BioSource International, Inc. Announces Record First Quarter Sales and Earnings.Business Editors/Health/Medical Writers 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)--April 23, 2004 BioSource International, Inc. (Nasdaq:BIOI), announced today its operating results for the first quarter ended March 31, 2004. 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 March 31, 2004, were a record $12.3 million, an increase of $1.4 million, or 13%, compared to net sales for the quarter ended March 31, 2003. The Company's revenues benefited by a $594,000, or 6%, positive impact of foreign exchange for the quarter ended March 31, 2004, when compared to the quarter ended March 31, 2003. The Company earned a net income for the quarter ended March 31, 2004, of $709,000, compared to net income of $103,000 for the quarter ended March 31, 2003. Earnings Before Interest, Taxes, Depreciation, and Amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. , or 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 , for the quarter ended March 31, 2004, was $1,519,000. "I am pleased with the progress we have made in the implementation of our more focused approach to our business," stated Mr. Terrance J. Bieker, President and Chief Executive Officer of BioSource. "Our 2003 actions to reduce operating costs operating costs npl → gastos mpl operacionales in our Custom Business and our strategy of being more customer focused and selling higher margin products is beginning to take traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. . I am particularly pleased that our organic sales growth in the first quarter of 2004 is more than double that of the fourth quarter of 2003." Mr. Bieker further commented: "Our 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. growth strategy is to focus and capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. our existing strength in 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 (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). and 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. ) and to reposition our core biological and custom service capabilities to support that growth strategy." Sales of the Company's Signaling product lines grew 14% compared to the comparable prior-year quarter, from $2.3 million to $2.6 million. The Company's sales growth in its Cytokine product lines for the quarter grew 17%, from $4.9 million to $5.7 million. The Company's sales in its Custom product lines grew 7%, compared to the comparable prior-year quarter, from $3.7 million to $4.0 million. 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 56% for the three months ended March 31, 2004, and 57% for the three months ended March 31, 2003. The Company's increases in its Custom and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. gross margins, when compared to the first quarter of 2003, were offset by a decline in gross margins in the U.S. The Company does not believe this is indicative of any trends and expects its gross profit margin to fluctuate somewhat during the remaining quarters of 2004. Research and development expense for the three months ended March 31, 2004 and 2003, was $1.4 million and $2.0 million and represented 11% and 18% of sales, respectively. The decrease of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $600,000 is related to reductions in payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. and related costs and general lab supplies and 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. R&D investment to its core capabilities and new strategic direction. The Company anticipates its R&D expenses to moderately increase in the remaining quarters of 2004. Selling, marketing, and administrative expenses were $4.4 million for the three months ended March 31, 2004, and $4.0 million for the three months ended March 31, 2003, representing 36% of sales for both periods presented. This $400,000 increase is related to sales and marketing expenses increasing approximately $100,000 due to modest increases in payroll and office expenses and G&A expenses increasing approximately $300,000 due primarily to increases in benefits, legal, accounting, and other consulting fees. The Company anticipates its sales and marketing expenses to remain relatively constant throughout 2004, while its general and administrative expenses will rise slightly due to increases in benefits, legal, and accounting fees related to implementation of new regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. resulting from the Sarbanes-Oxley Act See SOX. of 2002. The Company's effective income tax rate was 21%, with an income tax expense of $188,000 for the quarter ended March 31, 2004. 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 March 31, 2004. 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. "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. ourselves to our customers and to build value for our shareholders by leading certain high volume test markets, creating superior customer support annually, and consistently improving financial performance," stated Mr. Bieker. "We have a good start in 2004. We are maintaining our initial guidance of sales growth at between 8% and 10%, but increasing our guidance for EBITDA to a minimum of $3.75 million. Our strategic plan is designed for consistent, long-term improvement in annual revenues and EBITDA and to build shareholder value through improved financial performance." The Company will conduct a conference call today, Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , April 23, 2004, at 10:00 A.M. Pacific Time. All interested parties may call 800-265-0241. The code number is 44938927 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 broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased 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, the Company's projections with respect to its sales growth and EBITDA (or earnings before interest, taxes, depreciation, and amortization) calculation. Factors that could cause actual results to differ and vary materially from expectations include, but are not limited to, our ability to expand our product offerings and any transition to new products, product quality and availability, any change in business conditions, changes in our sales strategy and product development plans, competitive pricing pressures, continued market acceptance of our products, name recognition of our products, delays in the development of new technology, intellectual property and proprietary rights may not be valid or infringe in·fringe 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 dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). 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 Months Ended March 31, 2004 and 2003
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
----------------------------------
2004 2003
--------------- ---------------
Net sales $ 12,286 10,899
Cost of sales 5,426 4,690
--------------- ---------------
Gross profit 6,860 6,209
Operating expenses:
Research and development 1,385 1,979
Sales and marketing 2,470 2,388
General and administrative 1,955 1,576
Amortization of intangibles 139 145
--------------- ---------------
Total operating expenses 5,949 6,088
--------------- ---------------
Operating income 911 121
Interest income, net 11 11
Other expense, net (25) (18)
--------------- ---------------
Income before income taxes 897 114
Income tax expense 188 11
--------------- ---------------
Net Income 709 103
=============== ===============
Net income per share:
Basic $ 0.08 0.01
=============== ===============
Diluted $ 0.07 0.01
=============== ===============
Shares used to compute per share
amounts:
Basic 9,395 9,635
=============== ===============
Diluted 9,752 10,026
=============== ===============
BIOSOURCE INTERNATIONAL, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
March 31, December 31,
2004 2003
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 3,794 3,297
Accounts receivable, less allowance
for doubtful accounts of $213 at
March 31, 2004, and $258 at December
31, 2003 7,217 6,308
Inventories, net 9,170 9,074
Prepaid expenses and other current
assets 889 652
Deferred income taxes 2,363 2,363
------------- -------------
Total current assets 23,433 21,694
Property and equipment, net 6,191 6,235
Intangible assets net of accumulated
amortization of $3,319 at March 31, 2004,
and $3,230 at December 31, 2003 5,362 5,500
Goodwill 307 307
Other assets 532 519
Deferred tax assets 10,078 10,078
------------- -------------
$ 45,903 44,333
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,078 2,451
Accrued expenses 3,184 3,227
Deferred revenue 202 249
Income tax payable 527 104
------------- -------------
Total current liabilities 6,991 6,031
Commitments and contingencies
Stockholders' equity:
Common stock, $.001 par value. Authorized
20,000,000 shares: issued and
outstanding 9,403,951 shares at March
31, 2004, and 9,376,860 at December 31,
2003 9 9
Additional paid-in capital 42,698 42,633
Accumulated deficit (3,743) (4,452)
Accumulated other comprehensive gain
(loss) (52) 112
------------- -------------
Net stockholders' equity 38,912 38,302
------------- -------------
$ 45,903 44,333
============= =============
BioSource International, Inc.
Pro forma Presentation
Reconciliation of GAAP Net Income to EBITDA
Projection:
Three Months Year
Ended Ended
31-Mar-04 31-Dec-04
------------------- -------------------
GAAP Net income $709,000 $950,000
Add/(subtract):
Interest (10,000) (40,000)
Taxes 189,000 256,500
Depreciation 493,000 2,031,500
Amortization 138,000 552,000
------------------- -------------------
EBITDA $1,519,000 $3,750,000
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