Dade Behring Reports Strong Financial Performance for the Fourth Quarter and Full Year, 2005; EPS Growth of 46 Percent for the Quarter and 55 Percent for the Full Year.DEERFIELD Deerfield, towns, United States Deerfield. 1 Village (1990 pop. 17,327), Cook and Lake counties, NE Ill., a residential suburb of Chicago; inc. 1903. The huge Sara Lee Bakery is its major industry, and there is other light manufacturing. , Ill. -- Dade v. t. 1. To hold up by leading strings or by the hand, as a child while he toddles. Little children when they learn to go By painful mothers daded to and fro. - Drayton. v. i. 1. 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 net income of $34 million or 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 of $0.38 for the quarter ended December December: see month. 31, 2005, an increase of 43 percent and 46 percent, respectively, over the same period last year, reflecting solid business momentum and improving profitability. Worldwide fourth quarter revenue of $421 million increased slightly over the fourth quarter of 2004 and grew 3.6 percent on a constant currency(1) basis. Net income for the full year increased 56 percent to $125 million on revenue growth of 6.3 percent, and revenue reached approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.7 billion, establishing yet another record year for the company in terms of reported earnings and revenue. Full year revenue increased 5.9 percent on a constant currency basis. "Our consistently strong performance comes directly from the successful execution of our targeted business strategy and the excellent service and practical innovation we provide our customers in the clinical laboratory," 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. . "We are especially pleased with the record-level gains in our installed base of instruments at customer facilities, a key indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of market share growth." The company's installed base of instruments grew to 38,100 during the fourth quarter, an increase of 2.7 percent since September September: see month. 30, 2005, and 8.7 percent or 3,000 instruments for the year. Revenue growth relative to installed base growth reflects the trend of a declining percentage of instruments being placed under sales-type leases Sales-type lease The leasing out of a firm's own equipment, such as a printing company leasing its own presses, thereby competing with an independent leasing company. . 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 , after investing activities, was $50 million for the quarter, and was negatively impacted by a $10 million reduction in non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. factored 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 . Cash flow was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by strong working capital management. "We have effectively managed our operations, and the fundamentals of our business continue to be solid," said John Duffey, Dade Behring's Chief Financial Officer. "In addition, we have established key processes with the goal to further generate strong profitability and cash flow for our shareholders." Key Highlights Worldwide core product revenue increased 3.6 percent and 6.6 percent for the quarter and full year, respectively, on a constant currency basis, driven primarily by strong 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. , service and operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. revenue. Revenue 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. grew 2.5 percent in the fourth quarter and 6.9 percent for the full year, and was negatively impacted by the lower level of instruments placed under sales-type leases. Revenue outside of the United States grew 4.5 percent and 5.0 percent for the quarter and full year, respectively, on a constant currency basis. Fourth quarter global instrument revenue, which was 11 percent of total sales, declined by approximately two percentage points from the same period last year. Sales-type lease revenue represented 4 percent of total sales in 2005. Key revenue drivers for the quarter included strong global growth in Dimension(R) test volume and continued strength in the company's cardiac cardiac /car·di·ac/ (-ak) 1. pertaining to the heart. 2. pertaining to the cardia. car·di·ac adj. 1. Of, near, or relating to the heart. 2. , 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. and microbiology microbiology: see biology. microbiology Scientific study of microorganisms, a diverse group of simple life-forms including protozoans, algae, molds, bacteria, and viruses. product lines. Core product reagent, service, and operating lease revenue increased 6.0 percent for the quarter. In 2005, the company invested an 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. $7.5 million in research and development to help fuel future revenue growth. The company has a number of new products across all product segments that it expects to launch in 2006. During the fourth quarter, the company repurchased $63 million of its common shares at an average price of $39.26 per share, and paid its third cash dividend of $0.03 per common share. Cash earnings per share(2) was $0.35 and $1.70 for the fourth quarter and full year, respectively. The full year cash earnings per share includes a second-quarter $0.26 per share payment 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. the company's pre-existing Adj. 1. pre-existing - existing previously or before something; "variations on pre-existent musical themes" pre-existent, preexistent, preexisting antecedent - preceding in time or order 11.9 percent senior subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". . As announced earlier today, the company's board of directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the company to purchase an incremental 5 million shares of common stock under the company's share repurchase plan share repurchase plan A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and . As of December 31, 2005, the company had purchased 3.0 million of the 5.0 million shares authorized Shares authorized The maximum number of shares of stock of a company allowed in the articles of incorporation, which may be changed only by a shareholder vote. See: Issued and outstanding. shares authorized See authorized capital stock. for repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. in April, 2005. In addition, the company announced today that its board of directors increased the quarterly cash dividend from $0.03 to $0.05 per common share beginning with the first quarter, 2006, payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. . Fourth Quarter 2005 Announcements During the fourth quarter, the company announced the launch of the 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. cardiac marker Cardiac marker A substance in the blood whose level rises following a myocardial infarction. Mentioned in: Myoglobin Test, Troponins Test cardiac marker for use on its BN(TM) II and BN ProSpec(R) systems. This test is used to determine if a patient is at high risk of a heart attack or stroke, and has been well received by customers. The company also announced the signing of an important three-year agreement with Novation The substitution of a new contract for an old one. The new agreement extinguishes the rights and obligations that were in effect under the old agreement. A novation ordinarily arises when a new individual assumes an obligation to pay that was incurred by the original party , a health care contracting services company that serves the purchasing needs of more than 2,500 members and affiliates of VHA VHA Veterans Health Administration VHA Variable Housing Allowance VHA Villages Homeowners Association VHA Voluntary Hospitals Association VHA Virtual Home Agent VHA Very High Altitude VHA Vapor Hazard Area VHA Vermont Holstein-Friesian Association Inc. and the University HealthSystem Consortium, for Dade Behring's MicroScan(R) microbiology instruments and test panels. Also during the fourth quarter, the company announced the opening of its new distribution center in Duisburg Duisburg (düs`b  rk), city (1994 pop. 536,800), North Rhine–Westphalia, W Germany, at the confluence of the Rhine and Ruhr rivers. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , a facility that
services customers in over 40 countries.In addition, the company announced it had been awarded Treasury and Risk Management magazine's annual Alexander Hamilton Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. Gold Award for excellence in financial risk management. This press release may contain "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. These forward statements include information 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 business, perspective, performance, opportunities and 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. Investors are cautioned that any such 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. are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by the company. With 2005 revenue of nearly $1.7 billion, Dade Behring is the world's largest company dedicated solely to 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 . It offers a wide range of products, systems and services designed to meet the day-to-day day-to-day adj. 1. Occurring on a routine or daily basis: the day-to-day movements of the stock market. 2. 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. 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 2002 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). .
Dade Behring Holdings, Inc.
Revenue By Product Line
and Region (unaudited)
(Dollars in millions)
Quarter Ended December 31,
---------------------------------------
% Change
-------------------
On a
Constant
Currency
Basis
Product Line 2005 2004 Reported (a)
---------------------------- --------- --------- --------- ---------
Core Products
Core Chemistry $270.6 $273.7 -1.1% 1.7%
Hemostasis 77.0 74.0 4.1% 8.5%
Microbiology 43.8 41.8 4.8% 8.1%
Infectious Disease
Diagnostics 21.1 22.0 -4.1% 1.8%
---------------------------- --------- --------- --------- ---------
Total Core Products 412.5 411.5 0.2% 3.6%
Mature Products/Other 8.3 8.5 -2.4% 3.2%
---------------------------- --------- --------- --------- ---------
Total $420.8 $420.0 0.2% 3.6%
---------------------------- --------- --------- --------- ---------
Region
----------------------------
United States $199.1 $194.2 2.5% 2.5%
Non-U.S. 221.7 225.8 -1.8% 4.5%
---------------------------- --------- --------- --------- ---------
Total $420.8 $420.0 0.2% 3.6%
---------------------------- --------- --------- --------- ---------
Year Ended December 31,
---------------------------------------
% Change
-------------------
On a
Constant
Currency
Basis
Product Line 2005 2004 Reported (a)
---------------------------- --------- --------- --------- ---------
Core Products
Core Chemistry $1,074.8 $1,005.6 6.9% 6.4%
Hemostasis 298.7 276.7 8.0% 7.5%
Microbiology 164.8 152.5 8.1% 8.2%
Infectious Disease
Diagnostics 86.4 84.0 2.9% 2.0%
---------------------------- --------- --------- --------- ---------
Total Core Products 1,624.7 1,518.8 7.0% 6.6%
Mature Products/Other 33.4 41.0 -18.5% -19.4%
---------------------------- --------- --------- --------- ---------
Total $1,658.1 $1,559.8 6.3% 5.9%
---------------------------- --------- --------- --------- ---------
Region
----------------------------
United States $766.3 $716.9 6.9% 6.9%
Non-U.S. 891.8 842.9 5.8% 5.0%
---------------------------- --------- --------- --------- ---------
Total $1,658.1 $1,559.8 6.3% 5.9%
---------------------------- --------- --------- --------- ---------
(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- December 31, December 31,
related data) 2005 2004
----------------------------------------- ------------ ------------
Assets
------
Current assets:
Cash and cash equivalents $34.6 $30.0
Accounts receivable, net 315.7 318.1
Inventories 165.0 168.8
Prepaid expenses and other current
assets 24.5 15.4
Deferred income taxes 54.2 7.5
----------------------------------------- ------------ ------------
Total current assets 594.0 539.8
Property, plant and equipment, net 429.5 446.3
Deferred income taxes 199.3 16.0
Identifiable intangible assets, net 356.9 396.8
Goodwill 187.8 466.0
Other assets 33.1 39.5
----------------------------------------- ------------ ------------
Total assets $1,800.6 $1,904.4
----------------------------------------- ------------ ------------
Liabilities and Shareholders' Equity
-------------------------------------
Current liabilities:
Short-term debt $5.5 $8.6
Accounts payable 75.4 81.5
Accrued liabilities 248.8 274.9
----------------------------------------- ------------ ------------
Total current liabilities 329.7 365.0
Long-term debt 386.0 433.6
Deferred income taxes 16.6 102.1
Other liabilities 159.9 158.5
----------------------------------------- ------------ ------------
Total liabilities 892.2 1,059.2
Commitments and contingencies
Common stock: $.01 par value; 150,000,000
and 130,000,000 shares authorized
at December 31, 2005 and December 31,
2004, respectively; 88,029,061 and
87,388,998 shares issued and
outstanding at December 31, 2005 and
December 31, 2004, respectively 0.9 0.9
Additional paid-in capital 708.8 732.5
Unearned stock-based compensation (3.6) (8.1)
Retained earnings 196.3 79.4
Accumulated other comprehensive income 6.0 40.5
----------------------------------------- ------------ ------------
Total shareholders' equity 908.4 845.2
----------------------------------------- ------------ ------------
Total liabilities and shareholders'
equity $1,800.6 $1,904.4
----------------------------------------- ------------ ------------
Dade Behring Holdings, Inc.
Consolidated Statements of Operations (unaudited)
Quarter Ended Year Ended
(Dollars in millions, except December 31, December 31,
per share data) 2005 2004 2005 2004
----------------------------- --------- --------- --------- ---------
Net sales $420.8 $420.0 $1,658.1 $1,559.8
Cost of goods sold 190.4 192.1 741.3 704.8
----------------------------- --------- --------- --------- ---------
Gross profit 230.4 227.9 916.8 855.0
Operating costs and expenses:
Marketing and
administrative expenses 136.0 142.3 548.6 529.2
Research and development
expenses 38.0 37.8 141.5 134.0
----------------------------- --------- --------- --------- ---------
Income from operations 56.4 47.8 226.7 191.8
Other income (expense):
Interest expense (7.6) (14.3) (43.5) (64.0)
Interest income 1.0 0.4 4.3 2.4
Foreign exchange gain
(loss) 2.2 1.7 1.3 (2.5)
Loss on redemption/purchase
of senior subordinated
notes - (0.7) (24.0) (5.0)
Other 0.6 (1.5) (0.1) (2.3)
----------------------------- --------- --------- --------- ---------
Income before income tax
expense 52.6 33.4 164.7 120.4
Income tax expense 18.3 9.4 39.8 40.5
----------------------------- --------- --------- --------- ---------
Net income $34.3 $24.0 $124.9 $79.9
----------------------------- --------- --------- --------- ---------
Basic shares outstanding 88.4 87.0 88.5 85.6
million million million million
Diluted shares outstanding 91.3 92.0 91.9 91.0
million million million million
Basic earnings per common
share $0.39 $0.27 $1.41 $0.93
--------- --------- --------- ---------
Diluted earnings per common
share $0.38 $0.26 $1.36 $0.88
--------- --------- --------- ---------
-------------------------------------------------- -------------------
Operating Cash Flow to Cash
Earnings reconciliation:
Operating Cash Flow $101.0 $93.2 $294.0 $249.8
Net changes in balance sheet
items not in earnings; loss
on disposal of fixed assets (29.1) (28.7) (1.4) (10.7)
Capital expenditures and
investment in licensing
agreements (51.0) (43.4) (153.0) (132.1)
Income tax expense 18.3 9.4 39.8 40.5
Cash paid during the period
for taxes (7.5) (3.5) (23.3) (12.3)
----------------------------- --------- --------- --------- ---------
Cash Earnings (b) $31.7 $27.0 $156.1 $135.2
----------------------------- --------- --------- --------- ---------
Net income to Cash Earnings
reconciliation:
Net income $34.3 $24.0 $124.9 $79.9
Depreciation and
amortization (including
amortization of debt
issuance costs) 36.5 39.3 163.0 152.8
Capital expenditures and
investment in licensing
agreements (51.0) (43.4) (153.0) (132.1)
Stock-based compensation
expense 1.1 1.2 4.7 6.4
Income tax expense 18.3 9.4 39.8 40.5
Cash paid during the period
for taxes (7.5) (3.5) (23.3) (12.3)
----------------------------- --------- --------- --------- ---------
Cash Earnings (b) $31.7 $27.0 $156.1 $135.2
----------------------------- --------- --------- --------- ---------
(b) "Cash earnings" is not a U.S. GAAP defined measure. The company
believes this measure provides meaningful profitability metrics,
given current accumulated tax loss carryforwards and the net
depreciation/amortization impacts relating to the revaluation of
assets during the company's 2002 restructuring.
Dade Behring Holdings, Inc.
Consolidated Statements of Cash Flows (unaudited)
Year Ended Year Ended
(Dollars in millions) December 31, December 31,
2005 2004
------------------------------------------ ------------ ------------
Operating Activities:
Net income $124.9 $79.9
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense 163.0 152.8
Net loss on disposal of fixed assets 3.6 4.5
Stock-based compensation expense 4.7 6.4
Payments from restructuring reserves - (0.4)
Deferred income taxes 23.2 27.8
Changes in balance sheet items (25.4) (21.2)
------------------------------------------ ------------ ------------
Net cash flow provided by operating
activities 294.0 249.8
------------------------------------------ ------------ ------------
Investing Activities:
Capital expenditures (149.0) (131.8)
Investment in licensing agreements (4.0) (0.3)
------------------------------------------ ------------ ------------
Net cash flow utilized for investing
activities (153.0) (132.1)
------------------------------------------ ------------ ------------
Financing Activities:
Net (repayments) borrowings related to
short-term debt (2.3) 3.0
Repayments of borrowings under former bank
credit agreement (158.3) (169.9)
Redemption/purchase of senior subordinated
notes (275.0) (40.3)
Borrowings under new revolving credit
facility 701.7 -
Repayments of borrowings under new
revolving credit facility (315.7) -
Payment of debt issuance costs (2.7) (0.3)
Proceeds from exercise of stock options 28.0 30.9
Proceeds from employee stock purchase plan 8.8 8.6
Repurchases of common stock (111.8) -
Dividends paid (8.0) -
------------------------------------------ ------------ ------------
Net cash flow utilized for financing
activities (135.3) (168.0)
------------------------------------------ ------------ ------------
Effect of foreign exchange rates on cash (1.1) 0.8
------------------------------------------ ------------ ------------
Net increase (decrease) in cash and cash
equivalents 4.6 (49.5)
Cash and Cash Equivalents:
Beginning of Period 30.0 79.5
------------------------------------------ ------------ ------------
End of Period $34.6 $30.0
------------------------------------------ ------------ ------------
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