. Earnings per share for 2004 were $1.63, which compares to $1.17 per share in 2003, an increase of 39%.
Invitrogen has regularly reported pro forma results which exclude acquisition related amortization and other costs. Fourth quarter pro forma net income was $45.2 million, or $0.80 per share, compared with pro forma net income in the fourth quarter of 2003 of $31.7 million, or $0.57 per share. Pro forma net income and pro forma earnings per share increased 42% and 40%, respectively. For the full year, pro forma net income was $166.1 million, or $2.91 per share, compared with pro forma net income in 2003 of $119.3 million, or $2.22 per share. Pro forma net income and pro forma earnings per share increased 39% and 31%, respectively, for the full year.
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.
Performance Highlights
| • | Surpassed $1 billion in revenues for the year |
| • | Generated $83.3 million in cash from operating activities for the quarter and $252.7 million for the full year, a record achievement |
| • | Announced acquisition of Bio Asia, a leading manufacturer and provider of reagents and custom R&D services to the Chinese research community |
| • | Announced strategic collaboration with Illumina, Inc. in the oligonucleotide market |
Conference Call and Webcast Today at 5:00 PM Eastern
The Company will discuss its fourth quarter and full-year 2004 results, as well as 2005 guidance on its conference call at 5 pm Eastern Time today. Additional details regarding the call and webcast are included later in this release.
Fourth Quarter Review
Greg Lucier, Invitrogen’s Chairman and CEO, commented: “We are pleased with the Company’s performance during the fourth quarter and for the full-year. Our BioDiscovery segment had a strong quarter with solid organic growth of 3%. The acceleration we are seeing in this business segment is a direct result of more effective selling and the successful launches of innovative new products. Our BioProduction segment had a very solid quarter with organic growth of 13%, driven by tremendous growth in our business tied to production of biologics. 2004 was a year of great change within Invitrogen, and I am confident that we’re a stronger and more inventive company than we were 12 months ago. We’re enthusiastic about 2005 and are confident in our abilities to continue to deliver value to our customers and shareholders.”
Fourth quarter revenue growth of 26% included approximately 4% from favorable changes in foreign currency exchange rates. Revenue growth of 7% in BioDiscovery was driven by organic growth of 3% and favorable foreign currency exchange rates. BioProduction revenues increased approximately 65% in the fourth quarter principally related to the acquired BioReliance business and continuing demand for cell culture products. Excluding the effects of currency and the acquisition of BioReliance, organic growth in BioProduction was 13% for the quarter.
Revenues for the full-year 2004 grew 32%, of which 5% resulted from favorable foreign currency exchange rates. Sales of BioDiscovery products increased 18% for the full-year 2004 versus 2003. For the same period, BioProduction revenues increased 56%. Excluding the effects of currency and acquisitions, organic growth for BioDiscovery and BioProduction was 2% and 11%, respectively for the year.
Fourth quarter 2004 gross margin was 62%, compared to 58% in the fourth quarter of 2003. BioDiscovery gross margin increased to 70% in the fourth quarter of 2004 from 69% last year as product mix has migrated toward higher value, proprietary product offerings. BioProduction gross margin increased to 51% from 50% in the comparable quarter of 2003, as a result of a migration toward higher value cell culture products.
Operating income was 16% of revenues in the fourth quarter of 2004 versus 9% in the fourth quarter of 2003. Operating income before acquisition related amortization and other costs was 25% of revenues in the fourth quarter of 2004 versus 24% of revenues in the fourth quarter of 2003.
Cash flows from operating activities were $83.3 million in the fourth quarter of 2004 and $252.7 million for the full-year 2004. Capital expenditures were $19.3 million during the fourth quarter of 2004 and $39.1 million for the full-year 2004. Free cash flow, defined as cash from operating activities less capital expenditures, was $64.0 million for the fourth quarter and $213.6 million for the year.
The impact of Emerging Issues Task Force (EITF) Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share,” on our pro forma earnings per share was $0.01 for the fourth quarter and $0.04 for the year.
2005 Outlook
Guidance is unchanged since the update given during the Dynal acquisition conference call. The Company projects that revenue for fiscal 2005 will be in a range of approximately $1,164 million to $1,184 million. Pro forma earnings per share are expected to range from $3.40 to $3.44. The Company will provide further detail on its business outlook on the conference call today.
Zymed Laboratories, Inc.
The previously announced Zymed Laboratories, Inc. acquisition closed on February 14, 2005. Zymed is a leading supplier of antibodies, which are a key component in Invitrogen’s comprehensive product portfolio of matched reagents for drug discovery and medical research.
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 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 50453881.
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 and had revenues of more than $1 billion in 2004. 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.
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.
INVITROGEN CORPORATION
INTERIM AND FULL-YEAR CONSOLIDATED STATEMENTS OF INCOME
| (in thousands, except per share data) | For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||
(unaudited)
| 2004 | 2003 | 2004 | 2003 | ||||||||||||
Revenues | $ | 262,235 | $ | 207,770 | $ | 1,023,851 | $ | 777,738 | ||||||||
Cost of revenues | 99,609 | 86,267 | 416,002 | 308,389 | ||||||||||||
Gross profit | 162,626 | 121,503 | 607,849 | 469,349 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 46,334 | 41,197 | 180,663 | 154,522 | ||||||||||||
General and administrative | 29,831 | 23,325 | 110,656 | 88,708 | ||||||||||||
Research and development | 20,000 | 16,050 | 73,116 | 54,593 | ||||||||||||
Purchased intangibles amortization | 25,282 | 23,130 | 106,821 | 79,373 | ||||||||||||
Purchased in-process research and development | — | — | 728 | 1,410 | ||||||||||||
Business integration costs | — | — | — | 1,318 | ||||||||||||
Total operating expenses | 121,447 | 103,702 | 471,984 | 379,924 | ||||||||||||
Operating income | 41,179 | 17,801 | 135,865 | 89,425 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income | 7,434 | 6,053 | 25,271 | 24,026 | ||||||||||||
Interest expense | (7,601 | ) | (8,312 | ) | (32,203 | ) | (28,561 | ) | ||||||||
Loss on early retirement of debt | — | — | (6,775 | ) | — | |||||||||||
Other income (expense), net | (467 | ) | (55 | ) | (782 | ) | 178 | |||||||||
Total other income and expense, net | (634 | ) | (2,314 | ) | (14,489 | ) | (4,357 | ) | ||||||||
Income before provision for income taxes and minority interest | 40,545 | 15,487 | 121,376 | 85,068 | ||||||||||||
Income tax provision | (10,081 | ) | (2,898 | ) | (32,551 | ) | (24,329 | ) | ||||||||
Minority interest | — | — | — | (609 | ) | |||||||||||
Net income | $ | 30,464 | $ | 12,589 | $ | 88,825 | $ | 60,130 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.60 | $ | 0.25 | $ | 1.72 | $ | 1.19 | ||||||||
Diluted | $ | 0.55 | $ | 0.24 | $ | 1.63 | $ | 1.17 | ||||||||
Weighted average shares used in per share calculation: | ||||||||||||||||
Basic | 51,108 | 51,028 | 51,684 | 50,346 | ||||||||||||
Diluted | 59,447 | 53,812 | 60,396 | 51,712 | ||||||||||||
INVITROGEN CORPORATION
RECONCILIATION OF GAAP TO PRO FORMA STATEMENT OF OPERATIONS(1)
| (in thousands, except per share data) | For the Three Months Ended December 31, 2004 | For the Three Months Ended December 31, 2003 | ||||||||||||||||||||||
(unaudited)
| GAAP | Adjustments | Pro Forma | GAAP | Adjustments | Pro Forma | ||||||||||||||||||
Revenues | $ | 262,235 | $ | — | $ | 262,235 | $ | 207,770 | $ | — | $ | 207,770 | ||||||||||||
Cost of revenues | 99,609 | (64 | )(3) | 99,545 | 86,267 | (8,458 | )(2)(3) | 77,809 | ||||||||||||||||
Gross profit | 162,626 | 64 | 162,690 | 121,503 | 8,458 | 129,961 | ||||||||||||||||||
Gross margin as a percentage of revenues | 62 | % | 62 | % | 58 | % | 63 | % | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | 46,334 | (62 | )(3) | 46,272 | 41,197 | (96 | )(3) | 41,101 | ||||||||||||||||
General and administrative | 29,831 | — | 29,831 | 23,325 | (8 | )(3) | 23,317 | |||||||||||||||||
Research and development | 20,000 | (221 | )(3) | 19,779 | 16,050 | (225 | )(3) | 15,825 | ||||||||||||||||
Purchased intangibles amortization | 25,282 | (25,282 | )(4) | — | 23,130 | (23,130 | )(4) | — | ||||||||||||||||
Total operating expenses | 121,447 | (25,565 | ) | 95,882 | 103,702 | (23,459 | ) | 80,243 | ||||||||||||||||
Operating income | 41,179 | 25,629 | 66,808 | 17,801 | 31,917 | 49,718 | ||||||||||||||||||
Operating income as a percentage of revenues | 16 | % | 25 | % | 9 | % | 24 | % | ||||||||||||||||
Total other income and expense, net | (634 | ) | — | (634 | ) | (2,314 | ) | — | (2,314 | ) | ||||||||||||||
Income before provision for income taxes and minority interest | 40,545 | 25,629 | 66,174 | 15,487 | 31,917 | 47,404 | ||||||||||||||||||
Income tax provision | (10,081 | ) | (10,898 | )(5) | (20,979 | ) | (2,898 | ) | (12,778 | )(5) | (15,676 | ) | ||||||||||||
Net income | $ | 30,464 | $ | 14,731 | $ | 45,195 | $ | 12,589 | $ | 19,139 | $ | 31,728 | ||||||||||||
Add back interest expense subordinated debt, net of tax | 2,391 | — | 2,391 | 189 | (7) | 2,087 | (6) | 2,276 | ||||||||||||||||
Numerator for diluted earnings per share | $ | 32,855 | $ | 14,731 | $ | 47,586 | $ | 12,778 | $ | 21,226 | $ | 34,004 | ||||||||||||
Net income per common share: | ||||||||||||||||||||||||
Basic | $ | 0.60 | $ | 0.88 | $ | 0.25 | $ | 0.62 | ||||||||||||||||
Diluted | $ | 0.55 | $ | 0.80 | $ | 0.24 | $ | 0.57 | (7) | |||||||||||||||
Weighted average shares used in per share calculation: | ||||||||||||||||||||||||
Basic | 51,108 | — | 51,108 | 51,028 | — | 51,028 | ||||||||||||||||||
Diluted | 59,447 | — | 59,447 | 53,812 | (7) | 5,807 | (6) | 59,619 | ||||||||||||||||
| (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 $8,351,000 for the three months ended December 31, 2004 and 2003, respectively. |
| (3) | Add back deferred compensation amortization totaling $347,000 and $436,000 for the three months ended December 31, 2004 and 2003, respectively, related to stock option plans assumed in business combinations. |
| (4) | Add back amortization of purchased intangibles. |
| (5) | 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. |
| (6) | Pro forma diluted earnings per share includes the potential dilution from the 2 1/4% Convertible Subordinated Notes due 2006, 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. |
| (7) | The Company has restated 2003 diluted weighted average shares and earnings per share to reflect the impact of Emerging Issues Task Force (EITF) Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share,” on its 1 1/2% Convertible Senior Notes due 2024 and 2% Convertible Senior Notes due 2023. |
INVITROGEN CORPORATION
RECONCILIATION OF GAAP TO PRO FORMA STATEMENT OF OPERATIONS(1)
| (in thousands, except per share data) | For the Year Ended December 31, 2004 | For the Year Ended December 31, 2003 | ||||||||||||||||||||||
(unaudited)
| GAAP | Adjustments | Pro Forma | GAAP | Adjustments | Pro Forma | ||||||||||||||||||
Revenues | $ | 1,023,851 | $ | — | $ | 1,023,851 | $ | 777,738 | $ | — | $ | 777,738 | ||||||||||||
Cost of revenues | 416,002 | (17,897 | )(2)(3) | 398,105 | 308,389 | (15,285 | )(2)(3) | 293,104 | ||||||||||||||||
Gross profit | 607,849 | 17,897 | 625,746 | 469,349 | 15,285 | 484,634 | ||||||||||||||||||
Gross margin as a percentage of revenues | 59 | % | 61 | % | 60 | % | 62 | % | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | 180,663 | (246 | )(3) | 180,417 | 154,522 | (133 | )(3) | 154,389 | ||||||||||||||||
General and administrative | 110,656 | (40 | )(3) | 110,616 | 88,708 | (191 | )(3) | 88,517 | ||||||||||||||||
Research and development | 73,116 | (864 | )(3) | 72,252 | 54,593 | (334 | )(3) | 54,259 | ||||||||||||||||
Purchased intangibles amortization | 106,821 | (106,821 | )(4) | — | 79,373 | (79,373 | )(4) | — | ||||||||||||||||
Purchased in-process research and development | 728 | (728 | )(5) | — | 1,410 | (1,410 | )(5) | — | ||||||||||||||||
Business integration costs | — | — | — | 1,318 | (1,318 | )(6) | — | |||||||||||||||||
Total operating expenses | 471,984 | (108,699 | ) | 363,285 | 379,924 | (82,759 | ) | 297,165 | ||||||||||||||||
Operating income | 135,865 | 126,596 | 262,461 | 89,425 | 98,044 | 187,469 | ||||||||||||||||||
Operating income as a percentage of revenues | 13 | % | 26 | % | 11 | % | 24 | % | ||||||||||||||||
Total other income and expense, net | (14,489 | ) | — | (14,489 | ) | (4,357 | ) | — | (4,357 | ) | ||||||||||||||
Income before provision for income taxes and minority interest | 121,376 | 126,596 | 247,972 | 85,068 | 98,044 | 183,112 | ||||||||||||||||||
Income tax provision | (32,551 | ) | (49,330 | )(7) | (81,881 | ) | (24,329 | ) | (38,845 | )(7) | (63,174 | ) | ||||||||||||
Minority interest | — | — | — | (609 | ) | — | (609 | ) | ||||||||||||||||
Net income | $ | 88,825 | $ | 77,266 | $ | 166,091 | $ | 60,130 | $ | 59,199 | $ | 119,329 | ||||||||||||
Add back interest expense subordinated debt, net of tax | 9,461 | — | 9,461 | 314 | (9) | 8,327 | (8) | 8,641 | ||||||||||||||||
Numerator for diluted earnings per share | $ | 98,286 | $ | 77,266 | $ | 175,552 | $ | 60,444 | $ | 67,526 | $ | 127,970 | ||||||||||||
Net income per common share: | ||||||||||||||||||||||||
Basic | $ | 1.72 | $ | 3.21 | $ | 1.19 | $ | 2.37 | ||||||||||||||||
Diluted | $ | 1.63 | $ | 2.91 | $ | 1.17 | $ | 2.22 | (9) | |||||||||||||||
Weighted average shares used in per share calculation: | ||||||||||||||||||||||||
Basic | 51,684 | — | 51,684 | 50,346 | — | 50,346 | ||||||||||||||||||
Diluted | 60,396 | — | 60,396 | 51,712 | (9) | 5,807 | (8) | 57,519 | ||||||||||||||||
| (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 $15,146,000 for the year ended December 31, 2004 and 2003, respectively. |
| (3) | Add back deferred compensation amortization totaling $1,452,000 and $797,000 for the year ended December 31, 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 2 1/4% Convertible Subordinate Notes due 2006, 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. |
| (9) | The Company has restated 2003 diluted weighted average shares and earnings per share to reflect the impact of Emerging Issues Task Force (EITF) Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share,” on its 1 1/2% Convertible Senior Notes due 2024 and 2% Convertible Senior Notes due 2023. |
INVITROGEN CORPORATION
EBITDA INFORMATION
| (in thousands, except per share data) | For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||
(unaudited)
| 2004 | 2003 | 2004 | 2003 | ||||||||
Operating income reported under GAAP | $ | 41,179 | $ | 17,801 | $ | 135,865 | $ | 89,425 | ||||
Add back business integration costs and merger-related amortization | 25,629 | 31,917 | 126,596 | 98,044 | ||||||||
Add back depreciation | 9,635 | 8,387 | 36,889 | 28,287 | ||||||||
Add back amortization of non merger-related deferred compensation | 1,023 | 430 | 3,124 | 701 | ||||||||
Add back amortization of all other intangible assets | 851 | 631 | 3,319 | 2,957 | ||||||||
EBITDA and business integration costs | $ | 78,317 | $ | 59,166 | $ | 305,793 | $ | 219,414 | ||||
INVITROGEN CORPORATION
BUSINESS SEGMENT HIGHLIGHTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(dollars in thousands) (unaudited)
| Bio- Discovery | Bio- Production | Unallocated(1) | Total | ||||||||||||
Segment Results for the Three Months Ended December 31, 2004 | ||||||||||||||||
Revenues from external customers | $ | 149,002 | $ | 113,233 | $ | — | $ | 262,235 | ||||||||
Gross profit | 104,950 | 57,740 | (64 | ) | 162,626 | |||||||||||
Gross margin as a percentage of revenues | 70 | % | 51 | % | 62 | % | ||||||||||
Selling and administrative | 50,703 | 25,400 | 62 | 76,165 | ||||||||||||
Research and development | 17,019 | 2,760 | 221 | 20,000 | ||||||||||||
Business integration costs and merger-related amortization(2) | — | — | 25,282 | 25,282 | ||||||||||||
Operating income (loss) | 37,228 | 29,580 | (25,629 | ) | 41,179 | |||||||||||
Operating margin as a percentage of revenues | 25 | % | 26 | % | 16 | % | ||||||||||
Segment Results for the Three Months Ended December 31, 2003(3) | ||||||||||||||||
Revenues from external customers | $ | 138,994 | $ | 68,776 | $ | — | $ | 207,770 | ||||||||
Gross profit | 95,314 | 34,647 | (8,458 | ) | 121,503 | |||||||||||
Gross margin as a percentage of revenues | 69 | % | 50 | % | 58 | % | ||||||||||
Selling and administrative | 48,399 | 16,019 | 104 | 64,522 | ||||||||||||
Research and development | 13,702 | 2,123 | 225 | 16,050 | ||||||||||||
Business integration costs and merger-related amortization(2) | — | — | 23,130 | 23,130 | ||||||||||||
Operating income (loss) | 33,213 | 16,505 | (31,917 | ) | 17,801 | |||||||||||
Operating margin as a percentage of revenues | 24 | % | 24 | % | 9 | % | ||||||||||
| (1) | Unallocated items for the three months ended December 31, 2004 and 2003, include costs for purchase accounting inventory revaluations of $0 and $8.4 million, amortization of purchased intangibles of $25.3 million and $23.1 million, and amortization of deferred compensation of $0.3 million and $0.4 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 December 31, 2004 and 2003, of $0.3 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. |
INVITROGEN CORPORATION
BUSINESS SEGMENT HIGHLIGHTS
FOR THE YEAR ENDED DECEMBER 31, 2004 AND 2003
(dollars in thousands) (unaudited)
| Bio- Discovery | Bio- Production | Unallocated(1) | Total | ||||||||||||
Segment Results for the Year Ended December 31, 2004 | ||||||||||||||||
Revenues from external customers | $ | 591,417 | $ | 432,434 | $ | — | $ | 1,023,851 | ||||||||
Gross profit | 415,753 | 209,993 | (17,897 | ) | 607,849 | |||||||||||
Gross margin as a percentage of revenues | 70 | % | 49 | % | 59 | % | ||||||||||
Selling and administrative | 196,971 | 94,062 | 286 | 291,319 | ||||||||||||
Research and development | 62,558 | 9,694 | 864 | 73,116 | ||||||||||||
Business integration costs and merger-related amortization(2) | — | — | 107,549 | 107,549 | ||||||||||||
Operating income (loss) | 156,224 | 106,237 | (126,596 | ) | 135,865 | |||||||||||
Operating margin as a percentage of revenues | 26 | % | 25 | % | 13 | % | ||||||||||
Segment Results for the Year Ended December 31, 2003(3) | ||||||||||||||||
Revenues from external customers | $ | 500,501 | $ | 277,237 | $ | — | $ | 777,738 | ||||||||
Gross profit | 339,782 | 144,852 | (15,285 | ) | 469,349 | |||||||||||
Gross margin as a percentage of revenues | 68 | % | 52 | % | 60 | % | ||||||||||
Selling and administrative | 181,695 | 61,211 | 324 | 243,230 | ||||||||||||
Research and development | 46,557 | 7,702 | 334 | 54,593 | ||||||||||||
Business integration costs and merger-related amortization(2) | — | — | 82,101 | 82,101 | ||||||||||||
Operating income (loss) | 111,530 | 75,939 | (98,044 | ) | 89,425 | |||||||||||
Operating margin as a percentage of revenues | 22 | % | 27 | % | 11 | % | ||||||||||
| (1) | Unallocated items for the year ended December 31, 2004 and 2003, include costs for purchase accounting inventory revaluations of $17.6 million and $15.1 million, amortization of purchased intangibles of $106.8 million and $79.4 million, amortization of deferred compensation of $1.5 million and $0.8 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 year ended December 31, 2004 and 2003, of $1.5 million and $0.8 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. |
INVITROGEN CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
| (in thousands) | December 31, 2004 | December 31, 2003 | ||||
| (unaudited) | ||||||
| ASSETS | ||||||
Current assets: | ||||||
Cash and investments | $ | 983,381 | $ | 998,737 | ||
Trade accounts receivable, net of allowance for doubtful accounts | 165,754 | 117,095 | ||||
Inventories | 122,787 | 126,707 | ||||
Deferred income taxes | 31,866 | 19,310 | ||||
Prepaid expenses and other current assets | 28,440 | 25,495 | ||||
Total current assets | 1,332,228 | 1,287,344 | ||||
Property and equipment, net | 222,193 | 186,231 | ||||
Goodwill | 1,424,671 | 983,407 | ||||
Intangible assets, net | 440,182 | 464,659 | ||||
Long-term investments | 109,088 | 177,070 | ||||
Other assets | 85,973 | 66,978 | ||||
Total assets | $ | 3,614,335 | $ | 3,165,689 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Current portion of long-term obligations | $ | 12,390 | $ | 1,784 | ||
Accounts payable, accrued expenses and other current liabilities | 183,285 | 121,151 | ||||
Income taxes | 510 | 2,758 | ||||
Total current liabilities | 196,185 | 125,693 | ||||
Long-term obligations and reserves | 35,876 | 32,069 | ||||
Pension liabilities | 15,307 | 17,249 | ||||
Deferred income tax liability | 153,716 | 161,331 | ||||
Convertible debentures | 1,300,000 | 1,022,500 | ||||
Stockholders’ equity | 1,913,251 | 1,806,847 | ||||
Total liabilities and stockholders’ equity | $ | 3,614,335 | $ | 3,165,689 | ||
# # #