Exhibit 99.1
Millipore Reports Second Quarter Financial Results;
Company posts fourth straight quarter of strong revenue
growth in both divisions;
continues successful execution of global supply chain initiative
BILLERICA, Mass.--(BUSINESS WIRE)--July 26, 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 second quarter
ended July 1, 2006.
Revenues for the second quarter grew 12 percent totaling $273.8
million. Changes in foreign exchange rates during the quarter had no
impact on total revenue growth. Millipore's Bioprocess Division grew
13 percent in the second quarter and its Bioscience Division grew 10
percent. Excluding the impact of acquisitions, revenue growth in the
second quarter was 8 percent.
Millipore reported second quarter net income of $29.1 million, or
$0.54 per share, compared to net income of $24.0 million or $0.47 per
share in the second quarter of 2005. Non-GAAP net income grew
approximately 28 percent in the second quarter totaling $38.9 million,
or $0.72 per share, compared to non-GAAP net income of $30.3 million,
or $0.60 per share in the second quarter of 2005. A reconciliation of
GAAP to non-GAAP financial measures is provided in the Company's
financial tables accompanying this press release.
"During the second quarter, our Bioscience Division continued to
accelerate its performance due to improved execution and growth in
international markets," said Martin Madaus, Chairman & CEO of
Millipore. "The momentum of our Bioscience business is complementing
the performance of our Bioprocess business, which is delivering solid
growth due to the attractive fundamentals of the biopharmaceutical
manufacturing market. Over the long-term, this balanced growth profile
will help us to generate consistent results and drive higher levels of
earnings and cash flow.
"In addition to the strong quarterly performance of both of our
divisions, our global supply chain initiatives contributed
significantly to the 130 basis points of improvement in our non-GAAP
gross profit margins and is ahead of schedule. We closed one facility
in the second quarter and have transferred 36 product lines since we
began this project. We are now at the mid-point of this program and we
anticipate generating higher gross profit margins over the next three
years."
Millipore completed its previously announced acquisition of
Serologicals Corporation on July 14, 2006, shortly after the close of
the second quarter. With the addition of Serologicals' differentiated
products, the Company will have a broad portfolio of high-margin
consumable products to generate growth in revenues and profitability.
Madaus added, "We are excited about the talent and differentiated
product lines we are acquiring from Serologicals. We expect to build
on our recent momentum by combining their products with our strong
global sales organization. This combination will enable us to increase
our market penetration in dynamic segments, such as cell culture
supplements, nuclear function, and stem cell research."
Second Quarter Highlights
-- Significant growth of the Company's laboratory water products
and services in all geographic regions
-- Strong growth in new Bioprocess products, including disposable
technologies and virus filters
-- Solid, balanced growth in Europe and the Americas
-- GAAP earnings per share increase of 14 percent; Non-GAAP
earnings per share increase of 20 percent
Revenue Growth by Geography ($ millions):
Three Months Ended Six Months Ended
----------------------- -----------------------
July 1, July 2, % July 1, July 2, %
2006 2005 Growth 2006 2005 Growth
------- ------- ------- ------- ------- -------
Americas $116.9 $103.5 13% $230.0 $206.8 11%
Europe 111.4 98.5 13% 220.5 200.9 10%
Asia/Pacific 45.5 43.0 6% 91.7 87.4 5%
------- ------- ------- -------
Total $273.8 $245.0 12% $542.2 $495.1 10%
======= ======= ======= =======
Revenue Growth by Division ($ millions):
Three Months Ended Six Months Ended
----------------------- -----------------------
July 1, July 2, % July 1, July 2, %
2006 2005 Growth 2006 2005 Growth
------- ------- ------- ------- ------- -------
Bioprocess $166.9 $148.0 13% $330.6 $298.2 11%
Bioscience 106.9 97.0 10% 211.6 196.9 7%
------- ------- ------- -------
Total $273.8 $245.0 12% $542.2 $495.1 10%
======= ======= ======= =======
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 website: 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:
3079051. The telephonic replay will be available beginning at 8:00
p.m. ET on July 26, 2006 until 8:00 p.m. ET on July 28, 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 in more than 47 facilities 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, and amortization of intangible assets related to
business acquisitions. 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 eighteen
months 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 and business acquisitions, 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 Six Months Ended
------------------- -------------------
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
--------- --------- --------- ---------
Net sales $273,775 $244,964 $542,190 $495,142
Cost of sales 130,249 116,125 256,021 230,228
--------- --------- --------- ---------
Gross profit 143,526 128,839 286,169 264,914
Selling, general and
administrative expenses 86,050 79,749 166,904 156,477
Research and development
expenses 19,717 17,341 38,130 33,414
Purchased intangibles
amortization 1,488 801 2,920 1,506
--------- --------- --------- ---------
Operating income 36,271 30,948 78,215 73,517
Interest income 9,268 633 16,160 1,308
Interest expense (7,992) (1,755) (12,185) (3,589)
--------- --------- --------- ---------
Income before income taxes
and minority interest 37,547 29,826 82,190 71,236
Provision for income taxes 7,986 5,849 18,001 14,959
Minority interest 424 - 521 -
--------- --------- --------- ---------
Net income $29,137 $23,977 $63,668 $56,277
========= ========= ========= =========
Diluted earnings per share $0.54 $0.47 $1.18 $1.11
========= ========= ========= =========
Diluted weighted average shares
outstanding 54,207 50,707 54,051 50,525
========= ========= ========= =========
Millipore Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
July 1, December 31,
2006 2005
------------ -------------
ASSETS
Current assets:
Cash and cash equivalents $1,239,127 $537,052
Marketable securities 266,709 113,839
Accounts receivable, net 217,267 188,130
Inventories 174,201 153,030
Deferred income taxes and other current
assets 79,230 75,050
------------ -------------
Total current assets 1,976,534 1,067,101
Property, plant and equipment, net 411,862 371,249
Deferred income taxes 67,633 73,190
Intangible assets, net 46,088 43,421
Goodwill 94,640 82,718
Other assets 25,712 8,986
------------ -------------
Total assets $2,622,469 $1,646,665
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $100,000 $-
Accounts payable 77,291 79,587
Accrued expenses and other current
liabilities 122,912 163,012
------------ -------------
Total current liabilities 300,203 242,599
Long-term debt 1,351,782 552,285
Other liabilities 60,562 60,218
Minority interest 4,073 -
Shareholders' equity 905,849 791,563
------------ -------------
Total liabilities and shareholders'
equity $2,622,469 $1,646,665
============ =============
Millipore Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended July 1, 2006
(dollars in thousands, except EPS data)
Gross Operat- Operat-
Gross Profit ing ing Pre-tax Net Diluted
Profit Margin Income Margin Income Income EPS
--------- ------- -------- ------- -------- -------- ------
GAAP
results,
three
months
ended July
1, 2006 $143,526 52.4% $36,271 13.2% $37,547 $29,137 $0.54
Non-GAAP
adjust-
ments:
Costs
related
to
manufact-
uring
consoli-
dation
strategy 6,339 2.3% 6,339 2.3% 6,339 4,329 0.08
Stock-
based
compen-
sation
expense 482 0.2% 3,135 1.2% 3,135 2,150 0.04
Acquis-
ition
related
expenses 70 0.0% 1,955 0.7% 1,955 1,335 0.02
Purchased
intang-
ibles
amortiz-
ation 1,488 0.6% 1,488 1,016 0.02
Bridge loan
commitment
fees in
connection
with
acquisition
of
Serologicals 1,310 895 0.02
--------- ------- -------- ------- -------- -------- ------
Total
non-GAAP
adjust-
ments 6,891 2.5% 12,917 4.8% 14,227 9,725 0.18
--------- ------- -------- ------- -------- -------- ------
Non-GAAP
results,
three
months
ended July
1, 2006 $150,417 54.9% $49,188 18.0% $51,774 $38,862 $0.72
========= ======= ======== ======= ======== ======== ======
Millipore Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
Six Months Ended July 1, 2006
(dollars in thousands, except EPS data)
Gross Operat- Operat-
Gross Profit ing ing Pre-tax Net Diluted
Profit Margin Income Margin Income Income EPS
--------- ------- -------- ------- --------- -------- -----
GAAP
results,
six months
ended July
1, 2006 $286,169 52.8% $78,215 14.4% $82,190 $63,668 $1.18
Non-GAAP
adjust-
ments:
Costs
related
to
manufact-
uring
consoli-
dation
strategy 10,564 1.9% 10,564 1.9% 10,564 6,967 0.13
Stock-
based
compen-
sation
expense 846 0.2% 5,714 1.1% 5,714 3,917 0.07
Acquis-
ition
related
expenses 70 0.0% 1,955 0.4% 1,955 1,335 0.02
Purchased
intang-
ibles
amortiz-
ation 2,920 0.5% 2,920 1,911 0.04
Bridge loan
commitment
fees in
connection
with
acquisition
of
Serologicals 1,310 895 0.02
--------- ------- -------- ------- --------- -------- -----
Total
non-GAAP
adjust-
ments 11,480 2.1% 21,153 3.9% 22,463 15,025 0.28
--------- ------- -------- ------- --------- -------- -----
Non-GAAP
results,
six months
ended July
1, 2006 $297,649 54.9% $99,368 18.3% $104,653 $78,693 $1.46
========= ======= ======== ======= ========= ======== =====
Millipore Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended July 2, 2005
(dollars in thousands, except EPS data)
Gross Operat- Operat-
Gross Profit ing ing Pre-tax Net Diluted
Profit Margin Income Margin Income Income EPS
--------- ------- -------- ------- -------- -------- -----
GAAP
results,
three
months
ended July
2, 2005 $128,839 52.6% $30,948 12.6% $29,826 $23,977 $0.47
Non-GAAP
adjust-
ments:
Costs
related
to
manufact-
uring
consoli-
dation
strategy 2,576 1.0% 2,576 1.0% 2,576 1,578 0.03
Costs
related
to divis-
ional
consoli-
dation 3,179 1.3% 3,179 1,946 0.04
Executive
termin-
ation
costs 3,792 1.6% 3,792 2,322 0.05
Purchased
intan-
gibles
amortiz-
ation 801 0.4% 801 491 0.01
--------- ------- -------- ------- ------- -------- ------
Total non-
GAAP
adjust-
ments 2,576 1.0% 10,348 4.3% 10,348 6,337 0.13
--------- ------- -------- ------- ------- -------- ------
Non-GAAP
results,
three
months
ended July
2, 2005 $131,415 53.6% $41,296 16.9% $40,174 $30,314 $0.60
========= ======= ======== ======= ======= ======== ======
Millipore Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
Six Months Ended July 2, 2005
(dollars in thousands, except EPS data)
Gross Operat- Operat-
Gross Profit ing ing Pre-tax Net Diluted
Profit Margin Income Margin Income Income EPS
--------- ------- -------- ------- ------- -------- ------
GAAP
results,
six months
ended July
2, 2005 $264,914 53.5% $73,517 14.8% $71,236 $56,277 $1.11
Non-GAAP
adjust-
ments:
Costs
related
to
manufact-
uring
consoli-
dation
strategy 2,576 0.5% 2,576 0.5% 2,576 1,578 0.03
Costs
related
to divis-
ional
consolid-
ation 3,674 0.8% 3,674 2,325 0.05
Executive
termin-
ation
costs 11,572 2.4% 11,572 8,290 0.17
Purchased
intan-
gibles
amortiz-
ation 1,506 0.3% 1,506 1,032 0.02
--------- ------- -------- ------- ------- -------- ------
Total non-
GAAP
adjust-
ments 2,576 0.5% 19,328 4.0% 19,328 13,225 0.27
--------- ------- -------- ------- ------- -------- ------
Non-GAAP
results,
six months
ended July
2, 2005 $267,490 54.0% $92,845 18.8% $90,564 $69,502 $1.38
========= ======= ======== ======= ======= ======== ======
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 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 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 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 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 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. In addition, non-GAAP operating income and
operating margin exclude one-time acquisition expenses in connection
with the acquisition of Serologicals.
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 expenses; and amortization of
intangibles related to business acquisitions 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 expenses and bridge loan commitment fees in connection
with the acquisition of Serologicals; and amortization of intangibles
related to business acquisitions 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; and amortization of intangibles
related to business acquisitions for the reasons described for net
income above.
CONTACT: Millipore
Joshua Young, 978-715-1527 or 800-225-3384
Director, Investor Relations
joshua_young@millipore.com