Exhibit 99.1 Millipore Reports Third Quarter Financial Results Strong Revenue Growth Drives Third Quarter Performance BILLERICA, Mass.--(BUSINESS WIRE)--Nov. 1, 2006--Millipore Corporation (NYSE:MIL), a leading provider of products and services that improve productivity in the laboratory and in biopharmaceutical manufacturing, today reported financial results for its third quarter ended September 30, 2006. Revenues for the third quarter grew 38 percent totaling $330.1 million. Changes in foreign exchange rates during the quarter increased total revenue growth by 2 percent. Millipore completed its acquisition of Serologicals during the third quarter. Excluding the impact of Serologicals and currency rate changes, Millipore's total revenue growth in the third quarter was 10 percent, which included 13 percent growth in its Bioprocess Division and 6 percent growth in its Bioscience Division. The Company reported third quarter net income of $14.8 million, or $0.27 per share, compared to net income of $22.9 million or $0.44 per share in the third quarter of 2005. Non-GAAP net income grew approximately 20 percent in the third quarter totaling $37.1 million, or $0.69 per share, compared to non-GAAP net income of $31.1 million, or $0.59 per share in the third quarter of 2005. A reconciliation of all GAAP to non-GAAP financial measures is provided in the Company's financial tables accompanying this press release. For the first nine months of 2006, Millipore reported total revenues of $872.3 million. Excluding the impact of Serologicals and currency rate changes, total revenue growth was 11 percent, compared to the Company's full-year 2006 guidance of 10 to 12 percent. The Company reported nine month net income of $78.5 million, or $1.45 per share, compared to net income of $79.2 million, or $1.55 per share in 2005. Non-GAAP net income for the first three quarters of 2006 was $115.8 million, or $2.14 per share, compared to $100.6 million, or $1.97 per share in 2005. "The initiatives we are implementing to accelerate our performance are working and we are on track to generate a second straight year of attractive organic revenue growth, while increasing our non-GAAP profitability," said Martin Madaus, Chairman & CEO of Millipore. "We are executing well and building a strong pipeline of opportunities in both divisions. Our Bioscience Division generated a strong quarter in North America for our laboratory water and sample preparation products, while our Bioprocess Division continues to benefit from healthy demand for our filtration and chromatography products. "Since the beginning of 2005, we have broadened our product portfolio and significantly improved our performance. We are participating in many new and attractive market segments, and our long-term growth prospects are stronger today than they were in the past. Over the next three quarters, we will be focused on completing the integration of Serologicals and fully capturing the value of this transaction. We are applying many of the same strategies and initiatives to the integration that we have applied to improve our own performance over the past seven quarters. Despite a slow start in certain segments of Serologicals' business, our success in driving operational improvements and cost synergies will enable us to meet our guidance of $3.00 to $3.10 in non-GAAP earnings per share for 2006." Third Quarter Highlights -- Strong quarter in North America for laboratory water and sample preparation & biotools business units -- Bioprocess growth benefited from strong demand for virus filtration and chromatography media -- Completed acquisition of Serologicals on July 14, 2006; third quarter results reflect 11 weeks of Serologicals financial performance -- Opened new $50 million R&D Center for Bioprocess Division -- Successfully reached mid-point of five year Global Supply Chain Initiative; project on track to deliver $40 million of annual savings by 2009 and will cost $10 million less than original forecast Revenue Growth by Geography ($ millions): Three Months Ended Nine Months Ended ----------------------- ----------------------- Sept. Sept. 30, Oct. 1, % 30, Oct. 1, % 2006 2005 Growth 2006 2005 Growth ------- ------- ------- ------- ------- ------- Americas $151.5 $103.1 47% $381.5 $309.9 23% Europe 126.8 95.3 33% 347.3 296.2 17% Asia/Pacific 51.8 41.2 26% 143.5 128.6 12% ------- ------- ------- ------- Total $330.1 $239.6 38% $872.3 $734.7 19% ======= ======= ======= ======= Revenue Growth by Division ($ millions): Three Months Ended Nine Months Ended ----------------------- ----------------------- Sept. Sept. 30, Oct. 1, % 30, Oct. 1, % 2006 2005 Growth 2006 2005 Growth ------- ------- ------- ------- ------- ------- Bioprocess $194.9 $145.7 34% $525.5 $443.8 18% Bioscience 135.2 93.9 44% 346.8 290.9 19% ------- ------- ------- ------- Total $330.1 $239.6 38% $872.3 $734.7 19% ======= ======= ======= ======= Quarterly Earnings Call Millipore will host a conference call and webcast to discuss its financial results, business outlook, and related corporate and financial matters at 4:45 p.m. Eastern Time today. The call can be accessed through Millipore's Web site: http://www.millipore.com. A replay of the call will be archived on the Investor Relations section of the website and will also be available via telephone by dialing (800) 642-1687 or (706) 645-9291 and entering confirmation code: 8952877. The telephonic replay will be available beginning at 8:00 p.m. ET on November 1, 2006 until 8:00 p.m. ET on November 3, 2006. About Millipore Millipore is a leading provider of products and services that improve productivity in biopharmaceutical manufacturing and in clinical, analytical and research laboratories. The Company is organized in two operating divisions. Its Bioprocess Division helps to enable pharmaceutical and biotechnology companies to optimize their manufacturing productivity, ensure the quality of drugs, and scale up the production of difficult-to-manufacture biologics. Its Bioscience Division helps to optimize laboratory productivity and workflows by providing reagents, kits and other enabling technologies and products for life science research and development. Millipore has a deep understanding of its customers' research and manufacturing process needs, and offers reliable and innovative tools, technologies and services. The Company is part of the S&P 500 Index and employs approximately 5,800 employees worldwide. For additional information on Millipore Corporation, please visit its website at: www.millipore.com. Use of Non-GAAP Financial Measures The non-GAAP financial measures used in this press release - which are non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating margin, non-GAAP pre-tax income, non-GAAP net income, and non-GAAP diluted earnings per share - exclude stock based compensation expense, costs related to our manufacturing consolidation strategy, severance related to leadership changes and division consolidation, acquisition and financing expenses related to the acquisition of Serologicals, amortization of intangible assets and inventory fair value adjustments related to business acquisitions, and accrual for environmental site remediation costs. There are limitations in using non-GAAP financial measures as they are not prepared in accordance with generally accepted accounting principles and may be different than non-GAAP financial measures used by other companies. We believe that the non-GAAP financial measures provide useful and supplementary information to investors regarding our quarterly performance. It is our belief that these non-GAAP financial measures have been particularly useful to investors over the last couple of years because of the significant changes that have occurred outside of our day-to-day business in accordance with the execution of our new strategy. This strategy includes strengthening our leadership position with bioscience customers, becoming a strategic supplier in bioscience research markets, leading our industry in product quality and manufacturing effectiveness, becoming a magnet for talent, and doubling the value of the Company by 2009. The financial impact of certain elements of these activities, particularly leadership changes, our manufacturing consolidation strategy, division consolidation, and acquisitions, are often large relative to our overall financial performance and most of the related charges are recorded in one or two financial quarters but not in other financial quarters, which can adversely affect the comparability of our results on a period-to-period comparable basis. In addition, certain activities, such as the significant costs associated with consolidating manufacturing facilities, business acquisitions, and environmental site remediation costs, happen infrequently and the underlying costs associated with such activities impact a limited number of quarters significantly, but do not recur. As an example, the scope and scale of our manufacturing consolidation strategy was the largest in our history. When we complete this initiative, we will have closed eight manufacturing plants. Beginning in the first quarter of 2006, we excluded, and will continue to exclude during 2006, stock based compensation expense from our non-GAAP results. We regularly use non-GAAP financial measures internally to understand, manage, and evaluate our business results and make operating decisions. We also measure our employees and compensate them, in part, based on such non-GAAP measures. For the same reasons, we also use this information for our forecasting activities. The non-GAAP financial measures presented herein also facilitate comparisons to our historical operating results, which have consistently been presented in this manner. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material effect on our reported results and, therefore, should not be relied upon as the sole financial measures to evaluate our financial results. The non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial measures. Investors are encouraged to review the reconciliation of the financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release. Our earnings guidance, however, is only provided on a non-GAAP basis. It is not feasible to provide GAAP diluted earnings per share guidance because the items excluded, other than amortization expense, are difficult to predict and estimate and are primarily dependent on future events. Forward Looking Statements: The matters discussed herein, as well as in future oral and written statements by management of Millipore Corporation that are forward-looking statements, are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Potential risks and uncertainties that could affect Millipore's future operating results include, without limitation, the inability to successfully integrate Serologicals or other acquired businesses, failure to achieve design wins into our pharmaceutical and biotechnology customers' manufacturing design phase for a particular drug; delay, suspension or termination of a customer's volume production; lack of availability of raw materials or component products on a timely basis; regulatory delay in the approval of new therapeutics; limitations on cash flow for operations and investment due to increased debt service obligations; the inability to establish and maintain necessary product and process quality levels; reduced demand for cell culture products using bovine serum; the inability to realize the expected benefits of development, marketing, licensing and other alliances; competitive factors such as new membrane or chromatography technology; the inability to achieve anticipated cost benefits of our supply chain initiative; risks relating to our concentration of principal manufacturing operations; the inability to utilize technology in current or planned products due to overriding rights by third parties; potential environmental liabilities; conditions in the economy in general and in the bioscience and bioprocess markets in particular; foreign exchange fluctuations; reduced private and government research funding; exposure to product liability claims; and difficulties inherent in transferring or outsourcing of manufacturing operations. Please refer to our filings with the SEC, including our most recent Annual Report on Form 10-K, for more information on these and other risks that could cause actual results to differ. Millipore Corporation Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended ------------------- ------------------- September October September October 30, 1, 30, 1, 2006 2005 2006 2005 --------- --------- --------- --------- Net sales $330,117 $239,557 $872,307 $734,699 Cost of sales 169,261 116,862 425,282 347,090 --------- --------- --------- --------- Gross profit 160,856 122,695 447,025 387,609 Selling, general and administrative expenses 106,785 72,601 276,609 230,584 Research and development expenses 24,637 18,858 62,767 52,272 --------- --------- --------- --------- Operating income 29,434 31,236 107,649 104,753 Interest income 4,713 894 20,873 2,202 Interest expense (16,548) (1,432) (28,733) (5,021) --------- --------- --------- --------- Income before income taxes and minority interest 17,599 30,698 99,789 101,934 Provision for income taxes 2,347 7,824 20,348 22,783 Minority interest 439 - 960 - --------- --------- --------- --------- Net income $14,813 $22,874 $78,481 $79,151 ========= ========= ========= ========= Diluted earnings per share $0.27 $0.44 $1.45 $1.55 ========= ========= ========= ========= Diluted weighted average shares outstanding 54,172 52,579 54,168 51,185 ========= ========= ========= ========= Millipore Corporation Condensed Consolidated Balance Sheets (In thousands) (Unaudited) September December 30, 31, 2006 2005 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $91,408 $537,052 Marketable securities - 113,839 Accounts receivable, net 252,198 188,130 Inventories 278,425 153,030 Assets held for sale 19,090 - Deferred income taxes and other current assets 91,854 75,050 ----------- ----------- Total current assets 732,975 1,067,101 Property, plant and equipment, net 500,473 371,249 Deferred income taxes 83,810 73,190 Intangible assets, net 496,913 43,421 Goodwill 1,055,103 82,718 Other assets 25,476 8,986 ----------- ----------- Total assets $2,894,750 $1,646,665 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes Payable $100,000 $- Accounts payable 91,598 79,587 Accrued expenses and other current liabilities 161,482 115,655 Income taxes payable and deferred income taxes 46,240 47,357 ----------- ----------- Total current liabilities 399,320 242,599 Long-term debt 1,342,393 552,285 Deferred income taxes 164,972 5,713 Other liabilities 53,591 54,505 Minority interest 4,136 - Shareholders' equity 930,338 791,563 ----------- ----------- Total liabilities and shareholders' equity $2,894,750 $1,646,665 =========== =========== Millipore Corporation Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended September 30, 2006 (dollars in thousands, except EPS data) Gross Gross Operating Operating Profit Profit Income Margin Margin ------------------------------------- GAAP results, three months ended September 30, 2006 $160,856 48.7% $29,434 8.9% Non-GAAP adjustments: Costs related to manufacturing consolidation strategy 4,474 1.4% 4,474 1.4% Acquisition inventory fair value amortization 13,279 4.0% 13,279 4.0% Stock-based compensation expense 474 0.1% 3,246 1.0% Acquisition integration and restructuring expenses 399 0.1% 6,105 1.9% Purchased intangibles amortization 2,153 0.7% 6,065 1.8% Environmental accrual 2,100 0.6% --------- ------- --------- --------- Total non-GAAP adjustments 20,779 6.3% 35,269 10.7% --------- ------- --------- --------- Non-GAAP results, three months ended September 30, 2006 $181,635 55.0% $64,703 19.6% ========= ======= ========= ========= Pre-tax Net Diluted Income Income EPS -------------------------- GAAP results, three months ended September 30, 2006 $17,599 $14,813 $0.27 Non-GAAP adjustments: Costs related to manufacturing consolidation strategy 4,474 2,811 0.06 Acquisition inventory fair value amortization 13,279 8,344 0.16 Stock-based compensation expense 3,246 2,211 0.04 Acquisition integration and restructuring expenses 6,105 3,836 0.07 Purchased intangibles amortization 6,065 3,811 0.07 Environmental accrual 2,100 1,319 0.02 -------- -------- ------- Total non-GAAP adjustments 35,269 22,332 0.42 -------- -------- ------- Non-GAAP results, three months ended September 30, 2006 $52,868 $37,145 $0.69 ======== ======== ======= (a) Please refer to our press release for a full explanation for the use of non-GAAP measures. Millipore Corporation Reconciliation of GAAP to Non-GAAP Financial Measures Nine Months Ended September 30, 2006 (dollars in thousands, except EPS data) Gross Gross Operating Operating Profit Profit Income Margin Margin ------------------------------------- GAAP results, nine months ended September 30, 2006 $447,025 51.2% $107,649 12.3% Non-GAAP adjustments: Costs related to manufacturing consolidation strategy 15,038 1.7% 15,038 1.8% Acquisition inventory fair value amortization 13,279 1.5% 13,279 1.6% Stock-based compensation expense 1,320 0.2% 8,960 1.0% Acquisition integration and restructuring expenses 469 0.1% 8,060 0.9% Purchased intangibles amortization 2,153 0.2% 8,985 1.0% Environmental accrual 2,100 0.2% Bridge loan commitment fees in connection with acquisition of Serologicals --------- ------- --------- --------- Total non-GAAP adjustments 32,259 3.7% 56,422 6.5% --------- ------- --------- --------- Non-GAAP results, nine months ended September 30, 2006 $479,284 54.9% $164,071 18.8% ========= ======= ========= ========= Pre-tax Net Diluted Income Income EPS ---------------------------- GAAP results, nine months ended September 30, 2006 $99,789 $78,481 $1.45 Non-GAAP adjustments: Costs related to manufacturing consolidation strategy 15,038 9,778 0.18 Acquisition inventory fair value amortization 13,279 8,344 0.15 Stock-based compensation expense 8,960 6,128 0.11 Acquisition integration and restructuring expenses 8,060 5,171 0.09 Purchased intangibles amortization 8,985 5,722 0.11 Environmental accrual 2,100 1,319 0.03 Bridge loan commitment fees in connection with acquisition of Serologicals 1,310 895 0.02 --------- --------- ------- Total non-GAAP adjustments 57,732 37,357 0.69 --------- --------- ------- Non-GAAP results, nine months ended September 30, 2006 $157,521 $115,838 $2.14 ========= ========= ======= (a) Please refer to our press release for a full explanation for the use of non-GAAP measures. Millipore Corporation Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended October 1, 2005 (dollars in thousands, except EPS data) Gross Gross Operating Operating Profit Profit Income Margin Margin ------------------------------------- GAAP results, three months ended October 1, 2005 $122,695 51.2% $31,236 13.0% Non-GAAP adjustments: Costs related to manufacturing consolidation strategy 4,435 1.9% 4,435 1.9% Acquisition inventory fair value amortization 1,907 0.8% 1,907 0.8% Costs related to divisional consolidation 3,148 1.3% Purchased intangibles amortization 1,261 0.5% --------- ------- --------- --------- Total non-GAAP adjustments 6,342 2.7% 10,751 4.5% --------- ------- --------- --------- Non-GAAP results, three months ended October 1, 2005 $129,037 53.9% $41,987 17.5% ========= ======= ========= ========= Pre-tax Net Diluted Income Income EPS -------------------------- GAAP results, three months ended October 1, 2005 $30,698 $22,874 $0.44 Non-GAAP adjustments: Costs related to manufacturing consolidation strategy 4,435 3,382 0.06 Acquisition inventory fair value amortization 1,907 1,454 0.03 Costs related to divisional consolidation 3,148 2,400 0.04 Purchased intangibles amortization 1,261 962 0.02 -------- -------- ------- Total non-GAAP adjustments 10,751 8,198 0.15 -------- -------- ------- Non-GAAP results, three months ended October 1, 2005 $41,449 $31,072 $0.59 ======== ======== ======= (a) Please refer to our press release for a full explanation for the use of non-GAAP measures. Millipore Corporation Reconciliation of GAAP to Non-GAAP Financial Measures Nine Months Ended October 1, 2005 (dollars in thousands, except EPS data) Gross Gross Operating Operating Profit Profit Income Margin Margin ------------------------------------- GAAP results, nine months ended October 1, 2005 $387,609 52.8% $104,753 14.3% Non-GAAP adjustments: Costs related to manufacturing consolidation strategy 7,011 0.9% 7,011 1.0% Acquisition inventory fair value amortization 1,907 0.3% 1,907 0.2% Costs related to divisional consolidation 3,195 0.4% Executive termination costs 12,050 1.7% Purchased intangibles amortization 2,767 0.4% In-process R&D write-off 3,149 0.4% --------- ------- --------- --------- Total non-GAAP adjustments 8,918 1.2% 30,079 4.1% --------- ------- --------- --------- Non-GAAP results, nine months ended October 1, 2005 $396,527 54.0% $134,832 18.4% ========= ======= ========= ========= Pre-tax Net Diluted Income Income EPS ---------------------------- GAAP results, nine months ended October 1, 2005 $101,934 $79,151 $1.55 Non-GAAP adjustments: Costs related to manufacturing consolidation strategy 7,011 4,993 0.10 Acquisition inventory fair value amortization 1,907 1,358 0.03 Costs related to divisional consolidation 3,195 2,276 0.04 Executive termination costs 12,050 8,582 0.17 Purchased intangibles amortization 2,767 1,971 0.04 In-process R&D write-off 3,149 2,243 0.04 --------- --------- ------- Total non-GAAP adjustments 30,079 21,423 0.42 --------- --------- ------- Non-GAAP results, nine months ended October 1, 2005 $132,013 $100,574 $1.97 ========= ========= ======= (a) Please refer to our press release for a full explanation for the use of non-GAAP measures. Non-GAAP Gross Profit and Gross Profit Margin The calculation of non-GAAP gross profit and gross profit margin is displayed in the above tables. Non-GAAP gross profit and gross profit margin exclude the costs related to our manufacturing consolidation strategy for the reasons described above in the introductory paragraphs of the "Use of Non-GAAP Financial Measures" section of this press release. Non-GAAP gross margin and gross profit margin exclude the amortization of acquired inventory fair value adjustments from business acquisitions because (1) the amounts are non-cash, (2) we can not influence the timing and amount of future expense recognition, and (3) excluding such expenses provides investors and management better visibility into the components of operating expenses. Non-GAAP gross profit and gross profit margin also exclude stock-based compensation expense because the accounting treatment on a year-over-year basis for option grants has changed with the adoption of Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004), Share-based Payment ("SFAS 123R"). We implemented the new accounting standard using the modified prospective method, which does not allow for restatement of prior period results and, accordingly, renders the year-over-year comparison not meaningful. In addition, non-GAAP gross profit and gross profit margin exclude the one-time acquisition and related integration expenses in connection with the acquisition of Serologicals. Non-GAAP Operating Income and Operating Margin The calculation of non-GAAP operating income and operating margin is displayed in the above tables. Non-GAAP operating income and operating margin exclude the amortization of intangible assets and acquired inventory fair value adjustments related to business acquisitions because (1) the amounts are non-cash, (2) we can not influence the timing and amount of future expense recognition, and (3) excluding such expenses provides investors and management better visibility into the components of operating expenses. The calculation of Non-GAAP operating income and operating margin also exclude the costs related to our manufacturing consolidation strategy and severance related to leadership changes and division consolidation for the reasons described above in the introductory paragraphs of the "Use of Non-GAAP Financial Measures" section of this press release. Non-GAAP operating income and operating margin exclude stock-based compensation expense because the accounting treatment on a year-over-year basis for option grants has changed with the adoption of SFAS No. 123R. We implemented the new accounting standard using the modified prospective method, which does not allow for restatement of prior period results and, accordingly, renders the year-over-year comparison not meaningful. Non-GAAP operating income and operating margin exclude one-time acquisition and related integration expenses in connection with the acquisition of Serologicals because this is the largest acquisition in recent Millipore history. In addition, we have also excluded environmental site remediation costs from the non-GAAP operating income and operating margin because these costs are significant and non-recurring for Millipore. Non-GAAP Pre-tax Income The calculation of non-GAAP pre-tax income is displayed in the above tables. Non-GAAP pre-tax income excludes bridge loan commitment fees in connection with the acquisition of Serologicals. The calculation of non-GAAP pre-tax income also excludes costs related to our manufacturing consolidation strategy; severance related to leadership changes and division consolidation; stock-based compensation expense; acquisition and integration expenses; amortization of intangible assets and acquired inventory fair value adjustments related to business acquisitions; and environmental site remediation costs for the reasons described for operating income and operating margin above. Non-GAAP Net Income The calculation of non-GAAP net income is displayed in the above tables. Because pre-tax income is included in the net income calculation, the net income calculation excludes costs related to our manufacturing consolidation strategy; severance related to leadership changes and division consolidation; stock-based compensation expense; acquisition and integration expenses and bridge loan commitment fees in connection with the acquisition of Serologicals; amortization of intangible assets and acquired inventory fair value adjustments related to business acquisitions; and environmental site remediation costs for the reasons described for pre-tax income above. Non-GAAP Diluted Earnings per Share The calculation of non-GAAP diluted earnings per share is displayed in the above tables. Because net income is included in the diluted earnings per share calculation, the diluted earnings per share calculation excludes the amounts for costs related to our manufacturing consolidation strategy; severance related to leadership changes and division consolidation; stock-based compensation expense; acquisition expenses and bridge loan commitment fees in connection with the acquisition of Serologicals; amortization of intangible assets and acquired inventory fair value adjustments related to business acquisitions; and environmental site remediation costs for the reasons described for net income above. CONTACT: Joshua Young Director, Investor Relations (978) 715 - 1527 (800) 225 - 3384 joshua_young@millipore.com OR Lynn Garvin Vice President, Corporate Communications Millipore Corporation 978-715-1043 lynn_garvin@millipore.com
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Millipore (MIL) Inactive 8-KResults of Operations and Financial Condition
Filed: 3 Nov 06, 12:00am