IRIS Reports Record 4th Quarter and Fiscal Year Revenues and Earnings; Net Income for the Year Grows 169% on 44% Revenue Growth.CHATSWORTH Chatsworth, estate, Derbyshire, central England, near Chesterfield. It is the seat of the dukes of Devonshire. Begun in 1552, the present Classical-style Chatsworth House was rebuilt in 1686. , Calif. -- IRIS Iris, in Greek mythology Iris (ī`rĭs), in Greek mythology, goddess of the rainbow; daughter of Electra and Thaumas. She was often represented as a messenger of Zeus and Hera. International, 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 :IRIS) today announced record financial results for the fourth quarter ended Dec. 31, 2005, with revenues of $17.2 million and net income of $1.7 million ($0.10 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). For the full year revenues grew 44% to a record $62.8 million and net income increased 169% to $6.1 million ($0.35 per diluted share). The record performance resulted from continued sales growth of iQ(R)200 Automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. Urinalysis urinalysis (y  r'ənăl`ĭsĭs), clinical examination of urine for the purpose of medical diagnosis. product line and
solid contribution from the Sample Processing Business Unit (formerly
StatSpin(R)). Overall, revenues increased 41% and 44% in the fourth
quarter and full year, respectively, over the corresponding periods of
2004.Key Data:
(000s omitted, % %
except per share) Q4 05 Q4 04 Increase 2005 2004 Increase
----------------------------------------------------------------------
Consolidated
revenue $17,237 $12,186 41% $62,780 $43,650 44%
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Diagnostics revenue $14,832 $10,145 46% $53,250 $35,307 51%
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Sample Processing
revenue $2,405 $2,041 18% $9,530 $8,343 14%
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Gross profit margin $8,547 $6,096 40% $31,145 $21,391 46%
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Operating income $2,014 $1,344 50% $8,941 $4,465 100%
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Net income $1,741 $831 110% $6,131 $2,280 169%
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EPS - Basic $0.10 $0.05 100% $0.37 $0.16 131%
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EPS - Diluted $0.10 $0.05 100% $0.35 $0.14 150%
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Shares outstanding
- Basic 17,144 15,913 8% 16,758 14,459 16%
----------------------------------------------------------------------
Shares outstanding
- Diluted 18,188 16,880 8% 17,654 15,818 12%
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Cash and cash
equivalents 19,145 12,839 49%
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2005 Operational Highlights: --EPS(*) increased 150% to $0.35 per diluted share. --Operating Income doubled to $8.9 million. --777 iQ200 analyzers shipped through Dec. 31, 2005, 112 in the fourth quarter. --Consumables and service revenue increased 28% to $25.7 million. --Net operating tax loss carry-forward See Loss Carry-Back. of approximately $19.9 million. --Strong balance sheet with no debt and increased cash position to $19.1 million. "Our growth in earnings demonstrates the financial leverage achieved with the acceleration of our high margin recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. consumable A material that is used up and needs continuous replenishment, such as paper and toner. "The low-tech end of the high-tech field!" products. Our instrument sales continue to be strong with 112 iQ200 urinalysis analyzers shipped during the fourth quarter and a total of 777 iQ200 analyzers shipped since the product was introduced in August 2003. The strong demand for our iQ200 product line and the successful product releases in 2005 of the iQ200 Sprint(TM) and the iQ200 Body Fluids Module, both new product line extensions Product line Extensions and Patient safety In a world of product line extensions, there are many different products with similar names. Examples of these include oxycodone versus oxycontin (oycodone CR), buproprion vs buprion SR vs bruproprion XL, codeine versus codeine contin , reflects the quality and value of our proprietary technology," stated IRIS President and Chief Executive Officer Cesar Garcia Cesar Garcia is the Director General of the National Intelligence Coordinating Agency. He is a graduate of the Philippine Military Academy class 1970. . "I am pleased to report that we have again achieved record quarterly revenues of $17.2 million for the fourth quarter, an increase of 41% over 2004." "Our quarterly performance also reflects a year over year increase of 31% in the consumables and service category, with quarterly revenues exceeding comparable prior year quarterly revenues by $1.7 million. As expected, our service revenue and profits have improved significantly and they will continue to grow during 2006 as more domestic customers acquire service contracts after the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the instrument warranty. Customers are beginning to use our new body fluid application on a routine basis and the related consumables should continue to grow in future periods." "Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the fourth quarter were $6.5 million compared to $4.8 million in the comparable period a year ago, reflecting the growth of the Company and needed expansion of infrastructure, now capable of supporting a much higher revenue level. The cost increase in the quarter included $240K relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the accelerated vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of stock options and the amortization of discounts on Common Stock purchased by employees, higher research and development and general and administrative expenses that were offset by approximately $500,000 of income tax credits which lowered the overall tax rate and provision for both the quarter and the year." "Our Company continues to invest significantly in research and new product development. In 2005, we increased R&D expenses 28% to finance product line extensions and next generation platforms that should begin to materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. in the second half of 2007. During the last year, we released the iQ200 Sprint(TM), the iQ200 Body Fluids Module, the StatSpin(R) Express 3 Centrifuge centrifuge (sĕn`trəfy  j), device using centrifugal force to separate two or more substances of different density, e.g., two liquids or a liquid and a solid. platform and a major software
upgrade for the iQ200 platform. Our plans to re-launch the urine urine, clear, amber-colored fluid formed by the kidneys that carries metabolic wastes out of the body (see urinary system). As the blood circulates it collects excretory products from the tissues and these substances are separated from the blood by the kidneys and chemistry business acquired from Quidel, Inc. are on schedule. We will
introduce this new urine chemistry product line under new brands,
iChem(TM) and vChem(TM), at the CLMA CLMA Clinical Laboratory Management AssociationCLMA Contact Lens Manufacturers Association CLMA Cariboo Lumber Manufacturers' Association (Canada) CLMA Canadian Lumber Manufacturers Association CLMA Collegiate Middle Level Association Convention later this month. As previously reported, we anticipate increasing R&D expenses to 10% of revenue in 2006 to finance exciting new product initiatives that should significantly increase our business and strengthen our competitive position in the urinalysis and sample processing markets," Mr. Garcia Gar·ci·a , Jerome John Known as "Jerry." 1942-1995. American musician who gained fame as the cofounder and lead guitarist of the folk-rock group the Grateful Dead (1965-1995). said. Net revenues for the fourth quarter ended Dec. 31, 2005, increased 41% to $17.2 million, compared with $12.2 million in the corresponding quarter of 2004. Net income increased 110% to $1.7 million, or $0.10 per diluted share, compared with net income of $831,000, or $0.05 per diluted share for the fourth quarter of 2004. Diluted average shares outstanding were 18.2 million in the fourth quarter compared to 16.9 million during the 2004 comparable period. For the year ended Dec. 31, 2005, net revenues increased 44% to $62.8 million, compared with $43.7 million during the corresponding period of 2004, a 44% increase. Net income for 2005 increased 169% to $6.1 million, or $0.35 per diluted share, compared with net income of $2.3 million, or $0.14 per diluted share for 2004, a 150% increase. Diluted average shares outstanding were 17.7 million in 2005 compared to 15.8 million in 2004. Revenues from the Company's Sample Processing Business Unit were $2.4 million for the quarter and $9.5 million for the year; 18% and 14% increases, respectively, over the prior year periods. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. was 50% during the fourth quarter of both periods. Operating expenses for the quarter decreased to 38% as a percentage of revenues from 39% for the prior year quarter. Marketing and sales expenses increased by $387,000 primarily to support the 41% increase in revenues during the quarter. General and administrative expenses increased by $560,000, primarily as a result of increased personnel costs and professional fees. The increased personnel costs include $240K relating to vesting of stock options plus deferred compensation amortization of stock purchases under the Company's Employee Stock Purchase Plan. The results for the quarter were also positively impacted by a lower tax provision resulting from R&D tax credits for 2005. As of Dec. 31, 2005, our cash position improved to $19.1 million despite the utilization of cash to provide leasing financing arrangements for some domestic sales of urinalysis instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. of approximately $5.0 million and investments in improvements at the Company's two manufacturing facilities of approximately $1.4 million. 2006 Guidance: The Company reaffirms guidance issued in July July: see month. 2005, when it indicated that 2006 revenue is expected to be between $72 and $76 million and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. is expected to reach 20% excluding the effect of expensing of stock options which became effective January January: see month. 1, 2006. The Company also indicated that Research & Development expenses would increase to approximately 10% of revenues. This increase in R&D funding includes the development of new urinalysis instrumentation, and a new platform for advanced applications in urinalysis, rare cell detection and other body fluids. The Company will hold a conference call with members of the investment community at 11:30 a.m., Eastern Time today. To participate in the call, dial 1-800-289-0569 approximately 10 minutes before the call is scheduled to begin. International callers should dial 1-913-981-5542. A Webcast of the call can be accessed at www.proiris.com or at www.vcall.com. THE COMPANY IRIS International, Inc. (www.proiris.com) is a leader in automated urinalysis technology with systems in major medical institutions throughout the world. The Company's newest generation iQ(R)200 Automated Urine Microscopy microscopy /mi·cros·co·py/ (mi-kros´kah-pe) examination under or observation by means of the microscope. mi·cros·co·py n. 1. The study of microscopes. 2. 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. , utilizing image flow cytometry flow cytometry (flōˑ sī·t  ˑ·m ,
patented Automated Intelligent Microscopy (AIM) technology and neural neural /neu·ral/ (noor´al)1. pertaining to a nerve or to the nerves. 2. situated in the region of the spinal axis, as the neural arch. neu·ral adj. 1. network-based particle particle /par·ti·cle/ (pahr´ti-k'l) a tiny mass of material. Dane particle an intact hepatitis B viral particle. recognition, achieves a significant reduction in the cost and time-consuming steps involved in manual microscopic microscopic /mi·cro·scop·ic/ (mi?kro-skop´ik) 1. of extremely small size; visible only by the aid of the microscope. 2. pertaining or relating to a microscope or to microscopy. analysis. The Company's Sample Processing Business Unit (formerly StatSpin), based in Westwood, Mass., manufactures innovative centrifuges and sample processing products. Advanced Digital Imaging Research, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (ADIR ADIR Asociación para el Desarollo Integral Rural (Association for Rural Integral Improvement, Guatemala) ADIR Aircraft Data Insertion Retrieval ), based near Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , is the Company's imaging research and development subsidiary. (*) Includes a tax provision despite tax NOLs that eliminate payment of taxes on income SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. PROVISION This news release contains 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. made in reliance upon the safe harbor provisions 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. Forward-looking statements include, but are not limited to, the Company's views on future commercial revenues, market growth, capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. , and new product introductions, and are generally identified by phrases such as "thinks," "anticipates," "believes," "estimates," "expects," "intends," "plans," and similar words. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. Examples of forward-looking statements in this news release include our expectation that sales of consumables and service will continue to increase during 2006, revenues and operating income guidance for 2006, anticipated research and development expenditures in 2006, product initiatives and anticipated product releases and the effects such new products will have on the Company's business. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management's own knowledge and assessment of the Company's industry, competition and capital requirements. Other factors and uncertainties that could affect the Company's forward-looking statements include, among other things, the following: the acceptance by customers of our new iQ(R)200 product platform, our substantial expansion of international sales and our reliance on key suppliers, the potential need for changes in long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategy in response to future developments; future advances in diagnostic testing Diagnostic testing Testing performed to determine if someone is affected with a particular disease. Mentioned in: Von Willebrand Disease methods and procedures, as well as potential changes in government regulations and healthcare policies, both of which could adversely affect the economics of the diagnostic testing procedures automated by the Company's products; rapid technological change in the microelectronics microelectronics, branch of electronic technology devoted to the design and development of extremely small electronic devices that consume very little electric power. and software industries; and increasing competition from imaging and non-imaging based in-vitro diagnostic products. The Company refers interested persons to its most recent 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 other SEC filings for a description of additional uncertainties and factors that may affect forward-looking statements. The Company assumes no duty to update its forward-looking statements.
IRIS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited - in thousands)
Assets At December 31,
------------------------------
2005 2004
-------------- --------------
Current assets:
Cash and cash equivalents $ 19,145 $ 12,839
Accounts receivable, net 11,874 8,348
Inventories, net 7,590 7,834
Prepaid expenses and other current
assets 1,122 579
Investment in sales-type leases 1,281 499
Deferred tax asset 3,326 3,650
-------------- --------------
Total current assets 44,338 33,749
Property and equipment, at cost, net 4,076 3,880
Goodwill 189 189
Software development costs, net 1,570 1,930
Deferred tax asset 6,713 5,665
Inventories - long term portion 632 290
Investment in sales-type leases 6,015 2,142
Other assets 396 291
-------------- --------------
Total assets $ 63,929 $ 48,136
============== ==============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 4,464 $ 4,258
Accrued expenses 4,188 3,398
Deferred service contract revenue 1,457 1,134
-------------- --------------
Total current liabilities 10,109 8,790
Deferred service contract revenue,
long term 51 173
-------------- --------------
Total liabilities 10,160 8,963
Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value
Authorized: 50 million shares;
issued and outstanding: 17,222
shares and 15,962 shares 172 159
Additional paid-in capital 70,856 61,972
Unearned compensation (546) (125)
Accumulated other comprehensive income - 11
Accumulated deficit (16,713) (22,844)
-------------- --------------
Total shareholders' equity 53,769 39,173
-------------- --------------
Total liabilities and shareholders'
equity $ 63,929 $ 48,136
============== ==============
IRIS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited - in thousands)
For the Year ended December 31,
------------------------------
2005 2004 2003
---------- ---------- --------
Sales of IVD instruments $ 27,542 $ 14,845 $ 7,470
Sales of IVD consumables and service 25,708 20,126 17,252
Sales of sample processing
instruments and supplies 9,530 8,343 6,076
Royalty and license revenues - 336 547
---------- ---------- --------
Net revenues 62,780 43,650 31,345
---------- ---------- --------
Cost of goods - IVD instruments 15,456 10,092 5,982
Cost of goods - IVD consumable and
supplies 11,185 7,982 6,629
Cost of goods - sample processing
instruments and supplies 4,994 4,185 3,101
---------- ---------- --------
Cost of goods sold 31,635 22,259 15,712
---------- ---------- --------
Gross margin 31,145 21,391 15,633
---------- ---------- --------
Marketing and selling 10,026 7,165 5,346
General and administrative 7,141 5,841 6,437
Research and development, net 5,037 3,920 4,393
Total operating expenses 22,204 16,926 16,176
---------- ---------- --------
Operating income (loss) 8,941 4,465 (543)
Other income (expense):
Interest income 607 111 40
Interest expense (15) (243) (351)
Other income (expense) 13 (534) (29)
---------- ---------- --------
Income (loss) before provision
(benefit) for income taxes 9,546 3,799 (883)
Provision (benefit) for income taxes 3,415 1,519 (353)
---------- ---------- --------
Net income (loss) $ 6,131 $ 2,280 $ (530)
========== ========== ========
Basic net income (loss) per share $ .37 $ 0.16 $ (0.05)
========== ========== ========
Diluted net income (loss) per share $ .35 $ 0.14 $ (0.05)
========== ========== ========
Weighted average number of
common shares outstanding - basic 16,758 14,459 11,245
========== ========== ========
Weighted average number of
common shares outstanding - diluted 17,654 15,818 11,245
========== ========== ========
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