Applied Biosystems Reports Fourth Quarter and Fiscal 2005 Results.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. ): --Q4 Fully 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. 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. of $0.35 ($0.31 on a non-GAAP basis, excluding specified items) --Record Quarterly and Fiscal Year Net Revenues and Cash Flow from Operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses --Board of Directors Authorizes Expanded Share Repurchase 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. Program Applied Biosystems Group (NYSE: ABI), an Applera Corporation business, today reported net revenues of $479 million for the fourth quarter of fiscal 2005, a 4% increase over the prior year quarter. Net revenues included favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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 1%, compared to the prior year quarter. Income 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 was $71.6 million compared to $40.5 million for the prior year quarter. Earnings per share (EPS) from continuing operations for the quarter were $0.35, compared to $0.20 for the prior year quarter. EPS from continuing operations for the quarter on a non-GAAP basis, excluding the specified items described in the reconciliation schedule below, were $0.31, a 15% increase compared to $0.27 for the prior year quarter. The net effect of foreign currency on EPS was a benefit of approximately $0.01, compared to the prior year quarter. All per share amounts refer to per share of Applera Corporation-Applied Biosystems Group Common Stock. Net income for the fourth quarter of fiscal 2005 was $71.6 million, compared to $51.1 million for the prior year quarter. For the fourth quarter of fiscal 2004, net income included an after-tax benefit of $10.6 million related 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. comprised of a $7.6 million German tax benefit and a $3.0 million reduction in a 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. liability in connection with a final settlement payment. "Applied Biosystems demonstrated substantial growth in earnings and cash flow in the fourth quarter and during fiscal 2005," said Tony L. White, Chief Executive Officer, Applera Corporation. "Measures taken during fiscal 2005 to improve operations and align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. expenditures are paying off. We enter fiscal 2006 in a very healthy financial position, with a stronger operational focus and multiple initiatives in place to accelerate revenue growth over the next 12 to 24 months." Catherine M. Burzik, President, Applied Biosystems, said, "Revenue growth accelerated slightly during the fourth quarter. The Real-Time PCR/Applied Genomics category continued to register double-digit gains over the prior year quarter, led by strong demand for our biosecurity and human identification products, TaqMan(R) Gene Expression assays, and other consumables. Revenues in the DNA Sequencing DNA sequencing The determination of the sequence of nucleotides in a sample of DNA. category increased modestly for the second consecutive quarter. A challenging pharmaceutical 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. environment, coupled with time required by customers to evaluate our recently introduced products prior to purchase, slowed 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. systems sales during the fourth quarter. Additionally, we are encouraged by the double-digit increase in overall consumables revenues achieved in the fourth quarter." During the fourth quarters of both fiscal 2005 and 2004, the Group recorded items that affected the comparability of results. For the fourth quarter of fiscal 2005, these items decreased income before taxes by $20.2 million. These items included pre-tax charges of $11.4 million for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and benefit costs, $6.2 million for charges related to facility lease agreements and $2.6 million for asset impairments. All charges relate to the Group's previously announced decision to reduce and rebalance the Applied Biosystems workforce. Also recorded during the fourth quarter of fiscal 2005 were tax benefits of $23.5 million primarily related to additional U.S. R&D credit carryforwards, expected results of Canadian examinations and settlement of certain UK tax matters. During the fourth quarter of fiscal 2004, the Group recorded pre-tax charges of $19.3 million. This amount included charges of $14.9 million for impairments of patents and acquired technology and $4.4 million for asset impairments and other expenses related to the decision to transfer a product line back to HTS HTS Heights HTS Harmonized Tariff System HTS High Throughput Screening (biomolecular assay screening) HTS High-Throughput Screening (Pharmaceutical Industry) HTS Harmonized Tariff Schedule Biosystems, 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 Three months ended
June 30, 2005 June 30, 2004
GAAP Adj. Adjusted GAAP Adj. Adjusted
amounts amounts amounts amounts
-------- ----- -------- ------- ----- --------
Operating income $ 60.5 $(20.2) $ 80.7 $ 52.5 $(19.3) $ 71.8
Income before income
taxes 65.4 (20.2) 85.6 56.2 (19.3) 75.5
Provision (benefit)
for income taxes (6.2) (30.1) 23.9 15.7 (5.5) 21.2
Income from
continuing
operations 71.6 9.9 61.7 40.5 (13.8) 54.3
Earnings per share
allocations(1) (1.1) (1.1) -
Adjusted income from
continuing
operations for
earnings per share $ 70.5 $ 8.8 $ 61.7 $ 40.5 $(13.8) $ 54.3
Total diluted
earnings per share
from continuing
operations $ 0.35 $ 0.04 $ 0.31 $ 0.20 $(0.07) $ 0.27
(1) Represents allocation of interperiod taxes to adjust income from
continuing operations for purposes of calculating earnings per
share.
Quarterly Financial Highlights --Revenue for the five product categories and the change relative to the prior year quarter were: $143 million for DNA Sequencing, a 2% increase; $140 million for Real-Time PCR/Applied Genomics, a 16% increase; $119 million for Mass Spectrometry, a 1% decline; $46 million for Core PCR PCR polymerase chain reaction. PCR abbr. polymerase chain reaction Polymerase chain reaction (PCR) and DNA Synthesis DNA synthesis commonly refers to:
--Revenues by source and the change relative to the prior year quarter were: $225 million for Instruments, a 3% decline; $179 million for Consumables, a 17% increase; and $75 million for Other Sources, including service and support, royalties, licenses, and consulting, a 2% decline. --Revenues for major geographic regions and their change relative to the prior year quarter were: $201 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 5% decline; $171 million in Europe, a 14% increase, including favorable foreign currency effects of approximately 2%; and $86 million in Asia Pacific, a 9% increase, including favorable foreign currency effects of approximately 1%. --Gross margin in the fourth quarter of fiscal 2005 was 53.0%. The gross margin in the prior year quarter was 53.4%. The decline in gross margin was attributable to lower licensing fees and royalties, partially offset by decreases in software amortization and warranty costs. --Selling, general, and administrative (SG&A) expenditures in the fourth quarter of fiscal 2005 increased approximately 1% to $124.8 million from $123.9 million in the prior year quarter. --Research, development, and engineering (R&D) expenditures in the fourth quarter of fiscal 2005 were $48.3 million, representing 10.1% of revenues, compared to $51.3 million, representing 11.1% of revenues, in the prior year quarter. The decrease in R&D expenditures was due primarily to cost savings realized from the integration earlier in fiscal 2005 of the 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. Net of the impact of the MALDI transaction, R&D expenditures were consistent with the prior year. --Cash flow from operations was $116 million and capital expenditures were $20 million for the quarter. As of the end of the quarter, cash and short term investments were $756 million, up from $676 million as of March 31, 2005. 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 $378 million, representing 56 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 $117 million, representing 2.4 months of inventory on hand. Quarterly Business Highlights --In April, the Group announced a Joint Research Protocol with the NCI See Liberate. Cohort Consortium in the Study of Breast and Prostate Cancer prostate cancer, cancer originating in the prostate gland. Prostate cancer is the leading malignancy in men in the United States and is second only to lung cancer as a cause of cancer death in men. through which the Consortium will use Applied Biosystems TaqMan(R) 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. Assays and 7900HT Real-Time PCR Systems to identify novel inherited inherited received by inheritance. inherited achondroplastic dwarfism see achondroplastic dwarfism. inherited combined immunodeficiency see combined immune deficiency syndrome (disease). gene variants that may contribute to the development of these two cancers. --In May, the Group announced the expansion of its PCR (polymerase chain reaction polymerase chain reaction (pŏl`ĭmərās') (PCR), laboratory process in which a particular DNA segment from a mixture of DNA chains is rapidly replicated, producing a large, readily analyzed sample of a piece of DNA; the process is ) licensing program to include key patents covering real-time PCR and the settlement of litigation and arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the with Hoffmann-La Roche. Subsequent to the end of the quarter, the Group announced its first licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. , Invitrogen Corporation, under the expanded PCR licensing program. --In June, the Group and Invitrogen Corporation announced a strategic co-marketing and re-selling alliance to deliver solutions for proteomic analyses and biomarker biomarker /bio·mark·er/ (bi´o-mahr?ker) 1. a biological molecule used as a marker for a substance or process of interest. 2. tumor marker. bi·o·mark·er n. 1. studies in drug discovery and disease research worldwide. --In June, the Group joined with academic collaborators in presenting data showing the utility of a preliminary version of Applied Biosystems TaqMan(R) MicroRNA Assays to profile microRNA (miRNA) expression in mouse stem cells stem cells, unspecialized human or animal cells that can produce mature specialized body cells and at the same time replicate themselves. Embryonic stem cells are derived from a blastocyst (the blastula typical of placental mammals; see embryo), which is very young and in human brain cancer samples. --During the quarter, the Group began shipments of several new mass spectrometers: the 3200 Q TRAP(R) and 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. 3200(TM) LC/MS/MS Systems, for food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. , environmental, forensic Belonging to courts of justice. forensic 1) adj. from Latin forensis for "belonging to the forum," ancient Rome's site for public debate, and currently meaning pertaining to the courts. , clinical research, and pharmaceutical analysis markets; and the 4800 MALDI TOF/TOF(TM) 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. , offering a new level of sensitivity and efficiency for 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. workflows. Fiscal 2005 Highlights For fiscal 2005, the Group reported net revenues of $1.79 billion, a 3% increase over fiscal 2004 revenues of $1.74 billion. The net effect of foreign currency increased net revenues in fiscal 2005 by approximately 2%, compared to the prior year. Income from continuing operations in fiscal 2005 was $236.9 million, as compared to $172.3 million for the prior year. EPS from continuing operations for fiscal 2005 were $1.19, compared to $0.83 for the prior year period. EPS from continuing operations on a non-GAAP basis, excluding the specified items described in the reconciliation schedule below, were $1.05, compared to $0.86 for the prior year period. The net effect of foreign currency on fiscal 2005 net income was a benefit of approximately $0.07 per share. Cash flow from operations for fiscal 2005 was $334 million compared to $289 million for fiscal 2004. Annual revenues for the five product categories and their change relative to the prior year were: $541 million for DNA Sequencing, a 5% decline; $520 million for Real-Time PCR/Applied Genomics, a 21% increase; $427 million for Mass Spectrometry, a 3% increase; $191 million for Core PCR and DNA Synthesis, a 6% decline; and $108 million for Other Product Lines, a 10% decline. Revenues by source and the change relative to the prior year were: $804 million for Instruments, a 4% decline; $681 million for Consumables, a 12% increase; and $302 million for Other Sources, including service and support, royalties, licenses, and consulting, a 4% increase. During both fiscal 2005 and 2004, the Group recorded items that affected the comparability of results. For fiscal 2005, the total amount of these items increased income before taxes by $6.4 million. These items included pre-tax gains of $29.7 million for the sale of certain MALDI Time-of-Flight (TOF) assets to MDS Inc. and $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. Fiscal 2005 results also included pre-tax charges of $21.4 million for severance and benefit costs, $8.5 million for charges related to facility lease agreements and $1.9 million for asset impairments and other expenses. In addition, fiscal 2005 results included $23.5 million for the above mentioned tax benefits. During fiscal 2004, the Group recorded pre-tax charges of $7.1 million. This amount included the pre-tax charges of $14.9 million and $4.4 million discussed above and a pre-tax charge of $5.6 million for severance and benefit costs. Fiscal 2004 results also included pre-tax gains of $11.2 million related to sales of investments and $6.6 million for legal settlements. The following table summarizes the impact of these items on EPS calculations:
Reconciliation of GAAP amounts to Adjusted amounts
(Dollar amounts in millions)
Twelve months ended Twelve months ended
June 30, 2005 June 30, 2004
GAAP Adj. Adjusted GAAP Adj. Adjusted
amounts amounts amounts amounts
------- ----- -------- ------- ----- --------
Operating income $280.1 $ 6.4 $273.7 $215.9 $(18.3) $234.2
Income before income
taxes 297.2 6.4 290.8 239.7 (7.1) 246.8
Provision for income
taxes 60.3 (21.1) 81.4 67.4 (1.2) 68.6
Income from continuing
operations 236.9 27.5 209.4 172.3 (5.9) 178.2
Earnings per share
allocations(1) - - -
Adjusted income from
continuing
operations for
earnings per share $236.9 $27.5 $209.4 $172.3 $ (5.9) $178.2
Total diluted earnings
per share
from continuing
operations $ 1.19 $0.14 $ 1.05 $ 0.83 $(0.03) $ 0.86
(1) Represents allocation of interperiod taxes to adjust income from
continuing operations for purposes of calculating earnings per
share.
Share Repurchase Program During fiscal 2005, the Group repurchased approximately 284,000 shares of Applera Corporation-Applied Biosystems Group common stock at a cost of $6.1 million. In view of the Group's strong cash flow performance during fiscal 2005 and its cash resources of $756 million as of June 30, 2005, the Board of Directors believes that the Group has sufficient financial resources 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. shares and pursue internal and external investment alternatives. Accordingly, the Board has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase of up to 10% of the outstanding shares of Applera Corporation-Applied Biosystems Group common stock. This authorization The right or permission to use a system resource; the process of granting access. See access control. supplements the Group's existing authority to replenish re·plen·ish v. re·plen·ished, re·plen·ish·ing, re·plen·ish·es v.tr. 1. To fill or make complete again; add a new stock or supply to: replenish the larder. 2. shares issued under its employee stock benefit plans. The new authorization has no time restrictions and delegates to company management discretion to purchase shares at times and prices it deems appropriate through open market purchases, privately negotiated transactions, tender offers, exchange offers, or otherwise. It is anticipated that repurchases will be made from time to time depending on market conditions and will be funded using the Group's U.S. cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. and cash generated from domestic operations, as well as funds to be borrowed under the Company's Revolving Credit Agreement Revolving credit agreement A legal commitment in which a bank promises to lend a customer up to a specified maximum amount during a specified period. revolving credit agreement See line of credit. , if and when required. Applied Biosystems Outlook The Group believes that its fiscal year 2006 outlook and financial performance will be affected by, among other things: the introduction and adoption of new products; the level of commercial investments in life science R&D; the level of government funding for life science research; the outcome of pending litigation matters; competitive product introductions and pricing; purchase patterns from large 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 for DNA sequencing instruments and consumables; and the success of the Group's expanded licensing program for PCR technology. Subject to the inherent uncertainty associated with these factors, Applied Biosystems has the following expectations regarding its financial performance for fiscal 2006: --Fiscal 2006 Revenue Growth Rate: Annual revenue growth is anticipated to be in the low single digits. This outlook includes the impact of currency, which at current exchange rates is expected to reduce reported revenue growth by approximately 1 percent. Revenues are expected to increase for both instruments and consumables. The Group anticipates revenue growth in the 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. and Mass Spectrometry product categories and revenue declines in the DNA Sequencing and Core PCR and DNA Synthesis categories. Revenues in the Other Product Lines category are expected to approximately equal those in fiscal 2005. Quarterly year-over-year revenue changes may be different from our annual expectations due to a variety of factors, including the timing of customer orders and disbursements of government funding. --Fiscal 2006 Margins and Expenses: The Group anticipates gross margin to equal, or slightly exceed, the fiscal 2005 gross margin of 53.2%. Consistent with the decision taken during the fourth quarter to rebalance resources, total 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. are expected to be slightly higher in fiscal 2006 compared to the prior year, as higher SG&A expense as a percent of total revenues is expected to be approximately offset by lower R&D expense as a percent of total revenues. The Group expects operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: to increase modestly from the fiscal 2005 level, excluding special items in both fiscal years. --Fiscal 2006 Effective Tax Rate: The Group expects the effective tax rate to be approximately 30%, compared to 28% in fiscal 2005. Factors contributing to the anticipated increase in the effective tax rate include the phase out of export tax benefits and a change in the mix of U.S. versus foreign income. We continue to analyze certain product manufacturing alternatives that could impact the tax rate. Independent of the expected effective tax rate, we anticipate that several outstanding tax matters in multiple taxing jurisdictions may be resolved in the Company's favor during fiscal 2006. --Fiscal 2006 Earnings Per Share Growth: Excluding the special fiscal 2005 items mentioned above, the Group expects earnings per share to increase at or slightly above the annual revenue growth rate. In addition, the Group believes that earnings per share would increase at a low double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" rate over the fiscal 2005 level, excluding the anticipated effects of currency, the expensing of stock options now required under Statement of Financial Accounting Standards No. 123, "Share-Based Payment (revised 2004)," and the increase in the effective tax rate. --Fiscal 2006 Capital Spending: Capital spending is expected be in the range of $50-60 million. The Group continues to develop a plan to repatriate repatriate To bring home assets that are currently held in a foreign country. Domestic corporations are frequently taxed on the profits that they repatriate, a factor inducing the firms to leave overseas the profits earned there. cash balances held outside the U.S. during fiscal 2006 consistent with the repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. provision of the American Jobs Creation Act of 2004. 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 fourth quarter of fiscal 2005, end-user sales for all products sold through the alliance with 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 49% to $18.2 million from $12.2 million in the same quarter last year. This increase was primarily due to increased sales of HCV HCV abbr. hepatitis C virus HCV 1 Hepatitis C virus, see there 2. Human coronavirus. See Coronavirus. genotyping, HCV viral load viral load n. The concentration of a virus, such as HIV, in the blood. viral load, n a measure of the number of virus particles present in the bloodstream, expressed as copies per milliliter. , and 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. analyte specific reagents The FDA defines analyte specific reagents (ASRs) in 21 CFR 864.4020 as “antibodies, both polyclonal and monoclonal, specific receptor proteins, ligands, nucleic acid sequences, and similar reagents which, through specific binding or chemical reaction with (ASRs) manufactured by Celera Diagnostics. During the recently completed quarter, the pre-tax loss decreased to $4.6 million, compared to $8.7 million in the same quarter last year. The smaller pre-tax loss was primarily due to increased gross margin and lower R&D expenses. Reported revenues differ from end-user sales and 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 profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of arrangement between Abbott and Celera Diagnostics and technology-related revenues. Reported revenues declined to $9.4 million, compared to $9.7 million in the same quarter last year, primarily as a result of decreased equalization payments offset by increased license and collaboration revenue, mostly due to a milestone payment from Merck & Co. Inc. for the completion of a collaboration in 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. . Fluctuation Fluctuation A price or interest rate change. 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 between the alliance partners. Net cash used was $5.6 million in the quarter, compared to $5.4 million in the fourth quarter of fiscal 2004 due to increased working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. offset by lower pre-tax losses. For fiscal 2005, end-user alliance sales for all products sold through the alliance with Abbott increased 34% to $61.7 million from $45.9 million in fiscal 2004. This increase was primarily due to increased sales of ASRs for HCV genotyping and viral load, HLA HLA human leukocyte antigens. HLA abbr. human leukocyte antigen HLA (human leuckocyte antigen) products, and our ViroSeq(TM) product. Pre-tax losses decreased to $29.9 million from $42.0 million during the prior year. Reported revenues decreased to $35.5 million from $36.7 million in fiscal 2004. Net cash used for the year was $32.1 million compared to $43.3 million in fiscal 2004. "We are pleased with the performance at Celera Diagnostics," said Kathy Ordonez, President, Celera Diagnostics. "Our alliance with Abbott this year achieved our goal for end-user sales and brought new products to market. We also had promising discoveries in our gene association work and made advancements in developing new products. The recent CE certification of both HIV-1 and HCV RealTime(TM) tests on the m2000 system sold by Abbott and included in the alliance represents the first of what we expect will be a growing portfolio of automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. assays that enable our participation in this large and established market for nucleic acid nucleic acid, any of a group of organic substances found in the chromosomes of living cells and viruses that play a central role in the storage and replication of hereditary information and in the expression of this information through protein synthesis. testing of infectious diseases infectious diseases: see communicable diseases. ." During the fourth quarter of fiscal 2005, Celera Diagnostics continued to work closely with its collaborators and clinical partners toward the completion of genetic studies in cardiovascular cardiovascular /car·dio·vas·cu·lar/ (-vas´ku-ler) pertaining to the heart and blood vessels. car·di·o·vas·cu·lar adj. Abbr. and other diseases. The ongoing publication of this work is pivotal to the demonstration of the utility of its new diagnostic markers as new testing procedures based on this work move toward commercialization. Scientific Highlights --A study was presented in a scientific session at the Annual Digestive Disease All diseases that pertain to the gastrointestinal tract are labelled as digestive diseases. This includes diseases of the esophagus, stomach, first, second and third part of the duodenum, jejunum, ileum, the ileo-cecal complex, large intestine (ascending, transverse and descending Week conference in which Celera Diagnostics and its collaborators at the University of California The University of California has a combined student body of more than 191,000 students, over 1,340,000 living alumni, and a combined systemwide and campus endowment of just over $7.3 billion (8th largest in the United States). at San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden described the role of several genetic variations in 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. . This finding was a variant variant /var·i·ant/ (var´e-ant) 1. something that differs in some characteristic from the class to which it belongs. 2. exhibiting such variation. var·i·ant adj. in the DDX DDx abbreviation for differential diagnosis; used in medical records. 5 gene associated with a greater than 20-fold increase in risk for Non-Alcoholic Steatohepatitis (NASH Nash , Ogden 1902-1971. American writer known for his droll epigrammatic verse, much of which appeared in the New Yorker. Noun 1. Nash - United States writer noted for his droll epigrams (1902-1971) Ogden Nash ), a common progressive liver disease that often leads to fibrosis fibrosis /fi·bro·sis/ (fi-bro´sis) formation of fibrous tissue.fibrot´ic congenital hepatic fibrosis and cirrhosis cirrhosis (sərō`səs), degeneration of tissue in an organ resulting in fibrosis, with nodule and scar formation. The term is most often used in relation to the liver, because that organ is most often involved in cirrhosis. . --Results on a variant in a second gene (CPT CPT See: Carriage Paid To 1A) associated with progression to fibrosis in HCV-infected patients were presented at the European Society for the Study of the Liver in Paris in April. This variant was also associated with risk for NASH and these findings were reported at a meeting of the American Association American Association refers to one of the following professional baseball leagues:
--Celera Diagnostics completed its collaboration with Merck & Co., Inc. to identify novel targets for drug discovery in Alzheimer's disease and diagnostic markers related to Alzheimer's disease. --Celera Diagnostics completed discovery and replication studies replication study Internal medicine A clinical study that seeks to verify data from a prior study to identify novel genes associated with psoriasis psoriasis (sôrī`əsĭs), occasionally acute but usually chronic and recurrent inflammation of the skin. The exact cause is unknown, but the disease appears to be an inherited, possibly autoimmune disorder that causes the and other autoimmune diseases Autoimmune diseases A group of diseases, like rheumatoid arthritis and systemic lupus erythematosus, in which immune cells turn on the body, attacking various tissues and organs. Mentioned in: Complement Deficiencies, Premature Menopause . Celera Genomics is using this information in its drug discovery programs. Celera Diagnostics Joint Venture Outlook Celera Diagnostics anticipates that its fiscal 2006 financial performance will be affected by, among other things: continued growth in demand for current products, such as ASRs for cystic fibrosis and HCV; sales of new products for 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. testing on the m2000 system sold through the alliance with Abbott and others in development at Celera Diagnostics; and new alliance product sales for ASRs for Fragile X and other genetic diseases. Celera Diagnostics intends to continue advancing 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. research and its medical utility studies to create value from diagnostic testing Diagnostic testing Testing performed to determine if someone is affected with a particular disease. Mentioned in: Von Willebrand Disease and, together with Celera Genomics, to seek partnerships to leverage proteomic capabilities to identify novel targets, pharmacogenomic markers and biomarkers. Subject to the inherent uncertainty associated with these factors, Celera Diagnostics has the following expectations regarding its financial performance for fiscal 2006: For fiscal 2006, Celera Diagnostics anticipates pre-tax losses to be in the range of $19 to $23 million, and fiscal 2006 net cash use to be in the range of $25 to $30 million. Total end user sales for the alliance between Celera Diagnostics and Abbott are anticipated to be in the range of $80 to $90 million. Conference Call & Webcast A conference call with Applera Corporation executives will be held today at 11:00 a.m. (ET) to discuss these results and other matters related to the businesses. The call will be formatted to focus on each of the Applera businesses separately, approximately at the times indicated below, although the exact timing may be different as the call will proceed without pause between segments:
-- Applied Biosystems Group 11:00 a.m. (ET)
-- Celera Diagnostics 11:45 a.m.
-- Celera Genomics Group 12:00 p.m.
During each segment, the management team will make prepared remarks and answer questions from securities analysts and investment professionals. Investors, securities analysts, representatives of the media and other interested parties who would like to participate should dial 706.634.4992 (code "Applera") at any time from 10:45 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 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 July 27 until August 7, 2005. Interested parties should call 706.645.9291 and enter conference ID 7618772. 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 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. 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 nearly $1.8 billion during fiscal 2005. The Celera Genomics Group (NYSE:CRA See Community Reinvestment Act. ) is engaged principally in the discovery and development of targeted 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. 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 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 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 and customer acceptance of new products; (2) Applied Biosystems' sales are dependent on customers' capital spending policies and government-sponsored research; (3) 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; (4) risks associated with Applied Biosystems' growth strategy, including difficulties in integrating acquired operations or technologies; (5) the risk of 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; (6) risks associated with lawsuits, arbitrations, investigations, and other legal actions with private parties and governmental entities, particularly involving claims for 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. of patents and other intellectual property rights; (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 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 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 2005. Applera Corporation. All Rights Reserved. Applied Biosystems and Celera are registered trademarks, and AB (Design), 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, and API 3200 and API 5000 are trademarks 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 Twelve months ended
June 30, June 30,
2005 2004 (1) 2005 2004 (1)
------------ ------------ ------------ ------------
Net revenues $ 478.5 $ 460.5 $ 1,787.1 $ 1,741.1
Cost of sales 224.7 214.7 835.5 828.8
------------ ------------ ------------ ------------
Gross margin 253.8 245.8 951.6 912.3
Selling, general
and administrative 124.8 123.9 485.7 465.2
Research,
development and
engineering 48.3 51.3 192.2 214.2
Employee-related
charges, asset
impairments and
other 20.2 18.1 31.8 23.7
Asset dispositions
and legal
settlements (38.2) (6.7)
------------ ------------ ------------ ------------
Operating income 60.5 52.5 280.1 215.9
Gain on
investments, net 0.1 11.2
Interest income,
net 4.5 2.9 13.9 12.0
Other income
(expense), net 0.4 0.7 3.2 0.6
------------ ------------ ------------ ------------
Income before
income taxes 65.4 56.2 297.2 239.7
Provision
(benefit) for
income taxes (6.2) 15.7 60.3 67.4
------------ ------------ ------------ ------------
Income from
continuing
operations 71.6 40.5 236.9 172.3
Income from
discontinued
operations, net
of income taxes 10.6 10.6
------------ ------------ ------------ ------------
Net income $ 71.6 $ 51.1 $ 236.9 $ 182.9
============ ============ ============ ============
Earnings per share
analysis
------------------
Income from
continuing
operations $ 71.6 $ 40.5 $ 236.9 $ 172.3
Allocated
interperiod
taxes(2) (1.1)
------------ ------------ ------------ ------------
Total income from
continuing
operations
allocated 70.5 40.5 236.9 172.3
Less dividends
declared on
common stock 8.4 8.6 33.4 34.6
------------ ------------ ------------ ------------
Undistributed
earnings $ 62.1 $ 31.9 $ 203.5 $ 137.7
============ ============ ============ ============
Allocation of
basic earnings
per share
Basic distributed
earnings per share $ 0.04 $ 0.04 $ 0.17 $ 0.17
Basic undistributed
earnings per share 0.32 0.16 1.04 0.67
------------ ------------ ------------ ------------
Total basic earnings
per share from
continuing
operations $ 0.36 $ 0.20 $ 1.21 $ 0.84
============ ============ ============ ============
Allocation of
diluted earnings
per share
Diluted distributed
earnings per
share $ 0.04 $ 0.04 $ 0.17 $ 0.17
Diluted undistributed
earnings per share 0.31 0.16 1.02 0.66
------------ ------------ ------------ ------------
Total diluted
earnings per
share from
continuing
operations $ 0.35 $ 0.20 $ 1.19 $ 0.83
============ ============ ============ ============
Income from
discontinued
operations per
share
Basic $ - $ 0.06 $ - $ 0.05
Diluted $ - $ 0.05 $ - $ 0.05
Net income per
share
Basic $ 0.36 $ 0.26 $ 1.21 $ 0.89
Diluted $ 0.35 $ 0.25 $ 1.19 $ 0.88
Weighted average
number of common
shares
Basic 197,585,000 199,007,000 196,358,000 204,596,000
Diluted 200,310,000 202,014,000 199,017,000 208,337,000
(1) Certain prior period amounts have been reclassified for
comparative purposes.
(2) Represents allocation of interperiod taxes to adjust income from
continuing operations for purposes of calculating earnings per
share.
APPLERA CORPORATION
APPLIED BIOSYSTEMS GROUP
Revenues By Product Categories
(Dollar amounts in millions)
(Unaudited)
Three months ended
June 30,
2005 2004 Change
-------- -------- -------
DNA Sequencing $ 143.0 $ 139.8 2%
% of total revenues 30% 30%
Real-Time PCR/Applied Genomics 139.6 120.8 16%
% of total revenues 29% 26%
Mass Spectrometry 118.9 119.5 -1%
% of total revenues 25% 26%
Core PCR & DNA Synthesis(1) 46.3 49.9 -7%
% of total revenues 10% 11%
Other Product Lines 30.7 30.5 1%
% of total revenues 6% 7%
-------- --------
Total $ 478.5 $ 460.5 4%
======== ========
Twelve months ended
June 30,
2005 2004 Change
-------- -------- -------
DNA Sequencing $ 541.5 $ 572.5 -5%
% of total revenues 30% 33%
Real-Time PCR/Applied Genomics 519.7 430.9 21%
% of total revenues 29% 25%
Mass Spectrometry 426.8 414.8 3%
% of total revenues 24% 24%
Core PCR & DNA Synthesis(1) 190.7 202.4 -6%
% of total revenues 11% 11%
Other Product Lines 108.4 120.5 -10%
% of total revenues 6% 7%
-------- --------
Total $1,787.1 $1,741.1 3%
======== ========
(1) The product category Core PCR & DNA Synthesis was previously
called Core DNA Synthesis & PCR.
APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2005
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied Celera
Biosystems Genomics Celera Elimi- Consol-
Group Group Diagnostics nations idated
---------- -------- ----------- ------- ---------
Net revenues $478.5 $5.0 $9.4 (1.9) $491.0
Cost of sales 224.7 1.0 2.7 (1.1) 227.3
---------- -------- ----------- ------- ---------
Gross margin 253.8 4.0 6.7 (0.8) 263.7
Selling, general
and
administrative 124.8 6.9 3.5 135.2
Research,
development and
engineering 48.3 27.3 7.8 (0.9) 82.5
Amortization of
intangible assets 0.7 0.7
Employee-related
charges, asset
impairments and
other 20.2 (0.2) 20.0
---------- -------- ----------- ------- ---------
Operating
income (loss) 60.5 (30.7) (4.6) 0.1 25.3
Interest
income, net 4.5 4.8 9.3
Other income
(expense), net 0.4 0.1 0.5
Loss from joint
venture (4.6) 4.6
---------- -------- ----------- ------- ---------
Income (loss)
before income
taxes 65.4 (30.4) (4.6) 4.7 35.1
Benefit for
income taxes (6.2) (14.0) (1) 1.1 (19.1)
---------- -------- ----------- ------- ---------
Net income (loss) $71.6 $(16.4) $(4.6) $3.6 $54.2
========== ======== =========== ======= =========
Net income (loss)
per share
Basic $0.36 $(0.22)
Diluted $0.35 $(0.22)
(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 June 30, 2004
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied Celera
Biosystems Genomics Celera Elimi- Consol-
Group Group Diagnostics nations idated
---------- -------- ----------- ------- --------
Net revenues $460.5 $12.4 $9.7 $(3.0) $479.6
Cost of sales 214.7 2.5 4.7 (2.1) 219.8
---------- -------- ----------- ------- --------
Gross margin 245.8 9.9 5.0 (0.9) 259.8
Selling, general
and
administrative 123.9 7.3 3.6 134.8
Research,
development and
engineering 51.3 28.7 10.1 (1.1) 89.0
Amortization of
intangible assets 0.7 0.7
Employee-related
charges, asset
impairments and
other 18.1 18.1 36.2
---------- -------- ----------- ------- --------
Operating
income (loss) 52.5 (44.9) (8.7) 0.2 (0.9)
Gain on
investments, net 0.1 24.8 24.9
Interest income,
net 2.9 2.5 5.4
Other income
(expense), net 0.7 0.5 1.2
Loss from joint
venture (8.7) 8.7
---------- -------- ----------- ------- --------
Income (loss)
before income
taxes 56.2 (25.8) (8.7) 8.9 30.6
Provision
(benefit) for
income taxes 15.7 (20.0) (1) 0.6 (3.7)
---------- -------- ----------- ------- --------
Income (loss)
from continuing
operations 40.5 (5.8) (8.7) 8.3 34.3
Income from
discontinued
operations,
net of income
taxes 10.6 10.6
---------- -------- ----------- ------- --------
Net income
(loss) $51.1 $(5.8) $(8.7) $8.3 $44.9
========== ======== =========== ======= ========
Income (loss)
from continuing
operations per
share
Basic and
diluted $0.20 $(0.08)
Income from
discontinued
operations per
share
Basic $0.06 $-
Diluted $0.05 $-
Net income (loss)
per share
Basic $0.26 $(0.08)
Diluted $0.25 $(0.08)
(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.
Certain fiscal 2004 amounts have been reclassified for comparative
purposes.
APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Twelve Months Ended June 30, 2005
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied Celera
Biosystems Genomics Celera Elimi- Consol-
Group Group Diagnostics nations idated
---------- -------- ----------- -------- ---------
Net revenues $1,787.1 $ 31.0 $ 35.5 $(8.5) $1,845.1
Cost of sales 835.5 6.0 13.9 (5.7) 849.7
---------- -------- ----------- -------- ---------
Gross margin 951.6 25.0 21.6 (2.8) 995.4
Selling, general
and
administrative 485.7 26.2 13.6 525.5
Research,
development and
engineering 192.2 103.5 37.9 (2.9) 330.7
Amortization of
intangible
assets 2.9 2.9
Employee-related
charges, asset
impairments and
other 31.8 2.6 34.4
Asset dispositions
and litigation
settlements (38.2) (38.2)
---------- -------- ----------- -------- ---------
Operating income
(loss) 280.1 (110.2) (29.9) 0.1 140.1
Interest income,
net 13.9 14.9 28.8
Other income
(expense), net 3.2 1.3 4.5
Loss from joint
venture (29.9) 29.9
---------- -------- ----------- -------- ---------
Income (loss)
before income
taxes 297.2 (123.9) (29.9) 30.0 173.4
Provision
(benefit) for
income taxes 60.3 (46.8) (1) 0.1 13.6
---------- -------- ----------- -------- ---------
Net income (loss)$ 236.9 $(77.1) $(29.9) $29.9 $ 159.8
========== ======== =========== ======== =========
Net income (loss)
per share
Basic $1.21 $(1.05)
Diluted $1.19 $(1.05)
(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 Twelve Months Ended June 30, 2004
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied Celera
Biosystems Genomics Celera Elimi- Consol-
Group Group Diagnostics nations idated
---------- -------- ----------- ------- ---------
Net revenues $1,741.1 $ 60.1 $ 36.7 $(12.7) $1,825.2
Cost of sales 828.8 10.8 20.1 (7.8) 851.9
---------- -------- ----------- ------- ---------
Gross margin 912.3 49.3 16.6 (4.9) 973.3
Selling, general
and
administrative 465.2 32.4 14.7 512.3
Research,
development
and engineering 214.2 101.4 43.9 (5.2) 354.3
Amortization of
intangible assets 2.9 2.9
Employee-related
charges, asset
impairments and
other 23.7 18.1 41.8
Litigation
settlements (6.7) (6.7)
---------- -------- ----------- ------- ---------
Operating income
(loss) 215.9 (105.5) (42.0) 0.3 68.7
Gain on
investments,
net 11.2 24.3 35.5
Interest income,
net 12.0 10.8 22.8
Other income
(expense), net 0.6 1.9 2.5
Loss from joint
venture (42.0) 42.0
---------- -------- ----------- ------- ---------
Income (loss)
before income
taxes 239.7 (110.5) (42.0) 42.3 129.5
Provision
(benefit) for
income taxes 67.4 (53.0) (1) 0.1 14.5
---------- -------- ----------- ------- ---------
Income (loss)
from continuing
operations 172.3 (57.5) (42.0) 42.2 115.0
Income from
discontinued
operations,
net of income
taxes 10.6 10.6
---------- -------- ----------- ------- ---------
Net income (loss)$ 182.9 $(57.5) $(42.0) $ 42.2 $ 125.6
========== ======== =========== ======= =========
Income (loss)
from continuing
operations per
share
Basic $0.84 $(0.79)
Diluted $0.83 $(0.79)
Income from
discontinued
operations per
share
Basic and
diluted $0.05 $-
Net income (loss)
per share
Basic $0.89 $(0.79)
Diluted $0.88 $(0.79)
(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.
Certain fiscal 2004 amounts have been reclassified for comparative
purposes.
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