EXHIBIT 99.1
Diagnostic Products Corporation Announces Fourth Quarter and Full Year
2004 Results
LOS ANGELES--(BUSINESS WIRE)--Feb. 10, 2005--Diagnostic Products
Corporation (NYSE:DP) today reported record fourth quarter sales of
$117.7 million, an increase of 12% over $104.8 million a year ago. The
dollar weakened in the fourth quarter, which had a positive impact on
sales of 5%. Net income decreased to $11.1 million, or $.37 per
diluted share, from net income of $15.5 million, or $.52 per share for
the same quarter a year ago due to a number of unusual expenses. These
items included: an additional $2.4 million ($1.6 million in General
and Administrative expense and $800,000 in interest expense) of
accruals to reflect settlement discussions with the Department of
Justice and the Securities and Exchange Commission's Staff regarding
the Company's Chinese subsidiary; $600,000 in related legal fees; $2.0
million in General and Administrative expense related to
Sarbanes-Oxley Section 404 compliance; $500,000 in leasehold
write-downs in General and Administrative expense; $1.4 million in
cost of sales for the previously announced homocysteine license from
Competitive Technologies, Inc.; $1.0 million in cost of sales related
to production problems experienced in the fourth quarter with the
IMMULITE 2500; and $1.0 million in cost of sales related to inventory
write-offs, including $500,000 related to products discontinued in the
fourth quarter, specifically the microplate allergy.
Sales for the year ended December 31, 2004 were $443.2 million, a
16% increase over the $381.4 million recorded in 2003. Net income for
the year was $61.7 million, or $2.06 per diluted share, versus $61.8
million, or $2.08, per share last year. The dollar weakened in 2004,
which had a positive impact on sales of 5%.
Sales of IMMULITE products grew approximately 15% in the fourth
quarter to $108.1 million, compared to $94.3 million in 2003. For the
year, IMMULITE product line sales were $404.9 million, compared to
$338.0 million in 2003, an increase of 20%. Sales of the mature RIA
product line were $5.9 million for the quarter, down 8% from last year
and $24.1 million for the year, down 10% from last year. Sales of
other products were $3.7 million in the quarter, down from $4.2
million last year, and $14.2 million for the year, down from $16.7
million in 2003.
The Company shipped a total of 251 IMMULITE instruments in the
fourth quarter, including 172 IMMULITE 2000s and 2500s. For the year,
the Company shipped 977 IMMULITE instruments, including 714 IMMULITE
2000s and 2500s. The total number of instruments shipped worldwide is
now over 10,000. "Overall I'm happy with our underlying performance
this quarter. The US growth rate remains strong at 16%, particularly
in light of us losing $800,000 of Homocysteine business due to
customers' patent litigation issues. We now have shipped over 10,000
instruments world-wide and the demand for the 2000 remains high. I am
also pleased to report that we have submitted everything requested by
the FDA related to the Application Integrity Policy and are hopeful to
have the issue resolved in the near future," said Michael Ziering, CEO
of DPC.
Jim Brill, CFO, added, "The amounts we have accrued related to the
Chinese subsidiary's legal issues, which now total $4.8 million,
reflect the amounts being discussed with the Department of Justice and
the SEC's Staff as part of settlement of this matter; however, terms
and conditions are still being discussed and any settlements are
subject to final approval on both sides. Any settlement recommended by
the SEC's Staff must be approved by the Commission. We were
disappointed with the manufacturing issues we had with the IMMULITE
2500, but I am happy to report that they have been resolved. As of the
end of the quarter we had shipped all the instruments we had available
in the New Jersey manufacturing facility."
Diagnostic Products Corporation (DPC), founded in 1971, is the
global leader dedicated primarily to immunodiagnostics. DPC designs
and manufactures automated laboratory instrumentation, which provides
fast, accurate results while reducing labor and reagent costs. DPC's
product menu includes a large variety of immunoassays covering a broad
range of clinical disease states including 350 specific allergens and
allergy panels. Through partnerships with manufacturers of chemistry
systems and reagents, DPC also addresses the chemistry and laboratory
automation testing needs of its customers. DPC sells its products to
hospitals, clinics and laboratories domestically and in more than 100
countries.
DPC is committed to delivering to customers the highest quality
products with superior service and support. The turquoise zebra icon
symbolizes DPC's uniqueness in the immunodiagnostic industry as "a
company that stands out." Additional Company information can be found
on the Company's Web site at www.dpcweb.com.
Except for the historical information contained herein, this press
release contains forward- looking statements that involve risks and
uncertainties that could cause actual results to differ materially.
These factors include the effects of governmental and other actions
relating to the FDA's decision that its Application Integrity Policy
should be applied to the Company or relating to the Company's Chinese
affiliate; the rate of customer demand for the Company's products; the
Company's ability to successfully market new and existing products;
its dependence on certain suppliers; domestic and foreign government
regulation; its ability to keep abreast of technological innovations
and to translate them into new products; competition; political and
economic instability in certain markets, including the movements of
foreign currencies relative to the dollar; and other risks and
uncertainties disclosed from time to time in the Company's SEC reports
and filings.
Diagnostic Products Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited - In thousands except per share data)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2004 2003 2004 2003
---------- ----------- ---------- -----------
SALES:
Non-Affiliated
Customers $109,840 $95,539 $410,306 $351,455
Unconsolidated
Affiliates 7,819 9,279 32,867 29,931
---------- ---------- --------- ----------
TOTAL SALES 117,659 104,818 443,173 381,386
COST OF SALES 56,075 46,509 193,345 164,364
---------- ----------- ---------- -----------
GROSS PROFIT 61,584 58,309 249,828 217,022
---------- ----------- ---------- -----------
OPERATING EXPENSES:
Selling 20,390 17,386 77,624 64,090
Research and Development 11,639 10,591 45,277 40,677
General and
Administrative 15,313 9,618 47,790 34,928
Sale of Product Line - - - (4,218 )
Equity in Income of
Affiliates (1,914 ) (1,863 ) (8,451 ) (6,064 )
---------- ----------- ---------- -----------
TOTAL OPERATING EXPENSES 45,428 35,732 162,240 129,413
---------- ----------- ---------- -----------
TOTAL OPERATING INCOME 16,156 22,577 87,588 87,609
Interest/Other Income
(Expense)-Net (364 ) 391 417 827
---------- ----------- ---------- -----------
INCOME BEFORE INCOME
TAXES AND MINORITY
INTEREST 15,792 22,968 88,005 88,436
PROVISION FOR INCOME
TAXES 4,308 7,294 25,495 26,280
MINORITY INTEREST 341 173 775 361
---------- ----------- ---------- -----------
NET INCOME $11,143 $ 15,501 $61,735 $ 61,795
---------- ----------- ---------- -----------
EARNINGS PER SHARE:
BASIC $0.38 $0.54 $2.12 $2.15
DILUTED $0.37 $0.52 $2.06 $2.08
AVERAGE SHARES
OUTSTANDING:
BASIC 29,181 28,850 29,082 28,731
DILUTED 30,016 29,804 29,912 29,679
CONTACT: Diagnostic Products Corporation
James L. Brill, 310-645-8200
info@dpconline.com
www.dpcweb.com