Company Meets Revenue and EPS Expectations; Achieves 47% Revenue Growth in Q4
And 23% for 2001
TUCSON, Ariz., Feb. 8 /PRNewswire-FirstCall/ -- Ventana Medical Systems,
Inc. (Nasdaq: VMSI), a leading supplier of automated instrument reagent
systems to histology and drug discovery labs worldwide, today reported sales
of $25.5 million for the quarter ending December 31, 2001, a 47% increase over
the fourth quarter of 2000. Net income for the fourth quarter was $2.3 million
compared with a net loss of $2.5 million for the same period in 2000. For the
fourth quarter, diluted earnings per share were $0.14, compared with a $0.17
loss per share in the fourth quarter of 2000.
FOURTH-QUARTER 2001
"Our fourth-quarter revenues set another record for Ventana and provide
further evidence that we are strongly executing against our growth
objectives," commented Christopher Gleeson, Ventana's President and Chief
Executive Officer. "Instrument and reagent revenues grew 82% and 34%,
respectively, versus last year's fourth quarter. Instrument revenue was up
sharply on the broadening market success of the revolutionary BenchMark system
with its baking through staining (BTS) technology. Reagent growth was fueled
by our customers' on-going enthusiastic response to our expanded reagent
product line, particularly our new ISH probes, which are fully automated on
our BenchMark platform. We are also pleased that we were able to grow our
profits while significantly increasing our investments in R&D and the sales
and marketing organizations."
Gross margin was 69% in the quarter. R&D investment increased 21% versus
fourth-quarter 2000. This increase was driven by the Company's aggressive new
platform development programs for the anatomical pathology market and its
reagent chemistry application initiatives for both the histology and molecular
discovery businesses. Investment in the sales and marketing organizations
increased by 7% versus fourth-quarter 2000.
The Company demonstrated continued balance sheet progress with day's sales
outstanding (DSO) at 73, compared with 87 in the fourth-quarter 2000. Day's
sales in inventory (DSI) were 135 versus 126 in fourth-quarter 2000 and 146 in
third-quarter 2001.
The Company successfully completed the relocation of all manufacturing and
commercial operations to its new facility in November, thereby consolidating
operations previously located across seven sites in the Tucson area.
FY 2001
Net sales for the year ended December 31, 2001 increased to a record
$87.8 million from $71.1 million for the same period in 2000. The overall 23%
increase was paced by 27% year-over-year growth in reagent revenues. After
adjusting for discontinuation of the electron microscopy line business, net
sales improved 27% over 2000. Gross margin for the year was 69% and R&D
spending increased by 34%.
The Company reported $1.4 million in net income, or $0.09 per share,
compared with a $27.3 million net loss and a $1.85 loss per share for the same
period in 2000.
"We are very pleased with our momentum coming out of 2001. We have
successfully returned the company to profitability and expect 2002 to reflect
strong revenue growth and continued improvement in our bottom line as we begin
leveraging the investment we have made in R&D and commercial infrastructure,"
commented Gleeson.
The Company's BenchMark system won a medical design excellence award in
2001 and is the only system in the world to offer fully automated BTS
technology for both IHC and ISH testing. The commercial value of the BenchMark
system grew further in 2001 through the introduction of seven new automated
probe assays. Among these were the fully automated Inform Her2 neu gene test
and the world's only slide-based HPV test for tissue- and liquid-based
methods. "Customer acceptance of the BenchMark has exceeded our expectations
and we are pleased with the selection of the system by several top cancer
institutes," said Gleeson.
A commercial collaboration with CloneTech and GlaxoSmithkline's selection
of the Discovery instrument for gene expression profiling and proteomics
testing were highlights of the Molecular Discovery business in 2001 and with
several new detection systems due for launch in the first-quarter of 2002,
Ventana expects to be able to further grow this targeted research tools
business during the year.
CALENDAR YEAR 2002 OUTLOOK
Ventana confirmed the guidance for 2002 it gave in its October 19, 2001
conference call. "We expect continued revenue growth and substantial
profitability gains in 2002," noted Gleeson. "We expect to see sales growth of
approximately 20% over 2001 numbers, gross margins above 70%, and net income
at around 6% to 8% of sales. R&D spending in 2002 will be between 15% and 16%
of sales, well above our longer-term target of 10% to 12% of sales, but below
the 17% seen in 2001. We continue to see this higher level of spending in the
near term as a prudent investment in the exciting growth opportunities the
Company has in both clinical chemistry and drug discovery labs."
CONFERENCE CALL
Ventana will hold a conference call to discuss fourth-quarter 2001 results
and the outlook for 2002 at 10:00 a.m. EST on Friday, February 8, 2002. The
call can be accessed live and will be available for replay over the Internet
via http://www.vcall.com .
Ventana develops, manufactures and markets instrument/reagent systems that
automate tissue preparation and slide staining in clinical histology and drug
discovery laboratories worldwide. Ventana's clinical systems are important
tools used in the diagnosis and treatment of cancer and infectious diseases.
Ventana's drug discovery systems are used to accelerate the discovery of new
drug targets and evaluate the safety of new drug compounds.
This news release contains certain "forward-looking" statements and
information within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements, by their very nature, include risks and uncertainties.
Accordingly, the company's actual results could differ materially from those
discussed in this release. A wide variety of factors could cause or contribute
to such differences and could adversely impact revenues profitability, cash
flow and capital needs. Such factors, many of which are beyond the control of
the company, include the following: market acceptance of new automated
histology products, continued success in asset management, continued
improvements in our manufacturing efficiencies, on-schedule launches of our
new products, currency exchange rate variability, competition and competitive
pressures on pricing and general economic conditions in the United States and
in the regions served by the company. A more complete listing of cautionary
statements and risk factors is contained in the company's report on Form 10-K
for the year ended Dec. 31, 2000, filed with the Securities and Exchange
Commission.
Visit the Ventana Medical Systems, Inc. website at http://www.ventanamed.com
The Molecular Discovery Systems Division has its own website
at http://www.ventanadiscovery.com
Ventana Medical Systems, Inc.
Consolidated Statements of Operations
(in thousands except per share data)
(Unaudited)
Three Months Ended:
December 31
2001 2000
Sales:
Reagents and other $16,944 $12,674
Instruments 8,594 4,727
Total net sales 25,538 17,401
Cost of goods sold 7,924 5,839
Gross profit 17,614 11,562
Operating expenses:
Research and development 3,636 3,006
Selling, general and administrative 11,340 11,094
Amortization of intangibles 440 424
Income (loss) from operations 2,198 (2,962)
Other income 66 434
Pretax income (loss) 2,264 (2,528)
Provision for income tax - -
Net income (loss) $2,264 $(2,528)
Net income (loss) per common share:
_ Basic $0.14 $(0.17)
_ Diluted $0.14 $(0.17)
Outstanding Shares - basic 16,074 15,307
Outstanding Shares - diluted 16,517 15,307
Ventana Medical Systems, Inc.
Consolidated Statements of Operations
(in thousands except per share data)
(Unaudited)
Twelve Months Ended:
December 31
2001 2000
Sales:
Reagents and other $61,586 $49,682
Instruments 26,227 21,467
Total net sales 87,813 71,149
Cost of goods sold 27,622 36,377
Gross profit 60,191 34,772
Operating expenses:
Research and development 14,929 11,116
Selling, general and administrative 42,760 43,800
Amortization of intangibles 1,575 1,474
Nonrecurring expenses _ 4,519
Income (loss) from operations 927 (26,137)
Other income 826 1,346
Income (loss) before taxes and
cumulative
effect of accounting change 1,753 (24,791)
Provision for income tax 311 350
Income (loss) before cumulative
effect of accounting change 1,442 (25,141)
Cumulative effect of accounting
change, net of tax _ (2,154)
Net income (loss) $1,442 $(27,295)
Net income (loss) per common share:
_ Basic $0.09 $(1.85)
_ Diluted $0.09 $(1.85)
Outstanding Shares - basic 15,905 14,770
Outstanding Shares - diluted 16,427 14,770
Ventana Medical Systems, Inc.
Consolidated Balance Sheet
(in thousands except share data)
(Unaudited)
December 31,
ASSETS 2001 2000
Current assets:
Cash and cash equivalents $12,280 $38,512
Accounts receivable 20,448 16,682
Inventories 11,763 8,100
Prepaid expenses 520 460
Deferred tax benefit, current
portion 4,817 4,817
Other current assets 752 492
Total current assets 50,580 69,063
Property and equipment, net 41,432 22,329
Intangibles, net 11,982 11,887
Other assets 3,006 2,318
Deferred tax benefit, long-term
portion 3,985 3,985
Total assets $110,985 $109,582
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $4,733 $5,943
Other current liabilities 9,578 13,143
Total current liabilities 14,311 19,086
Long-term debt 2,521 3,408
Stockholders' equity:
Common stock - $.001 par value;
50,000,000 shares authorized;
16,110,466 and 15,444,122 shares
issued and outstanding at
December 31, 2001 and
December 31, 2000, respectively 16 15
Additional paid-in capital 140,587 134,862
Accumulated deficit (45,194) (46,636)
Cumulative foreign currency
translation adjustment (656) (553)
Treasury stock - 40,000 shares, at
cost (600) (600)
Total stockholders' equity 94,153 87,088
Total liabilities and stockholders'
equity $110,985 $109,582
Ventana Medical Systems, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Twelve Months Ended
December 31,
2001 2000
Operating activities:
Net income (loss) $1,442 $(27,295)
Adjustments to reconcile net income
(loss) to cash provided
by (used in) operating activities:
Cumulative effect of accounting
change - 2,154
Depreciation and amortization 6,807 5,497
Benefit from deferred taxes - (1,255)
Non-cash intangibles and property
and equipment charges - 7,914
Changes in operating assets and
liabilities, net (13,212) 14,743
Net cash (used in) provided by
operating activities (4,963) 1,758
Investing activities:
Purchase of property and equipment,
net (24,335) (15,150)
Purchase of intangible assets, net (1,670) (3,708)
Net cash used in investing activities (26,005) (18,858)
Financing activities:
Net proceeds from private placement - 46,847
(Repayment) borrowings of debt (887) 1,364
Issuance of stock - net 5,726 6,052
Net cash provided by financing
activities 4,839 54,263
Effect of exchange rate change on cash (103) (438)
Net (decrease) increase in cash and
cash equivalents (26,232) 36,725
Cash and cash equivalents, beginning
of period 38,512 1,787
Cash and cash equivalents, end of
period $12,280 $38,512
SOURCE Ventana Medical Systems, Inc.
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Related links:
http://www.ventanadiscovery.com
http://www.ventanamed.com
CONTACT:
Christopher Gleeson, President and CEO,
+1-520-229-3787, or Nick Malden, Vice President and CFO,
+1-520-229-3857, both of Ventana Medical Systems
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