Dade Behring Reports Continued Global Revenue and Net Income Growth in the First Quarter of 2004; Cash Generation Remains Strong.Business Editors DEERFIELD, Ill.--(BUSINESS WIRE)--April 29, 2004 Dade Behring Beh·ring , Emil Von 1854-1917. German physiologist. He won a 1901 Nobel Prize for work on serum immunization against diphtheria and tetanus. Holdings, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DADE) today reported revenue of $381.8 million for the quarter ended March 31, 2004, an 11.4 percent increase over first quarter 2003. On a constant currency basis(1), revenue rose 3.6 percent year-over-year with core product revenue growing 5.9 percent. Net income for the quarter was $17.0 million, an increase of 57 percent, or $.38 per share (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. ), a 46 percent increase. Net income for the same period in 2003 was $10.8 million or $.26 per share (diluted). "Our growth continues to be steady, strong, and reliable, driven by our customer-focused approach to product design and service delivery" said Jim Reid-Anderson, Dade Behring's Chairman, 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. . "As the largest company in the world solely focused on clinical 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 , we have a unique advantage in understanding and responding to customer needs. That competitive advantage has served us and our customers very well, as indicated by our consistent, quarter-to-quarter revenue growth, which has been supported by equally consistent improvements in profitability." Net debt (gross debt less cash) decreased by $38 million from December 31, 2003 to $531 million as of March 31, 2004. For the first quarter, 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 less capital expenditures was $24 million, which included $6 million of incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. factoring of non-U.S. receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , and $2 million of premium payments associated with the early redemption of senior subordinated notes. The company also received $14 million of proceeds from the exercise of employee stock options. The company repaid $40 million of its term debt during the first quarter and redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. $16 million of its senior subordinated notes. In addition, the company has repaid a further $20 million of bank debt in April and has notified the note holders of its intent to redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. an additional $7 million of its senior subordinated notes in May. "Careful, strategic cash management and our consistent attention to process improvements continue to result in improved efficiencies and cash flow," said John Duffey, Dade Behring's Chief Financial Officer. "We are constantly looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. the right ways to further strengthen our business by effectively managing our cash while continuing to make appropriate levels of short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. and long-term investments in our business." Cash earnings per share(2) on a diluted basis was $.82. Cash earnings per share adds back depreciation/amortization and stock-based compensation expense, deducts capital expenditures and adjusts income tax expense to taxes actually paid. Operational Highlights The company's total worldwide installed base of instruments grew to approximately 32,900 units in the quarter, an increase of 1.6 percent compared to the company's installed base at the end of 2003. First quarter 2004 sales 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. increased by 7.2 percent versus first quarter 2003 sales, and international sales increased by 15.2 percent, or 0.8 percent on a constant currency basis during the same period. R&D spending for the quarter was $30.4 million, a 17.8 percent increase over the prior year. On a constant currency basis, R&D spending grew $3.0 million or 10.9 percent year-over-year. Key drivers for the quarter's results included the following: -- Continued strong growth in Dade Behring's core chemistry business, which rose 14.0 percent over prior year, or 7.1 percent on a constant currency basis, driven by the Dimension(R) portfolio of products, and -- Hemostasis hemostasis /he·mo·sta·sis/ (he?mo-sta´sis) (he-mos´tah-sis) 1. the arrest of bleeding by the physiological properties of vasoconstriction and coagulation or by surgical means. 2. revenues, which grew 21.1 percent over prior year, or 10.5 percent on a constant currency basis, driven by successful new product launches enhancing both instrument and 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. sales. "Our pioneering leadership in the concept of workstation consolidation, which is an outstanding example of customer-focused innovation in action, has made the Dimension family of products a consistent winner for Dade Behring and our customers," said Reid-Anderson. "We anticipate the same significant benefits from future product launches, including the launch of Dimension Vista(TM), our next generation high-volume chemistry/immunochemistry analyzer analyzer /ana·ly·zer/ (an´ah-li?zer) 1. a Nicol prism attached to a polarizing apparatus which extinguishes the ray of light polarized by the polarizer. 2. ." The Dimension Vista(TM) system is now anticipated to be released sometime during the first half of 2006 and full commercialization in all major markets should occur later during that same year. "The Dimension Vista(TM) system will be launched when we are absolutely certain that the product meets our very high standards of customer satisfaction and quality," said Reid-Anderson. "We will not compromise in this area. We are taking the time and opportunity to incorporate feedback from both our customer testing and internal testing into the product prior to launch. We are very pleased that initial testing feedback has been positive." The company is anticipating a late 2004 or early 2005 launch of the Dimension(R) Xpand(R) Plus system, an updated version of its low-volume chemistry/immunochemistry system and a first half 2005 launch of the BCS (1) (The British Computer Society, Swindon, Wiltshire, England, www.bcs.org) The chartered body for information technology professionals in the U.K., founded in 1957. (R) XP analyzer, an update to one of its high volume coagulation coagulation (kōăg'y  lā`shən), the collecting into a mass of minute particles of a solid dispersed throughout a liquid (a sol), usually followed by the precipitation or instruments.Assays planned for launch in 2004 include the Dimension(R) cardiac test for congestive heart failure congestive heart failure, inability of the heart to expel sufficient blood to keep pace with the metabolic demands of the body. In the healthy individual the heart can tolerate large increases of workload for a considerable length of time. , NT proBNP, as well as other cardiac tests: homocysteine Homocysteine Definition Homocysteine is a naturally occurring amino acid found in blood plasma. High levels of homocysteine in the blood are believed to increase the chance of heart disease, stroke, Alzheimer's disease, and osteoporosis. for BN(TM) systems and a new risk stratification risk stratification Medical decision-making The constellation of activities–eg, lab and clinical testing used to determine a person's risk for suffering a particular condition and need–or lack thereof–for preventive intervention claim for Troponin I troponin I n. A subunit of troponin found in muscle and cartilage that inhibits the formation of blood vessels and is under investigation as a potential cancer therapy. on the Stratus stratus: see cloud. (Stratus Technologies, Maynard, MA, www.stratus.com) A manufacturer of fault-tolerant computers founded in 1980. It supports both the VOS and FTX Unix operating systems on its XA/R line of i860-based systems. (R) CS system. In addition, the company anticipates release of several microbiology microbiology: see biology. microbiology Scientific study of microorganisms, a diverse group of simple life-forms including protozoans, algae, molds, bacteria, and viruses. tests, including Synergies Plus(TM), a mixed panel of rapid identification of bacteria and "report when ready" antibiotic antibiotic, any of a variety of substances, usually obtained from microorganisms, that inhibit the growth of or destroy certain other microorganisms. Types of Antibiotics susceptibility testing susceptibility test Antimicrobial susceptibility test, see there . "This combination of rapid testing with MicroScan's reputation for accuracy further enhances our product line, which we believe is already the gold standard," said Reid-Anderson. "Drug testing is also a major emphasis area for our new product introductions, building on the excellent momentum of Dade Behring's Syva(R) and Dimension(R) lines. We plan to release five new Syva(R) tests for sample adulteration Mixing something impure with something genuine, or an inferior article with a superior one of the same kind. Adulteration usually refers to mixing other matter of an inferior and sometimes harmful quality with food or drink intended to be sold. , and new therapeutic drug monitoring therapeutic drug monitoring Clinical pharmacology The regular measurement of serum levels of drugs requiring close 'titration' of doses in order to ensure that there are sufficient levels in the blood to be therapeutically effective, while avoiding potentially tests are being added to the Dimension(R) line: Procainamide, Lidocaine lidocaine /li·do·caine/ (li´do-kan) an anesthetic with sedative, analgesic, and cardiac depressant properties, applied topically in the form of the base or hydrochloride salt as a local anesthetic; also used in the latter form as a , N-Acetylprocainamide, and a new application for better monitoring of the immunosuppresant Cyclosporine cyclosporine /cy·clo·spor·ine/ (-spor´en) a cyclic peptide from an extract of soil fungi that selectively inhibits T cell function; used as an immunosuppressant to prevent rejection in organ transplant recipients and to treat severe ." First quarter 2004 Bank 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 (3) was $81.5 million, which included a $1.9 million expense related to the early redemption of senior subordinated notes. This compares with first quarter 2003 Bank EBITDA of $70.5 million, a year-over-year increase of $11.0 million, or 15.6 percent. On a constant currency basis, Bank EBITDA increased $1.8 million. With 2003 revenues of over $1.4 billion, Dade Behring is the world's largest company dedicated solely to clinical diagnostics. It offers a wide range of products, systems and services designed to meet the day-to-day needs of labs, delivering innovative solutions to customers and enhancing the quality of life for patients. Additional company information is available on the internet at www.dadebehring.com. This press release may contain "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. These forward statements include statements regarding the intent, belief or current expectation of the company and members of its senior management team, including, without limitation, expectations regarding prospective performance and opportunities and the outlook for the Company's businesses, perspective, performance, opportunities and regulatory approval. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by the Company. 1. "Constant currency" is not a U. S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). defined measure. The company believes this measure provides a meaningful analysis of the underlying activity, since it eliminates the effect of changes in foreign currency exchange rates. Changes on a constant currency basis have been calculated by comparing reported current year amounts to prior year amounts in local currency translated at the foreign currency exchange rates for the current year. "Constant currency," as defined or presented by the company, may not be comparable to similarly titled measures reported by other companies. 2. "Cash earnings per share" is not a U. S. GAAP defined measure. The company believes this measure provides meaningful profitability metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. , given current accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. tax loss carryforwards tax loss carryforward See carryforward. and the net depreciation/amortization impacts relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of assets during the company's recent restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). . 3. To allow for accurate year-over-year comparisons and because it is an important financial metric for certain investors, the company will continue to report "Bank EBITDA" (earnings before interest, taxes, depreciation, amortization and certain non-cash and non-recurring charges as defined in the company's bank credit agreement).
Dade Behring Holdings, Inc.
Revenue By Product Line and Region
Quarter Ended
March 31,
-----------------------------------
(Dollars in millions) % Change
------------------
On a
Constant
Product Line Currency
2004 2003 Reported Basis (a)
--------------------------------- ------- ------- -------- ---------
Core Products
Core Chemistry $246.0 $215.8 14.0% 7.1%
Hemostasis 69.4 57.3 21.1% 10.5%
Microbiology 33.8 32.1 5.3% 0.5%
Infectious Disease Diagnostics 19.4 19.1 1.6% -12.0%
-------------------------------- ------- ------- -------- ---------
Total Core Products 368.6 324.3 13.7% 5.9%
Mature Products 13.2 18.4 -28.3% -35.1%
-------------------------------- ------- ------- -------- ---------
Total $381.8 $342.7 11.4% 3.6%
-------------------------------- ------- ------- -------- ---------
Region
--------------------------------
United States $173.8 $162.1 7.2% 7.2%
International 208.0 180.6 15.2% 0.8%
-------------------------------- ------- ------- -------- ---------
Total $381.8 $342.7 11.4% 3.6%
-------------------------------- ------- ------- -------- ---------
(a) "Constant currency" is not a U.S. GAAP defined measure. The
company believes this measure provides a meaningful analysis of
the underlying activity, since it eliminates the effect of changes
in foreign currency exchange rates. The change in sales on a
constant currency basis has been calculated by comparing reported
current year sales to prior year sales in local currency
translated at the foreign currency exchange rates for the current
year. "Constant currency," as defined or presented by the company,
may not be comparable to similarly titled measures reported by
other companies.
Dade Behring Holdings, Inc.
Consolidated Balance Sheets (unaudited)
(Dollars in millions, except share-related data)
March 31, December 31,
2004 2003
--------------------------------------------- ----------- ------------
Assets
------
Current assets:
Cash and cash equivalents $57.8 $79.5
Accounts receivable, net 289.7 293.6
Inventories 173.0 177.6
Prepaid expenses and other current assets 14.1 18.1
Deferred income taxes 0.5 1.0
--------------------------------------------- ----------- ------------
Total current assets 535.1 569.8
Property, plant and equipment, net 419.4 427.7
Debt issuance costs, net 15.0 15.6
Deferred income taxes 12.2 7.9
Identifiable intangible assets, net 399.1 409.8
Goodwill 503.1 514.6
Other assets 25.7 25.9
--------------------------------------------- ----------- ------------
Total assets $1,909.6 $1,971.3
--------------------------------------------- ----------- ------------
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Short-term debt $1.2 $4.8
Accounts payable 78.6 89.7
Accrued liabilities 250.9 257.2
--------------------------------------------- ----------- ------------
Total current liabilities 330.7 351.7
Long-term debt 587.1 643.4
Deferred income taxes 104.8 108.2
Other liabilities 164.5 171.7
--------------------------------------------- ----------- ------------
Total liabilities 1,187.1 1,275.0
Commitments and contingencies
Common stock: $.01 par value; 65,000,000
shares authorized at March 31, 2004
and December 31, 2003; 42,314,204 and
41,411,506 shares issued and outstanding
at March 31, 2004 and December 31, 2003,
respectively 0.4 0.4
Additional paid-in capital 700.8 686.1
Unearned stock-based compensation (10.2) (10.6)
Accumulated earnings (deficit) 16.5 (0.5)
Accumulated other comprehensive income 15.0 20.9
--------------------------------------------- ----------- ------------
Total shareholders' equity 722.5 696.3
--------------------------------------------- ----------- ------------
Total liabilities and shareholders' equity $1,909.6 $1,971.3
--------------------------------------------- ----------- ------------
Dade Behring Holdings, Inc.
Consolidated Statements of Operations (unaudited)
Quarter ended March 31,
(Dollars in millions, except per share data) 2004 2003
-------------------------------------------- ---------- ------------
Net sales $381.8 $342.7
Cost of goods sold 177.1 163.9
-------------------------------------------- ----------- ------------
Gross profit 204.7 178.8
Operating costs and expenses:
Marketing and administrative expenses 127.4 113.6
Research and development expenses 30.4 25.8
-------------------------------------------- ----------- ------------
Income from operations 46.9 39.4
Other income (expense):
Interest expense (16.6) (19.9)
Interest income 0.7 0.9
Foreign exchange loss (1.7) (2.2)
Loss on redemption of senior subordinated
notes (1.9) -
Other - (0.6)
-------------------------------------------- ----------- ------------
Income before income tax expense 27.4 17.6
Income tax expense 10.4 6.8
-------------------------------------------- ----------- ------------
Net income $17.0 $10.8
-------------------------------------------- ----------- ------------
Basic shares outstanding 42.0 million 39.9 million
Diluted shares outstanding 44.7 million 41.0 million
Basic earnings per common share $0.41 $0.27
------------ ------------
Diluted earnings per common share $0.38 $0.26
------------ ------------
----------------------------------------------------------------------
Net income to Bank EBITDA reconciliation:
Net income $17.0 $10.8
Depreciation and amortization
(including amortization
of deferred financing fees) 37.0 32.2
Non-cash charges:
Loss on disposal of fixed assets 0.8 0.9
Stock-based compensation expense 1.3 1.4
Income tax expense 10.4 6.8
Interest expense, net (excluding
amortization of deferred financing fees) 15.0 18.4
------------------------------------------- ------------ ------------
Bank EBITDA $81.5 $70.5
------------------------------------------- ------------ ------------
----------------------------------------------------------------------
Net income to Cash Earnings reconciliation:
Net income $17.0 $10.8
Depreciation and amortization (including
amortization of deferred financing fees) 37.0 32.2
Capital expenditures (26.1) (19.9)
Stock-based compensation expense 1.3 1.4
Income tax expense 10.4 6.8
Cash paid during the period for taxes (2.8) (0.8)
------------------------------------------- ------------ ------------
Cash Earnings $36.8 $30.5
------------------------------------------- ------------ ------------
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