Exhibit 99.1
Investor and Financial Contacts:
Adam S. Taich
Vice President, Investor Relations
(760) 603-7208
Invitrogen Announces Third Quarter 2005 Results
CARLSBAD, CA, October 27, 2005 — Invitrogen Corporation (Nasdaq: IVGN) today announced results for its third quarter ended September 30, 2005. Revenues for the third quarter were $289.6 million, an increase of 13% over the $256.3 million reported for the third quarter of 2004. Net income for the third quarter was $23.9 million versus $28.2 million for the same quarter in 2004, a decrease of 15% due to a non-cash charge of approximately $5.2 million related to purchase accounting inventory adjustments associated with the recent acquisition of Dynal Biotech. Earnings per share for the third quarter of 2005 decreased 18% to $0.42 per share, as compared to $0.51 per share reported in the third quarter of 2004.
Revenues for the nine months ended September 30, 2005, were $873.2 million, an increase of 15% over the $761.6 million reported for the first nine months of 2004. Net income for the nine months ended September 30, 2005, was $85.8 million versus $58.4 million for the same period in 2004, an increase of 47%. Earnings per share for the first nine months of 2005 increased 41% to $1.52 per share, as compared to $1.08 per share reported in the first nine months of 2004.
Invitrogen has regularly reported pro forma results which exclude acquisition related amortization and other costs. Third quarter pro forma net income was $46.7 million, or $0.80 per share, compared with pro forma net income in the third quarter of 2004 of $43.0 million, or $0.76 per share. Pro forma net income and pro forma earnings per share increased 8% and 5%, 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 at www.invitrogen.com.
Performance Highlights
• | Revenue growth of 15% for the total company year to date |
• | Year to date free cash flow of $167 million |
• | Completed acquisitions of BioSource International, Quantum Dot Corporation and the BioPixels® business unit of BioCrystal, Ltd. |
Conference Call and Webcast Today at 5:00 PM Eastern
The Company will discuss its third quarter results, as well as its revised 2005 guidance on its conference call at 5:00 pm Eastern Time today. Additional details regarding the call and webcast are included later in this release.
Third Quarter Review
Greg Lucier, Invitrogen’s Chairman and CEO, commented: “Invitrogen had a solid third quarter. We continue to improve our operational execution and delivered solid margins and strong cash flow. The BioDiscovery segment performed well with a 24% growth rate, and we continue to see a strong rate of growth taking place in the fourth quarter. The BioProduction segment’s performance did not meet our expectations. The continued softness at our BioReliance unit, coupled with the timing of media orders to large biomanufacuturing accounts, made the third quarter a difficult period. A number of changes are being made in that segment in the fourth quarter to address this performance. The acquisition of Quantum Dot in the quarter, and the early closing of BioSource, build on our strategy to position the business in the higher growth areas of life science research.”
Third quarter revenue growth of 13% included approximately 12% from acquisitions and no impact from foreign currency exchange rates. The BioDiscovery segment grew 24% compared to the comparable quarter in 2004. Acquisitions contributed 20% to the growth rate for the quarter. Revenues in BioProduction declined 2% compared with the third quarter of 2004 due to a decline in service revenues at BioReliance.
Revenues for the nine months ended September 30, 2005 grew 15%, of which 2% resulted from favorable foreign currency exchange rates and a 9% contribution from acquisitions. Sales of BioDiscovery products increased 20% for the nine months ended September 30, 2005 versus the same period in 2004. For the same period, BioProduction revenues increased 8%.
Third quarter 2005 pro forma gross margin was 62%, compared to 61% in the third quarter of 2004. BioDiscovery gross margin was 70% in the third quarter of both 2005 and 2004. BioProduction gross margin were 47% in the third quarter of 2005 and 50% in the comparable quarter of 2004.
Operating income was 12% of revenues in the third quarter of 2005 versus 16% in the third quarter of 2004. Pro forma operating margin was 24% of revenues in the third quarter of 2005 compared with 25% in the third quarter of 2004.
Cash flows from operating activities were approximately $82 million in the third quarter and $218 million for the nine months ended September 30, 2005. Capital expenditures were approximately $18 million during the third quarter of 2005 and $51 million for the nine months ended September 30, 2005. Free cash flow, defined as cash from operating activities less capital expenditures, was $64 million for the third quarter and $167 million for the nine months ended September 30, 2005.
Revised 2005 Outlook
The Company’s revenue guidance for the full-year remains at a range of $1,190 to $1,195 which accounts for both the early closing of the BioSource acquisition and the significant movements in currency rates since the Company originally provided guidance. This range implies an organic growth rate of at least 6%, consistent with previous guidance. Pro forma earnings per share are expected to range from $3.42 to $3.45 to account for dilution related to both the BioSource and Quantum Dot acquisitions. The Company will provide further detail on its business outlook and guidance on the conference call today.
Repatriation of Cash
The company is taking the opportunity provided by the American Jobs Creation Act of 2004 to repatriate approximately $115 million prior to the end of the year. The repatriation pursuant to the Act will allow the company to reduce the U.S. tax liability arising from the repatriation, resulting in a net tax benefit of approximately $10 million to be recorded in the fourth quarter. In addition, the subsidiaries from which earnings are being repatriated will then be liquidated. As a result of the liquidation of these subsidiaries, the company will also record currency gains of approximately $20 million.
Share Repurchase
During the third quarter, Invitrogen repurchased 500,000 shares of its common stock. This repurchase concluded the existing share repurchase authorization. Future repurchases will depend on market conditions and other considerations. Funds for any additional repurchases are expected to come primarily from cash generated from operations, or funds on hand.
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 at www.invitrogen.com.
The conference call will be webcast live over the Company’s investor relations website at www.invitrogen.com and will be archived at the site for one month.
To listen to the live conference call, please dial (866) 202-3109 (domestic) or (617) 213-8844 (international) and use passcode 72377218. 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 55982310.
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 4,500 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 gross margin, 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 2005; 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 to a) the Company’s ability to identify promising technology and, 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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND RECONCILIATION OF PRO FORMA ADJUSTMENTS(1)
(in thousands, except per share data) (unaudited) | For the three months ended September 30, 2005 | For the three months ended September 30, 2004 | ||||||||||||||||||||||
GAAP | Adjustments | Pro forma | GAAP | Adjustments | Pro forma | |||||||||||||||||||
Revenues | $ | 289,639 | $ | — | $ | 289,639 | $ | 256,328 | $ | — | $ | 256,328 | ||||||||||||
Cost of revenues | 116,515 | (5,222 | )(2)(3) | 111,293 | 99,123 | (78 | )(3) | 99,045 | ||||||||||||||||
Gross profit | 173,124 | 5,222 | 178,346 | 157,205 | 78 | 157,283 | ||||||||||||||||||
Gross margin | 60 | % | 62 | % | 61 | % | 61 | % | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | 52,644 | (61 | )(3) | 52,583 | 45,614 | (61 | )(3) | 45,553 | ||||||||||||||||
General and administrative | 31,142 | (12 | )(3) | 31,130 | 27,596 | (17 | )(3) | 27,579 | ||||||||||||||||
Research and development | 26,400 | (216 | )(3) | 26,184 | 19,214 | (199 | )(3) | 19,015 | ||||||||||||||||
Purchased intangibles amortization | 29,509 | (29,509 | )(4) | — | 25,004 | (25,004 | )(4) | — | ||||||||||||||||
Total operating expenses | 139,695 | (29,798 | ) | 109,897 | 117,428 | (25,281 | ) | 92,147 | ||||||||||||||||
Operating income | 33,429 | 35,020 | 68,449 | 39,777 | 25,359 | 65,136 | ||||||||||||||||||
Operating margin | 12 | % | 24 | % | 16 | % | 25 | % | ||||||||||||||||
Total other income (expense), net | 17 | — | 17 | (1,299 | ) | — | (1,299 | ) | ||||||||||||||||
Income before provision for income taxes | 33,446 | 35,020 | 68,466 | 38,478 | 25,359 | 63,837 | ||||||||||||||||||
Income tax provision | (9,579 | ) | (12,234 | )(5) | (21,813 | ) | (10,315 | ) | (10,480 | )(5) | (20,795 | ) | ||||||||||||
Net income | $ | 23,867 | $ | 22,786 | $ | 46,653 | $ | 28,163 | $ | 14,879 | $ | 43,042 | ||||||||||||
Add back interest expense for subordinated debt, net of tax(6) | 1,825 | — | 1,825 | 2,375 | — | 2,375 | ||||||||||||||||||
Numerator for diluted earnings per share | $ | 25,692 | $ | 22,786 | $ | 48,478 | $ | 30,538 | $ | 14,879 | $ | 45,417 | ||||||||||||
Earnings per common share: | ||||||||||||||||||||||||
Basic | $ | 0.45 | $ | 0.89 | $ | 0.54 | $ | 0.83 | ||||||||||||||||
Diluted(6) | $ | 0.42 | $ | 0.80 | $ | 0.51 | $ | 0.76 | ||||||||||||||||
Weighted average shares used in per share calculation: | ||||||||||||||||||||||||
Basic | 52,622 | — | 52,622 | 51,748 | — | 51,748 | ||||||||||||||||||
Diluted(6) | 60,704 | — | 60,704 | 59,939 | — | 59,939 |
(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 and in-process research and development to provide a supplemental comparison of results of operations. |
(2) | Add back costs for purchase accounting inventory revaluations of $5.2 million and $0 million for the three months ended September 30, 2005 and 2004, respectively. |
(3) | Add back deferred compensation amortization totaling $0.4 million for the three months ended September 30, 2005 and 2004, 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 pretax 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 jursdiction having a higher tax rate than the Company’s overall average income tax rate. |
(6) | The Company has restated 2004 diluted weighted average shares and earnings per share to reflect the impact of Emerging Issues Task Force Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share,” on its 11/2% Convertible Senior Notes due 2024 and 2% Convertible Senior Notes due 2023. |
INVITROGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND RECONCILIATION OF PRO FORMA ADJUSTMENTS(1)
(in thousands, except per share data) (unaudited) | For the nine months ended September 30, 2005 | For the nine months ended September 30, 2004 | ||||||||||||||||||||||
GAAP | Adjustments | Pro forma | GAAP | Adjustments | Pro forma | |||||||||||||||||||
Revenues | $ | 873,176 | $ | — | $ | 873,176 | $ | 761,616 | $ | — | $ | 761,616 | ||||||||||||
Cost of revenues | 351,347 | (17,168 | )(2)(3) | 334,179 | 316,393 | (17,833 | )(2)(3) | 298,560 | ||||||||||||||||
Gross profit | 521,829 | 17,168 | 538,997 | 445,223 | 17,833 | 463,056 | ||||||||||||||||||
Gross margin | 60 | % | 62 | % | 58 | % | 61 | % | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | 157,418 | (182 | )(3) | 157,236 | 134,329 | (184 | )(3) | 134,145 | ||||||||||||||||
General and administrative | 93,145 | (35 | )(3) | 93,110 | 80,825 | (40 | )(3) | 80,785 | ||||||||||||||||
Research and development | 71,904 | (647 | )(3) | 71,257 | 53,116 | (643 | )(3) | 52,473 | ||||||||||||||||
Purchased intangibles amortization | 85,276 | (85,276 | )(4) | — | 81,539 | (81,539 | )(4) | — | ||||||||||||||||
Purchased in-process research and development | 13,886 | (13,886 | )(5) | — | 728 | (728 | )(5) | — | ||||||||||||||||
Total operating expenses | 421,629 | (100,026 | ) | 321,603 | 350,537 | (83,134 | ) | 267,403 | ||||||||||||||||
Operating income | 100,200 | 117,194 | 217,394 | 94,686 | 100,967 | 195,653 | ||||||||||||||||||
Operating margin | 11 | % | 25 | % | 12 | % | 26 | % | ||||||||||||||||
Total other income (expense), net | 21,915 | (20,123 | )(6) | 1,792 | (13,855 | ) | — | (13,855 | ) | |||||||||||||||
Income before provision for income taxes | 122,115 | 97,071 | 219,186 | 80,831 | 100,967 | 181,798 | ||||||||||||||||||
Income tax provision | (36,268 | ) | (34,529 | )(7) | (70,797 | ) | (22,470 | ) | (38,432 | )(7) | (60,902 | ) | ||||||||||||
Net income | $ | 85,847 | $ | 62,542 | $ | 148,389 | $ | 58,361 | $ | 62,535 | $ | 120,896 | ||||||||||||
Add back interest expense for subordinated debt, net of tax(9) | 6,225 | — | 6,225 | 796 | 6,273 | (8) | 7,069 | |||||||||||||||||
Numerator for diluted earnings per share | $ | 92,072 | $ | 62,542 | $ | 154,614 | $ | 59,157 | $ | 68,808 | $ | 127,965 | ||||||||||||
Earnings per common share: | ||||||||||||||||||||||||
Basic | $ | 1.65 | $ | 2.85 | $ | 1.13 | $ | 2.33 | ||||||||||||||||
Diluted(9) | $ | 1.52 | $ | 2.56 | $ | 1.08 | $ | 2.11 | ||||||||||||||||
Weighted average shares used in per share calculation: | ||||||||||||||||||||||||
Basic | 52,051 | — | 52,051 | 51,876 | — | 51,876 | ||||||||||||||||||
Diluted(9) | 60,465 | — | 60,465 | 54,904 | 5,807 | (8) | 60,711 |
(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 and in-process research and development to provide a supplemental comparison of results of operations. |
(2) | Add back costs for purchase accounting inventory revaluations of $17.0 million and $17.6 million for the nine months ended September 30, 2005 and 2004, respectively. |
(3) | Add back deferred compensation amortization totaling $1.1 million for the nine months ended September 30, 2005 and 2004, related to stock option plans assumed in business combinations. |
(4) | Add back amortization of purchased intangibles. |
(5) | Add back in-process research and development. |
(6) | Add back gain on foreign currency transaction, net of loss on sale of investments, used for business acquisitions. |
(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 pretax 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 jursdiction 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. |
(9) | The Company has restated 2004 diluted weighted average shares and earnings per share to reflect the impact of Emerging Issues Task Force Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share,” on its 11/2% Convertible Senior Notes due 2024 and 2% Convertible Senior Notes due 2023. |
INVITROGEN CORPORATION
EBITDA INFORMATION
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||
(in thousands) (unaudited) | 2005 | 2004 | 2005 | 2004 | ||||||||
Operating income reported under GAAP | $ | 33,429 | $ | 39,777 | $ | 100,200 | $ | 94,686 | ||||
Add back in-process research and development and merger related amortization | 35,020 | 25,359 | 117,194 | 100,967 | ||||||||
Add back depreciation | 9,428 | 8,680 | 28,583 | 27,254 | ||||||||
Add back amortization of non merger-related deferred compensation | 1,704 | 922 | 4,342 | 2,101 | ||||||||
Add back amortization of all other intangible assets | 1,134 | 1,037 | 3,047 | 2,468 | ||||||||
EBITDA | $ | 80,715 | $ | 75,775 | $ | 253,366 | $ | 227,476 | ||||
INVITROGEN CORPORATION
BUSINESS SEGMENT HIGHLIGHTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(in thousands) (unaudited) | Bio- Discovery | Bio- Production | Unallocated(1) | Total | ||||||||||||
Segment results for the three months ended September 30, 2005 | ||||||||||||||||
Revenues | $ | 181,985 | $ | 107,654 | $ | — | $ | 289,639 | ||||||||
Gross profit | 127,222 | 51,124 | (5,222 | ) | 173,124 | |||||||||||
Gross margin | 70 | % | 47 | % | 60 | % | ||||||||||
Selling and administrative | 59,454 | 24,259 | 73 | 83,786 | ||||||||||||
Research and development | 23,078 | 3,106 | 216 | 26,400 | ||||||||||||
Purchased intangibles amortization | — | — | 29,509 | 29,509 | ||||||||||||
Operating income (loss) | $ | 44,690 | $ | 23,759 | $ | (35,020 | ) | $ | 33,429 | |||||||
Operating margin | 25 | % | 22 | % | 12 | % | ||||||||||
Segment results for the three months ended September 30, 2004 | ||||||||||||||||
Revenues | $ | 146,742 | $ | 109,586 | $ | — | $ | 256,328 | ||||||||
Gross profit | 102,886 | 54,397 | (78 | ) | 157,205 | |||||||||||
Gross margin | 70 | % | 50 | % | 61 | % | ||||||||||
Selling and administrative | 49,299 | 23,833 | 78 | 73,210 | ||||||||||||
Research and development | 16,577 | 2,438 | 199 | 19,214 | ||||||||||||
Purchased intangibles amortization | — | — | 25,004 | 25,004 | ||||||||||||
Operating income (loss) | $ | 37,010 | $ | 28,126 | $ | (25,359 | ) | $ | 39,777 | |||||||
Operating margin | 25 | % | 26 | % | 16 | % |
(1) | Unallocated items for the three months ended September 30, 2005 and 2004, include costs for purchase accounting inventory revaluations of $5.2 million and $0 million, amortization of purchased intangibles of $29.5 million and $25.0 million and amortization of deferred compensation of $0.4 million and $0.4 million, respectively. These items 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. |
INVITROGEN CORPORATION
BUSINESS SEGMENT HIGHLIGHTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(in thousands) (unaudited) | Bio- Discovery | Bio- Production | Unallocated(1) | Total | ||||||||||||
Segment results for the nine months ended September 30, 2005 | ||||||||||||||||
Revenues | $ | 529,758 | $ | 343,418 | $ | — | $ | 873,176 | ||||||||
Gross profit | 374,467 | 164,530 | (17,168 | ) | 521,829 | |||||||||||
Gross margin | 71 | % | 48 | % | 60 | % | ||||||||||
Selling and administrative | 175,147 | 75,199 | 217 | 250,563 | ||||||||||||
Research and development | 62,519 | 8,738 | 647 | 71,904 | ||||||||||||
Purchased intangibles amortization and in-process research and development | — | — | 99,162 | 99,162 | ||||||||||||
Operating income (loss) | $ | 136,801 | $ | 80,593 | $ | (117,194 | ) | $ | 100,200 | |||||||
Operating margin | 26 | % | 23 | % | 11 | % | ||||||||||
Segment results for the nine months ended September 30, 2004 | ||||||||||||||||
Revenues | $ | 442,415 | $ | 319,201 | $ | — | $ | 761,616 | ||||||||
Gross profit | 310,803 | 152,253 | (17,833 | ) | 445,223 | |||||||||||
Gross margin | 70 | % | 48 | % | 58 | % | ||||||||||
Selling and administrative | 146,268 | 68,662 | 224 | 215,154 | ||||||||||||
Research and development | 45,539 | 6,934 | 643 | 53,116 | ||||||||||||
Purchased intangibles amortization and in-process research and development | — | — | 82,267 | 82,267 | ||||||||||||
Operating income (loss) | $ | 118,996 | $ | 76,657 | $ | (100,967 | ) | $ | 94,686 | |||||||
Operating margin | 27 | % | 24 | % | 12 | % |
(1) | Unallocated items for the nine months ended September 30, 2005 and 2004, include costs for purchase accounting inventory revaluations of $17.0 million and $17.6 million, amortization of purchased intangibles of $85.3 million and $81.5 million, in-process research and development of $13.9 million and $0.7 million and amortization of deferred compensation of $1.1 million and $1.1 million, respectively. These items 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. |
INVITROGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, | ||||||||
(in thousands) (unaudited) | 2005 | 2004 | ||||||
Net income | $ | 85,847 | $ | 58,361 | ||||
Add back in-process research and development and merger related amortization | 117,194 | 100,967 | ||||||
Add back depreciation | 28,583 | 27,254 | ||||||
Balance sheet changes | (2,030 | ) | 6,552 | |||||
Other noncash adjustments | (11,353 | ) | (23,672 | ) | ||||
Net cash provided by operating activities | 218,241 | 169,462 | ||||||
Capital expenditures | (51,009 | ) | (19,703 | ) | ||||
Free cash flow | 167,232 | 149,759 | ||||||
Net cash provided by (used in) other investing activities | 11,297 | (604,057 | ) | |||||
Net cash provided by financing activities | 249,671 | 228,307 | ||||||
Effect of exchange rate changes on cash | (26,451 | ) | 871 | |||||
Net increase (decrease) in cash and cash equivalents | $ | 401,749 | $ | (225,120 | ) | |||
INVITROGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) | September 30, 2005 | December 31, 2004 | ||||
(unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and investments | $ | 961,635 | $ | 983,381 | ||
Trade accounts receivable, net of allowance for doubtful accounts | 185,071 | 165,754 | ||||
Inventories | 152,105 | 122,787 | ||||
Deferred income taxes | 25,510 | 31,866 | ||||
Prepaid expenses and other current assets | 27,697 | 28,440 | ||||
Total current assets | 1,352,018 | 1,332,228 | ||||
Property and equipment, net | 266,486 | 222,193 | ||||
Goodwill | 1,741,752 | 1,424,671 | ||||
Intangible assets, net | 496,608 | 440,182 | ||||
Long-term investments | 5,183 | 109,088 | ||||
Other assets | 88,017 | 85,973 | ||||
Total assets | $ | 3,950,064 | $ | 3,614,335 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Current portion of long-term debt | $ | 2,403 | $ | 12,390 | ||
Accounts payable, accrued expenses and other current liabilities | 178,330 | 183,285 | ||||
Income taxes | 14,728 | 510 | ||||
Total current liabilities | 195,461 | 196,185 | ||||
Long-term debt | 1,525,934 | 1,319,315 | ||||
Pension liabilities | 17,001 | 15,307 | ||||
Deferred income tax liability | 169,842 | 153,716 | ||||
Other long-term liabilities | 15,285 | 16,561 | ||||
Stockholders’ equity | 2,026,541 | 1,913,251 | ||||
Total liabilities and stockholders’ equity | $ | 3,950,064 | $ | 3,614,335 | ||
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