Applied Biosystems Reports First Quarter Fiscal 2003 Earnings Per Share of 16 Cents From Continuing Operations.Business Editors/Biotechnology, Health & Medical Writers BIOWIRE2K FOSTER CITY, Calif.--(BUSINESS WIRE)--Oct. 24, 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 Corporation business, today reported that earnings per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the in the first quarter of fiscal 2003, ended September 30, 2002, were $0.16 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 versus $0.15 per diluted share in the first quarter of fiscal 2002. All per share amounts refer to per share of Applera Corporation-Applied Biosystems Group Common Stock. The Group, as successor to The Perkin-Elmer Corporation in a patent lawsuit lawsuit: see procedure; tort. , recorded a $16.4 million charge, net of income taxes, as a result of an adverse jury verdict received in October 2002. The amount awarded of $13.3 million is subject to entry of a final judgment by the court, where interest and additional damages may be added. As the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. related to a product line which was sold in 1999, the related charge was recorded to discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Including this charge, 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 first quarter of fiscal 2003 were $0.08 versus $0.15 for the prior year. Income from continuing operations in the first quarter of fiscal 2003 was $34.2 million compared to $32.2 million in the same period last year. 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 income from continuing operations by approximately $2 million, or $0.01 per diluted share. 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 first quarter of fiscal 2003 was $43.3 million compared to $43.1 million in the year-earlier quarter. Net income after the $16.4 million charge to discontinued operations for the first quarter of fiscal 2003 was $17.8 million. Net revenues for the Group for the first quarter of fiscal 2003 were $395.9 million compared to $366.6 million for the first quarter of fiscal 2002, an 8 percent increase. Excluding the effects of foreign currency, revenues increased approximately 7 percent. Revenues from instrument sales in the first quarter of fiscal 2003 increased approximately 16 percent to $189.0 million from $162.3 million in the same period last year. Instrument sales increased in all three strategic product categories including DNA Sequencing DNA sequencing The determination of the sequence of nucleotides in a sample of DNA. , Sequence Detection Systems (SDS 1. (company) SDS - Scientific Data Systems. 2. (tool) SDS - Schema Definition Set. ), and 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. . Consumables sales in the first quarter of fiscal 2003 decreased 7 percent to $138.4 million from $149.2 million in the same period a year ago. This decrease was primarily a result of a decline in DNA sequencing consumables. Revenues from other sources, including service contracts, royalties, licenses, and contract research, increased 24 percent to $68.5 million from $55.1 million in the year-earlier quarter. This increase resulted primarily from higher service revenues, license fees, and royalties, including $5.4 million for a license relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc certain mass spectrometry technology. Gross margin in the first quarter of fiscal 2003 was 51.2 percent versus 51.1 percent in the prior year. Although gross margin was relatively unchanged year-to-year, higher margins from royalty and license revenues were offset by increases in lower margin service revenues. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the first quarter of fiscal 2003 was 10.9 percent, compared with 11.8 percent in the same period a year ago. SG&A expenses were approximately 25 percent of revenues for both periods. R&D expenditures in the first quarter of fiscal 2003 increased 17 percent to $61.0 million, or 15.4 percent of revenues, from $52.3 million, or 14.3 percent of revenues, in the year-earlier quarter. R&D expenses were primarily driven by the ongoing funding of the Applera Genomics Initiative and support for new products in development. The first tangible outcomes from the Applera Genomics Initiative emerged in the first quarter of fiscal 2003 with the launch of the first sets of next-generation SDS reagents using the TaqMan(R) chemistries. These products currently include approximately 120,000 Assays-on-DemandTM for SNP SNP Scottish National Party Noun 1. SNP - (genetics) genetic variation in a DNA sequence that occurs when a single nucleotide in a genome is altered; SNPs are usually considered to be point mutations that have been evolutionarily 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. and nearly 13,000 gene expression assays. Tony L. White, Chief Executive Officer of Applera said, "First quarter results demonstrate that our aggressive investments in R&D are working, and as a result, we expect continued revenue growth for the balance of this fiscal year." Michael W. Hunkapiller, Ph.D., President, Applied Biosystems, said, "Strong early adoption of new Applied Biosystems' sequencing product lines, in particular the ABI 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 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. by the major academic 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, suggests that we have turned the corner on declines in our sequencing product line. We anticipate that the lower operating costs operating costs npl → gastos mpl operacionales of the ABI 3730 DNA Analyzer product line are likely to lead to more sequencing and related applications using DNA electrophoresis DNA electrophoresis is an analytical technique used to separate DNA fragments by size. An electric field forces the fragments to migrate through a gel. DNA molecules normally migrate from negative to positive potential due to the net negative charge of the phosphate backbone of technology, which should be positive for ABI's sequencing prospects." "In the first quarter we saw strong growth in the SDS product category as we did in previous quarters, and exceptional growth in the mass spectrometry category," Dr. Hunkapiller said. "While the performance of our mass spectrometry product lines indicates our success in both the 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. and 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. markets, we would expect to see the growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. in mass spectrometry moderate over the next few quarters." Applied Biosystems Outlook Forecasting remains challenging for several reasons, including: unpredictable spending patterns in the pharmaceutical and biotechnology sectors; delays in consideration by the U.S. Congress of the fiscal 2003 National Institutes of Health budget; uncertainty over the status of supplemental annual funding by the Japanese government in its current fiscal year; and difficulties in predicting trends in the consumption of sequencing reagents by the Group's customer base. At this time, the Group reiterates its previous expectation 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. Gross margin in fiscal 2003 is expected to approximate fiscal 2002 levels. Additionally, the Group expects SG&A expenses to rise somewhat more slowly than revenue during fiscal 2003. While the Group anticipates that the Applera Genomics Initiative will be substantially 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 an increase in the level of overall R&D spending during the second quarter of fiscal 2003. However, as a percentage of revenues, R&D spending is expected to trend downward during the second and remaining quarters of fiscal 2003 and to approximate 14 percent of revenue for the fiscal year. This annual 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 28 percent, one percentage point lower than previously forecast due to anticipated higher utilization of foreign tax credits. 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 reiterates its previous expectation that diluted earnings per share from continuing operations for fiscal 2003 will be in the range of $0.85 to $0.95. The Group expects 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. from continuing operations during the first half of fiscal 2003 to be approximately flat with the prior year period due to the high levels of R&D spending anticipated during this period. The Group anticipates EPS growth in the second half of fiscal 2003 due to the expected increases in sales and the moderation in R&D spending growth. 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, CA. The comments in the Outlook sections of this press release, including the Celera Diagnostics Joint Venture outlook below, 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. Celera Diagnostics Joint Venture During the first quarter of fiscal 2003, end-user sales of products manufactured by Celera Diagnostics, a 50/50 joint venture between Applied Biosystems and Celera Genomics, were $3.9 million, a 63 percent increase over the $2.4 million in the comparable year-earlier period, primarily due to continued 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. Reported fiscal 2003 first quarter revenues for Celera Diagnostics were $3.0 million, compared to $1.8 million in the same period last year. On October 1, 2002, sales responsibilities for products manufactured by Celera Diagnostics were largely transferred from Applied Biosystems to the diagnostic division of 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. , which now records end user sales. Net cash use was $16.0 million in the first quarter of fiscal 2003 compared to $7.4 million in the first quarter of fiscal 2002. The pre-tax loss for the quarter was $13.3 million, compared to $9.4 million in the same period last year. Developments at Celera Diagnostics over the last three months include the following: -- Celera Diagnostics and Bristol-Myers Squibb (BMS) entered into a collaboration to study genes that may be useful in the diagnosis and treatment of cardiovascular disease and diabetes. Celera Diagnostics will retain exclusive rights to develop and market diagnostic products for these conditions based on markers identified by the studies. Recently, Celera Diagnostics began processing cardiovascular samples received from BMS and from other sources through its high-volume testing lab in Alameda, CA. -- Celera Diagnostics and Laboratory Corporation of America (LabCorp) announced a collaboration to establish the clinical utility of laboratory tests based on novel diagnostic markers for Alzheimer's disease, breast cancer, and prostate cancer. The agreement provides LabCorp with exclusive access for a defined time to markers found to have clinical utility through the collaboration, and establishes Celera Diagnostics as a preferred vendor to LabCorp for molecular diagnostics products. -- Celera Diagnostics and Quest Diagnostics announced a collaboration to establish the clinical utility of laboratory tests based on novel diagnostic markers for cardiovascular disease and diabetes. The agreement provides Quest with exclusive access for a defined time to markers found to have clinical utility through the collaboration, and establishes Celera Diagnostics as a preferred vendor to Quest for molecular diagnostics products. -- Celera Diagnostics remains on schedule to complete at least three large disease association studies in fiscal 2003. The Alzheimer's study is progressing according to plan, and samples are beginning to be processed for studies in cardiovascular disease and breast cancer. Celera Diagnostics Joint Venture Outlook For fiscal 2003, Celera Diagnostics continues to anticipate end-user sales, including those from its alliance with Abbott Laboratories, in a range of $18 to $22 million. This outlook assumes continued demand growth, both from new products and from higher sales of existing products, and successful product migration into the alliance. 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. Conference Call & Webcast A conference call with Applera Corporation executives will be held October 24, 2002 at 10:00 a.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) with investors and media to discuss these results and management's current outlook for the Company. The call will be formatted to focus on each of the Applera businesses separately, with the following expected start times: -- Applied Biosystems Group 10:00 a.m. (EDT) -- Celera Diagnostics 10:45 a.m. -- Celera Genomics Group 11:00 a.m. Investors, securities analysts, representatives of the media, and other interested parties who would like to participate should dial (+1) 706.634.4992 (code "applera") at any time from 9:45 a.m. until the end of the call. 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 section. A digital recording will be available two hours after the completion of the conference call from October 24 to November 2, 2002. Interested parties should call 706.645.9291 and enter Conference ID 6096430. 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 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, 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 proteomic, bioinformatic, and 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. capabilities to identify and validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data 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 and develop new therapeutics. Its Celera Discovery SystemTM 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 Outlook sections, are forward-looking. 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, including difficulties in integrating acquired operations or technologies; (6) the risk of electricity shortages and earthquakes, 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. Applied Biosystems' or Celera Diagnostics' operations; (7) uncertainty of the availability to Applied Biosystems or Celera Diagnostics of intellectual property protection, limitations on the ability of Celera Diagnostics to protect trade secrets, and the risk to Applied Biosystems and Celera Diagnostics 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) the Applied Biosystems Knowledge Business' dependence on the operation of computer hardware, software, and Internet applications and related technology, (9) Celera Diagnostics' reliance on existing and future collaborations, including its strategic alliance with Abbott Laboratories, which may not be successful; (10) 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 proprietary diagnostic products, (11) the risk that clinical trials of products that Celera Diagnostics does discover and develop will not proceed as anticipated or may not be successful, or that such products will not receive required regulatory clearances or approvals, (12) the uncertainty that Celera Diagnostics' products will be accepted and adopted by the market, including the risks that these products will not be competitive with products offered by other companies, or that users will not be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to receive adequate reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. for these products from third party payors such as private insurance companies and government insurance plans; (13) Celera Diagnostics' reliance on access to biological materials and related clinical and other information, which may be in limited supply or access to which may be limited, (14) legal, ethical, and social issues which could affect demand for Celera Diagnostics' products, (15) Celera Diagnostics' limited commercial manufacturing experience and capabilities and its reliance on a single manufacturing facility; (16) Celera Diagnostics' reliance on a single supplier or a limited number of suppliers for key components of certain of its products; (17) potential product liability or other claims against Celera Diagnostics as a result of the testing or use of its products; (18) intense competition in the industry in which Celera Diagnostics operates; and (19) 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 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. and Applied Biosystems are registered trademarks and AB (Design), 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, 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 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 is a trademark of the University of Washington, 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)
(Unaudited)
Three months ended
September 30,
2002 2001
--------- ---------
Net revenues $ 395.9 $ 366.6
Cost of sales 193.3 179.4
--------- ---------
Gross margin 202.6 187.2
Selling, general and administrative 98.3 91.8
Research, development and engineering 61.0 52.3
--------- ---------
Operating income 43.3 43.1
Interest income, net 3.2 3.3
Other income (expense), net 1.0 (1.0)
--------- ---------
Income before income taxes 47.5 45.4
Provision for income taxes 13.3 13.2
--------- ---------
Income from continuing operations 34.2 32.2
Loss from discontinued operations,
net of income taxes (16.4)
--------- ---------
Net income $ 17.8 $ 32.2
========= =========
Income from continuing operations per share
Basic $ 0.16 $ 0.15
Diluted $ 0.16 $ 0.15
Loss from discontinued operations per share
Basic $ (0.08) $ -
Diluted $ (0.08) $ -
Net income per share
Basic $ 0.08 $ 0.15
Diluted $ 0.08 $ 0.15
Average common shares outstanding
Basic 208,825,000 211,363,000
Diluted 210,010,000 215,213,000
APPLERA CORPORATION
APPLIED BIOSYSTEMS GROUP
Revenues By Product Categories
(Dollar amounts in millions)
(Unaudited)
Three months ended
September 30,
2002 2001 Change
--------- --------- ---------
DNA Sequencing $ 149.3 $ 150.2 -1%
% of total revenues 38% 41%
SDS & Other Applied Genomics 83.5 68.8 21%
% of total revenues 21% 19%
Mass Spectrometry 83.4 54.2 54%
% of total revenues 21% 15%
Core DNA Synthesis & PCR 49.0 59.1 -17%
% of total revenues 12% 16%
Other Product Lines 30.7 34.3 -10%
% of total revenues 8% 9%
--------- ---------
Total $ 395.9 $ 366.6 8%
========= =========
APPLERA CORPORATION
CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2002
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied Celera
Biosystems Genomics Celera
Group Group Diagnostics Eliminations Consolidated
---------- -------- ----------- ------------ ------------
Net revenues $395.9 $23.6 $3.0 $(5.2) $417.3
Cost of sales 193.3 3.4 2.4 (4.2) 194.9
-------- -------- -------- -------- --------
Gross margin 202.6 20.2 0.6 (1.0) 222.4
Selling,
general and
administrative 98.3 7.0 2.8 108.1
Research,
development
and
engineering 61.0 32.5 11.1 (1.3) 103.3
Amortization of
intangible
assets 2.7 2.7
-------- -------- -------- -------- --------
Operating
income (loss) 43.3 (22.0) (13.3) 0.3 8.3
Interest
income, net 3.2 5.2 8.4
Other income
(expense), net 1.0 (3.2) 0.1 (2.1)
Loss from joint
venture (13.3) 13.3
-------- -------- -------- -------- --------
Income (loss)
before income
taxes 47.5 (33.3) (13.3) 13.7 14.6
Provision
(benefit) for
income taxes 13.3 (13.7) a 2.9 2.5
-------- -------- -------- -------- --------
Income (loss)
from
continuing
operations 34.2 (19.6) (13.3) 10.8 12.1
Loss from
discontinued
operations,
net of income
taxes (16.4) (16.4)
-------- -------- -------- -------- --------
Net income
(loss) $17.8 $(19.6) $(13.3) $10.8 $(4.3)
======== ======== ======== ======== ========
Income (loss) from
continuing operations per
share
Basic $ 0.16 $(0.28)
Diluted $ 0.16 $(0.28)
Loss from
discontinued
operations per
share
Basic $(0.08) $ -
Diluted $(0.08) $ -
Net income
(loss) per
share
Basic $ 0.08 $(0.28)
Diluted $ 0.08 $(0.28)
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 September 30, 2001
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied Celera
Biosystems Genomics Celera
Group Group Diagnostics Eliminations Consolidated
---------- -------- ----------- ------------ ------------
Net revenues $366.6 $27.3 $1.8 $(7.8) $387.9
Cost of sales 179.4 11.9 1.5 (6.2) 186.6
-------- -------- -------- -------- --------
Gross margin 187.2 15.4 0.3 (1.6) 201.3
Selling,
general and
administrative 91.8 12.6 2.7 107.1
Research,
development and
engineering 52.3 27.8 7.0 (2.6) 84.5
Amortization of
intangible
assets 0.5 0.5
-------- -------- -------- -------- --------
Operating
income (loss) 43.1 (25.5) (9.4) 1.0 9.2
Interest
income, net 3.3 10.9 (0.1) 14.1
Other income
(expense), net (1.0) (0.7) (1.7)
Loss from joint
venture (9.4) 9.4
-------- -------- -------- -------- --------
Income (loss)
before income
taxes 45.4 (24.7) (9.4) 10.3 21.6
Provision
(benefit) for
income taxes 13.2 (9.1) a 0.5 4.6
-------- -------- -------- -------- --------
Net income
(loss) $32.2 $(15.6) $(9.4) $9.8 $17.0
======== ======== ======== ======== ========
Net income
(loss) per
share
Basic $0.15 $(0.25)
Diluted $0.15 $(0.25)
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.
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