Qiagen profits slump, but tops expectations
the second quarter of 2004, but profits fell by a fifth as the cost
of restructuring took its toll.
The company reported net income of $14.6 million, or $0.10 a share, compared to $11.1 million, or $0.08 a share, for the comparable period of last year.
Including charges related to relocation and restructuring expenses, as well as the buyout by certain former members of the management of Qiagen's synthetic DNA business unit during the quarter, profit fell 21 per cent to $8.8 million, or $0.06 cents a share.
The DNA synthesis business had been suffering from competition and pricing pressures, and its divestment into a new business known as Operon Biotechnologies is designed to improve margins at Qiagen.
Sales climbed 14 per cent to $98.6 million, driven by robust growth of 16 per cent in the consumables business and, regionally, a strong performance in the US, where turnover increased 19 per cent, the company said.
Qiagen performed above its own expectations for the period, and as a result has revised upward its guidance for the full year. Revenues of $376-$381 million are forecast, compared to the original target of $373-$380 million, leading to earnings per share in the $0.36-$0.38 range.
Among Qiagen's highlights in the second quarter was the launch of a series of new consumables and instrumentation products in its core areas stabilization, separation, purification and handling of nucleic acids, including several novel preanalytical consumable solutions for automated sample preparation on the BioRobot EZ1 system and the BioRobot M48 workstation.
The company sees considerable potential in preanalytical tools, used to prepare and handle samples ahead of the actual analysis. It is developing a range of sample collection, separation, purification and handling products, and recently entered into an agreement with Protedyne to increase its potential to automate these processes.
Meantime, the company has announced plans to offer $150 million of convertible notes - due in 2024 - to institutional investors outside the US. The initial purchasers will also have an option to buy up to an additional $22.5 million in notes.
Qiagen said that it is hoping to take advantage of current financing opportunities in the convertible bond market, and intends to use the proceeds to repay debt ($100 million of short-term debt that matures next year), for general corporate purposes and acquisitions and to 'optimise the structure of its balance sheet'.
