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 Gen-Probe Reports Financial Results for Third Quarter 2009October 29, 2009 -- Operating Activities Generate $31.9 Million of Cash in Quarter --SAN DIEGO, Calif., Oct. 29 /PRNewswire-FirstCall/ -- Gen-Probe Incorporated (Nasdaq: GPRO) today reported financial results for the third quarter of 2009, with record product sales and total revenues driving non-GAAP earnings per share (EPS) of $0.47. "Gen-Probe posted very good financial results in the third quarter of 2009, driven by strong growth in our base STD testing business and revenue from our recent Tepnel acquisition," said Carl Hull, the Company's president and chief executive officer. "We also advanced several strategic priorities by acquiring the infectious disease company Prodesse, spinning off our industrial testing business, and initiating two pivotal clinical studies in oncology and women's health." Comparisons to the third quarter of 2008 were negatively affected by a one-time, $10.0 million milestone payment in the prior year period, as described below. In the third quarter of 2009, product sales were $119.0 million, compared to $108.3 million in the prior year period, an increase of 10%. Compared to the third quarter of 2008, the stronger US dollar reduced product sales growth by an estimated $2.5 million, or 2%(2). Total revenues for the third quarter of 2009 were $122.7 million, compared to $121.2 million in the prior year period, an increase of 1%. Net income was $23.8 million ($0.47 per share) on a non-GAAP basis in the third quarter of 2009, compared to $29.1 million ($0.52 per share) in the prior year period, a decrease of 18% (10% per share). Including $1.6 million of after-tax expenses ($0.03 per share) related to the Company's acquisitions of Tepnel and Prodesse and the industrial spin-off, net income in the third quarter of 2009 was $22.2 million ($0.44 per share) on a GAAP basis. For the first nine months of 2009, product sales were $348.3 million, compared to $323.5 million in the prior year period, an increase of 8%. Compared to the first nine months of 2008, the stronger US dollar reduced product sales growth by an estimated $11.1 million, or 3%. Total revenues for the first nine months of 2009 were $359.4 million, compared to $363.6 million in the prior year period, a decrease of 1%. Net income was $74.0 million ($1.43 per share) on a non-GAAP basis in the first nine months of 2009, compared to $85.8 million ($1.55 per share) in the prior year period, a decrease of 14% (8% per share). Including $6.3 million of after-tax expenses ($0.12 per share) related to the Company's acquisitions of Tepnel and Prodesse and the industrial spin-off, net income in the first nine months of 2009 was $67.8 million ($1.31 per share) on a GAAP basis. As previously disclosed, Gen-Probe's total revenues, net income and EPS in the first nine months of 2008 benefited from a number of non-recurring items. The two most significant benefits were:
-- $16.4 million of royalty and license revenue ($0.20 of EPS), which was
recorded in the first quarter of 2008 based on the settlement of patent
infringement litigation against Bayer (now Siemens Healthcare
Diagnostics).
-- $10.0 million of collaborative research revenue ($0.12 of EPS), which
was recorded from the Company's commercial partner, Novartis
Diagnostics, in the third quarter of 2008 based on the full approval by
the US Food and Drug Administration (FDA) of the PROCLEIX® ULTRIO®
assay on the TIGRIS® system.
By comparison, the Company's product sales, total revenues, net income and EPS in the first nine months of 2009 benefited from $8.2 million of one-time revenue ($0.10 of EPS) recorded in the first quarter associated with the previously announced renegotiation of the Company's collaboration agreement with Novartis Diagnostics. Detailed Results Gen-Probe's clinical diagnostics sales of $69.6 million in the third quarter of 2009 benefited from revenue associated with Tepnel's transplant diagnostics and genetic testing products, and continued strong growth of the APTIMA Combo 2® assay, an amplified nucleic acid test (NAT) for simultaneously detecting Chlamydia trachomatis and Neisseria gonorrhoeae. Clinical diagnostics sales were negatively affected by the stronger US dollar, which reduced growth by an estimated $0.8 million, or more than 1%, compared to the prior year period. In blood screening, product sales of $45.4 million in the third quarter of 2009 were negatively affected by $7.9 million of lower product shipments to Novartis. This reduction, which was expected, resulted primarily from: lower US shipments of the PROCLEIX HIV-1/HCV assay as customers began to adopt the PROCLEIX ULTRIO assay; lower US shipments of the PROCLEIX ULTRIO assay due to the post-marketing study in the prior year period; and lower West Nile virus assay shipments due to previously discussed ordering patterns. Blood screening sales growth also was negatively affected by the stronger US dollar, which reduced growth by an estimated $1.7 million, or 3%. "As we forecast three months ago, blood screening sales in the third quarter continued to be affected by negative ordering patterns that outweighed a 1% increase in underlying donations tested," Mr. Hull said. Sales of research products and services in the third quarter of 2009 were $3.9 million. These sales, resulting from the Tepnel acquisition, were not included in Gen-Probe's prior year results. Third quarter product sales were, in millions:
Three Months
Ended Sept. 30, Change
--------------- --------------------
As Constant
2009 2008 Reported Currency
---- ---- -------- --------
Clinical
Diagnostics $69.6 $55.5 25% 27%
Blood Screening $45.4 $52.7 -14% -11%
Research Products and Services $3.9 N/A N/A N/A
---- --- --- ---
Total Product Sales $119.0 $108.3 10% 12%
Product sales in the first nine months of 2009 were, in millions:
Nine Months
Ended Sept. 30, Change
--------------- --------------------
As Constant
2009 2008 Reported Currency
---- ---- -------- --------
Clinical Diagnostics $196.6 $165.2 19% 21%
Blood Screening $144.1 $158.2 -9% -4%
Research Products and Services $7.6 N/A N/A N/A
---- --- --- ---
Total Product Sales $348.3 $323.5 8% 11%
Collaborative research revenues in the third quarter of 2009 were $2.0 million, compared to $11.3 million in the prior year period. As discussed above, this significant decrease resulted primarily from a $10.0 million milestone the Company earned from Novartis in the prior year period based on the full FDA approval of the PROCLEIX ULTRIO assay on the TIGRIS system. For the first nine months of 2009, collaborative research revenues were $5.9 million, compared to $18.5 million in the prior year period. Royalty and license revenues for the third quarter of 2009 were $1.8 million, compared to $1.6 million in the prior year period, an increase of 13%. For the first nine months of 2009, royalty and license revenues were $5.3 million, compared to $21.6 million in the prior year period. As discussed above, this significant decrease resulted primarily from $16.4 million of revenue that was recorded in the first quarter of 2008 associated with the settlement of Gen-Probe's patent infringement litigation against Bayer. Gross margin on product sales in the third quarter of 2009 was 69.5% on a non-GAAP basis that excludes $0.1 million of acquisition-related depreciation expense, compared to 71.7% in the prior year period. This decrease resulted primarily from the stronger US dollar, the addition of Tepnel's generally lower-margin revenues, and lower sales of blood screening products. For the first nine months of 2009, gross margin on product sales was 69.1% on a non-GAAP basis that excludes $0.2 million of acquisition-related depreciation expense, compared to 70.4% in the prior year period. On a GAAP basis, gross margin on product sales was 69.4% in the third quarter of 2009, and 69.0% for the first nine months of the year. Acquisition-related intangible amortization expenses were $1.1 million in the third quarter of 2009 and $2.3 million in the first nine months of the year, compared to $0 in the comparable prior year periods. Research and development (R&D) expenses in the third quarter of 2009 were $27.5 million, compared to $24.5 million in the prior year period, an increase of 12% that resulted primarily from expenses associated with clinical trials of the Company's HPV, PCA3 and trichomonas assays, and from the addition of Tepnel's R&D activities. For the first nine months of 2009, R&D expenses were $78.5 million, compared to $76.9 million in the prior year period, an increase of 2%. Marketing and sales expenses in the third quarter of 2009 were $13.5 million, compared to $10.7 million in the prior year period, an increase of 26% that resulted primarily from the addition of Tepnel's cost structure, and European sales force expansion and market development efforts. For the first nine months of 2009, marketing and sales expenses were $38.5 million, compared to $34.1 million in the prior year period, an increase of 13%. General and administrative (G&A) expenses in the third quarter of 2009 were $14.2 million on a non-GAAP basis that excludes $1.1 million of transaction-related expense, compared to $12.9 million in the prior year period. This increase of 10% resulted primarily from the addition of Tepnel's cost structure. For the first nine months of 2009, G&A expenses were $41.0 million on a non-GAAP basis that excludes $5.9 million of transaction-related expense, compared to $38.5 million in the prior year period, an increase of 6%. On a GAAP basis, G&A expenses were $15.2 million in the third quarter of 2009, up 18% compared to the prior year period, and $46.9 million for the first nine months of the year, up 22% compared to the prior year period. Total other income in the third quarter of 2009 was $4.3 million, compared to $2.2 million in the prior year period, an increase of 95% that resulted primarily from a $1.6 million impairment charge in the prior year period associated with the Company's equity investment in Qualigen, Inc. For the first nine months of 2009, total other income was $17.4 million, compared to $11.6 million in the prior year period, an increase of 50% that resulted primarily from investment gains realized from selling portions of the Company's municipal bond portfolio. In the third quarter of 2009, Gen-Probe generated net cash of $31.9 million from its operating activities, substantially higher than GAAP net income of $22.2 million. The Company spent $7.6 million on property, plant and equipment in the quarter. In the third quarter of 2009, the Company repurchased approximately 1.8 million shares of its stock for $69.3 million, completing the share repurchase program announced in August of 2008. Throughout the program, the Company repurchased approximately 6.0 million shares of its common stock for $249.8 million. Gen-Probe continues to have a strong balance sheet. As of September 30, 2009, the Company had $517.9 million of cash, cash equivalents and short-term investments, and $240.8 million of short-term debt. The Company currently pays interest on substantially all of this debt at a rate 0.6 percent above the one-month London Interbank Offered Rate (LIBOR), which was recently below 0.3 percent. In October, Gen-Probe paid approximately $60.0 million to complete its acquisition of Prodesse. Updated 2009 Financial Guidance In the table below, Gen-Probe's non-GAAP guidance excludes certain expenses related to the Tepnel and Prodesse acquisitions, and the spin-off of the Company's industrial testing business.
Current Previous Current Previous
Guidance Guidance Guidance Guidance
(non-GAAP) (non-GAAP) (GAAP) (GAAP)
Total revenues $493 to $500 $490 to $503 $493 to $500 $490 to $503
million million million million
Product gross
margins ~ 69% 68% to 69% ~ 69% 68% to 69%
Acquisition-
related
intangibles
amortization N/A N/A $3-4 million $3-4 million
R&D expenses ~ 22% ~ 22% ~ 22% ~ 22%
Marketing and
sales
expenses ~ 11% 10% to 11% ~ 11% 10% to 11%
G&A expenses ~ 11% 10% to 11% 12% to 13% 11% to 12%
Tax rate ~ 34% ~ 34% ~ 34% ~ 34%
Diluted shares ~ 51.5 million ~ 52 million ~ 51.5 million ~ 52 million
EPS $1.90 to $1.93 $1.85 to $1.95 $1.77 to $1.79 $1.73 to $1.85
Recent Events
-- Prodesse Acquisition. On October 22, the Company announced that it had
completed its acquisition of Prodesse, Inc., a leader in molecular
testing for influenza and other infectious diseases, for approximately
$60.0 million in cash. Gen-Probe's purchase price could increase to up
to $85.0 million if Prodesse achieves certain financial and regulatory
milestones in 2010 and 2011.
-- EUA for ProFlu-ST(TM). Earlier today, Gen-Probe announced that the FDA
had granted an EUA (emergency use authorization) for Prodesse's test,
ProFlu-ST(TM), to be used in CLIA high complexity laboratories for the
diagnosis of 2009 H1N1 influenza virus infection, aided by an algorithm
that relies on seasonal influenza A/H1 virus and seasonal influenza A/H3
virus results, from a single sample in individuals who are diagnosed
with influenza A by currently available FDA-cleared or authorized
devices.
-- Industrial Spin-Off. On September 14, Gen-Probe announced that it was
spinning off its industrial testing assets into a new, independent
company focused on developing rapid, highly accurate molecular assays
for biopharmaceutical production, water and food safety testing, and
other applications. Gen-Probe owns 19.9% of the new company, Roka
Bioscience, Inc.
-- Prostate Cancer Clinical Trial. On August 27, the Company announced
that it had begun a clinical trial intended to secure US regulatory
approval of its PROGENSA® PCA3 assay, a new molecular test that may
help determine the need for a repeat prostate biopsy.
-- Trichomonas Clinical Trial. On August 17, Gen-Probe announced that it
had begun a clinical trial intended to secure US regulatory approval of
its APTIMA® assay for Trichomonas vaginalis on the fully automated
TIGRIS® system. Trichomonas is a common, sexually transmitted
parasite.
-- Qiagen Arbitration. In April, Gen-Probe announced that the Company and
Roche had prevailed in the arbitration with Digene (now Qiagen)
concerning the Company's supply and purchase agreement with Roche for
HPV products. In August, the arbitrators issued their final award,
which granted Gen-Probe's motion to recover attorneys' fees and costs in
the amount of $3.0 million from Digene. Gen-Probe has filed a petition
to confirm the arbitration award in the US District Court for the
Southern District of New York, and Digene has filed a petition to vacate
or modify the award. A hearing on the petitions is set for December.
-- Patent Litigation. On October 21, Gen-Probe disclosed that it had filed
a complaint for patent infringement against Becton, Dickinson and
Company in the US District Court for the Southern District of
California. The complaint alleges that Becton Dickinson's Viper(TM)
XTR(TM) testing system and associated consumables infringe eight of the
Company's US patents. The complaint seeks monetary damages and
injunctive relief.
-- R&D Re-Organization. In October, the Company re-organized its R&D
organization into several cross-functional project teams to increase
alignment with corporate strategy, better integrate research activities
into product development, accommodate new areas of therapeutic focus,
and ultimately increase development efficiency and speed to market.
Webcast Conference Call A live webcast of Gen-Probe's third quarter 2009 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 also will be available for approximately 24 hours. The replay number is 866-360-7718 for domestic callers and 203-369-0170 for international callers. About Gen-Probe Gen-Probe Incorporated is a global leader in the development, manufacture and marketing of rapid, accurate and cost-effective NATs used primarily to diagnose human diseases and screen donated human blood. Gen-Probe has more than 25 years of NAT expertise, and received the 2004 National Medal of Technology, America's highest honor for technological innovation, for developing NAT assays for blood screening. Gen-Probe is headquartered in San Diego and employs approximately 1,200 people. For more information, go to www.gen-probe.com. About Non-GAAP Financial Measures To supplement Gen-Probe's financial results for the third quarter of 2009 and its updated 2009 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, gross margin, G&A expenses, income tax rate, and EPS. Gen-Probe's 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-Probe's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance by excluding certain expenses 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-Probe's performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to Gen-Probe's 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. Trademarks APTIMA, APTIMA COMBO 2 and TIGRIS are trademarks of Gen-Probe. PROCLEIX and ULTRIO are trademarks of Novartis. 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 "Updated 2009 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-Probe's financial condition, possible or expected results of operations, 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 2009 financial targets, (ii) the risk that we may not integrate acquisitions, such as Tepnel and Prodesse, successfully, (iii) the possibility that the market for the sale of our new products, such as our PROGENSA PCA3 and APTIMA HPV 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 products, including the investigational PROGENSA PCA3 and APTIMA HPV and trichomonas assays 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, Siemens (as assignee of Bayer) 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 management's 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. ---------------- (1) In this press release, all per share amounts are calculated on a fully diluted basis. Non-GAAP EPS for the third quarter of 2009 excludes $1.6 million of after-tax expenses ($0.03 per share) related to the Company's acquisitions of Tepnel and Prodesse, and the spin-off of industrial testing assets to Roka BioScience. Some totals may not foot due to rounding. (2) In this press release, all estimates of "constant currency" growth exclude foreign currency fluctuations associated with acquired Tepnel revenues, since Tepnel was not part of Gen-Probe in the prior year period.
Contact:
Michael Watts
Vice president, investor relations and corporate communications
858-410-8673
Gen-Probe Incorporated
Consolidated Balance Sheets - GAAP
(In thousands, except share and per share data)
September 30, December 31,
2009 2008
---- ----
(unaudited)
Assets
Current assets:
Cash and cash equivalents, including
restricted cash of $18 and $0 at
September 30, 2009 and December 31,
2008, respectively $156,739 $60,122
Marketable securities 361,203 371,276
Trade accounts receivable, net of
allowance for doubtful accounts of $740
and $700 at September 30, 2009 and
December 31, 2008, respectively 44,629 33,397
Accounts receivable - other 3,185 2,900
Inventories 58,432 54,406
Deferred income tax 8,827 7,269
Prepaid income tax 8,809 2,306
Prepaid expenses 17,956 15,094
Other current assets 4,443 6,135
----- -----
Total current assets 664,223 552,905
Marketable securities, net of current portion 6,677 73,780
Property, plant and equipment, net 153,594 141,922
Capitalized software, net 12,496 13,409
Goodwill 91,114 18,621
Deferred income tax, net of current portion 12,193 12,286
Purchased intangibles, net 56,097 298
Licenses, manufacturing access fees and
other assets, net 63,255 56,310
------ ------
Total assets $1,059,649 $869,531
========== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $18,035 $16,050
Accrued salaries and employee benefits 27,815 25,093
Other accrued expenses 11,194 4,027
Income tax payable 853 -
Short-term borrowings 240,841 -
Deferred income tax 1,355 -
Deferred revenue 2,238 1,278
----- -----
Total current liabilities 302,331 46,448
Non-current income tax payable 5,401 4,773
Deferred income tax, net of current portion 14,387 55
Deferred revenue, net of current portion 2,249 2,333
Other long-term liabilities 3,357 2,162
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,
48,925,449 and 52,920,971 shares issued
and outstanding at September 30, 2009
and December 31, 2008, respectively 5 5
Additional paid-in capital 231,838 382,544
Accumulated other comprehensive income 4,167 3,055
Retained earnings 495,914 428,156
------- -------
Total stockholders' equity 731,924 813,760
------- -------
Total liabilities and stockholders' equity $1,059,649 $869,531
========== ========
Gen-Probe Incorporated
Consolidated Statements of Income - GAAP
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Product sales $118,951 $108,253 $348,289 $323,461
Collaborative research
revenue 2,000 11,343 5,862 18,453
Royalty and license
revenue 1,753 1,581 5,281 21,640
----- ----- ----- ------
Total revenues 122,704 121,177 359,432 363,554
Operating expenses:
Cost of product sales
(excluding
acquisition-related
intangibles
amortization) 36,345 30,681 107,939 95,827
Acquisition-related
intangibles amortization 1,136 - 2,250 -
Research and development 27,475 24,507 78,542 76,941
Marketing and sales 13,477 10,709 38,547 34,070
General and
administrative 15,234 12,908 46,903 38,516
------ ------ ------ ------
Total operating expenses 93,667 78,805 274,181 245,354
------ ------ ------- -------
Income from operations 29,037 42,372 85,251 118,200
Investment and interest
income 4,676 4,167 19,680 12,274
Interest expense (588) (1) (1,465) (3)
Other income/(expense) 210 (1,929) (827) (647)
--- ------ ---- ----
Total other income, net 4,298 2,237 17,388 11,624
----- ----- ------ ------
Income before income tax 33,335 44,609 102,639 129,824
Income tax expense 11,139 15,531 34,881 44,010
------ ------ ------ ------
Net income $22,196 $29,078 $67,758 $85,814
======= ======= ======= =======
Net income per share:
Basic $0.45 $0.53 $1.33 $1.58
===== ===== ===== =====
Diluted $0.44 $0.52 $1.31 $1.55
===== ===== ===== =====
Weighted average shares
outstanding:
Basic 49,614 54,363 51,133 54,174
====== ====== ====== ======
Diluted 50,136 55,552 51,767 55,357
====== ====== ====== ======
Gen-Probe Incorporated
Consolidated Statements of Income - Non-GAAP
(In thousands, except per share data)
(Unaudited)
Three Months Ended
September 30, 2009
----------------------------
Non-GAAP Adjustments GAAP
-------- ----------- ----
Revenues:
Product sales $118,951 $- $118,951
Collaborative research revenue 2,000 - 2,000
Royalty and license revenue 1,753 - 1,753
----- --- -----
Total revenues 122,704 - 122,704
Operating expenses:
Cost of product sales (excluding
acquisition-related intangibles
amortization) 36,252 93 36,345
Acquisition-related intangibles
amortization - 1,136 1,136
Research and development 27,475 - 27,475
Marketing and sales 13,477 - 13,477
General and administrative 14,155 1,079 15,234
------ ----- ------
Total operating expenses 91,359 2,308 93,667
------ ----- ------
Income from operations 31,345 (2,308) 29,037
Investment and interest income 4,676 - 4,676
Interest expense (588) - (588)
Other income/(expense) 210 - 210
--- --- ---
Total other income, net 4,298 - 4,298
----- --- -----
Income before income tax 35,643 (2,308) 33,335
Income tax expense 11,864 (725) 11,139
------ ---- ------
Net income $23,779 $(1,583) $22,196
======= ======= =======
Net income per share:
Basic $0.48 $(0.03) $0.45
===== ====== =====
Diluted $0.47 $(0.03) $0.44
===== ====== =====
Weighted average shares outstanding:
Basic 49,614 - 49,614
====== === ======
Diluted 50,136 - 50,136
====== === ======
Gen-Probe Incorporated
Consolidated Statements of Income - Non-GAAP
(In thousands, except per share data)
(Unaudited)
Nine Months Ended
September 30, 2009
----------------------------
Non-GAAP Adjustments GAAP
-------- ----------- ----
Revenues:
Product sales $348,289 $- $348,289
Collaborative research revenue 5,862 - 5,862
Royalty and license revenue 5,281 - 5,281
----- --- -----
Total revenues 359,432 - 359,432
Operating expenses:
Cost of product sales (excluding
acquisition-related intangibles
amortization) 107,756 183 107,939
Acquisition-related intangibles
amortization - 2,250 2,250
Research and development 78,542 - 78,542
Marketing and sales 38,547 - 38,547
General and administrative 41,018 5,885 46,903
------ ----- ------
Total operating expenses 265,863 8,318 274,181
------- ----- -------
Income from operations 93,569 (8,318) 85,251
Investment and interest income 19,680 - 19,680
Interest expense (1,465) - (1,465)
Other income/(expense) (827) - (827)
---- --- ----
Total other income, net 17,388 - 17,388
------ --- ------
Income before income tax 110,957 (8,318) 102,639
Income tax expense 36,934 (2,053) 34,881
------ ------ ------
Net income $74,023 $(6,265) $67,758
======= ======= =======
Net income per share:
Basic $1.45 $(0.12) $1.33
===== ====== =====
Diluted $1.43 $(0.12) $1.31
===== ====== =====
Weighted average shares outstanding:
Basic 51,133 - 51,133
====== === ======
Diluted 51,767 - 51,767
====== === ======
Gen-Probe Incorporated
Consolidated Statements of Cash Flows - GAAP
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
------------------
2009 2008
---- ----
Operating activities:
Net income $67,758 $85,814
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 29,468 26,217
Amortization of premiums on investments, net of
accretion of discounts 4,050 5,118
Stock-based compensation 17,743 15,012
Stock-based compensation income tax benefits 1,937 3,025
Excess tax benefit from stock-based compensation (1,186) (2,510)
Deferred revenue (249) (3,399)
Deferred income tax (1,318) (961)
Gain on sale of investment in MPI - (1,600)
Impairment of intangible assets - 5,086
Loss on disposal of property and equipment 82 38
Changes in assets and liabilities:
Trade and other accounts receivable (4,379) 11,403
Inventories 2,325 (4,270)
Prepaid expenses (1,675) 7,060
Other current assets 2,156 (2,255)
Goodwill 856 -
Other long-term assets (3,608) (510)
Accounts payable (2,985) 7,381
Accrued salaries and employee benefits 1 4,922
Other accrued expenses 1,672 96
Income tax payable (6,655) 2,926
Other long-term liabilities 733 426
--- ---
Net cash provided by operating activities 106,726 159,019
------- -------
Investing activities:
Proceeds from sales and maturities of marketable
securities 410,700 94,103
Purchases of marketable securities (338,976) (225,290)
Purchases of property, plant and equipment (22,284) (30,530)
Capitalization of software development costs (576) -
Purchases of intangible assets, including licenses
and manufacturing access fees (918) (1,868)
Net cash paid for business combinations (123,713) -
Cash paid for investment in DiagnoCure and related
license fees (5,500) -
Proceeds from sale of investment in MPI - 4,100
Cash paid for Roche manufacturing access fees - (10,000)
Other assets (175) 10
---- ---
Net cash used in investing activities (81,442) (169,475)
------- --------
Financing activities:
Excess tax benefit from stock-based compensation 1,186 2,510
Repurchase and retirement of restricted stock for
payment of taxes (923) (1,309)
Repurchase and retirement of common stock (174,847) (9,992)
Proceeds from issuance of common stock 5,961 17,848
Short-term borrowings, net 238,450 -
------- ---
Net cash provided by financing activities 69,827 9,057
------ -----
Effect of exchange rate changes on cash and cash
equivalents 1,506 (198)
----- ----
Net increase (decrease) in cash and cash
equivalents 96,617 (1,597)
Cash and cash equivalents at the beginning of
period 60,122 75,963
------ ------
Cash and cash equivalents at the end of period $156,739 $74,366
======== =======
SOURCE Gen-Probe Incorporated Come And Visit
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