EXHIBIT 99.1
CONTACTS: CESAR GARCIA
PRESIDENT AND CHIEF EXECUTIVE OFFICER
818-709-1244 X123 OR
RON STABINER, THE WALL STREET GROUP, INC.
212-888-4848
FOR IMMEDIATE RELEASE:
IRIS POSTS RECORD PERFORMANCE AS 1ST QUARTER 2005
OPERATING INCOME DOUBLES ON 49% REVENUE GROWTH
INCREASES 2005 GUIDANCE TO $0.30-$0.35 AND REVENUE GROWTH OF AT LEAST 35%
CHATSWORTH, CALIF., APRIL 28, 2005 - IRIS INTERNATIONAL, INC. (NASDAQ: IRIS)
today announced record revenues of $14.0 million for the first quarter ended
March 31, 2005, and earnings of $0.08 per basic share ($0.07 per fully diluted
share). The record performance results primarily from sales for its new iQ(R)200
Automated Urinalysis Analyzer and increasing recurring revenues from sales of
consumables.
KEY FINANCIAL INDICATORS
INCREASE
(000S OMITTED, EXCEPT PER SHARE) Q1 05 Q1 04 (DECREASE) % CHG
- ---------------------------------- -------- -------- -------- --------
CONSOLIDATED REVENUE ............. $ 13,964 $ 9,375 $ 4,589 49%
DIAGNOSTICS REVENUE .............. $ 11,638 $ 7,401 $ 4,237 57%
STATSPIN REVENUE ................. $ 2,326 $ 1,974 $ 352 18%
GROSS PROFIT MARGIN .............. $ 6,894 $ 4,704 $ 2,190 47%
OPERATING INCOME ................. $ 2,026 $ 968 $ 1,058 109%
NET INCOME ....................... $ 1,271 $ 529 $ 742 140%
EPS - BASIC ...................... $ 0.08 $ 0.04 $ 0.04 100%
EPS - DILUTED .................... $ 0.07 $ 0.04 $ 0.03 75%
DEBT ............................. $ 0 $ 5,032 $ (5,032) 100%
SHARES OUTSTANDING - BASIC ....... 16,218 12,051 4,167 35%
SHARES OUTSTANDING - DILUTED ..... 17,294 13,846 3,448 25%
CASH AND CASH EQUIVALENTS ........ $ 13,428 $ 3,216 $ 10,212 318%
OTHER Q1 2005 OPERATIONAL HIGHLIGHTS:
o INCREASED EARNINGS TO $0.08 PER BASIC SHARE ($0.07* PER DILUTED SHARE)
FROM $0.04
o OPERATING INCOME IMPROVED TO $2,026K FROM $968K
o VERY STRONG INTERNATIONAL DEMAND FOR THE IQ200 AND IQ200 SPRINT(TM)
ANALYZERS RESULTING IN RECORD INSTRUMENTS REVENUE - THE ACCELERATION OF
INSTRUMENT PLACEMENTS SHOULD RESULT IN SIGNIFICANTLY HIGHER CONSUMABLE
AND SERVICE REVENUES IN FUTURE PERIODS
o SALES OF CONSUMABLES AND SERVICE OF $5.7 MILLION, AN INCREASE OF 22%
COMPARED TO Q1 2004
o NET OPERATING LOSS TAX CARRY-FORWARD OF $16 MILLION AVAILABLE FOR
FUTURE PERIODS
o STRONG BALANCE SHEET WITH NO OUTSTANDING DEBT
- --------------------------------------------------------------------------------
* ASSUMES 40% TAX RATE DESPITE NOLS THAT ELIMINATE PAYMENT OF FEDERAL INCOME
TAXES FOR 2004.
"We are very satisfied with the high demand for iQ200 analyzers in the first
quarter," stated Cesar Garcia, Chief Executive Officer of IRIS. "Our
international instrument shipments significantly exceeded our expectations while
domestic instrument shipments were slightly ahead of expectation. After a very
strong fourth quarter, I am pleased to report that we have achieved record
quarterly revenues of $14.0 million and operating income of $2.0 million in a
quarter that has been traditionally slow due to lower instruments sales.
"This is our fifth consecutive quarter with sequential revenue growth,
representing a 49% increase over the corresponding period last year. Our
performance is beginning to reflect the anticipated increases in consumables and
service, with quarterly revenues in this category exceeding prior year results
by more than $1 million, an increase of 22%. We expect this trend to continue to
accelerate as more instruments are put into routine use and more domestic
customers acquire service contracts, after the expiration of the instrument
warranty.
"I am also pleased to report that our customers will be presenting 12
peer-reviewed scientific posters attesting to the superior clinical utility of
our platform at the EUROMEDLAB Conference & Exhibit in Glasgow, Scotland, in May
2005. This international conference attracts more than 2,500 participants,
typically laboratory scientists and technologists from around the world. We have
also been informed that five additional peer-reviewed scientific posters
submitted by our customers have been accepted for presentation at the American
Association of Clinical Chemistry Conference in Orlando, Florida, in July 2005.
The high level of interest demonstrated by the medical community confirms that
the iQ200 Microscopy Analyzer has been adopted as the standard of care in urine
microscopy."
Mr. Garcia stated that "IRIS' new product pipeline became more robust with the
recent U.S. Food and Drug Administration (FDA) 510k clearance of the iQ200 body
fluids application and the market launch of the Express 3 centrifuge by our
StatSpin small medical devices division. Both products will be commercially
available during the second quarter. We also continue to make progress in our
feasibility program to extend the iQ200 platform into advanced urinalysis
applications that could open new market opportunities in the diagnosis of
bacteria and rare cell detection in urine -- an estimated addressable market of
approximately $300 million."
IRIS International yesterday announced the signing of a definitive agreement to
acquire the assets of the urine chemistry strip product line from Quidel
Corporation. "We are addressing a significant international market gap with the
acquisition of this product line and related intellectual property," Mr. Garcia
said. "We believe that this strategic acquisition brings core technology that
will allow us to compete more effectively and begin to participate in an
estimated addressable international market consisting of 8,000 potential sites
and representing $250 million in annual sales. Our revised financial guidance
for 2005 incorporates the commencement of this business activity."
The Company's operating income margin increased to 15% compared with 10% in the
prior year quarter. "We must keep our eyes on our operating margin because
average gross margins fluctuate from quarter to quarter depending on the mix
between products sold directly and through distributors, and gross margin may
not be the final indicator of the profit generation capability of the Company,"
Mr. Garcia said. He added that "the Company expects to achieve operating margins
of at least 20 percent in 2006 and beyond." IRIS has now secured distribution in
50 countries, all through distributors, except in France where the company sells
directly to end-users through its IRIS Diagnostics France SARL, based in Paris,
France.
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Net revenues for the first quarter ended Mar. 31, 2005, rose 49% to $14.0
million, compared with $9.4 million in the corresponding quarter of 2004. Net
income amounted to $1.3 million, or $0.08 per basic share ($0.07 per diluted
share), on 16.2 million basic shares outstanding (17.3 million diluted shares),
compared with net income of $529,000, or $0.04 per basic and diluted share, on
12.1 million basic and 13.8 million diluted shares outstanding during the first
quarter of 2004.
The IN VITRO diagnostics segment revenues grew approximately 57% during the
first quarter. The international sector of this segment continues to get
stronger, and represented approximately 31% of the IN VITRO diagnostics
segment's first quarter revenues. "We are also pleased to report that revenue
from consumables, supplies and services is growing and represented 49% of the
first quarter segment revenues and approximately 41% of our consolidated
revenues over the same period," Mr. Garcia stated. "Instrument bookings for the
first quarter 2005 are stronger than anticipated, and our consumable revenue
growth should continue to accelerate during 2005."
Revenues from StatSpin, the Company's small laboratory devices subsidiary, were
$2.3 million for the first quarter, up from $2.0 million in the year-ago
quarter, an 18% increase.
IRIS' gross profit margin was 49% in the first quarter versus 50% in the prior
year quarter, primarily due to stronger sales of instruments versus consumables
and service and increased international sales of iQ200 Microscopy Analyzers and
related consumables through distributors at lower margins.
As of Mar. 31, 2005, IRIS had $13.4 million in cash on hand and net operating
loss tax carry-forwards of $16 million available for use in future years.
REVISED 2005 GUIDANCE:
o PROJECTED REVENUE GROWTH INCREASED TO AT LEAST 35% FROM AT
LEAST 25%
o PROJECTED EARNINGS PER SHARE OF $0.30 - $0.35
"Because of these results, we are increasing our guidance to reflect the strong
demand that we are experiencing for the iQ200 Analyzer and the recently released
iQ200 Sprint Analyzers," Mr. Garcia said. "During 2005, we expect consolidated
revenues to grow at least 35% over 2004 and earnings to grow to $0.30 - $0.35
per share, on estimated diluted shares of approximately 18.3 million. Free cash
flow will begin to grow at a significant rate in the second half of the year and
we expect further escalation in 2006."
THE COMPANY WILL HOLD A CONFERENCE CALL WITH MEMBERS OF THE INVESTMENT COMMUNITY
AT 11:00 A.M. EASTERN TIME TODAY. TO PARTICIPATE IN THE CALL, DIAL
1-800-817-2743 APPROXIMATELY 10 MINUTES BEFORE THE CALL IS SCHEDULED TO BEGIN.
INTERNATIONAL CALLERS SHOULD DIAL 913-981-4915. A WEBCAST OF THE CALL CAN BE
ACCESSED AT www.proiris.com OR AT www.vcall.com.
THE COMPANY
IRIS International, Inc. (www.proiris.com) is a leader in automated urinalysis
technology with systems in major medical institutions throughout the world. The
Company's newest generation iQ(R)200 Automated Urine Microscopy Analyzer,
utilizing image flow cytometry, patented Automated Intelligent Microscopy (AIM)
technology and neural network-based particle recognition, achieves a significant
reduction in the cost and time-consuming steps involved in manual microscopic
analysis. The Company's StatSpin(R) subsidiary, based in Norwood, Mass.,
manufactures innovative centrifuges and blood analysis products. Advanced
Digital Imaging Research, LLC (ADIR), based near Houston, Texas, is the
Company's imaging research and development subsidiary.
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SAFE HARBOR PROVISION
This news release contains forward-looking statements made in reliance upon the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, but are not limited to, the Company's views
on future commercial revenues, market growth, capital requirements, and new
product introductions, and are generally identified by phrases such as "thinks,"
"anticipates," "believes," "estimates," "expects," "intends," "plans," and
similar words. Forward-looking statements are not guarantees of future
performance and are inherently subject to uncertainties and other factors which
could cause actual results to differ materially from the forward-looking
statement. These statements are based upon, among other things, assumptions made
by, and information currently available to, management, including management's
own knowledge and assessment of the Company's industry, competition and capital
requirements. Other factors and uncertainties that could affect the Company's
forward-looking statements include, among other things, the following: the
acceptance by customers of our new iQ(R)200 product platform, our substantial
expansion of international sales and our reliance on key suppliers, the
potential need for changes in long-term strategy in response to future
developments; future advances in diagnostic testing methods and procedures, as
well as potential changes in government regulations and healthcare policies,
both of which could adversely affect the economics of the diagnostic testing
procedures automated by the Company's products; rapid technological change in
the microelectronics and software industries; and increasing competition from
imaging and non-imaging based in-vitro diagnostic products. The Company refers
interested persons to its most recent Annual Report on Form 10-K and its other
SEC filings for a description of additional uncertainties and factors that may
affect forward-looking statements. The Company assumes no duty to update its
forward-looking statements.
(TABLES FOLLOW)
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IRIS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the three months
ended
(in thousands except for per share amounts) March 31,
- -------------------------------------------------------- --------------------
2005 2004
-------- --------
Sales of IVD instruments ............................... $ 5,939 $ 2,543
Sales of IVD consumables and service ................... 5,699 4,672
Sales of small laboratory devices and supplies ......... 2,326 1,974
Royalty and license revenues ........................... -- 186
-------- --------
Net revenues ........................................... 13,964 9,375
-------- --------
Cost of goods - IVD instruments ........................ 3,593 1,864
Cost of goods - IVD consumables and service ............ 2,315 1,800
Cost of goods - small laboratory devices and supplies .. 1,162 1,007
-------- --------
Cost of goods sold ..................................... 7,070 4,671
-------- --------
Gross margin ........................................... 6,894 4,704
-------- --------
Marketing and selling expenses ......................... 2,391 1,490
General and administrative expenses .................... 1,394 1,193
Research and development, net .......................... 1,083 1,053
-------- --------
Total operating expenses ............................... 4,868 3,736
-------- --------
Operating income ....................................... 2,026 968
Other income (expense):
Interest income ..................................... 53 11
Interest expense .................................... (5) (90)
Other (expense) income .............................. 44 (7)
-------- --------
Income before income taxes ............................. 2,118 882
Provision for income taxes ............................. 847 353
-------- --------
Net income ............................................. $ 1,271 $ 529
======== ========
Basic net income per share ............................. 0.08 0.04
======== ========
Diluted net income per share ........................... $ 0.07 $ 0.04
======== ========
Basic - average shares outstanding ..................... 16,218 12,051
======== ========
Diluted - average shares outstanding ................... 17,294 13,846
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
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IRIS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
MAR. 31, DEC. 31,
ASSETS 2005 2004
-------- --------
Current assets:
Cash and cash equivalents ............................ $ 13,428 $ 12,839
Accounts receivable, net ............................. 10,290 8,847
Inventories, net ..................................... 7,012 7,834
Prepaid expenses and other current assets ............ 447 381
Investment available for sale ........................ 121 198
Deferred tax asset ................................... 3,650 3,650
-------- --------
Total current assets .............................. 34,948 33,749
Property and equipment, at cost, net ................. 3,896 3,880
Goodwill ............................................. 189 189
Software development costs, net ...................... 1,760 1,930
Deferred tax asset ................................... 4,824 5,665
Inventories - long term portion ...................... 489 290
Other assets ......................................... 3,111 2,433
-------- --------
Total assets ......................................... $ 49,217 $ 48,136
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ..................................... $ 3,287 $ 4,258
Accrued expenses ..................................... 2,661 3,398
Deferred service contract revenue .................... 1,269 1,134
-------- --------
Total current liabilities ....................... 7,217 8,790
Deferred service contract revenue, long term ......... 139 173
-------- --------
Total liabilities ............................... 7,356 8,963
Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value
Authorized: 50 million shares; issued and
outstanding: 16,322 shares and 15,962 shares ..... 163 159
Additional paid-in capital ........................... 63,545 61,972
Unearned compensation ................................ (274) (125)
Accumulated other comprehensive income ............... -- 11
Accumulated deficit .................................. (21,573) (22,844)
-------- --------
Total shareholders' equity ...................... 41,861 39,173
-------- --------
Total liabilities and shareholders' equity .......... $ 49,217 $ 48,136
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
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