Applied Biosystems Reports Fiscal 2005 First Quarter Results; Fully Diluted EPS of $0.18-$0.18 on a Non-GAAP Basis, Excluding Specified Items-Net Revenues of $390 Million.FOSTER CITY, Calif. -- 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 revenues of $390 million for the first quarter of fiscal 2005, a 2% increase over the prior year quarter. Net revenues include favorable 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. of approximately 2%, compared to the prior year quarter. Net income was $37 million, compared to $33 million for the prior year quarter. Earnings per share (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. ) for the quarter were $0.18, compared to $0.16 for the prior year quarter. EPS on a non-GAAP basis, excluding the specified items described below, for the quarter were also $0.18. The net effect of foreign currency on EPS was a benefit of approximately $0.02, compared to the prior year quarter. "Applied Biosystems undertook actions during the first quarter to improve its organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. and business processes and to enhance opportunities for its 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. business," said Tony L. White, Chief Executive Officer, Applera Corporation. "We believe these actions will be positive for both growth and operating efficiency." Catherine M. Burzik, President, Applied Biosystems said, "Revenue growth over the prior year quarter was highest in our Real-Time PCR/Other Applied Genomics applied genomics Molecular genetics Molecular medicine The use of genetic information to diagnose, prognosticate and manage disease, based on the techniques of PCR, real time-PCR, DNA sequencing, and gene rearrangement studies for leukemia and lymphoma. product category, where growth was driven by the continued strength of our TaqMan(R) based systems, our human identification products, and our expanding line of biosecurity products. Mass Spectrometry revenue growth was led by sales of our 4000 Q TRAP(R) LC/MS/MS System. In contrast, DNA Sequencing DNA sequencing The determination of the sequence of nucleotides in a sample of DNA. revenue declined compared to the prior year quarter, primarily as a result of decreased sales of 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. Analyzers." During the first quarter of fiscal 2005, the Group recorded items that affected the comparability of the results with the first quarter of fiscal 2004. These items, which netted $1.1 million pre-tax, were comprised of a pre-tax gain of $8.5 million related to the settlement of a patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. claim and termination of a joint development agreement with Illumina, Inc., and a pre-tax charge of $7.4 million for severance and benefit costs. The severance charges related primarily to staff reductions intended to better align the Group's resources with anticipated business opportunities and to integrate the Applied Biosystems MALDI MALDI Matrix-Assisted Laser Desorption/Ionization TOF (Top Of Form) The beginning of a physical paper form. To position paper in many printers, the printer is turned offline, the forms are aligned properly and the TOF button is pressed. product line into the Applied Biosystems/MDS Sciex Instruments joint venture with MDS MDS, n See temporomandibular pain-dysfunction syndrome. MDS 1 Maternal deprivation syndrome, see there 2 Myelodysplastic syndrome, see there Inc. The following table summarizes the impact of these items on EPS calculations:
Reconciliation of GAAP amounts to Adjusted amounts
(Dollar amounts in millions)
Three months ended September 30, 2004
GAAP Adjusted
amounts Adjustments amounts
------- ------------ ---------
Oeprating income $ 48.6 $ 1.1 $ 47.5
Income before income taxes 51.6 1.1 $ 50.5
Provision for income taxes 14.5 0.3 $ 14.2
Net income 37.1 0.8 $ 36.3
Total diluted earnings
per share 0.18 - 0.18
Additional Financial Highlights --Revenues for the five product categories and their growth relative to the prior year quarter were: $116 million for DNA Sequencing, a 7% decline; $112 million for Real-Time PCR/Other Applied Genomics, a 19% increase; $89 million for Mass Spectrometry, an 8% increase; $47 million for Core DNA Synthesis DNA synthesis commonly refers to:
PCR abbr. polymerase chain reaction Polymerase chain reaction (PCR) , a 7% decline; and $26 million for Other Product Lines, a 14% decline. --Revenues by source and their growth relative to the prior year quarter were: $162 million for Instruments, a 6% decline; $156 million for Consumables, an 11% increase; and $72 million for Other Sources, including service and support, royalties, licenses, and consulting, a 2% increase. --Revenues for the major geographic regions and their growth relative to the prior year quarter were: $193 million in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , a 2% increase; $115 million in Europe, an 11% increase, including favorable foreign currency effects of approximately 5%; and $71 million in Asia Pacific, an 8% decrease, including favorable foreign currency effects of approximately 4%. Revenues in Japan, which are included in total revenues for Asia Pacific, declined 13% from the prior year quarter, including favorable foreign currency effects of approximately 6%. The ongoing transition of universities to Independent Administrative Agency An official governmental body empowered with the authority to direct and supervise the implementation of particular legislative acts. In addition to agency, such governmental bodies may be called commissions, corporations (e.g. status continued to negatively affect sales in Japan. --Gross Margin increased to 53.2% from 51.8% in the prior year quarter, reflecting reduced software amortization, reduced warranty costs, and the effects of foreign currency. --Selling, general, and administrative (SG&A) expenditures were $109 million, an increase of $13 million, or 13%, over the prior year quarter. Fiscal 2005 first quarter amounts included $4 million of higher litigation-related legal expenses, and unfavorable foreign currency effects of approximately $2 million, compared to the prior year quarter. --Research, development and engineering (R&D) expenses were $51 million for the quarter, a decrease of $9 million, or 14%, below the prior year quarter, as a result of the recent realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of the R&D product portfolio. --Cash flow from operations was $40 million for the quarter and capital expenditures were $9 million. As of the end of the quarter, cash was $535 million, up from $505 million as of June 30, 2004, accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying were $329 million, representing 65 days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). , and inventory was $139 million, representing 3.7 months of inventory on hand. Business Highlights --Catherine M. Burzik was promoted to President, Applied Biosystems following the retirement of Michael W. Hunkapiller, Ph.D. --During the first quarter, the Group announced an agreement for the expansion of its Applied Biosystems/MDS Sciex Instruments joint venture with MDS to include Applied Biosystems' MALDI Time-of-Flight (TOF) mass spectrometry systems. The transaction was completed last week. --The Group introduced LS*LIMS LIMS Laboratory Information Management System LIMS Library Information Management System LIMS Limb Infrared Monitor of the Stratosphere LIMS Land Information Management System (Canada) LIMS Logistics Information Management System (TM) Software, a new workflow management and process automation solution designed to increase productivity, improve data quality, and integrate data from many different sources for genomics and proteomics laboratories. --The Group introduced the 3130 line of Genetic Analyzers for low- to medium-throughput laboratories designed to deliver enhanced automation, faster turnaround times (1) In batch processing, the time it takes to receive finished reports after submission of documents or files for processing. In an online environment, turnaround time is the same as response time. , higher reliability, and higher data quality across a wide range of applications. --The Group introduced both the 7900HT Fast Real-Time PCR System and the 9800 Fast PCR System. Both systems are intended to reduce time to results and increase productivity for our customers. Applied Biosystems Outlook --Applied Biosystems continues to expect low- to mid-single digit revenue growth for fiscal 2005. --Applied Biosystems continues to expect EPS growth for fiscal 2005 at a rate exceeding that of the annual revenue growth rate. This expectation excludes certain types of items which are included in EPS under GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , as set forth below under "Use of Non-GAAP Financial Information." The Group believes this outlook and its fiscal year 2005 financial performance will continue to be affected by, among other things, the timing and level of future NIH "Not invented here." See digispeak. NIH - The United States National Institutes of Health. funding in the U.S. and the ongoing transition of universities in Japan to Independent Administrative Agency status. Other risks and uncertainties that may affect Applied Biosystems' financial performance are detailed in the "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. " section of this release. The comments in the Outlook sections of this press release, including the Celera Diagnostics Joint Venture Outlook below, reflect management's current outlook. Applera 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 Celera Diagnostics is a 50/50 joint venture between the Applied Biosystems group of Applera Corporation and Celera Genomics. For the first quarter of fiscal 2005, end-user alliance sales for all products, sold primarily by 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. , increased to $12.9 million from $9.6 million in the same quarter last year. This increase was primarily due to higher demand for products sourced during the second half of fiscal 2004 from third parties, including products for HLA typing HLA typing n. A method for determining compatibility for bone marrow transplantation using the tissue of unrelated donors and recipients. , and higher demand for Abbott alliance products, including infectious disease Infectious disease A pathological condition spread among biological species. Infectious diseases, although varied in their effects, are always associated with viruses, bacteria, fungi, protozoa, multicellular parasites and aberrant proteins known as prions. products and instruments. During the recently completed quarter, the pre-tax loss decreased to $9.3 million, compared to $12.0 million in the same quarter last year. This decrease was primarily due to higher revenue and gross margin, and lower SG&A expenses. Reported revenues increased to $9.2 million, compared to $8.5 million in the same quarter last year. Reported revenues for the recent quarter consist primarily of equalization payments Equalization payments are cash payments made in some federal systems of government from the federal government to state or provincial governments with the objective of offsetting differences in available revenue or in the cost of providing services. from Abbott resulting from the profit-sharing arrangement between Abbott and Celera Diagnostics and technology-related revenues. Fluctuation in equalization payments can lead to fluctuation in both reported revenues and gross margins from period to period due to differences in end-user sales of alliance products and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. between the alliance partners. Net cash used during the quarter was $10.3 million, compared to $14.7 million in the first quarter of fiscal 2004. "We are continuing to reduce our operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and to advance our discovery research to identify and validate new markers of disease," said Kathy Ordonez, President, Celera Diagnostics. "We plan to complete medical utility studies in the coming months related to risk for myocardial infarction myocardial infarction: see under infarction. , rheumatoid arthritis rheumatoid arthritis Chronic, progressive autoimmune disease causing connective-tissue inflammation, mostly in synovial joints. It can occur at any age, is more common in women, and has an unpredictable course. and breast cancer metastasis metastasis /me·tas·ta·sis/ (me-tas´tah-sis) pl. metas´tases 1. transfer of disease from one organ or part of the body to another not directly connected with it, due either to transfer of pathogenic microorganisms or to . These studies should indicate the utility of our constellations of markers relative to existing diagnostic methods, and should aid in defining our path to new products." Celera Diagnostics Highlights --An October 2004 publication in the online edition of the Proceedings of the National Academy of Sciences The Proceedings of the National Academy of Sciences of the United States of America, usually referred to as PNAS, is the official journal of the United States National Academy of Sciences. described genetic variants associated with late-onset Alzheimer's disease Alzheimer's disease (ăls`hī'mərz, ôls–), degenerative disease of nerve cells in the cerebral cortex that leads to atrophy of the brain and senile dementia. that were discovered by scientists at Celera Diagnostics and its collaborators. These gene variants, also referred to as single nucleotide polymorphisms Noun 1. single nucleotide polymorphism - (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 successful enough to recur in a (SNPs), are in genes that code for the GAPD GAPD Guard Capacity Adaptation Based on Prediction and Dropping enzyme, which is involved in glucose metabolism glucose metabolism, n the process by which simple sugars found in many foods are processed and used to produce energy in the form of ATP. Once consumed, glucose is absorbed by the intestines and into the blood. and neuronal neu·ro·nal adj. Relating to a neuron. neuronal pertaining to or emanating from a neuron. neuronal abiotrophy see hereditary neuronal abiotrophy of Swedish Lapland dogs. apoptosis apoptosis or programmed cell death Mechanism that allows cells to self-destruct when stimulated by the appropriate trigger. It may be initiated when a cell is no longer needed, when a cell becomes a threat to the organism's health, or for other reasons. , the programmed death of brain cells. This research may have pharmacogenomic implications for drugs in development, as well as for current and future therapies for Alzheimer's and other neurodegenerative diseases neurodegenerative diseases diseases characterized by neurodegeneration. Lesions are microscopic only but in chronic disease with massive involvement there may be grossly visible atrophy of affected nervous tissue. . --During the last three months, Celera Diagnostics initiated studies to determine the medical utility of markers associated with the diseases mentioned above. These markers were previously identified and replicated in discovery research studies. Additional discovery work is underway to identify genetic markers genetic marker n. A gene phenotypically associated with a particular, easily identified trait and used to identify an individual or cell carrying that gene. related to Alzheimer's disease, liver disease Liver Disease Definition Liver disease is a general term for any damage that reduces the functioning of the liver. Description The liver is a large, solid organ located in the upper right-hand side of the abdomen. , other forms of cardiovascular disease Cardiovascular disease Disease that affects the heart and blood vessels. Mentioned in: Lipoproteins Test cardiovascular disease and autoimmune disorders Autoimmune Disorders Definition Autoimmune disorders are conditions in which a person's immune system attacks the body's own cells, causing tissue destruction. . Celera Diagnostics Joint Venture Outlook Celera Diagnostics intends to continue advancing its disease association and medical utility studies during fiscal 2005. It also anticipates increased sales of existing products sold through its alliance with Abbott, particularly ASRs for 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. and products for infectious disease testing. Celera Diagnostics is also planning the introduction of new products. For fiscal 2005, Celera Diagnostics anticipates pre-tax losses to be in a range of $28 to $35 million, and fiscal 2005 net cash use to be in a range of $30 to $40 million. Total end user sales for the alliance between Celera Diagnostics and Abbott are anticipated to be in range of $60 to $70 million during fiscal 2005. Risks and uncertainties that may affect Celera Diagnostics' financial performance are detailed in the Forward-Looking Statements section of this release. Use of Non-GAAP Financial Information This press release contains non-GAAP information, including earnings per share adjusted to exclude certain costs, expenses, gains and losses and other specified items. These measures are not in accordance with, or an alternative for, generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and may be different from non-GAAP measures used by other companies. Among the items included in GAAP earnings but excluded for purposes of determining adjusted earnings are: gains or losses from sales of operating assets Operating Assets Another term for working capital. and investments; restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , including severance charges; charges and recoveries relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc significant legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. and asset impairment charges. We believe the presentation of non-GAAP information provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when GAAP information is viewed in conjunction with non-GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. In addition, this information is among the primary indicators we use as a basis for evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting future periods. This information is not intended to be considered in isolation or as a substitute for GAAP financial information. Conference Call & Webcast --A conference call to discuss financial results will be held today at 11:00 a.m. (ET). Management will focus on each of the Applera businesses separately at the approximate times below: --Applied Biosystems Group 11:00 a.m. (ET) --Celera Diagnostics 11:45 a.m. (ET) --Celera Genomics Group 12:15 p.m. (ET) --Conference call number is 706.634.4992 (code "Applera"). --This conference call will also be webcast and can be accessed on the "Investors & Media" section of either www.applera.com or www.celera.com, or the "Investors" section of www.appliedbiosystems.com. --A digital recording will be available approximately two hours after the completion of the conference call on October 26 until November 7, 2004. The replay number is 706.645.9291, conference ID 1528463. About Applera Corporation and Applied Biosystems Applera Corporation consists of two operating groups. The Applied Biosystems Group serves the life science industry and research community by developing and marketing instrument-based systems, consumables, software, and services. 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, develop new pharmaceuticals, and 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 $1.7 billion during fiscal 2004. The Celera Genomics Group is engaged principally in the discovery and development of targeted therapeutics for cancer, autoimmune autoimmune /au·to·im·mune/ (-i-mun´) directed against the body's own tissue; see under disease and response. au·to·im·mune adj. and inflammatory diseases Noun 1. inflammatory disease - a disease characterized by inflammation disease - an impairment of health or a condition of abnormal functioning NEC, necrotizing enterocolitis - an acute inflammatory disease occurring in the intestines of premature infants; . Celera Genomics is leveraging its proteomic, bioinformatic, and genomic capabilities to identify and validate drug targets, and to discover and develop small molecule therapeutics. It is also seeking to advance therapeutic antibody and selected small molecule drug programs in collaboration with global technology and market leaders. Celera Diagnostics, a 50/50 joint venture between Applied Biosystems and Celera Genomics, is focused on discovery, development, and commercialization of diagnostic products. Information about Applera Corporation, including reports and other information filed by the company with the Securities and Exchange Commission, is available at http://www.applera.com, or by telephoning 800.762.6923. Information about Applied Biosystems is available at http://www.appliedbiosystems.com/. Forward-Looking Statements 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," "anticipate," and "planned," among others. These forward-looking statements 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) Applied Biosystems' sales are dependent on customers' 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. policies and government-sponsored research; (3) Applied Biosystems' significant overseas operations, with attendant exposure to fluctuations in the value of foreign currencies; (4) risks associated with Applied Biosystems' growth strategy, including difficulties in integrating acquired operations or technologies; (5) the risk of earthquakes, which could interrupt Applied Biosystems' or Celera Diagnostics' operations; (6) 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 claims; (7) Applied Biosystems' dependence on the operation of computer hardware, software, and Internet applications and related technology for its businesses, particularly those focused on the development and marketing of information-based products and services; (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 proprietary diagnostic products; (10) 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; (11) 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 to receive adequate reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. for these products from fourth party payors such as private insurance companies and government insurance plans; (12) 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; (13) legal, ethical, and social issues which could affect demand for Celera Diagnostics' products; (14) Celera Diagnostics' limited commercial manufacturing experience and capabilities and its reliance on a single principal manufacturing facility; (15) Applied Biosystems' and Celera Diagnostics' reliance on a single supplier or a limited number of suppliers for key components of some of their products; (16) potential product liability or other claims against Celera Diagnostics as a result of the testing or use of its products; (17) intense competition in the industry in which Celera Diagnostics operates; and (18) 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 2004. Applera Corporation. All Rights Reserved. Applied Biosystems, Celera and AB (Design) are registered trademarks and Applera, Celera Diagnostics, and Celera Genomics are trademarks of Applera Corporation or its subsidiaries in the U. S. and/or certain other countries. Q TRAP is a registered trademark of Applied Biosystems/MDS SCIEX, which is a joint venture between Applera Corporation and MDS Inc. TaqMan is a registered trademark of Roche Molecular Systems, Inc.
APPLERA CORPORATION
APPLIED BIOSYSTEMS GROUP
CONDENSED COMBINED STATEMENTS OF OPERATIONS
(Dollar amounts in millions except per share amounts)
(Unaudited)
Three months ended
September 30,
2004 2003(*)
------------- --------------
Net revenues $390.3 $382.7
Cost of sales 182.7 184.6
------------- --------------
Gross margin 207.6 198.1
Selling, general and administrative 109.0 96.3
Research, development and engineering 51.1 59.6
Employee-related charges, asset
impairments and other 7.4
Litigation settlement (8.5)
------------- --------------
Operating income 48.6 42.2
Gain on investments, net 1.2
Interest income, net 2.4 2.9
Other income (expense), net 0.6 0.1
------------- --------------
Income before income taxes 51.6 46.4
Provision for income taxes 14.5 13.0
------------- --------------
Net income $37.1 $33.4
============= ==============
Earnings per share analysis
----------------------------------------
Net income $37.1 $33.4
Allocated intercompany sales of assets (0.1)
Allocated interperiod taxes (0.6)
------------- --------------
Total net income allocated 36.4 33.4
Less dividends declared on common stock 8.3 8.9
------------- --------------
Undistributed earnings $28.1 $24.5
============= ==============
Allocation of basic earnings per share
Basic distributed earnings per share $0.04 $0.04
Basic undistributed earnings per share 0.15 0.12
------------- --------------
Total basic earnings per share $0.19 $0.16
============= ==============
Allocation of diluted earnings per share
Diluted distributed earnings per share $0.04 $0.04
Diluted undistributed earnings per share 0.14 0.12
------------- --------------
Total diluted earnings per share $0.18 $0.16
============= ==============
Weighted average number of common shares
Basic 195,526,000 208,414,000
Diluted 198,252,000 211,620,000
(*)Prior year numbers have been reclassified for comparative purposes.
APPLERA CORPORATION
APPLIED BIOSYSTEMS GROUP
Revenues By Product Categories
(Dollar amounts in millions)
(Unaudited)
Three months ended
September 30,
2004 2003 Change
--------- -------- -------
DNA Sequencing $116.1 $124.8 -7%
% of total revenues 30% 33%
Real-Time PCR/Other Applied Genomics(A) 111.8 94.3 19%
% of total revenues 29% 25%
Mass Spectrometry 89.1 82.4 8%
% of total revenues 23% 21%
Core DNA Synthesis & PCR 47.4 51.2 -7%
% of total revenues 12% 13%
Other Product Lines 25.9 30.0 -14%
% of total revenues 6% 8%
--------- --------
Total $390.3 $382.7 2%
========= ========
(A) The product category Real-Time PCR/Other Applied Genomics was
previously called SDS/Other Applied Genomics.
APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2004
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied Celera
Biosystems Genomics Celera Elimin- Consol-
Group Group Diagnostics ations idated
-------- --------- ----------- ------- --------
Net revenues $390.3 $9.6 $9.2 $(1.9) $407.2
Cost of sales 182.7 2.6 3.1 (1.1) 187.3
-------- --------- -------- ------- -------
Gross margin 207.6 7.0 6.1 (0.8) 219.9
Selling, general
and administrative 109.0 5.5 3.0 (0.1) 117.4
Research, development
and engineering 51.1 24.4 12.4 (0.6) 87.3
Amortization of
intangible assets 0.7 0.7
Employee-related
charges, asset
impairments and
other 7.4 2.8 10.2
Litigation
settlement (8.5) (8.5)
-------- --------- -------- ------- -------
Operating income
(loss) 48.6 (26.4) (9.3) (0.1) 12.8
Interest income, net 2.4 2.9 5.3
Other income
(expense), net 0.6 1.5 2.1
Loss from joint
venture (9.3) 9.3
-------- --------- -------- ------- -------
Income (loss) before
income taxes 51.6 (31.3) (9.3) 9.2 20.2
Provision (benefit)
for income taxes 14.5 (11.0) (1) 0.6 4.1
-------- --------- -------- ------- -------
Net income
(loss) $37.1 $(20.3) $(9.3) $8.6 $16.1
======== ========= ======== ======= =======
Net income (loss) per
share
Basic $0.19 $(0.28)
Diluted $0.18 $(0.28)
(1) 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
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2003
(Dollar amounts in millions except per share amounts)
(unaudited)
Applied Celera
Biosystems Genomics Celera Elimin- Consol-
Group Group Diagnostics ations idated
-------- --------- ----------- ------- --------
Net revenues $382.7 $17.3 $8.5 $(3.5) $405.0
Cost of sales 184.6 2.7 3.6 (2.2) 188.7
-------- --------- -------- ------- -------
Gross margin 198.1 14.6 4.9 (1.3) 216.3
Selling, general and
administrative 96.3 8.2 4.5 0.1 109.1
Research, development
and engineering 59.6 21.8 12.4 (1.4) 92.4
Amortization of
intangible assets 0.7 0.7
-------- --------- -------- ------- -------
Operating income
(loss) 42.2 (16.1) (12.0) 14.1
Gain (loss) on
investments, net 1.2 (0.7) 0.5
Interest income, net 2.9 3.1 6.0
Other income
(expense), net 0.1 (1.0) (0.9)
Loss from joint
venture (12.0) 12.0
-------- --------- -------- ------- -------
Income (loss) before
income taxes 46.4 (26.7) (12.0) 12.0 19.7
Provision (benefit)
for income taxes 13.0 (10.4) (1) 1.1 3.7
-------- --------- -------- ------- -------
Net income (loss) $33.4 $(16.3) $(12.0) $10.9 $16.0
======== ========= ======== ======= =======
Net income (loss) per
share
Basic $0.16 $(0.23)
Diluted $0.16 $(0.23)
(1) 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.
First quarter fiscal 2004 numbers have been reclassified for
comparative purposes.
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