Dade Behring Reports Strong Revenue Growth for the Third Quarter of 2006.

Company continues to generate strong cash earnings

DEERFIELD, Ill. -- Dade Behring Holdings, Inc. (NASDAQ:DADE) today reported revenue of $424 million for the third quarter ending September 30, 2006, an increase of 5.7 percent over the same period last year, and also reported third quarter earnings per share of $0.33, a decrease of $0.20 per share as compared to the third quarter of 2005. The prior year's third quarter net income included a tax benefit of $15.1 million, or $0.16 per share, that resulted from the company's assessment of its ability to use certain tax loss carryforwards and foreign tax credits.

For the first nine months of the year, revenue grew 4 percent to $1,284 million and earnings per share grew 15 percent to $1.14. On a constant currency basis,(1) revenue for the third quarter and first nine months of 2006 increased 4.5 percent and 4.6 percent respectively.

"The high-quality products and exceptional service we consistently provide clinical laboratory customers are the foundation of our strong revenue growth," said Jim Reid-Anderson, Chairman, President and CEO, Dade Behring. "Dade Behring is well positioned operationally and financially in an attractive, growing industry that is critical to patient care and helps reduce overall health care costs."

The company continued to invest in product development activities with incremental spending of $4.5 million in the third quarter and $15.0 million in the first nine months of the year as compared to similar periods in the prior year. For the first nine months of 2006, research and development spending was 9.2 percent of revenue, up from 8.4 percent of revenue in 2005.

In the quarter, the company's stock-based compensation expense was $5.0 million, as compared to $1.0 million in the third quarter of 2005. September year-to-date expense was $15.0 million and $3.6 million for 2006 and 2005, respectively.

Cash flow from operations, after investing activities and excess tax benefits from stock-based compensation, was $43 million for the third quarter and $109 million for the nine months ended September 30, 2006. In the third quarter, the company paid a $4 million dividend, funded $20 million towards its U.S. pension plan, and repurchased $33 million of its common stock. The company repurchased $155 million of its common shares during the first nine months of 2006 and $267 million since the inception of the program in mid-2005.

Cash earnings per share(2) increased 18 percent in the quarter to $0.45 and increased 30 percent to $1.77 for the first nine months of 2006. As a result of its second quarter 2005 debt refinancing initiative, the company paid a $24 million make-whole payment to its bondholders, which negatively impacted 2005 cash earnings per share by $0.16.

In October, the company amended its $600 million revolving credit facility agreement to lower borrowing rates by 22.5 basis points. At the company's current credit ratings, the post-amendment borrowing rate is LIBOR plus 40 basis points.

Operational Highlights

Dade Behring's portfolio of instruments installed in clinical laboratories around the globe grew to 39,800, an increase of 1.4 percent in the quarter and 7.4 percent over September 30, 2005. The company tracks its installed base of instruments as a measure of market share growth and its ability to generate future sales of diagnostic tests.

Revenue growth was primarily driven by sales of the Dimension([R]) family of products and the cardiac, hemostasis and microbiology product lines. Third quarter 2006 revenue in the United States grew 4.4 percent and revenue outside the United States grew 4.6 percent on a constant currency basis. For the first nine months of the year, U.S. revenue grew 5.2 percent and non-U.S. revenue grew 4.0 percent on a constant currency basis.

The company's gross profit margin in the third quarter, 2006, as compared to the same period last year, was negatively impacted by adverse product and geographic sales mix, pricing, expenses charged to cost of goods sold that were recorded as marketing and administrative expenses in 2005, Dimension Vista([R]) related introduction costs and stock-based compensation expense.

Dimension Vista([R]) System Commercialization

Over the next six months Dade Behring intends to place a limited number of Dimension Vista([R]) analyzers at customer facilities. The Dimension Vista([R]) 1500 Intelligent Lab System is a compact, ultra-integrated chemistry analyzer using advanced LOCI([TM]) detection technology designed for the high-volume clinical laboratory. The company anticipates a broader, but measured commercialization of the system beginning in the second quarter of 2007.

"The technological design of the Dimension Vista platform represents a major step forward for Dade Behring and the diagnostics industry as a whole," said Mark Wolsey-Paige, Senior Vice President, Strategy and Technology, Dade Behring. "Never before have so many capabilities been integrated into one analyzer to deliver solutions that support clinical laboratory customers and address their diagnostic testing needs."

In conjunction with the fourth quarter, 2006 launch of the Dimension Vista([R]) 1500 Intelligent Lab System, the company will begin recording non-cash amortization and depreciation of approximately $9 to 10 million per year related to previously capitalized system development costs and manufacturing assets. In addition, the company anticipates it will incur incremental costs associated with marketing, service support and early stage manufacturing inefficiencies ahead of the related product revenue. The Dimension Vista[R] System development cost amortization, manufacturing asset depreciation, and the majority of the incremental spending described above will be recorded in cost of goods sold, placing downward pressure on gross profit margins for the next 18 to 24 months.

Third Quarter 2006 Announcements

In the third quarter the company announced the launch of two new analyzers:

* The BCS([R]) XP Analyzer, a coagulation analyzer designed to improve productivity, workflow and turn-around time for patient results. The BCS([R]) XP System serves customers that run a broad menu of routine and specialty tests in mid- and high-volume clinical laboratories.

* The Quadriga BeFree System, an infectious disease testing analyzer launched outside the United States that primarily serves large blood bank laboratories.

The company also announced the capability to connect the Sysmex([R]) CA-7000 Coagulation Analyzer to the StreamLAB([R]) Analytical Workcell, extending automation capabilities to a high-speed coagulation analyzer.

In addition, the company announced the launch of two new drug tests:

* A test for one of the most frequently prescribed transplant rejection drugs Tacrolimus, for use on the company's Dimension([R]) chemistry analyzers and the V-Twin([R]) and Viva-E([TM]) drug testing analyzers.

* An automated Ecstasy test using the Syva gold standard EMIT([R]) Technology for use on the Dimension([R]) chemistry analyzers. The company had previously introduced this test on the Viva drug testing analyzers.

Also during the third quarter, the company announced the launch of the cardiac-specific CardioPhase([R]) hsCRP test on the company's Stratus([R]) CS Acute Care([TM]) Diagnostic System. Dade Behring now has a cardiac-specific high sensitivity C-reactive protein (hsCRP) test for use on three types of systems: BN([TM]) nephelometry systems, Dimension([R]) chemistry systems and the Stratus([R]) CS Acute Care([TM]) Diagnostic System for the near-patient setting.

In addition, the company announced the expansion of Dade Behring's educational scholarship program to include the new U.S. Legacy Scholarship, designed to recognize the clinical laboratory profession by funding laboratory science education for the children, grandchildren and siblings of clinical laboratory professionals.

About Dade Behring

With 2005 revenue of nearly $1.7 billion, Dade Behring is the world's largest company solely dedicated to clinical diagnostics. It offers a wide range of products, systems and services designed to meet the day-to-day needs of laboratories, 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" within the meaning of the Private Securities Litigation Reform Act 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 businesses, performance, opportunities and regulatory approval. In addition, the company is in the process of a major new product launch, which involves risks and uncertainties regarding product performance, costs of introduction and support, and customer acceptance. 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 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, given current accumulated tax loss carryforwards and the net depreciation/amortization impacts relating to the revaluation of assets during the company's 2002 restructuring.

Note: Quadriga BeFree is a registered trademark of Dade Behring Marburg GmbH in the European Community and other countries.

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