Cytyc Announces Record Fourth Quarter and Year-End 2004 Results.MARLBOROUGH Marl·bor·ough or Marl·bo·ro A city of east-central Massachusetts east-northeast of Worcester. Settled in 1657, it was nearly destroyed in 1676 during King Philip's War. Population: 38,100. , Mass. -- Quarterly Revenue Increases 41 Percent over Fourth Quarter 2003 ThinPrep ThinPrep™ Cytology A proprietary system–Cytec, Inc, in which specimens are obtained with a special fluid collection system and the slides for cytologic examination are spread in one-cell-thick layers. See thin prep. (R) Pap Test Pap test, Pap smear, or Papanicolaou test (păp'ənē`kəlou), medical procedure used to detect cancer of the uterine cervix. Reaches Record Revenue and Volume for Fourth Quarter Cytyc Cytyc Corporation (NASDAQ: CYTC) engages in the design, development, manufacture, and marketing of clinical products that focus on women’s health. Its products cover a range of women's health applications, including cervical cancer screening, breast cancer risk Corporation (Nasdaq:CYTC), a leading women's health Women's Health Definition Women's health is the effect of gender on disease and health that encompasses a broad range of biological and psychosocial issues. company, today announced record revenue for the fourth quarter of 2004 of $110.6 million, an increase of 41 percent over the $78.3 million reported in the fourth quarter of 2003. Fourth quarter 2004 net income was $25.4 million, or $0.21 per 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. share, compared to $19.5 million, or $0.17 per diluted share, in the fourth quarter of 2003. For the year ended December December: see month. 31, 2004, revenue grew 30 percent to $393.6 million compared to $303.1 million for the same period in 2003. Net income was $73.6 million for the year, or $0.63 per diluted share, compared to $76.2 million, or $0.68 per diluted share in 2003. For 2004, net income included the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $19.1 million for acquired in-process research and development related to the acquisition of Novacept in March 2004. Excluding this one-time charge, net income for the year ended December 31, 2004, was $92.7 million, or $0.79 per diluted share. Adoption of new accounting guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. related to the effect of contingent convertible debt on diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of resulted in a decrease in diluted earnings per share of $0.01 per share for the quarter and year ended December 31, 2004, which is reflected in the reported results. "I am very pleased with our strong operating and financial performance in 2004," said Patrick J. Sullivan, Cytyc's chairman, president and chief executive officer. "Our record year began with the Novacept acquisition and the creation of our surgical products division. This new business outperformed our initial expectations, exiting the year with an annual revenue run rate of approximately $100 million. In our domestic diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler division, we ended 2004 with our strongest quarter ever for the ThinPrep(R) Pap Test. We achieved the highest level of ThinPrep Pap Test volume and revenue in the Company's history. The adoption of our ThinPrep(R) Imaging System also continued to exceed our expectations. We shipped a total of 158 Imaging systems to U.S. customers since the launch of the Imager program, and 144 of these units were revenue generating at December 31, 2004. Additionally, we continued to see international market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" primarily driven by the ThinPrep Pap Test." Mr. Sullivan concluded, "I want to commend com·mend tr.v. com·mend·ed, com·mend·ing, com·mends 1. To represent as worthy, qualified, or desirable; recommend. 2. To express approval of; praise. See Synonyms at praise. 3. the entire Cytyc team for achieving these record results. We have an outstanding team of employees who are driven to exceed our customers' expectations, and I am confident that we are well positioned to deliver on our growth initiatives in 2005." Fourth Quarter 2004 Results Total worldwide revenue for the fourth quarter of 2004 was $110.6 million, an increase of 41 percent from the same period last year. Total revenue from the domestic diagnostic products division for the fourth quarter was $75.9 million compared to $69.1 million in the fourth quarter of 2003. These revenues were comprised of $70.2 million from sales of the ThinPrep Pap Test and usage fees associated with the ThinPrep Imaging System and $5.7 million in other revenues from instrument sales and non-GYN tests. International diagnostic products revenue for the quarter was $10.2 million, a 10 percent increase from the same period last year. Revenues from Cytyc Surgical Products, formerly Novacept, totaled $24.5 million for the fourth quarter, representing a 25 percent increase over the third quarter of 2004. 2004 Year-End year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. Results Total worldwide revenue for the year ended December 31, 2004, was $393.6 million, an increase of 30 percent over 2003. Total revenue from the domestic diagnostic products division for 2004 was $289.5 million compared to $271.3 million in 2003. These revenues were comprised of $268.9 million from sale of the ThinPrep Pap Test and usage fees associated with the ThinPrep Imaging system and $20.6 million in other revenues from instrument sales and non-GYN tests. International diagnostic products revenue totaled $40.5 million, a 27 percent increase over 2003. Total 2004 revenue for Cytyc Surgical Products was $63.6 million, which represents revenue for the period from the date of the acquisition of Novacept in March 2004 through year-end 2004. Cytyc discloses non-GAAP or pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma measures that exclude certain charges. Non-GAAP measures may exclude such items as charges related to acquired in-process research and development. Cytyc management uses these measures to establish operational goals, and believes that non-GAAP measures may assist investors in analyzing the underlying trends in Cytyc's business over time. Investors should consider these non-GAAP measures in addition to, not as a substitute for, or as superior to, financial reporting measures prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . Cytyc management will discuss fourth quarter and year-end results, business highlights and future expectations during a conference call on February February: see month. 10 at 9:00 a.m. (Eastern). The call will be hosted by Patrick Sullivan, chairman, president, and chief executive officer; Tim Adams Adams, town (1990 pop. 9,445), Berkshire co., NW Mass., in the Berkshires, on the Hoosic River; inc. 1778. Its manufactures include chemicals, textiles, and paper products. The Berkshire region attracts tourists year-round. , chief financial officer; Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. Levangie, executive vice president and chief commercial officer; and John McDonough McDonough is the name of several places in the United States:
Cytyc Corporation is a leading women's health company that designs, develops, manufactures, and markets innovative and clinically effective products. Cytyc products cover a range of women's health applications, including cervical cancer Cervical Cancer Definition Cervical cancer is a disease in which the cells of the cervix become abnormal and start to grow uncontrollably, forming tumors. screening, breast cancer risk assessment, and treatment of excessive menstrual menstrual /men·stru·al/ (men´stroo-al) pertaining to the menses or to menstruation. men·stru·al or men·stru·ous adj. Of or relating to menstruation. bleeding. The ThinPrep(R) System is the most widely used method for cervical cancer screening 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. . The ThinPrep System consists of the ThinPrep(R) 2000 Processor, ThinPrep(R) 3000 Processor, ThinPrep(R) Imaging System, and related reagents, filters, and other supplies. The ThinPrep System also provides the platform from which the Company launched its expansion into breast cancer risk assessment with the FirstCyte(R) Breast Test. Cytyc Surgical Products, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Cytyc Corporation, manufactures and markets the NovaSure(R) Impedance impedance, in electricity, measure in ohms of the degree to which an electric circuit resists the flow of electric current when a voltage is impressed across its terminals. Controlled Endometrial Ablation Endometrial ablation is a medical procedure that is used to remove (ablate) or destroy the endometrial lining of a woman's uterus. This technique is most often employed for women who suffer from excessive or prolonged bleeding during their menstrual cycle but can not or do not wish System, or the NovaSure(R) System, an innovative endometrial ablation device to treat menorrhagia menorrhagia /men·or·rha·gia/ (men?ah-ra´jah) hypermenorrhea. men·or·rha·gia n. See hypermenorrhea. , or excessive menstrual bleeding. Cytyc is traded on The Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol CYTC. Cytyc, ThinPrep, FirstCyte, and NovaSure are registered trademarks of Cytyc Corporation. 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. in this press release are made pursuant to the provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release which are not strictly historical statements, including, without limitation, statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's financial condition, operating results and future economic performance, and management's expectations regarding future growth opportunities, product acceptance and business strategy, constitute forward-looking statements. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially from those statements. Risks and uncertainties include, among others, dependence on key personnel and proprietary technology, uncertainty of product development efforts and product acceptance, management of growth and product diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. , risks associated with 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. 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 , the effective integration of acquired businesses and technologies, competition and competitive pricing pressures, risks associated with the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval processes and any healthcare reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. policies, introduction of disruptive technologies A new technology that has a serious impact on the status quo and changes the way people have been dealing with something, perhaps for decades. Music CDs all but wiped out the phonograph industry within a few years, and digital cameras are destined to eliminate the film industry. , as well as other risks detailed in the Company's filings with the Securities and Exchange Commission, including under the heading "Certain Factors Which May Affect Future Results" in its 2003 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and its most recent Quarterly Report on Form 10-Q Form 10-Q See 10-Q. filed with the Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they were made. The Company disclaims any obligation to publicly update or revise any such statements to reflect any change in Company expectations or events, conditions, or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
Cytyc Corporation
Consolidated Statements of Operations
(in thousands, except per share data)
---------------------------------------------------------------------
Three Months Ended
December 31, December 31,
2004 2003
--------------------------
Net sales $ 110,607 $ 78,294
Cost of sales 24,351 15,780
------------ -----------
Gross profit 86,256 62,514
------------ -----------
Operating expenses:
Research and development 5,789 3,736
Sales and marketing 28,098 19,346
General and administrative 10,607 8,298
------------ -----------
Total operating expenses 44,494 31,380
------------ -----------
Income from operations 41,762 31,134
Other (expense) income, net:
Interest income 821 542
Interest expense (1,786) -
Other 193 309
------------ -----------
Total other (expense) income, net (772) 851
------------ -----------
Income before provision for income taxes 40,990 31,985
Provision for income taxes 15,576 12,482
------------ -----------
Net income $ 25,414 $ 19,503
============ ===========
Net income per common and potential common share:
Basic $ 0.23 $ 0.18
============ ===========
Diluted (a) $ 0.21 $ 0.17
============ ===========
Weighted average common and potential common
shares outstanding:
Basic 112,466 109,694
============ ===========
Diluted (a) 125,946 111,633
============ ===========
(a) Diluted earnings per share in the fourth quarter of 2004 includes
the effect of the assumed conversion of 8.4 million shares related
to our $250 million of contingent convertible notes issued in
March 2004, in accordance with new accounting rules effective for
the year ended December 31, 2004. Inclusion of these shares
decreased our diluted earnings per share in the fourth quarter of
2004 by $0.01 per share.
Cytyc Corporation
Consolidated Statements of Operations
(in thousands, except per share data)
----------------------------------------------------------------------
Twelve Months
Twelve Months Ended Ended
December 31, 2004 December 31, 2003
------------------------------- -----------------
As
Pro Forma Adjustment Reported As Reported
--------- ---------------------------------------
Net sales $393,593 $ - $393,593 $ 303,060
Cost of sales 82,523 - 82,523 57,420
-------- -------- -------- ----------------
Gross profit 311,070 - 311,070 245,640
-------- -------- -------- ----------------
Operating expenses:
Research and
development 20,820 - 20,820 14,724
In-process
research and
development - 19,100 (a) 19,100 -
Sales and
marketing 102,011 - 102,011 79,547
General and
administrative 35,274 - 35,274 28,008
-------- -------- -------- ----------------
Total
operating
expenses 158,105 19,100 177,205 122,279
-------- -------- -------- ----------------
Income from
operations 152,965 (19,100) 133,865 123,361
Other (expense)
income, net:
Interest income 2,418 - 2,418 2,425
Interest
expense (5,376) - (5,376) -
Other (510) - (510) 197
-------- -------- -------- ----------------
Total other
(expense)
income, net (3,468) - (3,468) 2,622
-------- -------- -------- ----------------
Income before
provision for
income taxes 149,497 (19,100) 130,397 125,983
Provision for income
taxes 56,809 - 56,809 49,763
-------- -------- -------- ----------------
Net income $ 92,688 $(19,100) $ 73,588 $ 76,220
======== ======== ======== ================
Net income per common and
potential common share:
Basic $ 0.83 $ 0.66 $ 0.69
======== ======== ================
Diluted (b) $ 0.79 $ 0.63 $ 0.68
======== ======== ================
Weighted average common and
potential common
shares outstanding:
Basic 111,148 111,148 110,983
======== ======== ================
Diluted (b) 121,922 121,922 112,807
======== ======== ================
(a) One-time charge to write off in-process research and development
costs related to acquisition of Novacept in Q1 2004
(b) Diluted earnings per share in 2004 includes the effect of the
assumed conversion of 8.4 million shares (6.5 million weighted
average shares for the period deemed outstanding) related to our
$250 million of contingent convertible notes issued in March 2004,
in accordance with new accounting rules effective for the year
ended December 31, 2004. Inclusion of these shares decreased our
diluted earnings per share in fiscal year 2004 by $0.01 per share.
Cytyc Corporation
Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2004 2003
-------------- -------------
Assets:
Current assets
Cash and investment securities $232,295 $177,897
Accounts receivable, net 63,636 42,070
Inventories 17,310 12,991
Other current assets 7,549 4,859
-------------- -------------
Total current assets 320,790 237,817
-------------- -------------
Property and equipment:
Property and equipment 95,040 64,246
Equipment under customer usage
agreements 42,380 13,015
Less: accumulated depreciation and
amortization (45,908) (31,818)
-------------- -------------
Total property and equipment, net 91,512 45,443
-------------- -------------
Goodwill and other intangible assets,
net 388,908 107,246
Other assets, net 8,140 394
-------------- -------------
Total Assets $809,350 $390,900
============== =============
Liabilities and Stockholders' Equity:
Current liabilities $42,585 $32,920
Long-term debt and other non-current
liabilities 279,320 4,349
Stockholders' equity 487,445 353,631
-------------- -------------
Total Liabilities and Stockholders' Equity $809,350 $390,900
============== =============
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