Cytyc Reports Record Third Quarter Results.Revenue Increases 18 Percent to $154.3 Million 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 Grows to $0.31 MARLBOROUGH, Mass. -- Cytyc Corporation (Nasdaq: CYTC) today announced results for the third quarter ended September 30, 2006. Revenue for the quarter ended September 30, 2006 rose to $154.3 million compared to revenue of $130.8 million for the same period of 2005. Net income for the quarter was $36.1 million, or $0.31 per diluted share, compared to net income for the same period in 2005 of $31.1 million, or $0.26 per diluted share, an increase in diluted earnings per share of 18 percent. Third Quarter Highlights: * Domestic surgical products revenue increased 33 percent over third quarter 2005 to $53.0 million, representing 34 percent of total Company revenue. * International revenue increased 39 percent over third quarter 2005 to $17.3 million. * Domestic diagnostic products revenue increased to $84.0 million driven by a 47 percent increase in ThinPrep([R]) Imager revenue over third quarter 2005 and included the shipment of nine million ThinPrep([R]) Pap Tests Pap test, Pap smear, or Papanicolaou test (păp'ənē`kəlou), medical procedure used to detect cancer of the uterine cervix. and 30 ThinPrep Imaging Systems. * The business generated cash from operations of $43.5 million in the third quarter, bringing year-to-date cash from operations to $116.1 million. The Company completed a number of tax audits with a favorable net outcome that resulted in the recognition of a tax benefit of approximately $2 million, or $0.02 per diluted share. Patrick J. Sullivan, Cytyc's chairman, president, and chief executive officer, stated, "The Company's strong third quarter performance demonstrates our ability to continue to grow our domestic diagnostics business and post strong growth in both our surgical and international businesses. Our domestic surgical division grew 33 percent and was fueled by continued growth of our NovaSure([R])and MammoSite([R])products. As the U.S. market leader, the ThinPrep Pap Test remains the standard of care with nine million tests shipped during the quarter. The growth in the U.S. diagnostics division is driven by continued market adoption of the ThinPrep Imaging system, with nearly 40 percent of all ThinPrep Pap Test slides imaged during the quarter. I was particularly pleased with the 39 percent growth of our international business over the third quarter of 2005. This increase was driven by strong ThinPrep Pap Test sales of 1.9 million tests outside the U.S." Mr. Sullivan added, "During the quarter, we announced plans to acquire Vision Systems Limited (ASX ASX See: Australian Stock Exchange :VSL VSL Vessel (shipping) VSL Value of Statistical Life VSL Virtual Software Library VSL Variable Speed of Light (theoretical cosmology/physics) VSL Vector Statistical Library VSL Straight Line Velocity ). While we believe the acquisition represents an ideal opportunity to leverage our worldwide sales, service, and laboratory support infrastructure, we remain disciplined in our acquisition strategy and are focused on providing appropriate return for our shareholders. Therefore, on October 9, we announced that we would not increase the A$3.25 per share unconditional cash offer. Although our offer remains open, we intend to tender all acquired shares into Danaher's offer if and when it becomes effective." The Company's segment revenue was as follows:
[TABLE OMITTED]
Domestic diagnostic products revenue consists primarily of
revenue from sales of the ThinPrep Pap Test and use of the
ThinPrep Imaging System. Domestic surgical products revenue
consists of revenue from sales of the NovaSure Endometrial
Ablation System and the MammoSite and GliaSite(R) Radiation
Therapy Systems. International revenue consists primarily of
revenue from sales outside of the United States of the
NovaSure Endometrial Ablation System, the MammoSite Radiation
Therapy System, the ThinPrep Pap Test, and use of the
ThinPrep Imaging System.
The Company generated $43.5 million of 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 during the third quarter, which demonstrates the strength of its business model. Total cash and investments at the end of the third quarter was $204.7 million, after investing $21.5 million in the 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 during the third quarter. The Company has invested approximately $100 million in the share repurchase program during 2006. Non-GAAP Information In addition to disclosing results determined in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , or GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , Cytyc also discloses adjusted, or non-GAAP, results of operations that exclude certain items. By disclosing this non-GAAP information, management intends to provide investors with additional information to further analyze Cytyc's performance and underlying trends. In order to better assess operating trends, management utilizes a measure of adjusted net income and adjusted diluted net income per common share on a non-GAAP basis that excludes for the applicable period stock options expensed under new accounting guidelines adopted January 1, 2006, net of tax effects, and a charge, net of tax effects, related to the DEKA DEKA Dean Kamen (of DEKA Research and Development Corporation, Manchester, NH, USA) DEKA Deutsche Kapitalanlagegesellschaft Mbh (German investment fund) Products Limited Partnership arbitration panel arbitration panel A group of individuals charged with resolving a dispute between individuals and/or organizations. Arbitration panels to resolve investment disputes are sponsored by self-regulatory organizations such as NASD. decision in the first quarter of 2005. Management believes adjusted net income provides useful supplemental information to management and investors regarding the performance and underlying trends of Cytyc's business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets and facilitates comparisons to its historical operating results. Management uses this information internally for forecasting, budgeting, evaluating the effectiveness of Cytyc's operational strategies, and performance measurement for compensation of management and employees. Management believes it is important to provide investors with the same metrics used by management to measure operating performance, which assists investors in analyzing the underlying trends in Cytyc's business over time. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other data prepared in accordance with GAAP as measures of Cytyc's profitability or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made. See the tables in this press release for a reconciliation of non-GAAP amounts to amounts reported under GAAP. Cytyc management will discuss third quarter results, business highlights and future expectations during a conference call on October 26 at 8:30 a.m. (Eastern). The call will be hosted by Patrick J. Sullivan, Cytyc Corporation's chairman, president, and chief executive officer; Daniel J. Levangie, president, Cytyc Surgical Products; Tony Kingsley, president, Cytyc Diagnostic Products; and Timothy M. Adams, chief financial officer. A live webcast of the call may be accessed at Cytyc's website, http://ir.cytyc.com, and the event will be available for replay at this site approximately two hours following the call until November 9, 2006. Those without web access may access the call by dialing 201-689-8470. A telephonic replay of the call will be available through November 9, 2006, by dialing 201-612-7415; enter account # 3055 and conference ID # 216621. Cytyc Corporation is a leading provider of best-in-class medical technology that enables physicians and laboratories to improve patient's lives throughout the world. Cytyc provides diagnostic and minimally invasive surgical products targeting cancer and 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. . The ThinPrep([R]) System is the most widely used method for 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 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. The NovaSure([R]) Impedance 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, is 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 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 MammoSite([R]) Radiation Therapy System is a single-use device for the treatment of breast cancer that positions radiation sources directly into the post-lumpectomy site to optimize radiation treatment delivery while minimizing damage to healthy tissue. The GliaSite([R]) Radiation Therapy System is for the treatment of malignant brain tumors Brain Tumor Definition A brain tumor is an abnormal growth of tissue in the brain. Unlike other tumors, brain tumors spread by local extension and rarely metastasize (spread) outside the brain. . 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, NovaSure, MammoSite, and GliaSite 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 Cytyc's future financial condition, operating results and economic performance, and management's expectations regarding key customer relationships, 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 customers as well as reliance on proprietary technology, uncertainty of product development efforts and timelines, management of growth, product diversification, and organizational change, entry into new market segments domestically and new markets internationally, 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. , the successful consummation of planned acquisition transactions, 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 approval processes and healthcare reimbursement policies in the United States and abroad, introduction of technologies that are disruptive to Cytyc's business and operations, the impact of new accounting requirements and governmental rules and regulations, as well as other risks detailed in Cytyc's filings with the Securities and Exchange Commission, including those under the heading "Risk Factors" in its 2005 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. Cytyc cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they were made. Cytyc disclaims any obligation to publicly update or revise any such statements to reflect any change in its expectations or events, conditions, or circumstances 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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