Applied Biosystems Group Reports Fourth Quarter and Fiscal 2002 Results.Business Editors FOSTER CITY, Calif.--(BUSINESS WIRE)--July 25, 2002 Applied Biosystems Applied Biosystems, Inc. (formerly NASDAQ: ABIO) is the original name of a pioneer biotechnology company founded in 1981 in Foster City, California, among the Silicon Valley cities of the southern San Francisco Bay Area. Group (NYSE NYSE See: New York Stock Exchange : ABI Abi (ā`bī) [short for Abijah], in the Bible, King Hezekiah's mother. (Application Binary Interface) A specification for a specific hardware platform combined with the operating system. ), an Applera Applera Corporation of Norwalk, Connecticut, at #874 on the 2007 Fortune 1000 list, is one of the largest international biotechnology companies based in the United States. It is the successor company to what was the Life Sciences Division of Perkin-Elmer Corporation. Corporation business, today reported that earnings per share in the fourth quarter ended June June: see month. 30, 2002 were $0.20 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share excluding a special item, versus $0.22 for the prior year fourth quarter. The special item consisted of an $8.2 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge during the fourth quarter of fiscal 2002 for the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of investments. Including the special item, diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the fourth quarter of fiscal 2002 were $0.18 versus $0.22 for the prior year. All per share amounts refer to per share of Applera Corporation-Applied Biosystems Group Common Stock. Excluding the special item, net income in the fourth quarter of fiscal 2002 was $43.5 million compared to $47.6 million in the same period last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the fourth quarter of fiscal 2002 was $58.7 million compared to $66.1 million in the year-earlier quarter. Foreign currency effects Foreign Currency Effects The extent to which the changes in a foreign currency affects the return on a foreign investment. Notes: Foreign investments are complicated by the currency fluctuation and conversion between countries. increased net income by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2 million, or $0.01 per diluted share. Including the special item, net income for the fourth quarter of fiscal 2002 was $38.2 million versus $47.6 million in the same period last year. Net revenues for the Group for the fourth quarter of fiscal 2002 were $417.3 million, a 3 percent increase over $405.1 million in the fourth quarter of fiscal 2001. Excluding the effects of foreign currency, revenues increased approximately 2 percent. Sales to Celera Genomics ge·no·mics n. The study of all of the nucleotide sequences, including structural genes, regulatory sequences, and noncoding DNA segments, in the chromosomes of an organism. were $2.9 million versus $16.3 million in the prior year quarter. Excluding sales to Celera Genomics, revenues increased 7 percent for the quarter. Revenues from instrument sales were $199.7 million, or 4 percent higher than the $191.4 million reported in the prior year quarter. Revenues from sales of consumables were $152.9 million, 3 percent below the $158.3 million in the year-ago period. Revenues from other sources, including service contracts, royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. , licenses, and contract research, increased 17 percent, to $64.7 million from $55.4 million in the same period last year. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the fourth quarter of fiscal 2002 was 14.1 percent, compared with 16.3 percent in the same period a year ago. While the gross margin in the fourth quarter expanded to 52.1 percent versus 51.0 percent in the prior year as a result of previously implemented price increases and a shift in product mix, this improvement was more than offset by increases in SG&A and R&D expenses. SG&A expense was $100.8 million, or 24.2 percent of sales, versus $91.7 million, or 22.6 percent of sales, in the prior year. This increase reflects higher compensation and benefits expenses as well as incremental costs Costs which are additional costs to the Service appropriations that would not have been incurred absent support of the contingency operation. See also financial management. associated with new product initiatives. R&D expenditures in the fourth quarter of fiscal 2002 increased 19 percent to $58.0 million from $48.9 million in the same period in the prior year. As a percentage of sales, R&D expenditures were 13.9 percent in the fiscal fourth quarter compared to 12.1 percent in the prior year. This increase resulted primarily from the funding of the Applera Genomics Initiative, support for new products in development, including ICAT ICAT Isotope-Coded Affinity Tagging ICAT Intelligent Computer-Assisted Training ICAT International Centre for Automotive Technology (Gurgaon, India) ICAT International Convention Against Torture ICAT International Cat Agility Tournament (TM) software and the recently launched Assays-on-Demand(TM), Q TRAP To test for a particular condition in a running program; for example, to "trap an interrupt" means to wait for a particular interrupt to occur and then execute a corresponding routine. An error trap tests for an error condition and provides a recovery routine. (TM), and 3730 product line, and compensation related expenses. During the fourth quarter of 2002, the Group used $69.0 million to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. 3.9 million shares of Applera Corporation - Applied Biosystems Group Common Stock. "After what has been a very challenging period for many life science tool companies, I am pleased to be able to report a return to year over year revenue growth for Applied Biosystems for the fourth quarter," said Tony L. White, Chief Executive Officer of Applera Corporation. "Demand side trends continue to require caution; however, our commitment to R&D investment has enabled us to introduce a significant number of innovative new products over the past year which we believe position us to improve our financial performance." "While the hurdles that we faced in fiscal 2002 were substantial," White added, "I am proud that the Group has been able to remain profitable and cash flow positive. During fiscal 2002, Applied Biosystems increased its net cash and short term investments position by $78.5 million to $471.0 million despite using $69.0 million for share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. , and we begin fiscal 2003 with one of the strongest balance sheets in the industry." Commenting on fiscal fourth quarter results, Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. W. Hunkapiller, Ph.D., President of Applied Biosystems stated, "Two of our three largest businesses, mass spectrometry mass spectrometry or mass spectroscopy Analytic technique by which chemical substances are identified by sorting gaseous ions by mass using electric and magnetic fields. and Sequence Detection Systems (SDS 1. (company) SDS - Scientific Data Systems. 2. (tool) SDS - Schema Definition Set. ) and related products, performed extremely well. Mass spectrometry sales growth was once again driven by the success of the API (Application Programming Interface) A language and message format used by an application program to communicate with the operating system or some other control program such as a database management system (DBMS) or communications protocol. 4000(TM) LC/MS/MS System in the drug metabolism Drug Metabolism/Interactions Definition Drug metabolism is the process by which the body breaks down and converts medication into active chemical substances. Precautions Drugs can interact with other drugs, foods, and beverages. and pharmacokinetics pharmacokinetics /phar·ma·co·ki·net·ics/ (fahr?mah-ko-ki-net´iks) the action of drugs in the body over a period of time, including the processes of absorption, distribution, localization in tissues, biotransformation, and excretion. market, as well as demand for the Applied Biosystems 4700 Proteomics pro·te·o·mics n. The analysis of the expression, localization, functions, and interactions of the proteins produced by the genes of an organism. Analyzer analyzer /ana·ly·zer/ (an´ah-li?zer) 1. a Nicol prism attached to a polarizing apparatus which extinguishes the ray of light polarized by the polarizer. 2. with TOF/TOF(TM) Optics optics, scientific study of light. Physical optics is concerned with the genesis, nature, and properties of light; physiological optics with the part light plays in vision; and geometrical optics with the reflection and refraction of light as encountered in the study and the recently launched Q TRAP(TM) LC/MS/MS System. Additionally, demand for both our SDS instruments and reagents continued to grow. For DNA sequencing DNA sequencing The determination of the sequence of nucleotides in a sample of DNA. , our largest business, year over year revenue continued to decline during the quarter for both instruments and consumables, albeit at a slower rate than in the third quarter of fiscal 2002. Despite this lack of growth in sequencing, we are excited about our new sequencing product offerings, including both the ABI PRISM prism, in optics, a piece of translucent glass or crystal used to form a spectrum of light separated according to colors. Its cross section is usually triangular. (R) 3100-Avant Genetic Analyzer and the recently launched Applied Biosystems 3730xl DNA DNA: see nucleic acid. DNA or deoxyribonucleic acid One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes. Analyzer. "During the fourth quarter, we successfully launched our 3730 product line of sequencers and our Assays-on-Demand(TM) products, both of which have the potential to substantially increase productivity for our customers. We are excited to have many of the world's leading genome genome: see genetics. genome all the genetic content contained within an organism. An organism's genome is made up of molecules of deoxyribonucleic acid (DNA) that form long strands that are tightly wound into chromosomes, which are found in the centers as our early access partners for the 3730xl instrument and are encouraged by their early feedback on the system. Similarly, we were able to work with a number of exceptional collaborators on our gene expression and genotyping Genotyping refers to the process of determining the genotype of an individual with a biological assay. Current methods of doing this include PCR, DNA sequencing, and hybridization to DNA microarrays or beads. Assays-on-Demand(TM) products, and we now have more than 90,000 assays from this program available for purchase from our web site." Hunkapiller added, "We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our compelling new product offerings will allow Applied Biosystems to continue to serve the evolving needs of our diverse customer base." For the fiscal year ended June 30, 2002, the Group reported earnings per diluted share of $0.82 compared to $0.92 in the same period last year, excluding special items in both periods. Excluding special items, fiscal 2002 net income was $176.0 million compared with $202.6 million in fiscal 2001, and operating income in fiscal 2002 was $236.7 million compared to $279.9 million in the prior year. Foreign currency effects reduced net income by approximately $3 million, or $0.01 per diluted share. The special items consisted of a $2.2 million charge for acquired in-process R&D associated with the acquisition of Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. Probes, Inc. and a $8.2 million pretax charge for the write down of investments during fiscal 2002, and a $15.0 million pretax gain from the sale of investments in fiscal 2001. Including the $2.2 million charge for acquired in-process R&D, reported operating income was $234.5 million in fiscal 2002 versus $279.9 million in the prior year. Including all special items, net income was $168.5 million in fiscal 2002 versus $212.4 million in fiscal 2001, and reported diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. were $0.78 versus $0.96. For fiscal 2002, net revenues were $1.60 billion compared with $1.62 billion in the prior year. Excluding the effects of foreign currency, revenues were essentially unchanged from the prior year. Sales to Celera Genomics were $22.4 million for fiscal 2002 versus $64.1 million in the prior year. Excluding sales to Celera Genomics, revenues increased 2 percent during fiscal 2002. For the fiscal year, revenues from instrument sales were $762.9 million as compared with $813.3 million in the prior year, representing a decline of 6 percent. Consumables sales increased 2 percent to $601.4 million from $592.1 million in the prior year. Revenues from other sources increased 12 percent to $239.7 million in fiscal 2002 as compared with $214.1 million in fiscal 2001. Gross margin in fiscal 2002 was 52.1 percent compared with 52.2 percent in fiscal 2001. SG&A expense was 23.6 percent of revenues versus 23.5 percent in the prior year. R&D expenditures increased 19 percent and represented 13.7 percent of sales in fiscal 2002 versus 11.4 percent in the prior year. Celera Diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler Joint Venture Celera Diagnostics is a 50/50 joint venture between Applied Biosystems and Celera Genomics that was formed in April 2001. Fiscal 2002 fourth quarter revenues for Celera Diagnostics were $2.8 million, compared to $1.6 million in the same period last year, primarily due to higher sales of its cystic fibrosis cystic fibrosis (sĭs`tĭk fībrō`sĭs), inherited disorder of the exocrine glands (see gland), affecting children and young people; median survival is 25 years in females and 30 years in males. reagents. Applied Biosystems will continue to distribute Celera Diagnostics' products and record end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. sales through September September: see month. 2002. End-user product sales were $3.6 million, compared to $2.0 million in the comparable year-earlier period. Net cash use was $15.2 million in the fiscal 2002 fourth quarter. The pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss for the quarter was $14.5 million, compared to $5.0 million in the same period last year. Revenues for fiscal 2002 were $9.2 million, which corresponds to end-user product sales of $11.6 million. For fiscal 2002, the pre-tax loss was $44.7 million, and the net cash use was $45.9 million. At the conclusion of fiscal 2002, Celera Diagnostics had 173 employees. Developments at Celera Diagnostics over the last three months include the following: - Celera Diagnostics and Abbott Laboratories announced an alliance to develop, manufacture and market a broad range of in vitro molecular diagnostic products for disease detection, disease progression monitoring and therapy selection. The two companies will contribute current products to the alliance and collaborate on the development of new products. Approximately 250 scientists and engineers from the two companies have been assigned to the discovery program. The alliance will focus on development of nucleic acid-based tests for infectious and genetic diseases and cancer. - Celera Diagnostics initiated its first disease association study, in Alzheimer's disease. - Evaluation of new analyte specific reagents (ASRs) for cystic fibrosis testing began at selected clinical laboratories, while development proceeded on ASRs for hepatitis viral load and genotyping testing. - Celera Diagnostics received additional questions from the U.S. Food and Drug Administration regarding its 510(k) application to market the ViroSeq(TM) HIV-1 Genotyping System and expects to respond to these questions by the end of the first quarter of fiscal 2003. Applied Biosystems Financial Outlook Forecasting remains extremely challenging amid ongoing market uncertainty and unpredictable spending patterns in the pharmaceutical and biotechnology biotechnology, the use of biological processes, as through the exploitation and manipulation of living organisms or biological systems, in the development or manufacture of a product or in the technological solution to a problem. sectors. At this time, the Group reiterates its expectation of last quarter that revenue percentage growth in fiscal 2003 will be in the high single digits to low teens. The Group continues to expect that growth in fiscal 2003 will be heavily influenced by the adoption of new products, including the 3730 product line, Assays-on-Demand(TM) products, Assays-by-Design(SM) services, the 3100-Avant system, and the Q TRAP(TM) system. Gross margin in fiscal 2003 is expected to approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. fiscal 2002 levels. Additionally, the Group expects selling, general and administrative expense to rise somewhat more slowly than revenue during fiscal 2003. While the Group anticipates that the Applera Genomics Initiative will be largely completed by the end of calendar year 2002, spending for this initiative, as well as development costs related to the Knowledge Business, are expected to lead to significantly increased levels of overall R&D spending during the first two quarters of fiscal 2003. For fiscal 2003, the Group expects R&D expenses to approximate 14 percent of revenue. This outlook includes approximately $12 million in expenses, the majority of which are expected to be spent during the first half of fiscal 2003, for Applied Biosystems' share of the Applera Genomics Initiative funding. The Group expects the effective tax rate for fiscal 2003 to be approximately 29 percent. Future tax legislation may repeal The Annulment or abrogation of a previously existing statute by the enactment of a later law that revokes the former law. The revocation of the law can either be done through an express repeal or replace the existing U.S. export tax regime, as well as significantly change other international tax provisions of the Internal Revenue Code The Internal Revenue Code is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes. These laws constitute title 26 of the U.S. Code (26 U.S.C.A. § 1 et seq. . Such changes may result in a change in the effective tax rate for the Group. The Group expects diluted earnings per share for fiscal 2003 to be in the range of $0.85 to $0.95. Despite our forecasted revenue growth, the Group expects diluted EPS during the first and second quarters of fiscal 2003 to be approximately flat with the prior year due to the high levels of R&D spending anticipated during those periods. The Group anticipates year over year EPS growth in the second half of fiscal 2003. Capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in fiscal 2003 is anticipated to be approximately $170 million, including approximately $80 million for the facilities expansion in Pleasanton Pleasanton, city (1990 pop. 50,553), Alameda co., W Calif., a suburb of the San Francisco–Oakland area, in a vineyard and dairy region; inc. 1894. Wine and cheese are produced, and there are publishing and stone-quarrying industries. , CA. Celera Diagnostics Joint Venture Financial Outlook - For fiscal 2003, Celera Diagnostics anticipates end-user sales, including those from its alliance with Abbott Ab·bott , Berenice 1898-1991. American photographer known especially for her series of black-and-white portraits of New York City. Abbott, George 1887-1995. Laboratories, in a range of $18 to $22 million. Effective October October: see month. 1, 2002, Abbott Laboratories Abbott Laboratories (NYSE: ABT) is a diversified pharmaceuticals and health care company. It has over 65,000 employees and operates in 130 countries. The corporate headquarters are in Abbott Park, Illinois, a neighborhood of North Chicago, Illinois. will assume distribution from Applied Biosystems and will record most end-user sales. This outlook assumes continued demand growth, both from new products and from higher sales of existing products, and successful product migration into the alliance. Celera Diagnostics plans to introduce new ASRs for cystic fibrosis and hepatitis hepatitis (hĕp'ətī`tĭs), inflammation of the liver. There are many types of hepatitis. Causes include viruses, toxic chemicals, alcohol consumption, parasites and bacteria, and certain drugs. and to complete at least three additional disease association studies. For fiscal 2003, Celera Diagnostics anticipates pretax losses pretax loss A loss reported before tax benefits are considered. of $50 to $60 million and net cash use in the range of $55 to $65 million, including capital spending of approximately $10 million. The comments in these Outlook sections reflect management's current outlook. The Company does not have any current intention to update this outlook and plans to revisit re·vis·it tr.v. re·vis·it·ed, re·vis·it·ing, re·vis·its To visit again. n. A second or repeated visit. re the outlook for its businesses only once each quarter when financial results are announced. Conference Call & Webcast A conference call with Applera Corporation and Applied Biosystems executives will be held today, July July: see month. 25, at 10:00 a.m. (ET) with investors and media to discuss these results and management's current financial outlook for the Company. Investors, securities analysts, representatives of the media and international participants who would like to participate should dial 706.634.4992 (code "Applera") between 9:45 and 10:00 a.m. This conference call will also be webcast. Interested parties who wish to listen to the webcast should visit either www.applera.com and go to the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " section of the web site, or www.appliedbiosystems.com and go to the Investor Relations web page within the "About Us" section. A digital recording will be available two hours after the completion of the conference call from July 25 to August 3, 2002. Interested parties should call 706.645.9291 and enter Conference ID 4347065. About Applera Corporation and Applied Biosystems Applera Corporation comprises two operating groups. The Applied Biosystems Group develops and markets instrument-based systems, reagents, software, and contract services to the life science industry and research community. Customers use these tools to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. nucleic acids Nucleic acids The cellular molecules DNA and RNA that act as coded instructions for the production of proteins and are copied for transmission of inherited traits. (DNA and RNA RNA: see nucleic acid. RNA in full ribonucleic acid One of the two main types of nucleic acid (the other being DNA), which functions in cellular protein synthesis in all living cells and replaces DNA as the carrier of genetic ), small molecules, and proteins to make scientific discoveries, leading to the development of new pharmaceuticals, and to conduct standardized testing A standardized test is a test administered and scored in a standard manner. The tests are designed in such a way that the "questions, conditions for administering, scoring procedures, and interpretations are consistent" [1] . Applied Biosystems is headquartered in Foster City, CA, and reported sales of $1.6 billion during fiscal 2002. The Celera Genomics Group (NYSE:CRA See Community Reinvestment Act. ), located in Rockville Rockville, city (1990 pop. 44,835), seat of Montgomery co., W central Md., a NW suburb of Washington, D.C.; settled c.1760s, inc. as a city 1860. It has several scientific research and technology laboratories that focus on the aerospace, electronics, nuclear energy, , MD, and South San Francisco South San Francisco, city (1990 pop. 54,312), San Mateo co., W Calif.; inc. 1908. South San Francisco has several industrial parks; its manufactures include medical supplies and equipment, foods, paint, paper products, consumer goods, and clothing. , CA, is engaged principally in integrating advanced technologies to discover and develop new therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. . Celera intends to leverage its genomic genomic pertaining to a genome. genomic clone see clone. genomic DNA the DNA sequences making up the genome of an individual. genomic library see gene bank. and proteomic technology platforms to identify drug targets and diagnostic marker marker /mark·er/ (mahrk´er) something that identifies or that is used to identify. tumor marker candidates, and to discover novel therapeutic candidates. Its Celera Discovery System(TM) online platform, marketed exclusively through the Knowledge Business of Applied Biosystems, is an integrated source of information based on the human genome The human genome is the genome of Homo sapiens, which is composed of 24 distinct pairs of chromosomes (22 autosomal + X + Y) with a total of approximately 3 billion DNA base pairs containing an estimated 20,000–25,000 genes. and other biological and medical sources. Celera Diagnostics, a 50/50 joint venture between Applied Biosystems and Celera Genomics, is focused on discovery, development, and commercialization of novel diagnostic tests. Information about Applera Corporation, including reports and other information filed by the company with the Securities and Exchange Commission, is available at www.applera.com, or by telephoning 800.762.6923. Information about Applied Biosystems is available at www.appliedbiosystems.com. Certain statements in this press release, including the Financial Outlook sections, are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . These may be identified by the use of forward-looking words or phrases such as "believe," "expect," "should," and "planned," among others. These forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are based on Applera Corporation's current expectations. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for such forward-looking statements. In order to comply with the terms of the safe harbor, Applera Corporation notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. The risks and uncertainties that may affect the operations, performance, development, and results of Applied Biosystems include but are not limited to (1) rapidly changing technology could adversely affect demand for Applied Biosystems' products, and its business is dependent on development of new products; (2) uncertainty of successful integration of the Celera Discovery System(TM) into the Applied Biosystems Knowledge Business and market acceptance and adoption of Knowledge Business product offerings; (3) Applied Biosystems' sales are dependent on customers' capital spending policies and government-sponsored research; (4) Applied Biosystems' significant overseas operations, with attendant ATTENDANT. One who owes a duty or service to another, or in some sort depends upon him. Termes de la Ley, h.t. As to attendant terms, see Powell on Morts. Index, tit. Attendant term; Park on Dower, c. 1 7. exposure to fluctuations in the value of foreign currencies; (5) risks associated with Applied Biosystems' growth strategy; (6) the risk of electricity shortages and earthquakes Earthquakes See also geology. bathyseism an earthquake occurring at very deep levels of the earth. bradyseism the slow upward and downward motion of the earth’s crust. — bradyseismic, adj. , which could interrupt A signal that gets the attention of the CPU and is usually generated when I/O is required. For example, hardware interrupts are generated when a key is pressed or when the mouse is moved. Software interrupts are generated by a program requiring disk input or output. operations; (7) uncertainty of the availability of intellectual property protection and the ability to protect trade secrets, and the risk of infringement The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. claims; (8) Celera Diagnostics' reliance on existing and future collaborations, including its strategic alliance with Abbott Laboratories, which may not be successful; (9) Celera Diagnostics' unproven unproven Dubious, nonscientific, not proven, quack, questionable, unscientific adjective Relating to that which has not been validated by reproducible experiments or other scientific methods for determining effect or efficacy ability to discover, develop, or commercialize diagnostic products, the risk that clinical trials of products it does discover and develop will not proceed as anticipated or may not be successful, the uncertainty that such products will not be accepted and adopted by the market, and the risk that such products will not receive required regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals; (10) the possibility of delays in making Celera Diagnostics' manufacturing facility fully operational, and Celera Diagnostics' unproven ability to scale up manufacturing as products sales increase; (11) the risk that certain raw materials and equipment required by Celera Diagnostics may not be available or may not be available at acceptable prices; (12) potential product liability or other claims against Celera Diagnostics as a result of the testing or use of its products; (13) intense competition in the industry in which Celera Diagnostics operates; and (14) other factors that might be described from time to time in Applera Corporation's filings with the Securities and Exchange Commission. All information in this press release is as of the date of the release, and Applera does not undertake any duty to update this information, including any forward-looking statements, unless required by law. Copyright(c)2002. Applera Corporation. All Rights Reserved. ABI PRISM and Applied Biosystems are registered trademarks and AB (Design), API 4000, Applera, Assays-by-Design, Assays-on-Demand, Celera, Celera Diagnostics, Celera Discovery System, Celera Genomics, Celera SPIRIT, TOF/TOF, and ViroSeq are trademarks of Applera Corporation or its subsidiaries in the U.S. and certain other countries. Q TRAP is a trademark of Applied Biosystems/MDS SCIEX Instruments MDS MDS, n See temporomandibular pain-dysfunction syndrome. MDS 1 Maternal deprivation syndrome, see there 2 Myelodysplastic syndrome, see there Inc. partnership. ICAT is a trademark of the University of Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , exclusively licensed to the Applied Biosystems Group of Applera Corporation.
APPLERA CORPORATION
APPLIED BIOSYSTEMS GROUP
COMBINED STATEMENTS OF OPERATIONS
(Dollar amounts in millions except per share amounts)
Three months ended Twelve months ended
June 30, June 30,
2002 2001 2002 2001
-------- ------- --------- ---------
Net revenues $ 417.3 $ 405.1 $ 1,604.0 $ 1,619.5
Cost of sales 199.8 198.4 768.5 774.5
------- ------- --------- ---------
Gross margin 217.5 206.7 835.5 845.0
Selling, general
and administrative 100.8 91.7 379.2 380.6
Research,
development and
engineering 58.0 48.9 219.6 184.5
Acquired research
and development 2.2
------- ------- --------- ---------
Operating income 58.7 66.1 234.5 279.9
Gain (loss) on
investments (8.2) (8.6) 15.0
Interest income,
net 3.2 3.7 12.2 15.5
Other income
(expense), net (0.6) (1.8) (0.6) (5.9)
------- ------- --------- ---------
Income before
income taxes 53.1 68.0 237.5 304.5
Provision for
income taxes 14.9 20.4 69.0 92.1
------- ------- --------- ---------
Net income $ 38.2 $ 47.6 $ 168.5 $ 212.4
======= ======= ========= =========
Net income per
share
Basic $ 0.18 $ 0.23 $ 0.80 $ 1.01
Diluted $ 0.18 $ 0.22 $ 0.78 $ 0.96
Effect of special
items, net of tax,
on diluted income
per share
Loss (gain) on
investments $ 0.02 $ - $ 0.03 $ (0.04)
Acquired research
and development $ - $ - $ 0.01 $ -
Pro forma diluted
income per share,
excluding special
items $ 0.20 $ 0.22 $ 0.82 $ 0.92
Average common
shares
outstanding
Basic 211,101,000 210,970,000 211,626,000 210,188,000
Diluted 213,283,000 217,406,000 215,442,000 220,476,000
APPLERA CORPORATION
APPLIED BIOSYSTEMS GROUP
Revenues By Product Categories
(Dollar amounts in millions)
(Unaudited)
Three months ended
June 30,
2002 2001 Change
------- ------- -------
DNA Sequencing $ 147.2 $ 165.6 -11%
% of total revenues 35% 41%
SDS & Other Applied Genomics 88.6 72.0 23%
% of total revenues 21% 18%
Mass Spectrometry 79.1 56.2 41%
% of total revenues 19% 14%
Core DNA Synthesis & PCR 57.0 64.0 -11%
% of total revenues 14% 16%
Other Product Lines 45.4 47.3 -4%
% of total revenues 11% 11%
------- -------
Total $ 417.3 $ 405.1 3%
Twelve months ended
June 30,
2002 2001 Change
------- ------- ------
DNA Sequencing $ 602.9 $ 724.6 -17%
% of total revenues 37% 45%
SDS & Other Applied Genomics 322.6 262.1 23%
% of total revenues 20% 15%
Mass Spectrometry 285.2 222.7 28%
% of total revenues 18% 14%
Core DNA Synthesis & PCR 236.9 253.1 -6%
% of total revenues 15% 16%
Other Product Lines 156.4 157.0 0%
% of total revenues 10% 10%
------- -------
Total $ 1,604.0 $ 1,619.5 -1%
APPLERA CORPORATION
APPLIED BIOSYSTEMS GROUP
Revenues By Product Categories
(Dollar amounts in millions)
(Unaudited)
Fiscal 2002
----------------------------------------------
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- -------
DNA Sequencing $ 150.2 $ 156.3 $ 149.2 $ 147.2 $ 602.9
% of total revenues 41% 38% 36% 35% 37%
SDS & Other Applied
Genomics 68.8 78.5 86.7 88.6 322.6
% of total revenues 19% 19% 21% 21% 20%
Mass Spectrometry 54.2 76.2 75.7 79.1 285.2
% of total revenues 15% 19% 19% 19% 18%
Core DNA Synthesis &
PCR 59.1 62.6 58.2 57.0 236.9
% of total revenues 16% 15% 14% 14% 15%
Other Product Lines 34.3 37.5 39.2 45.4 156.4
% of total revenues 9% 9% 10% 11% 10%
------- -------- -------- -------- --------
Total $ 366.6 $ 411.1 $ 409.0 $ 417.3 $1,604.0
======= ======== ======== ======== ========
Fiscal 2001
-----------------------------------------------
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- --------
DNA Sequencing $ 173.0 $ 186.0 $ 200.0 $ 165.6 $ 724.6
% of total revenues 48% 45% 45% 41% 45%
SDS & Other Applied
Genomics 48.6 64.4 77.1 72.0 262.1
% of total revenues 13% 16% 18% 18% 15%
Mass Spectrometry 46.1 60.9 59.5 56.2 222.7
% of total revenues 13% 15% 14% 14% 14%
Core DNA Synthesis &
PCR 64.9 62.6 61.6 64.0 253.1
% of total revenues 18% 15% 14% 16% 16%
Other Product Lines 31.0 37.1 41.6 47.3 157.0
% of total revenues 8% 9% 9% 11% 10%
-------- -------- -------- -------- --------
Total $ 363.6 $ 411.0 $ 439.8 $ 405.1 $ 1,619.5
======== ======== ======== ======== =========
APPLERA CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2002
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied Celera
Biosystems Genomics Celera
Group Group Diagnostics Eliminations Consolidated
---------- -------- ----------- ------------ ------------
Net revenues $ 417.3 $ 28.1 $ 2.8 $ (6.5) $ 441.7
Cost of sales 199.8 6.6 1.7 (4.9) 203.2
------- ------ ------ -------- --------
Gross margin 217.5 21.5 1.1 (1.6) 238.5
Selling, general
and
administrative 100.8 10.2 2.2 0.2 113.4
Research,
development
and engineering 58.0 36.7 13.4 (2.8) 105.3
Amortization of
other intangible
assets 2.7 2.7
Other special
charges 2.8 2.8
------- ------ ------- -------- --------
Operating income
(loss) 58.7 (30.9) (14.5) 1.0 14.3
Loss on
investments (8.2) (6.0) 0.1 (14.1)
Interest income,
net 3.2 5.3 8.5
Other income
(expense), net (0.6) 0.7 0.1
Loss from joint
venture (14.5) 14.5
------- ------ ------- -------- --------
Income (loss)
before income
taxes 53.1 (45.4) (14.5) 15.6 8.8
Provision
(benefit) for
income taxes 14.9 (16.6) a 3.8 2.1
------- ------ ------- -------- --------
Net income
(loss) $ 38.2 $ (28.8) $ (14.5) $ 11.8 $ 6.7
======= ======= ======= ======== ========
Net income (loss)
per share
Basic $ 0.18 $ (0.42)
Diluted $ 0.18 $ (0.42)
a - The tax benefit associated with the operating loss generated by
Celera Diagnostics is recorded by the Celera Genomics group since
the Celera Genomics group has recorded 100% of Celera Diagnostics'
losses.
APPLERA CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2001
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied Celera
Biosystems Genomics Celera
Group Group Diagnostics Eliminations Consolidated
---------- -------- ----------- ------------ ------------
Net revenues $ 405.1 $ 27.4 $ 1.6 $ (17.8) $ 416.3
Cost of sales 198.4 14.8 1.0 (13.3) 200.9
------- ------- ------- -------- --------
Gross margin 206.7 12.6 0.6 (4.5) 215.4
Selling, general
and
administrative 91.7 15.8 1.1 108.6
Research,
development and
engineering 48.9 41.2 4.5 (5.6) 89.0
Amortization of
goodwill and other
intangible assets 10.9 10.9
Other special
charges 69.1 69.1
------- ------- ------- -------- --------
Operating income
(loss) 66.1 (124.4) (5.0) 1.1 (62.2)
Interest income,
net 3.7 13.0 16.7
Other income
(expense), net (1.8) (0.6) (2.4)
Loss from joint
venture (5.0) 5.0
------- ------- ------- -------- --------
Income (loss)
before income
taxes 68.0 (117.0) (5.0) 6.1 (47.9)
Provision
(benefit) for
income taxes 20.4 (15.3) a 5.1
------- ------- ------- -------- --------
Net income
(loss) $ 47.6 $ (101.7) $ (5.0) $ 6.1 $ (53.0)
======= ======== ======= ======== ========
Net income (loss)
per share
Basic $ 0.23 $ (1.66)
Diluted $ 0.22 $ (1.66)
a - The tax benefit associated with the operating loss generated by
Celera Diagnostics is recorded by the Celera Genomics group since
the Celera Genomics group has recorded 100% of Celera
Diagnostics' losses.
APPLERA CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS
For the Twelve Months Ended June 30, 2002
(Dollar amounts in millions except per share amounts)
Applied Celera
Biosystems Genomics Celera
Group Group Diagnostics Eliminations Consolidated
---------- -------- ----------- ------------ ------------
Net revenues $ 1,604.0 $ 120.9 $ 9.2 $ (32.9) $ 1,701.2
Cost of sales 768.5 51.9 6.2 (27.6) 799.0
--------- ------- ------- -------- ---------
Gross margin 835.5 69.0 3.0 (5.3) 902.2
Selling,
general and
administrative 379.2 50.4 8.7 0.1 438.4
Research,
development and
engineering 219.6 132.7 39.0 (9.4) 381.9
Amortization of
other intangible
assets 7.4 7.4
Other special
charges 25.8 25.8
Acquired research
and development 2.2 99.0 101.2
-------- ------- ------- -------- ---------
Operating
income (loss) 234.5 (246.3) (44.7) 4.0 (52.5)
Loss on
investments (8.6) (6.0) 0.1 (14.5)
Interest income,
net 12.2 31.3 43.5
Other income
(expense), net (0.6) (4.6) 0.1 (5.1)
Loss from joint
venture (44.7) 44.7
-------- ------- ------- -------- ---------
Income (loss)
before income
taxes 237.5 (270.3) (44.7) 48.9 (28.6)
Provision
(benefit) for
income taxes 69.0 (58.5) a 1.5 12.0
-------- ------- ------- -------- ---------
Net income
(loss) $ 168.5 $ (211.8) $ (44.7) $ 47.4 $ (40.6)
======== ======== ======= ======== =========
Net income (loss)
per share
Basic $ 0.80 $ (3.21)
Diluted $ 0.78 $ (3.21)
a - The tax benefit associated with the operating loss generated by
Celera Diagnostics is recorded by the Celera Genomics group since
the Celera Genomics group has recorded 100% of Celera
Diagnostics' losses.
APPLERA CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS
For the Twelve Months Ended June 30, 2001
(Dollar amounts in millions except per share amounts)
Applied Celera
Biosystems Genomics Celera
Group Group Diagnostics Eliminations Consolidated
---------- -------- ----------- ------------ ------------
Net revenues $ 1,619.5 $ 89.4 $ 1.6 $ (66.4) $ 1,644.1
Cost of sales 774.5 43.0 1.0 (37.8) 780.7
--------- ------- ------- -------- ---------
Gross margin 845.0 46.4 0.6 (28.6) 863.4
Selling,
general and
administrative 380.6 58.3 1.1 0.1 440.1
Research,
development and
engineering 184.5 164.7 4.5 (30.3) 323.4
Amortization of
goodwill and
other intangible
assets 43.9 43.9
Other special
charges 69.1 69.1
--------- ------- ------- -------- ---------
Operating
income (loss) 279.9 (289.6) (5.0) 1.6 (13.1)
Gain on
investments 15.0 15.0
Interest income,
net 15.5 62.7 78.2
Other income
(expense), net (5.9) (0.8) (6.7)
Loss from joint
venture (5.0) 5.0
--------- ------- ------- -------- ---------
Income (loss)
before income
taxes 304.5 (232.7) (5.0) 6.6 73.4
Provision
(benefit) for
income taxes 92.1 (46.5) a 0.6 46.2
--------- ------- ------- -------- ---------
Net income
(loss) $ 212.4 $ (186.2) $ (5.0) $ 6.0 $ 27.2
========= ======== ======= ======== =========
Net income
(loss) per
share
Basic $ 1.01 $ (3.07)
Diluted $ 0.96 $ (3.07)
a - The tax benefit associated with the operating loss generated by
Celera Diagnostics is recorded by the Celera Genomics group since
the Celera Genomics group has recorded 100% of Celera
Diagnostics' losses.
--30--mj/ny* nf/db/ny
CONTACT: Applied Biosystems
Media:
Lori Murray, 650/638-6130
murrayla@appliedbiosystems.com
or
Investors:
Linda Greub, 650/554-2349
greublm@appliedbiosystems.com
or
European Media and Investors
David Speechly, Ph.D., (+) 44.207.868.1642
speechdp@eur.appliedbiosystems.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: BIOTECHNOLOGY COMPUTERS/ELECTRONICS MEDICAL
PHARMACEUTICAL SOFTWARE CONFERENCE CALLS EARNINGS
SOURCE: Applied Biosystems
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