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QIAGEN Reports Second Quarter 2013 Results And Announces New Share Repurchase Program

Stocks in this article: QGEN

VENLO, The Netherlands, July 30, 2013 /PRNewswire/ --

  • Q2 2013 results: Adjusted net sales of $316.4 million (+3% CER) on growth in all regions; adjusted operating income of $83.4 million; adjusted diluted EPS of $0.27 per share
  • Making progress to accelerate innovation and growth amid challenging conditions
  • Building momentum in Personalized Healthcare with FDA approval of  therascreen    EGFR companion diagnostic and new pharma co-development projects
  • Next-generation sequencing initiative progressing with launch plans on target
  • Efficiency project completed with last group of actions to strengthen commercial and marketing operations, freeing up further resources for strategic initiatives
  • New program authorized to repurchase up to $100 million in QIAGEN shares
  • QIAGEN reaffirms guidance for higher adjusted sales and earnings in 2013

QIAGEN N.V. (NASDAQ: QGEN; Frankfurt Prime Standard: QIA) announced results of operations for the second quarter and first half of 2013 and announced plans to launch a new program to repurchase up to $100 million of its shares.

Adjusted net sales (includes non-GAAP revenues from Ingenuity) in the second quarter rose 3% (+3% at constant exchange rates, CER) to $316.4 million from the second quarter of 2012. Adjusted operating income in the quarter declined 3% to $83.4 million, as the adjusted operating income margin fell to 26% of net sales. Adjusted diluted earnings per share (EPS) rose to $0.27 in the second quarter of 2013 from $0.25 in the year-ago quarter. A restructuring charge of $76 million was taken in the second quarter of 2013 as part of implementing the last group of actions to complete a major efficiency project designed to free up resources for reallocation to strategic initiatives.

"QIAGEN delivered growth across all regions in the second quarter of 2013 despite challenging economic conditions, particularly given the funding concerns for life sciences research in the United States and Europe. Our focus on accelerating innovation and growth is delivering value with improving results in Molecular Diagnostics, Pharma and Academia," said Peer M. Schatz, Chief Executive Officer of QIAGEN N.V. "Multiple growth drivers are propelling QIAGEN forward, including the QuantiFERON-TB latent tuberculosis test, our industry-leading Personalized Healthcare portfolio and the successful QIAsymphony automation platform. We are moving ahead with plans to provide a unique solution for targeted areas of next-generation sequencing with a differentiated GeneReader sample-to-result workflow that integrates our rapidly expanding portfolio of GeneRead NGS assay panels and Ingenuity's gold-standard biological data interpretation solutions. We are completing the transformation of QIAGEN through an efficiency project that has strengthened our capabilities to capture growth opportunities in a fast-changing environment. Our conviction about QIAGEN's growth prospects is backed by a new $100 million share repurchase program. Based on the solid results in the first half of the year, QIAGEN continues to be well-positioned to achieve its goals for 2013."

Second  quarter 2013 results

                                                                    Change
    In $ millions, except per share
    information                                  Q2 2013  Q2 2012       $ CER

    Net sales, adjusted                            316.4    307.2      3%  3%
    Operating income, adjusted                      83.4     86.4     -3%
    Net income, adjusted                            64.2     60.8      6%
    Diluted EPS, adjusted                          $0.27    $0.25
    For information on the adjusted figures, please refer to the
    reconciliation table accompanying this release. Adjusted net sales is
    a non-GAAP measure that includes all revenue contributions of
    Ingenuity following the acquisition on April 29, 2013. Due to
    purchase accounting rules, reported net sales is reduced by fair
    value adjustments to deferred revenue related to sales contracts
    executed by Ingenuity prior to the acquisition. Reconciliations of
    reported results in accordance with U.S. GAAP to adjusted results are
    included in the tables accompanying this release.

Adjusted net sales grew 3% at constant exchange rates (CER) in the second quarter of 2013 on growth in all regions, as well as in Molecular Diagnostics (+4% CER), Pharma (+4% CER) and Academia (+3% CER). The ongoing product portfolio grew 1% CER, while Ingenuity (acquired April 29, 2013) and AmniSure (acquired May 3, 2012) provided approximately two percentage points of additional CER growth. Currency movements had no significant impact on reported sales growth.

An operating loss of $34.2 million in the second quarter of 2013 was primarily due to a restructuring charge of $76 million that included costs for the last group of actions in the major efficiency project, as compared to operating income of $45.4 million in the same period of 2012. Adjusted operating income, which excludes items such as restructuring and acquisition-related costs, share-based compensation and amortization of intangible assets, declined 3% to $83.4 million compared to $86.4 million in the second quarter of 2012. The adjusted operating income margin was 26% of net sales in the second quarter of 2013 compared to 28% in the 2012 period.

In the second quarter of 2013, net loss attributable to owners of QIAGEN N.V. was $51.8 million, or $0.22 per diluted share (based on 234.1 million shares), compared to net income of $33.3 million, or $0.14 per diluted share (based on 240.2 million shares) in the year-ago period. Adjusted net income attributable to owners of QIAGEN N.V. rose 6% to $64.2 million, or $0.27 per share on an adjusted diluted EPS basis (based on 240.5 million shares), compared to $60.8 million, or $0.25 per share (based on 240.2 million shares), in the 2012 quarter.

"QIAGEN has the financial resources to invest in attractive business opportunities that create value while also improving returns to shareholders, such as through our plans for a new $100 million share repurchase program," said Roland Sackers, Chief Financial Officer of QIAGEN N.V. "We are convinced the charges that are being taken to complete the efficiency project in 2013 will enable QIAGEN to grow faster, and to translate this growth into improving profitability and higher cash flows. We are also making two changes starting in 2014 in terms of financial reporting: with the completion of the efficiency project in 2013, restructuring costs will only be adjusted for business integration and acquisition-related activities; and share-based compensation costs will no longer be excluded from adjusted earnings. We are convinced QIAGEN is on track to deliver improved results in 2013 and capture a broad range of attractive growth opportunities."

First half 2013 results

                                                                    Change
    In $ millions, except per share
    information                                  H1 2013  H1 2012    $    CER

    Net sales, adjusted                            620.0    603.6   3%     3%
    Operating income, adjusted                     161.8    166.7  -3%
    Net income, adjusted                           118.9    115.6   3%
    Diluted EPS, adjusted                          $0.49    $0.48
    For information on the adjusted figures, please refer to the
    reconciliation table accompanying this release. Adjusted net sales is
    a non-GAAP measure that includes all revenue contributions of
    Ingenuity following the acquisition on April 29, 2013. Due to
    purchase accounting rules, reported net sales is reduced by fair
    value adjustments to deferred revenue related to sales contracts
    executed by Ingenuity prior to the acquisition. Reconciliations of
    reported results in accordance with U.S. GAAP to adjusted results are
    included in the tables accompanying this release.

Adjusted net sales rose 3% at constant exchange rates (CER) in the first half of 2013 on growth in all regions, particularly in Asia-Pacific / Japan (+6% CER), while Molecular Diagnostics (+7% CER) more than compensated for largely unchanged sales in the other customer classes. The ongoing product portfolio provided approximately 1 percentage point of growth, while Ingenuity (acquired April 29, 2013) and AmniSure (acquired May 3, 2012) provided approximately two percentage points of additional CER growth. Currency movements had no significant impact on reported sales growth.

Operating loss was $5.1 million in the first half of 2013 compared to operating income of $81.9 million in the same period of 2012. Adjusted operating income, which excludes items such as restructuring and acquisition-related costs, share-based compensation and amortization of intangible assets, declined 3% to $161.8 million compared to $166.7 million in the first half of 2012. The adjusted operating income margin declined to 26% of net sales from 28% in the year-ago period.

In the first half of 2013, the net loss attributable to owners of QIAGEN N.V. amounted to $31.8 million, or $0.14 per diluted share (based on 233.7 million shares), compared to net income of $61.9 million, or $0.26 per share (based on 239.6 million shares), in the year-ago period. Adjusted net income attributable to owners of QIAGEN N.V. rose 3% to $118.9 million, or $0.49 per share on an adjusted diluted EPS basis (based on 241.0 million shares), from $115.6 million, or $0.48 per share (based on 239.6 million shares), in the 2012 period.

At June 30, 2013, cash and cash equivalents declined to $299.8 million from $394.0 million at December 31, 2012. Net cash provided by operating activities amounted to $93.8 million in the first six months of 2013 compared to $100.0 million in the same period of 2012, with free cash flow improving to $60.1 million compared to $58.2 million in the year-ago period. Net cash used in investing activities was $138.0 million in the first half, less than the $185.0 million of net cash used in the first half of 2012. Net cash used in financing activities was $45.0 million in the first half of 2013, mainly due to completion of the share repurchase program in March 2013, compared to cash provided by financing activities of $78.0 million in the year-ago period.

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