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8-K - FORM 8-K - GEN PROBE INC | a58712e8vk.htm |
Exhibit 99.1
Contact:
Michael Watts
Vice president, investor relations and
corporate communications
858-410-8673
Vice president, investor relations and
corporate communications
858-410-8673
For Immediate Release
Gen-Probe Reports Financial Results for the Fourth Quarter and Full Year 2010
In Fourth Quarter, Company Generates Record Non-GAAP EPS of $0.61,
17% Higher than in the Prior Year Period, and GAAP EPS of $0.56
17% Higher than in the Prior Year Period, and GAAP EPS of $0.56
For Full Year 2010, Total Revenues of $543.3 Million Grow by 9%,
Non-GAAP EPS of $2.19 Increase by 12%
Non-GAAP EPS of $2.19 Increase by 12%
SAN DIEGO, CA, February 15, 2011 Gen-Probe Incorporated (NASDAQ: GPRO) today reported financial
results for the fourth quarter and full year 2010, highlighted by record non-GAAP earnings per
share (EPS) of $0.61 in the quarter, 17% higher than in the prior year period.
In the fourth quarter of 2010, Gen-Probe generated record clinical diagnostics sales and an
all-time high in earnings per share despite macroeconomic headwinds and unusually strong sales of
influenza products a year ago, said Carl Hull, the Companys president and chief executive
officer. At the same time, we took important steps to accelerate our future growth by filing US
regulatory applications for the APTIMA® human papillomavirus (HPV) and trichomonas
products, and by acquiring GTI Diagnostics.
Key financial results for the fourth quarter of 2010 were ($ in millions, except EPS):
Non-GAAP | GAAP | |||||||||||||||||||||||
2010 | 2009 | Change | 2010 | 2009 | Change | |||||||||||||||||||
Product sales |
$ | 131.1 | $ | 135.5 | -3 | % | $ | 131.1 | $ | 135.5 | -3 | % | ||||||||||||
Total revenues |
$ | 136.7 | $ | 138.9 | -2 | % | $ | 136.7 | $ | 138.9 | -2 | % | ||||||||||||
Operating profit |
$ | 40.1 | $ | 37.4 | +7 | % | $ | 36.8 | $ | 34.9 | +5 | % | ||||||||||||
Net income |
$ | 29.4 | $ | 25.8 | +14 | % | $ | 27.2 | $ | 24.0 | +13 | % | ||||||||||||
EPS |
$ | 0.61 | $ | 0.52 | +17 | % | $ | 0.56 | $ | 0.48 | +17 | % |
Key financial results for the full year 2010 were ($ in millions, except EPS):
Non-GAAP | GAAP | |||||||||||||||||||||||
2010 | 2009 | Change | 2010 | 2009 | Change | |||||||||||||||||||
Product sales |
$ | 522.7 | $ | 483.8 | +8 | % | $ | 522.7 | $ | 483.8 | +8 | % | ||||||||||||
Total revenues |
$ | 543.3 | $ | 498.3 | +9 | % | $ | 543.3 | $ | 498.3 | +9 | % | ||||||||||||
Operating profit |
$ | 149.4 | $ | 131.0 | +14 | % | $ | 137.8 | $ | 120.1 | +15 | % | ||||||||||||
Net income |
$ | 107.5 | $ | 99.8 | +8 | % | $ | 106.9 | $ | 91.8 | +16 | % | ||||||||||||
EPS |
$ | 2.19 | $ | 1.95 | +12 | % | $ | 2.18 | $ | 1.79 | +22 | % |
Revenue Detail
Clinical diagnostics product sales established a new record in the fourth quarter of 2010, with
growth driven by the APTIMA Combo 2® assay for detecting Chlamydia and gonorrhea.
Increased APTIMA sales offset lower sales of PRODESSE influenza assays, which were unusually strong
in the prior year period due to the H1N1 pandemic. Foreign exchange fluctuations reduced clinical
diagnostics sales by an estimated $0.5 million, or less than 1%, compared to the prior year period.
Blood screening product sales decreased in the fourth quarter of 2010, as expected, due to lower
sales of TIGRIS® instruments to Novartis, the Companys blood screening collaboration
partner. Sales of blood screening assays were flat compared to the prior year period. Foreign
exchange fluctuations reduced blood screening sales by an estimated $0.7 million, or 1%, compared
to the prior year period.
Sales of research products and services in the fourth quarter of 2010 declined mainly due to the
divestiture of the BioKits food testing business late in 2009, and foreign exchange effects.
Fourth quarter product sales were ($ in millions):
Three Months Ended Dec. 31, | Change | |||||||||||||||
2010 | 2009 | As Reported | Constant Currency | |||||||||||||
Clinical Diagnostics |
$ | 80.1 | $ | 77.6 | +3 | % | +4 | % | ||||||||
Blood Screening |
$ | 47.6 | $ | 53.4 | -11 | % | -10 | % | ||||||||
Research Products
and Services |
$ | 3.4 | $ | 4.4 | -23 | % | -21 | % | ||||||||
Total Product Sales |
$ | 131.1 | $ | 135.5 | -3 | % | -2 | % | ||||||||
Product sales for the full year 2010 were ($ in millions): | ||||||||||||||||
12 Months Ended Dec. 31, | Change | |||||||||||||||
2010 | 2009 | As Reported | Constant Currency | |||||||||||||
Clinical Diagnostics |
$ | 305.8 | $ | 274.2 | +12 | % | +12 | % | ||||||||
Blood Screening |
$ | 203.1 | $ | 197.5 | +3 | % | +3 | % | ||||||||
Research Products
and Services |
$ | 13.8 | $ | 12.0 | +15 | % | +17 | % | ||||||||
Total Product Sales |
$ | 522.7 | $ | 483.8 | +8 | % | +8 | % |
Collaborative research revenues in the fourth quarter of 2010 were $3.7 million, compared to $2.0
million in the prior year period, an increase of 85% that resulted primarily from increased funding
from Novartis associated with the development of the fully automated PANTHER instrument and the
PROCLEIX® ULTRIO® Plus assay for the blood screening market.
Royalty and license revenues in the fourth quarter of 2010 were $1.9 million, compared to $1.4
million in the prior year period, an increase of 36% that resulted primarily from higher royalties
received from Novartis and Ventana.
2
GAAP Income Statement Details
Gross margin on product sales was 69.4% in the fourth quarter of 2010, compared to 67.2% in the
prior year period. This increase resulted mainly from decreased sales of low-margin instruments.
Acquisition-related amortization expenses were $2.2 million in the fourth quarter of 2010, compared
to $1.9 million in the prior year period, an increase of 16% that resulted mainly from the October
2009 acquisition of Prodesse and its related intangible assets.
Research and development (R&D) expenses in the fourth quarter of 2010 were $26.9 million, compared
to $27.4 million in the prior year period, a decrease of 2% that resulted primarily from lower
clinical trial expenses.
Marketing and sales expenses in the fourth quarter of 2010 were $15.0 million, similar to $15.3
million in the prior year period.
G&A expenses were $15.6 million in the fourth quarter of 2010, compared to $14.9 million in the
prior year period, an increase of 5% that resulted mainly from expenses associated with the
consolidation of United Kingdom operations and the acquisition of GTI Diagnostics.
Total other income was $1.2 million in the fourth quarter of 2010, compared to $2.3 million in the
prior year period. This decrease of 48% resulted primarily from lower realized gains from the sale
of marketable securities, lower yields on the Companys municipal bond portfolio, and lower
investment balances due to share repurchases, acquisitions and strategic investments.
Income tax expense was $10.8 million in the fourth quarter of 2010, corresponding to a tax rate of
28%. Income tax expense benefited from the reinstatement of the federal R&D tax credit, which was
retroactive to the beginning of 2010.
Non-GAAP Income Statement Details
Excluding $0.1 million of acquisition-related depreciation expense, gross margin on product sales
in the fourth quarter of 2010 was 69.5%, compared to 67.3% in the prior year period.
Excluding transaction-related costs, general and administrative (G&A) expenses in the fourth
quarter of 2010 were $14.7 million, similar to $14.5 million in the prior year period.
Excluding a $0.4 million non-cash gain on a change in the fair value of contingent consideration,
total other income in the fourth quarter of 2010 was $0.8 million, compared to $2.3 million in the
prior year period.
Excluding adjustments to contingent consideration that largely are not taxable, income tax expense
in the fourth quarter of 2010 was $11.4 million, corresponding to a tax rate of 28%.
Cash Flows and Balance Sheet
In the fourth quarter of 2010, Gen-Probe generated net cash of $43.8 million from operating
activities, and spent $8.6 million on property, plant and equipment, leading to free cash flow of
$35.2 million. The Company repurchased approximately 245,000 shares of its stock in the fourth
quarter for $11.9 million, thereby completing its $100 million buyback program. In a separate
press release today, Gen-Probe announced a new, $150 million stock repurchase program.
Gen-Probe continues to have a strong balance sheet. As of December 31, 2010, the Company had
$489.7 million of cash, cash equivalents and marketable securities, and $240.0 million of
short-term debt. The Company pays interest on this debt at a rate 0.6% above the one-month London
Interbank Offered Rate (LIBOR), which has been below 0.3%.
3
2011 Financial Guidance
We anticipate 2011 will be a good year financially for Gen-Probe, said Herm Rosenman, the
Companys senior vice president and chief financial officer. As we said in our recent analyst
day, we forecast continued, high-single-digit growth in product sales, even as instrument sales
decline. We also expect improving gross and operating margins to drive solid earnings growth,
despite increased legal expenses and lower non-operating income. Gen-Probes 2011 financial
guidance is described in the table below:
Non-GAAP | GAAP | |||||||
Total revenues |
$570 to $595 million | $570 to $595 million | ||||||
Product gross margins |
68% to 69.5% | 68% to 69.5% | ||||||
Acquisition-related
amortization and
other transaction expense |
N/A | $13 to 14 million | ||||||
Operating margin |
27% to 29% | 25% to 27% | ||||||
Tax rate |
32% to 33% | 32% to 33% | ||||||
Diluted shares |
48 to 49 million | 48 to 49 million | ||||||
EPS |
$2.28 to $2.40 | $2.06 to $2.20 |
Notes on Presentation
In this press release, all per share amounts are calculated on a fully diluted basis. Some totals
may not foot due to rounding. Certain prior year amounts have been reclassified to conform to the
current year presentation.
About Non-GAAP Financial Measures
To supplement Gen-Probes financial results for the fourth quarter of 2010 and its 2011 financial
guidance, in each case presented in accordance with GAAP, Gen-Probe uses the following financial
measures defined as non-GAAP by the SEC: non-GAAP net income, non-GAAP gross margin, non-GAAP
marketing and sales expenses, non-GAAP G&A expenses, non-GAAP operating margin, non-GAAP income tax
rate, and non-GAAP EPS. Gen-Probes management does not, nor does it suggest that investors
should, consider such non-GAAP financial measures in isolation from, or as a substitute for,
financial information prepared and presented in accordance with GAAP. Gen-Probes management
believes that these non-GAAP financial measures provide meaningful supplemental information
regarding the Companys performance by excluding certain expenses and adjustments that may not be
indicative of core business results. Gen-Probe believes that both management and investors benefit
from referring to these non-GAAP financial measures in assessing Gen-Probes performance and when
planning, forecasting and analyzing future periods. These non-GAAP financial measures also
facilitate managements internal comparisons to Gen-Probes historical performance and our
competitors operating results. Gen-Probe believes these non-GAAP financial measures are useful to
investors in allowing for greater transparency with respect to supplemental information used by
management in its financial and operational decision making. Further, our reconciliations of
non-GAAP to GAAP operating results, which are included on the attached tables, are presented in the
format of consolidated statements of income solely to assist a reader in understanding the impact
of the various adjustments to our GAAP operating results, individually and in the aggregate, and
are not intended to place any undue prominence on our non-GAAP operating results.
Webcast Conference Call
A live webcast of Gen-Probes fourth quarter 2010 conference call for investors can be
accessed at http://www.gen-probe.com beginning at 4:30 p.m. Eastern Time today. The webcast will
be archived for at least 90 days. A telephone replay of the call will be available for
approximately 24 hours. Call 800-294-4406 (US) or 203-369-3231 (international).
4
About Gen-Probe
Gen-Probe is a global leader in the development, manufacture and marketing of rapid, accurate and
cost-effective molecular diagnostic products and services that are used primarily to diagnose human
diseases, screen donated human blood, and ensure transplant compatibility. Gen-Probe has
approximately 28 years of expertise in nucleic acid testing (NAT), and received the 2004 National
Medal of Technology, Americas highest honor for technological innovation, for developing NAT
assays for blood screening. Gen-Probe is headquartered in San Diego and employs approximately
1,400 people. For more information, go to www.gen-probe.com.
Trademarks
APTIMA, APTIMA COMBO 2, PANTHER, PRODESSE and TIGRIS are trademarks of Gen-Probe. All other
trademarks are the property of their owners.
Caution Regarding Forward-Looking Statements
Any statements in this news release about our expectations, beliefs, plans, objectives, assumptions
or future events or performance, including those under the heading 2011 Financial Guidance, are
not historical facts and are forward-looking statements. These statements are often, but not
always, made through the use of words or phrases such as believe, will, expect, anticipate,
estimate, intend, plan and would. For example, statements concerning Gen-Probes financial
condition, possible or expected results of operations, the development and commercialization of new
products, regulatory approvals, future milestones, growth opportunities, and plans of management
are all forward-looking statements. Forward-looking statements are not guarantees of performance.
They involve known and unknown risks, uncertainties and assumptions that may cause actual results,
levels of activity, performance or achievements to differ materially from those expressed or
implied. Some of these risks, uncertainties and assumptions include but are not limited to: (i)
the risk that we may not achieve our expected 2011 financial targets, (ii) the risk that we may not
integrate acquisitions, such as Tepnel, Prodesse and GTI Diagnostics, successfully, (iii) the
possibility that the market for the sale of our new products, such as our PANTHER instrument system
and PROGENSA PCA3, APTIMA HPV and APTIMA trichomonas assays, may not develop as expected, (iv) the
enhancement of existing products and the development of new products may not proceed as planned,
(v) the risk that investigational products, including those now in US clinical trials, may not be
approved by regulatory authorities or become commercially available in the time frame we
anticipate, or at all, (vi) the risk that we may not be able to compete effectively, (vii) the risk
that we may not be able to maintain our current corporate collaborations and enter into new
corporate collaborations or customer contracts, (viii) our dependence on Novartis and other third
parties for the distribution of some of our products, (ix) our dependence on a small number of
customers, contract manufacturers and single source suppliers of raw materials, (x) changes in
third-party reimbursement policies regarding our products could adversely affect sales, (xi)
changes in government regulation or tax policy affecting our diagnostic products could harm our
sales, increase our development costs or increase our taxes, (xii) the risk that our intellectual
property may be infringed by third parties or invalidated, and (xiii) our involvement in patent and
other intellectual property and commercial litigation could be expensive and could divert
managements attention. This list includes some, but not all, of the factors that could affect our
ability to achieve results described in any forward-looking statements. For additional information
about risks and uncertainties we face and a discussion of our financial statements and footnotes,
see documents we file with the SEC, including our most recent annual report on Form 10-K and all
subsequent periodic reports. We assume no obligation and expressly disclaim any duty to update
forward-looking statements to reflect events or circumstances after the date of this news release
or to reflect the occurrence of subsequent events.
# # #
5
Gen-Probe Incorporated
Consolidated Balance Sheets GAAP
(In thousands, except share and per share data)
(In thousands, except share and per share data)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents, including restricted cash
of $16 and $17 at December 31, 2010 and December 31,
2009, respectively |
$ | 59,690 | $ | 82,616 | ||||
Marketable securities |
170,648 | 402,990 | ||||||
Trade accounts receivable, net of allowance for
doubtful accounts of $355 and $516 at December 31,
2010 and December 31, 2009, respectively |
54,739 | 55,305 | ||||||
Accounts receivable other |
5,493 | 4,707 | ||||||
Inventories |
66,416 | 61,071 | ||||||
Deferred income tax |
13,634 | 13,959 | ||||||
Prepaid income tax |
2,993 | 7,317 | ||||||
Prepaid expenses |
11,672 | 14,526 | ||||||
Other current assets |
5,148 | 4,708 | ||||||
Total current assets |
390,433 | 647,199 | ||||||
Marketable securities, net of current portion |
259,317 | 15,472 | ||||||
Property, plant and equipment, net |
160,863 | 157,437 | ||||||
Capitalized software, net |
13,981 | 12,560 | ||||||
Patents, net |
12,450 | 1,556 | ||||||
Goodwill |
150,308 | 122,680 | ||||||
Purchased intangibles, net |
120,270 | 108,015 | ||||||
License, manufacturing access fees and other assets, net |
60,175 | 63,266 | ||||||
Total assets |
$ | 1,167,797 | $ | 1,128,185 | ||||
Liabilities and stockholders equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 14,614 | $ | 20,455 | ||||
Accrued salaries and employee benefits |
26,825 | 24,775 | ||||||
Other accrued expenses |
13,935 | 24,755 | ||||||
Income tax payable |
634 | | ||||||
Short-term borrowings |
240,000 | 240,127 | ||||||
Deferred revenue |
1,166 | 3,527 | ||||||
Total current liabilities |
297,174 | 313,639 | ||||||
Non-current income tax payable |
8,315 | 5,958 | ||||||
Deferred income tax |
29,775 | 23,220 | ||||||
Deferred revenue, net of current portion |
2,500 | 1,978 | ||||||
Other long-term liabilities |
6,654 | 16,215 | ||||||
Commitments and contingencies |
||||||||
Stockholders equity: |
||||||||
Preferred stock, $0.0001 par value per share;
20,000,000 shares authorized, none issued and
outstanding |
| | ||||||
Common stock, $0.0001 par value per share;
200,000,000 shares authorized, 47,966,156 and
49,143,798 shares issued and outstanding at December
31, 2010 and December 31, 2009, respectively |
5 | 5 | ||||||
Additional paid-in capital |
195,820 | 242,615 | ||||||
Accumulated other comprehensive income |
678 | 4,616 | ||||||
Retained earnings |
626,876 | 519,939 | ||||||
Total stockholders equity |
823,379 | 767,175 | ||||||
Total liabilities and stockholders equity |
$ | 1,167,797 | $ | 1,128,185 | ||||
6
Gen-Probe Incorporated
Consolidated Statements of Income GAAP
(In thousands, except per share data)
(Unaudited)
(In thousands, except per share data)
(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues: |
||||||||||||||||
Product sales |
$ | 131,093 | $ | 135,470 | $ | 522,709 | $ | 483,759 | ||||||||
Collaborative research revenue |
3,708 | 2,049 | 14,518 | 7,911 | ||||||||||||
Royalty and license revenue |
1,893 | 1,351 | 6,100 | 6,632 | ||||||||||||
Total revenues |
136,694 | 138,870 | 543,327 | 498,302 | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of product sales (excluding
acquisition-related intangible
amortization) |
40,104 | 44,454 | 169,222 | 152,393 | ||||||||||||
Acquisition-related intangible
amortization |
2,231 | 1,894 | 8,847 | 4,144 | ||||||||||||
Research and development |
26,885 | 27,428 | 111,103 | 105,970 | ||||||||||||
Marketing and sales |
15,016 | 15,306 | 59,492 | 53,853 | ||||||||||||
General and administrative |
15,610 | 14,925 | 56,818 | 61,828 | ||||||||||||
Total operating expenses |
99,846 | 104,007 | 405,482 | 378,188 | ||||||||||||
Income from operations |
36,848 | 34,863 | 137,845 | 120,114 | ||||||||||||
Other income/(expense): |
||||||||||||||||
Investment and interest income |
1,401 | 1,923 | 11,765 | 21,603 | ||||||||||||
Interest expense |
(535 | ) | (392 | ) | (2,216 | ) | (1,857 | ) | ||||||||
Gain on contingent consideration |
399 | | 7,994 | | ||||||||||||
Other income/(expense), net |
(95 | ) | 769 | (177 | ) | (58 | ) | |||||||||
Total other income, net |
1,170 | 2,300 | 17,366 | 19,688 | ||||||||||||
Income before income tax |
38,018 | 37,163 | 155,211 | 139,802 | ||||||||||||
Income tax expense |
10,780 | 13,138 | 48,274 | 48,019 | ||||||||||||
Net income |
$ | 27,238 | $ | 24,025 | $ | 106,937 | $ | 91,783 | ||||||||
Net income per share: |
||||||||||||||||
Basic |
$ | 0.57 | $ | 0.49 | $ | 2.20 | $ | 1.82 | ||||||||
Diluted |
$ | 0.56 | $ | 0.48 | $ | 2.18 | $ | 1.79 | ||||||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
47,827 | 48,923 | 48,560 | 50,356 | ||||||||||||
Diluted |
48,455 | 49,458 | 49,033 | 50,965 | ||||||||||||
7
Gen-Probe Incorporated
Consolidated Statements of Income Non-GAAP Reconciliations
(In thousands, except per share data)
(Unaudited)
(In thousands, except per share data)
(Unaudited)
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
December 31, 2010 | December 31, 2009 | |||||||||||||||||||||||
Non-GAAP | Adjustments | GAAP | Non-GAAP | Adjustments | GAAP | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Product sales |
$ | 131,093 | $ | | $ | 131,093 | $ | 135,470 | $ | | $ | 135,470 | ||||||||||||
Collaborative research
revenue |
3,708 | | 3,708 | 2,049 | | 2,049 | ||||||||||||||||||
Royalty and license revenue |
1,893 | | 1,893 | 1,351 | | 1,351 | ||||||||||||||||||
Total revenues |
136,694 | | 136,694 | 138,870 | | 138,870 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of product sales
(excluding acquisition-related intangible
amortization) |
40,013 | 91 | 40,104 | 44,361 | 93 | 44,454 | ||||||||||||||||||
Acquisition-related
intangible amortization |
| 2,231 | 2,231 | | 1,894 | 1,894 | ||||||||||||||||||
Research and development |
26,885 | | 26,885 | 27,428 | | 27,428 | ||||||||||||||||||
Marketing and sales |
15,016 | | 15,016 | 15,209 | 97 | 15,306 | ||||||||||||||||||
General and administrative |
14,670 | 940 | 15,610 | 14,479 | 446 | 14,925 | ||||||||||||||||||
Total operating expenses |
96,584 | 3,262 | 99,846 | 101,477 | 2,530 | 104,007 | ||||||||||||||||||
Income from operations |
40,110 | (3,262 | ) | 36,848 | 37,393 | (2,530 | ) | 34,863 | ||||||||||||||||
Other income/(expense): |
||||||||||||||||||||||||
Investment and interest
income |
1,401 | | 1,401 | 1,923 | | 1,923 | ||||||||||||||||||
Interest expense |
(535 | ) | | (535 | ) | (392 | ) | | (392 | ) | ||||||||||||||
Gain on contingent
consideration |
| 399 | 399 | | | | ||||||||||||||||||
Other income/(expense), net |
(95 | ) | | (95 | ) | 769 | | 769 | ||||||||||||||||
Total other income, net |
771 | 399 | 1,170 | 2,300 | | 2,300 | ||||||||||||||||||
Income before income tax |
40,881 | (2,863 | ) | 38,018 | 39,693 | (2,530 | ) | 37,163 | ||||||||||||||||
Income tax expense |
11,437 | (657 | ) | 10,780 | 13,890 | (752 | ) | 13,138 | ||||||||||||||||
Net income |
$ | 29,444 | $ | (2,206 | ) | $ | 27,238 | $ | 25,803 | $ | (1,778 | ) | $ | 24,025 | ||||||||||
Net income per share: |
||||||||||||||||||||||||
Basic |
$ | 0.61 | $ | (0.04 | ) | $ | 0.57 | $ | 0.53 | $ | (0.04 | ) | $ | 0.49 | ||||||||||
Diluted |
$ | 0.61 | $ | (0.05 | ) | $ | 0.56 | $ | 0.52 | $ | (0.04 | ) | $ | 0.48 | ||||||||||
Weighted average shares
outstanding: |
||||||||||||||||||||||||
Basic |
47,827 | 47,827 | 48,923 | 48,923 | ||||||||||||||||||||
Diluted |
48,455 | 48,455 | 49,458 | 49,458 | ||||||||||||||||||||
8
Gen-Probe Incorporated
Consolidated Statements of Income Non-GAAP Reconciliations
(In thousands, except per share data)
(Unaudited)
(In thousands, except per share data)
(Unaudited)
Twelve Months Ended | Twelve Months Ended | |||||||||||||||||||||||
December 31, 2010 | December 31, 2009 | |||||||||||||||||||||||
Non-GAAP | Adjustments | GAAP | Non-GAAP | Adjustments | GAAP | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Product sales |
$ | 522,709 | $ | | $ | 522,709 | $ | 483,759 | $ | | $ | 483,759 | ||||||||||||
Collaborative research
revenue |
14,518 | | 14,518 | 7,911 | | 7,911 | ||||||||||||||||||
Royalty and license revenue |
6,100 | | 6,100 | 6,632 | | 6,632 | ||||||||||||||||||
Total revenues |
543,327 | | 543,327 | 498,302 | | 498,302 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of product sales
(excluding acquisition-related intangible
amortization) |
168,860 | 362 | 169,222 | 152,118 | 275 | 152,393 | ||||||||||||||||||
Acquisition-related
intangible amortization |
| 8,847 | 8,847 | | 4,144 | 4,144 | ||||||||||||||||||
Research and development |
111,103 | | 111,103 | 105,970 | | 105,970 | ||||||||||||||||||
Marketing and sales |
59,492 | | 59,492 | 53,756 | 97 | 53,853 | ||||||||||||||||||
General and administrative |
54,491 | 2,327 | 56,818 | 55,497 | 6,331 | 61,828 | ||||||||||||||||||
Total operating expenses |
393,946 | 11,536 | 405,482 | 367,341 | 10,847 | 378,188 | ||||||||||||||||||
Income from operations |
149,381 | (11,536 | ) | 137,845 | 130,961 | (10,847 | ) | 120,114 | ||||||||||||||||
Other income/(expense): |
||||||||||||||||||||||||
Investment and interest
income |
11,765 | | 11,765 | 21,603 | | 21,603 | ||||||||||||||||||
Interest expense |
(2,216 | ) | | (2,216 | ) | (1,857 | ) | | (1,857 | ) | ||||||||||||||
Gain on contingent
consideration |
| 7,994 | 7,994 | | | | ||||||||||||||||||
Other income/(expense), net |
(177 | ) | | (177 | ) | (58 | ) | | (58 | ) | ||||||||||||||
Total other income, net |
9,372 | 7,994 | 17,366 | 19,688 | | 19,688 | ||||||||||||||||||
Income before income tax |
158,753 | (3,542 | ) | 155,211 | 150,649 | (10,847 | ) | 139,802 | ||||||||||||||||
Income tax expense |
51,303 | (3,029 | ) | 48,274 | 50,825 | (2,806 | ) | 48,019 | ||||||||||||||||
Net income |
$ | 107,450 | $ | (513 | ) | $ | 106,937 | $ | 99,824 | $ | (8,041 | ) | $ | 91,783 | ||||||||||
Net income per share: |
||||||||||||||||||||||||
Basic |
$ | 2.21 | $ | (0.01 | ) | $ | 2.20 | $ | 1.98 | $ | (0.16 | ) | $ | 1.82 | ||||||||||
Diluted |
$ | 2.19 | $ | (0.01 | ) | $ | 2.18 | $ | 1.95 | $ | (0.16 | ) | $ | 1.79 | ||||||||||
Weighted average shares
outstanding: |
||||||||||||||||||||||||
Basic |
48,560 | 48,560 | 50,356 | 50,356 | ||||||||||||||||||||
Diluted |
49,033 | 49,033 | 50,965 | 50,965 | ||||||||||||||||||||
9
Gen-Probe Incorporated
Consolidated Statements of Cash Flows GAAP
(In thousands)
(Unaudited)
(In thousands)
(Unaudited)
Twelve Months Ended | ||||||||
December 31, | ||||||||
2010 | 2009 | |||||||
Operating activities: |
||||||||
Net income |
$ | 106,937 | $ | 91,783 | ||||
Adjustments to reconcile net income to net cash provided by
operating activities: |
||||||||
Depreciation and amortization |
44,529 | 40,382 | ||||||
Amortization of premiums on investments, net of accretion of
discounts |
9,573 | 5,868 | ||||||
Stock-based compensation |
24,075 | 23,420 | ||||||
Excess tax benefit from employee stock-based compensation |
(3,692 | ) | (2,005 | ) | ||||
Deferred revenue |
(1,808 | ) | 812 | |||||
Deferred income tax |
(3,745 | ) | (5,786 | ) | ||||
Gain on contingent consideration |
(7,994 | ) | | |||||
Gain on sale of food safety business |
| (291 | ) | |||||
Loss on disposal of property and equipment |
1,065 | 221 | ||||||
Changes in assets and liabilities: |
||||||||
Trade and other accounts receivable |
2,649 | (11,303 | ) | |||||
Inventories |
(1,154 | ) | 2,315 | |||||
Prepaid expenses |
3,055 | 1,218 | ||||||
Other current assets |
(360 | ) | 1,912 | |||||
Other long-term assets |
(559 | ) | (4,123 | ) | ||||
Accounts payable |
(6,265 | ) | 3,500 | |||||
Accrued salaries and employee benefits |
(133 | ) | (676 | ) | ||||
Other accrued expenses |
(4,417 | ) | (806 | ) | ||||
Income tax payable |
7,688 | (2,371 | ) | |||||
Other long-term liabilities |
122 | 961 | ||||||
Net cash provided by operating activities |
169,566 | 145,031 | ||||||
Investing activities: |
||||||||
Proceeds from sales and maturities of marketable securities |
427,821 | 438,601 | ||||||
Purchases of marketable securities |
(401,434 | ) | (419,019 | ) | ||||
Proceeds from sale of property, plant and equipment |
82 | | ||||||
Purchases of property, plant and equipment |
(30,716 | ) | (32,364 | ) | ||||
Purchase of capitalized software |
(3,891 | ) | (1,290 | ) | ||||
Purchases of intangible assets, including licenses and
manufacturing access fees |
(2,513 | ) | (7,341 | ) | ||||
Net cash paid for business combinations |
(53,000 | ) | (183,725 | ) | ||||
Proceeds from sale of food safety business |
| 6,357 | ||||||
Cash paid for investment in Pacific Biosciences |
(50,000 | ) | | |||||
Other |
(820 | ) | 403 | |||||
Net cash used in investing activities |
(114,471 | ) | (198,378 | ) | ||||
Financing activities: |
||||||||
Repurchase and retirement of common stock |
(99,935 | ) | (174,847 | ) | ||||
Proceeds from issuance of common stock and employee stock
purchase plan |
31,830 | 10,923 | ||||||
Payment of contingent consideration |
(10,000 | ) | | |||||
Repurchase and retirement of restricted stock for payment of taxes |
(1,257 | ) | (1,716 | ) | ||||
Excess tax benefit from employee stock-based compensation |
3,692 | 2,005 | ||||||
Borrowings, net |
(228 | ) | 238,450 | |||||
Net cash (used in) provided by financing activities |
(75,898 | ) | 74,815 | |||||
Effect of exchange rate changes on cash and cash equivalents |
(2,123 | ) | 1,026 | |||||
Net increase in cash and cash equivalents |
(22,926 | ) | 22,494 | |||||
Cash and cash equivalents at the beginning of period |
82,616 | 60,122 | ||||||
Cash and cash equivalents at the end of period |
$ | 59,690 | $ | 82,616 | ||||
10