BioSource Signs Definitive Merger Agreement and Reports Record Second Quarter Sales.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. -- BioSource International, Inc. (Nasdaq: BIOI) today announced it has entered into a definitive merger agreement pursuant to which Invitrogen Invitrogen Corporation (NASDAQ: IVGN) is a life science research company, providing products and services that support academic and government research institutions and pharmaceutical and biotech companies worldwide in their efforts to improve the human condition. Corporation (Nasdaq: IVGN) will acquire BioSource in an all-cash transaction. Under the terms of the merger agreement, BioSource stockholders would receive $12.50 per share, or approximately $130 million, for all shares currently issued and outstanding. Terrance J. Bieker, President and 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. , stated, "Today's announcement is great news for our customers, investors and employees. We are pleased with the value realization for our investors and are convinced that the merger with Invitrogen will provide even stronger opportunities for the growth of our employees and the satisfaction of the needs of our life science customers." The transaction is subject to customary closing conditions, including regulatory approval and the approval of BioSource stockholders. The Board of Directors of BioSource is unanimously recommending that the Company's stockholders approve the transaction, and BioSource's largest shareholder has agreed to vote its shares in favor of upon the side of; favorable to; for the advantage of. See also: favor the transaction. The transaction is expected to be completed by the end of 2005. BioSource also today announced its financial results for its second quarter ended June June: see month. 30, 2005. Second Quarter Review For the second quarter ended June 30, 2005, the Company reported 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 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 of $13.0 million, a 15% increase as compared with $11.2 million for the second quarter of 2004. Foreign exchange rates favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted sales in the second quarter of 2005 by $0.2 million. Income from continuing operations was $1.2 million, representing an 82% increase compared with $0.7 million in the second quarter of 2004. For the six months ended June 30, 2005, net sales from continuing operations were $25.7 million, a 13% increase as compared with $22.8 million for the six months ended June 30, 2004. Foreign exchange rates favorably impacted period sales by $0.5 million. Income from continuing operations for the first half of 2005 was $2.3 million as compared to $1.5 million in the first half of 2004. Mr. Bieker stated, "This was a strong quarter for BioSource. We are pleased to report record sales and a substantial increase in income from continuing operations." Mr. Bieker continued, "We believe these results reinforce the 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. strategy we have pursued over the past eighteen months." Sales of the Company's cellular pathway assay products increased 18% for the second quarter ended June 30, 2005 compared to the second quarter of 2004. Biological and other product sales increased 15% and 12%, respectively, during the second quarter of 2005 compared to the second quarter of 2004. The gross margin from continuing operations improved to 59.5% in the second quarter of 2005 compared to 57.6% in the comparable quarter of the prior year. 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. from continuing operations in the second quarter of 2005 were as follows: --Sales and marketing expenses were $2.4 million, or 18.8% of sales, as compared to $2.3 million, or 20.1% of sales, in the second quarter of 2004, which was consistent with management's plan to increase such costs at a slower rate than sales growth. --General and administrative expenses increased to $2.3 million, or 18.1% of sales, as compared to $2.0 million, or 17.9% of sales, in the second quarter of 2004, primarily as a result of increased professional fees, including those associated with the announced merger transaction. --Research and development expenses increased to $1.6 million, or 12.2% of sales, as compared to $1.4 million, or 12.6% of sales, in the comparable quarter of 2004. --The Company's effective tax rate was 37.5% in the second quarter of 2005 compared to 8.9% in the second quarter of 2004. During the second quarter of 2004, the Company reversed approximately $0.1 million in income tax exposure reserves following the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. conclusion of an IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. audit of certain tax returns. Excluding the impact of the reversal of the income tax exposure reserve, the Company's effective tax rate for the three months ended June 30, 2004 would have been approximately 28%. At June 30, 2005, the Company's cash and cash equivalents totaled $7.1 million. The Company will host an investor conference call to discuss the merger and its second quarter financial results beginning at 8:00 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT on Tuesday Tuesday: see week. , July July: see month. 26, 2005. A live webcast of the Company's conference call will be available over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through its website at www.biosource.com. Interested parties may also listen to the call by dialing (866) 203-3436 and entering passcode #22938960. A replay of the webcast will be available at the same site for a two-week period beginning shortly after the call. Event archives are normally available one to two hours after the event ends. For the live event, listeners should go to the Web site at least 15 minutes before the event starts to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER AND WHERE YOU CAN FIND IT In connection with the proposed merger, BioSource intends to file a proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. and other relevant materials with the Securities and Exchange Commission ("SEC"). BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE PROPOSED MERGER, STOCKHOLDERS OF BIOSOURCE ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. The proxy statement and other relevant materials, and any other documents filed by BioSource with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . In addition, investors and stockholders of BioSource may obtain free copies of the documents filed with the SEC by contacting BioSource Investor Relations Investor relations The process by which the corporation communicates with its investors. at (805) 383-5200 or by directing a request to BioSource International, Inc., 542 Flynn Road, Camarillo, CA 93012, Attn: Investor Relations. BioSource and its executive officers and directors may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies from BioSource stockholders in favor of the proposed merger. Certain executive officers and directors of BioSource have interests in the merger that may differ from the interests of stockholders generally, including acceleration of vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of stock options and continuation of director and officer insurance and indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from . These interests will be described in the proxy statement when it becomes available. About BioSource International, Inc. 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. . For more information, please visit the Company's Web site at www.biosource.com. Statements included in this release that are not historical facts may be considered 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. that are subject to a variety of risks and uncertainties. In addition, readers are urged to consider statements that include the terms "will," "believes," "belief," "expects," "plans," "objectives," "anticipates," "intends," "targets," "projections," or the like to be uncertain and forward looking. 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" 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. Factors that could cause actual results to differ and vary materially from the forward-looking statements made herein include, among others, 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, possible invalidity in·va·lid 1 n. One who is incapacitated by a chronic illness or disability. adj. 1. Incapacitated by illness or injury. 2. Of, relating to, or intended for invalids. tr.v. or 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. issues related to intellectual property or proprietary rights, changes in customer buying patterns, one-time events, failure to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. the sale of the Company to Invitrogen Corporation contemplated by the announced merger agreement, and other important factors disclosed previously and from time to time in our filings with the Securities and Exchange Commission. These factors should not be construed as exhaustive. 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. 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.
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(as restated) (as restated)
Net sales $ 12,958 $ 11,241 $ 25,691 $ 22,773
Cost of goods sold 5,242 4,761 10,587 9,649
----------- ----------- ----------- -----------
Gross profit 7,716 6,480 15,104 13,124
Operating expenses:
Sales and marketing 2,433 2,255 4,961 4,594
General and
administrative 2,344 2,015 4,372 3,906
Research and
development 1,586 1,412 3,144 2,798
Amortization of
intangible assets 140 139 279 277
----------- ----------- ----------- -----------
Total operating
expenses 6,503 5,821 12,756 11,575
----------- ----------- ----------- -----------
Income from continuing
operations 1,213 659 2,348 1,549
Interest and other
income (expense), net (11) 3 (87) (14)
----------- ----------- ----------- -----------
Income from continuing
operations before
income taxes and
other items 1,202 662 2,261 1,535
Provision for income
taxes 451 59 831 239
----------- ----------- ----------- -----------
Income from continuing
operations before
other items 751 603 1,430 1,296
Discontinued
operations, net - (44) - (82)
----------- ----------- ----------- -----------
Net income 751 559 1,430 1,214
Dividend - (1,061) - (1,061)
----------- ----------- ----------- -----------
Net income (loss)
available to common
stockholders $ 751 $ (502) $ 1,430 $ 153
=========== =========== =========== ===========
Basic earnings (loss)
per share:
Income (loss) from
continuing
operations
including dividend $ 0.08 $ (0.05) $ 0.16 $ 0.03
Discontinued
operations, net - - - (0.01)
----------- ----------- ----------- -----------
Basic earnings (loss)
per share $ 0.08 $ (0.05) $ 0.16 $ 0.02
=========== =========== =========== ===========
Diluted earnings
(loss) per share:
Income (loss) from
continuing
operations
including dividend $ 0.08 $ (0.05) $0.15 $ 0.03
Discontinued
operations, net - - - (0.01)
----------- ----------- ----------- -----------
Diluted earnings
(loss) per share $ 0.08 $ (0.05) $ 0.15 $ 0.02
=========== =========== =========== ===========
Shares used in per
share calculations:
Basic 9,147 9,435 9,115 9,415
=========== =========== =========== ===========
Diluted 9,812 9,435 9,472 9,745
=========== =========== =========== ===========
BIOSOURCE INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
June 30, December 31,
2005 2004
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 7,094 $ 4,210
Accounts receivable, net 7,559 7,165
Inventories, net 7,982 7,857
Notes receivable - 544
Deferred income taxes 1,868 1,822
Other current assets 1,380 941
------------ ------------
Total current assets 25,883 22,539
Property and equipment, net 4,466 5,241
Intangible assets, net 4,976 5,253
Deferred income taxes 9,293 9,865
Other assets 612 651
------------ ------------
Total assets $ 45,230 $ 43,549
============ ============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $ 6,584 $ 6,249
Other current liabilities 805 872
------------ ------------
Total current liabilities 7,389 7,121
Stockholders' equity 37,841 36,428
------------ ------------
Total liabilities and stockholders'
equity $ 45,230 $ 43,549
============ ============
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