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QIAGEN Reports Third Quarter 2013 Results

Stocks in this article: CLVSQGEN

VENLO, The Netherlands, October 29, 2013 /PRNewswire/ --

  • Q3 2013 results: Adjusted net sales $323.8 million (+7% CER) on growth in all regions and customer classes; adjusted operating income $87.7 million; adjusted diluted EPS $0.28
  • Moving ahead in 2013 to accelerate innovation and growth across QIAGEN portfolio:
  • QIAsymphony breaks through 1,000 installed systems, driven by expansion of industry-leading menu that includes European launch of new  artus    CT/NG assay
  • NGS initiative building momentum, as acquisition of CLC bio and combination with Ingenuity build leadership in biological data analysis, interpretation and reporting
  • Personalized Healthcare leadership strengthened with U.S. launch of  therascreen    EGFR companion diagnostic and new pharma co-development projects
  • Top seven emerging markets deliver 23% CER growth in first nine months of 2013
  • 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 third quarter and first nine months of 2013, delivering sales growth in all regions and customer classes along with improved profitability.

Adjusted net sales (including non-GAAP revenues from Ingenuity) in the third quarter rose 6% from the year-ago quarter (+7% at constant exchange rates, CER) to $323.8 million. Adjusted operating income in the quarter rose 5% to $87.7 million, with the adjusted operating income margin at 27% of adjusted net sales. Adjusted diluted earnings per share (EPS) rose to $0.28 in the third quarter of 2013 from $0.26 in the same period of 2012.

"We are executing on strategic initiatives in 2013 to accelerate innovation and growth by expanding QIAGEN's portfolio of new products. We exceeded our communicated targets for improved sales and adjusted earnings in the third quarter of 2013, delivering growth in all customer classes and regions, particularly in emerging markets, under challenging economic conditions," said Peer M. Schatz, Chief Executive Officer of QIAGEN N.V. "Molecular Diagnostics delivered double-digit sales growth, as the QIAsymphony automation platform broke through 1,000 installed systems and we achieved further global expansion of the QuantiFERON-TB latent tuberculosis test as well as our industry-leading Personalized Healthcare franchise. The initiative to enter targeted areas of next-generation sequencing is showing strong momentum, leveraging QIAGEN's leadership in Sample & Assay Technologies to develop an ecosystem of universal products and services for next-generation sequencing, as well as the integrated, automated sample-to-insight GeneReader NGS benchtop workflow. The acquisition of CLC bio, which offers leading bioinformatics analysis software, reaffirms our strategic decision to become a leader in next-generation bioinformatics, with a focus on biological analysis and interpretation/reporting. With the capabilities, resources and employees to continue our transformation despite a challenging macroeconomic environment, QIAGEN continues to be well-positioned to achieve our goals for 2013 and to create new drivers for future growth."

Third  quarter 2013 results

                                                                     Change
    In $ millions, except per share
    information                                  Q3 2013  Q3 2012     $    CER
    Net sales, adjusted                            323.8    304.3    6%    7%
    Operating income, adjusted                      87.7     83.7    5%
    Net income, adjusted                            68.4     62.3   10%
    Diluted EPS, adjusted                          $0.28    $0.26
    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 7% at constant exchange rates (CER) in the third quarter of 2013 on growth in all regions and customer classes. Total CER sales growth was split evenly between the ongoing product portfolio and contributions from Ingenuity Systems, Inc. (acquired April 29, 2013). Currency movements had a negative impact of approximately one percentage point on reported sales growth.

Operating income declined 12% to $34.4 million in the third quarter of 2013 from $39.0 million in the same period of 2012, with approximately $12.5 million of restructuring charges taken in the 2013 period for the final group of projects in a major efficiency project being completed this year. Adjusted operating income, which excludes items such as restructuring and acquisition-related costs, share-based compensation and amortization of intangible assets, rose 5% to $87.7 million from $83.7 million in year-ago quarter. The adjusted operating income margin was 27.1% of adjusted net sales in the third quarter of 2013 compared to 27.5% in the 2012 period.

Net income attributable to owners of QIAGEN N.V. rose 39% to $40.7 million, or $0.17 per diluted share (based on 242.4 million shares), from $29.2 million, or $0.12 per diluted share (based on 242.1 million shares) in the year-ago period. Adjusted net income attributable to owners of QIAGEN N.V. rose 10% to $68.4 million, which included currency gains, from $62.3 million in the year-ago period. Adjusted diluted EPS rose to $0.28 per share compared to $0.26 per share in the 2012 quarter.

"QIAGEN is well-positioned for a new growth wave that is taking shape with a portfolio of innovative and differentiated products that address the needs of our customers by transforming biological samples into valuable molecular insights," said Roland Sackers, Chief Financial Officer of QIAGEN N.V. "We have the financial resources to invest in attractive opportunities that create value while also improving returns to shareholders, and the launch of our new $100 million share repurchase program in the third quarter of 2013 is a signal of that commitment. Our teams are determined to generate tangible benefits from the recently completed efficiency program through faster growth, improving profitability and higher cash flows. QIAGEN is on track to deliver improved results in 2013 while building on a broad range of attractive growth opportunities."

First nine months 2013 results

                                                                    Change
    In $ millions, except per share
    information                                  9M 2013  9M 2012    $    CER
    Net sales, adjusted                            943.7    907.9   4%     4%
    Operating income, adjusted                     249.5    250.4   0%
    Net income, adjusted                           187.3    177.9   5%
    Diluted EPS, adjusted                          $0.78    $0.74
    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 4% at constant exchange rates (CER) in the first nine months of 2013 on growth in all regions and customer classes, particularly Molecular Diagnostics (+8% CER), as higher sales of consumables and other revenues (+6% CER) more than offset lower instrument sales (-4% CER). Total sales growth of 4% CER was split evenly between the existing product portfolio and the acquisitions of Ingenuity (acquired April 29, 2013) and AmniSure International LLC (acquired May 3, 2012). Currency movements had no significant impact on reported sales growth in the nine-month period.

Operating income in the first nine months of 2013 amounted to $29.3 million compared to $120.9 million in the same period of 2012, due mainly to restructuring charges of approximately $101.0 million related to a major efficiency project completed in 2013. Adjusted operating income, which excludes items such as restructuring and acquisition-related costs, share-based compensation and amortization of intangible assets, was largely unchanged at $249.5 million in the first nine months of 2013 compared to $250.4 million in the 2012 period. The adjusted operating income margin declined to 26.4% of adjusted net sales from 27.6% in the year-ago period.

In the first nine months of 2013, net income attributable to owners of QIAGEN N.V. amounted to $8.9 million, or $0.04 per diluted share (based on 241.4 million shares), compared to net income of $91.1 million, or $0.38 per share (based on 240.4 million shares), in the year-ago period. Adjusted net income rose 5% to $187.3 million, or $0.78 per share on an adjusted diluted EPS basis, from $177.9 million, or $0.74 per share in the 2012 period.

At September 30, 2013, cash and cash equivalents declined to $280.0 million from $394.0 million at December 31, 2012. Net cash provided by operating activities amounted to $176.8 million in the first nine months of 2013 compared to $175.0 million in the same period of 2012, with free cash flow improving to $120.9 million compared to $107.0 million in the year-ago period. Net cash used in investing activities was $237.1 million in the first nine months of 2013, higher than the $222.7 million of net cash used in the same period of 2012. Net cash used in financing activities was $49.8 million in the first nine months of 2013, mainly due to completion of a share repurchase program in March 2013 and launch of a subsequent share repurchase program, compared to cash provided by financing activities of $81.6 million in the year-ago period.

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