BioSource International, Inc. Announces Fourth Quarter and Full Year 2003 Financial Results.Business Editors CAMARILLO Camarillo (kă'mərē`yō), city (1990 pop. 52,303), Ventura co., S Calif.; inc. 1964. It is the center of a fertile farm area where citrus fruits and flowers are grown. , Calif.--(BUSINESS WIRE)--Feb. 26, 2004 BioSource International, Inc. (Nasdaq:BIOI), announced today its operating results for the fourth quarter and year ended December December: see month. 31, 2003. Results for the three months ended December 31, 2003: Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter ended December 31, 2003 were $ 10.7 million, an increase of $836,000, or 8.5% compared to net sales for the quarter ended December 31, 2002. The Company's revenues benefited by a $571,000 positive impact of foreign exchange for the quarter ended December 31, 2003 when compared to the quarter ended December 31, 2002. For the three months ended December 31, 2003, sales of the Company's Signaling product lines grew 24% compared to the prior year quarter, from $1,900,000 to $2,400,000. The Company's sales growth in its Cytokine Cytokine Any of a group of soluble proteins that are released by a cell to send messages which are delivered to the same cell (autocrine), an adjacent cell (paracrine), or a distant cell (endocrine). product lines for the quarter was 13%, growing from $4,400,000 to $5,000,000. The Company's sales in its Custom product lines decreased 5% from the comparable prior year quarter, $3,500,000 to $3,400,000. Subsequent to the November November: see month. 2003 hiring of Mr. Terrance J. Bieker, the Company's new President and Chief Executive Officer, the Company has evaluated its core capabilities and the markets it serves and developed a three-year plan The Three-Year Plan of Reconstructing the Economy (Polish: Trzyletni Plan Odbudowy Gospodarki) was a centralized plan created by the Polish communist government to rebuild Poland after the devastation of the Second World War. . "This process has resulted in a more defined and focused approach to building long term investor value," stated Mr. Bieker. "Our capabilities and strengths in developing and distributing our traditional cytokine ELISA's and our market leadership position in our newer signal transduction Signal transduction The transmission of molecular signals from a cell's exterior to its interior. Molecular signals are transmitted between cells by the secretion of hormones and other chemical factors, which are then picked up by different cells. Phospho ELISA ELISA (e-li´sah) Enzyme-Linked Immuno-Sorbent Assay; any enzyme immunoassay using an enzyme-labeled immunoreactant and an immunosorbent. ELISA n. product line provide the growth momentum into which we will be focusing our future primary efforts and spending," stated Mr. Bieker. "The products directly related to these assays, including antibodies Antibodies Specialized cells of the immune system which can recognize organisms that invade the body (such as bacteria, viruses, and fungi). The antibodies are then able to set off a complex chain of events designed to kill these foreign invaders. , proteins, and sera & media will be sold as complimentary products to provide our customers with a complete solution for the research of the disease process through cellular pathways inside and outside the cell." "Our customers are the foundation for our future growth and success," said Mr. Bieker. "We have made significant changes to the way we serve our customer and manage our business. We have reduced our costs of manufacturing, realigned our R & D investment toward high volume cellular pathway pathway /path·way/ (path´wa) 1. a course usually followed. 2. the nerve structures through which an impulse passes between groups of nerve cells or between the central nervous system and an organ or muscle. assay ASSAY. A chemical examination of metals, by which the quantity of valuable or precious metal contained in any mineral or metallic mixture is ascertained. 2. By the acts of Congress of March 3, 1823, 3 Story's L. U. S. 1924; of June 25, 1834, 4 Shars. cont. Story's L. U. S. kits and focused our methods of market access. With these changes, we feel that a focused customer and revenue driven strategy is the key to long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. BioSource success. In the past we positioned ourselves to be a single source of all biological needs to all customers. Today we have focused on the high-volume testing customer and on providing them a complete solution of cellular pathway test kits and directly related biologicals Biologicals Biological products used to induce immunity to various infectious diseases or noxious substances of biological origin. The term is usually limited to immune serums, antitoxins, vaccines, and toxoids that have the effect of providing protective ." As a result of this focused strategic direction, certain assumptions related to fixed, working and human assets were evaluated and changed. With a more focused approach on assay kits and the directly related product lines, other non-strategic products were discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: . Accordingly, in the fourth quarter of 2003, approximately $250,000 of catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. products were discontinued and $1 million of inventoried products were evaluated and scrapped or fully reserved. Additionally, $130,000 of employee 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 costs and $325,000 related to the recruitment and hiring of its new Chief Executive Officer in November 2003 are included in the fourth quarter 2003 general and administrative expenses. In the quarter ended December 31, 2003, the Company also incurred a long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $341,000 related to the sale or disposition of certain fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → primarily related to the Company's oligonucleotide Oligonucleotide A deoxyribonucleic acid (DNA) or ribonucleic acid (RNA) sequence composed of two or more covalently linked nucleotides. Oligonucleotides are classified as deoxyribooligonucleotides or ribooligonucleotides. division. The Company incurred a net loss for the fourth quarter of $1,417,000 compared to net income of $46,000 for the comparable quarter in 2002. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. was 37% for the three months ended December 31, 2003 and 54% for the three months ended December 31, 2002. The Company's margin decrease was primarily due to the above mentioned discontinued or reserved inventory. Also contributing to this margin decrease were lower margins in the Company's custom product lines particularly its oligonucleotide division. Steps have been taken in the fourth quarter to reduce the Company's cost of manufacturing in its custom product lines. Research and development expense for the three months ended December 31, 2003 and 2002 was $1.5 million and $1.8 million and represented 14% and 18% of sales, respectively. The decrease of approximately $350,000 reflects the Company's efforts to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. investment to its core capabilities and new strategic direction. Selling, marketing and administrative expenses were $4.4 million for the three months ended December 31, 2003 and $3.7 million for the three months ended December 31, 2002 representing 41% and 37% of sales, respectively. G&A expenses were approximately $600,000 higher in the three months ended December 31, 2003 when compared to the three months ended December 31, 2002, due primarily to the above mentioned severance costs and charges related to the recruiting and hiring of the Company's new CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Also contributing was an increase in reserves for 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 . Sales and marketing expenses increased approximately $130,000 in the fourth quarter of 2003, compared to the fourth quarter of 2002 due primarily to increases in personnel costs. The Company anticipates a continued increased investment in its sales and marketing, but will manage this investment in line with anticipated 2004 revenue growth. Results for the year ended December 31, 2003: Net sales for the year ended December 31, 2003 were a record $44.1 million, an increase of $4 million or 10% compared to net sales for the year ended December 31, 2002. In 2003, the Company's revenues benefited by a $2,082,000 positive impact of foreign exchange when compared to 2002. For the year ended December 31, 2003, sales of the Company's Signaling product lines grew 31% compared to the comparable prior year period, from $6,900,000 to $9,100,000, The Company's sales growth in its Cytokine product lines for the year ending December 31, 2003 was 10%, growing from $18,200,000 to $20,100,000. The Company's sales in its Custom product lines remained flat compared to the comparable prior year period at $14,900,000. In addition to the $2.0 million of fixed, working and human asset expenses mentioned above that were incurred in the fourth quarter of 2003; an additional $235,000 was incurred in the third quarter as a result of the resignation of the previous CEO in September September: see month. . Consequently, the Company incurred a net loss for its fiscal year 2003 of $1,070,000 compared to net loss of $1,052,000 for the comparable period in 2002. In 2002 the Company recognized a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. , net of applicable income taxes, of $2,447,000, representing the cumulative effect of a change in accounting principle resulting from the implementation of Financial Accounting Standard 142, Accounting for Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . Gross profit margin was 50% for the year ended December 31, 2003 and 56% for the year ended December 31, 2002. The Company's margin decreased 6% due, in part, to the above mentioned fourth quarter discontinued or reserved inventory and to general increases in the Company's scrap and obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. , all primarily related to the shift in strategic direction. Also contributing to this full year margin decrease were lower margins in the Company's custom product lines. Specific steps have been taken to reduce our cost of manufacturing in the custom product lines and we are projecting to see an improvement in consolidated gross profit margin in 2004. Research and development expense for the year ended December 31, 2003 and 2002 were $7.0 million and $6.2 million and represented 16% and 15% of sales, respectively. The increase in research and development expenses for the year ended December 31, 2003 when compared to the prior year period reflects the Company's increased expenses for additional personnel and materials in the cytokine and signal transduction research areas. For the year, the Company increased R & D spending by 13% and expects, with the focus on cellular pathway assays and related biologicals, to keep 2004 spending in line with 2003 spending levels. This total investment in the Company's research capabilities has resulted in the commercialization of high quality, novel products which have produced increased sales in both the Cytokine and Signaling product lines. Selling, marketing and administrative expenses were $16.1 million for the year ended December 31, 2003 and $14.3 million for the year ended December 31, 2002, representing 37% and 36% of sales, respectively. Excluding the charges of $690,000 related to the costs incurred in connection with the resignation of our former CEO and the and hiring of our current CEO and other severance costs mentioned above, SG&A as a percentage of sales for 2003 would have been 35%. In the year ended December 31, 2003, our G&A expenses, excluding the charges of $690,000, increased approximately $250,000 compared to 2002, due primarily to increases in general office costs, consulting fees and reserves for accounts receivable. Our sales and marketing expenses for the year ended December 31, 2003 increased approximately $950,000 when compared to the year ended December 31, 2002 due primarily to increased personnel costs. The Company is recognizing an income tax benefit of $884,000 for the year ended December 31, 2003. The Company's income taxes have and may continue to fluctuate in the future depending on a number of factors, including the ability to use its deferred tax assets as of December 31, 2003. The Company believes it is more likely than not that it will be able to use those assets. In addition, the Company continues to benefit from R & D and other tax credits which when, applied to income levels for the periods presented, is resulting in effective tax rates lower than the current applicable federal and state statutory rates. Mr. Bieker sees BioSource over the next three years as "... a global leader in the development and commercialization of cellular pathway assays and related biologicals for the research of disease." He further adds that "We intend to differentiate differentiate /dif·fer·en·ti·ate/ (dif?er-en´she-at) 1. to distinguish, on the basis of differences. 2. to develop specialized form, character, or function differing from that surrounding it or from the original. and to build value by leading certain high volume test markets, creating superior customer support and annually and consistently improving financial performance. For 2004, we are projecting a total sales growth of 8 to 10% and a minimum EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $3.0 million. Our goal is to achieve consistent improvement in revenue and EBITDA over the next three years. Building shareholder value through increased financial performance is a high priority for this Company." The Company will conduct a conference call today, Thursday Thursday: see week. , February February: see month. 26, 2004 at 10:00 A.M. Pacific Time. All interested parties may call 800-299-7635. The code number is 24199362 to participate in the call. In addition, the Company will be web casting the conference call. You can participate by going to our website at www.biosource.com and entering the investor relations' portion of the website. BioSource International, Inc. is a broad based life sciences company focused on providing integrated solutions in the areas of functional genomics Noun 1. functional genomics - the branch of genomics that determines the biological function of the genes and their products genomics - the branch of genetics that studies organisms in terms of their genomes (their full DNA sequences) , proteomics pro·te·o·mics n. The analysis of the expression, localization, functions, and interactions of the proteins produced by the genes of an organism. , and drug discovery through the development, manufacturing, marketing and distribution of unique biologically active reagent reagent /re·a·gent/ (re-a´jent) a substance used to produce a chemical reaction so as to detect, measure, produce, etc., other substances. re·a·gent n. systems which facilitate, enable and accelerate pharmaceutical development and biomedical research Biomedical research (or experimental medicine), in general simply known as medical research, is the basic research or applied research conducted to aid the body of knowledge in the field of medicine. . This press release contains statements about expected future events that are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and subject to risks and uncertainties. For these statements, we claim the 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 "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. " within the meaning of 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. Examples of the forward-looking statements contained in this press release may include, without limitation, our projections with respect to its sales growth and EBITDA (or earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
v. in·fringed, in·fring·ing, in·fring·es v.tr. 1. To transgress or exceed the limits of; violate: infringe a contract; infringe a patent. 2. the rights of others, changes in customer buying pattern issues, one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. events and other important factors disclosed previously and from time to time in our filings with the Securities and Exchange Commission. These cautionary statements by us should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by us. We cannot always predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. In addition, readers are urged to consider statements that include the terms "believes," "belief," "expects," "plans," "objectives," "anticipates," "intends," "targets," "projections", or the like to be uncertain and forward-looking. All cautionary statements should be read as being applicable to all forward-looking statements wherever they appear. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
BIOSOURCE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Twelve Months Ended December 31, 2003 and 2002
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2003 2002 2003 2002
Net sales $10,717 9,881 44,094 40,055
Cost of sales 6,740 4,580 21,900 17,689
Gross profit 3,977 5,301 22,194 22,366
Operating expenses:
Research and development 1,478 1,825 7,007 6,187
Sales and marketing 2,234 2,100 9,298 8,339
General and administrative 2,187 1,590 6,851 5,916
Long-Lived Asset Impairment 341 - 341 -
Amortization of intangibles 140 160 575 641
Total operating expenses 6,380 5,675 24,072 21,083
Operating income (loss) (2,403) (374) (1,878) 1,283
Interest income, net 2 31 27 113
Other income (expense), net (3) 19 (103) 10
Income (loss) before income taxes (2,404) (324) (1,954) 1,406
Income tax expense (benefit) (987) (370) (884) 11
Income (loss) before
cumulative effect of
accounting change (1,417) 46 (1,070) 1,395
Cumulative effect of accounting
change (net of applicable
income taxes of $1,500) - - - (2,447)
Net income (loss) $(1,417) 46 (1,070) (1,052)
Net income (loss) per share before
accounting change:
Basic $ (0.15) 0.00 (0.11) 0.14
Diluted $ (0.15) 0.00 (0.11) 0.14
Net income (loss) per share:
Basic $ (0.15) 0.00 (0.11) (0.11)
Diluted $ (0.15) 0.00 (0.11) (0.10)
Shares used to compute per share
amounts:
Basic 9,359 9,660 9,403 9,787
Diluted 9,359 10,052 9,403 10,189
BIOSOURCE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
December December
31, 31,
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $ 3,297 5,941
Accounts receivable, less allowance for doubtful
accounts
of $258 at December 31, 2003 and $261 at
December 31, 2002 6,308 6,157
Inventories, net 9,074 8,880
Prepaid expenses and other current
assets 652 538
Deferred income taxes 2,363 1,873
Total current
assets 21,694 23,389
Property and equipment, net 6,235 7,398
Intangible assets net of accumulated amortization
of $3,230 at
December 31, 2003 and $2,655 at December 31, 2002 5,500 6,076
Goodwill 307 307
Other assets 519 526
Deferred tax assets 10,078 8,810
$ 44,333 46,506
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,451 3,115
Accrued expenses 3,227 2,910
Deferred revenue 249 427
Income tax payable 104 341
Total current
liabilities 6,031 6,793
Commitments and contingencies
Stockholders' equity:
Common stock, $.001 par value. Authorized
20,000,000 shares:
issued and outstanding 9,376,860 shares at
December 31, 2003 and 9,676,931 at December
31, 2002
9 10
Additional paid-in capital 42,633 44,500
Accumulated deficit (4,452) (3,382)
Accumulated other comprehensive gain (loss) 112 (1,415)
Net
stockholders'
equity 38,302 39,713
$ 44,333 46,506
BioSource International, Inc.
Regulation G - Pro forma Presentation
Reconciliation of GAAP Net Income to EBITDA
Projection
Year
Ended
31-Dec-04
GAAP
Net income (loss) $324,000
Add/(subtract)
Interest (3,000)
Taxes 138,000
Depreciation 2,040,000
Amortization 524,000
EBITDA $3,023,000
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