Second-Quarter Revenues Grow 14% to Record Levels;
Outlook Confirmed for 2001
TUCSON, Ariz., July 20 /PRNewswire/ -- 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
$21.3 million for the quarter ending June 30, 2001 -- a 14% increase over the
second quarter of 2000 and a 19% increase over that same quarter after
adjusting for the discontinuation of the electron microscopy product line in
2000 and the impact of lower foreign exchange rates in 2001. Net income for
the second quarter was $15,000 compared with a net loss of $22.9 million for
the same period in 2000. For the second quarter, diluted earnings per share
was $0.00, compared with a $1.52 loss per share in the second quarter of 2000.
SECOND-QUARTER 2001
"Our second-quarter revenues were the best in Ventana's history and
provide further evidence that the Company is executing against our growth
objectives," commented Christopher Gleeson, Ventana's President and Chief
Executive Officer. "Reagent revenues grew 28% versus last year's second
quarter and 12% on a sequential basis from first-quarter 2001 after adjusting
for foreign exchange. The reagent growth was fueled by the customer's on-
going enthusiastic response to our new systems and expanded reagent product
line. We are also satisfied by our return to profitability while
significantly increasing our investment in research and development and the
sales and marketing organizations."
R&D investment increased 11% versus second-quarter 2000 and 32% after
excluding the impact of last year's one-time charge. This increase was driven
by the Company's commitment to developing additional systems in the histology
area and molecular discovery businesses. Investment in the sales and
marketing organizations accounted for the 12% increase in selling, general and
administrative expenses versus the adjusted 2000 spending levels.
During the quarter, the Company released the first slide-based Human
Papillomarvirus (HPV) ASR product for detecting high- and low-risk forms of
HPV in liquid-based cytology specimens and cervical tissue biopsies. Data
presented at the International Academy of Cytology in Amsterdam last month
indicated that the Company's Food and Drug Administration-regulated slide-
based HPV ASR method showed outstanding specificity compared to current
methods.
The Company's molecular discovery business achieved several key milestones
in the second quarter. Recent announcements included a co-marketing agreement
with BD Biosciences Clontech Laboratories and GlaxoSmithKline plc's decision
to use the Discovery system in its target and drug discovery process.
The Company demonstrated continued balance sheet progress with day's sales
outstanding (DSO) at 59, compared with 65 in first quarter 2001 and 89 in
second quarter 2000. Day's sales in inventory (DSI) were 121 versus 129 in
first quarter 2001.
YEAR-TO-DATE 2001
Net sales for the six months ended June 30, 2001 increased to a record
$40.6 million from $35.8 million for the same period in 2000. The overall
13% increase was paced by 20% year-over-year reagent revenue growth. After
adjusting for discontinuation of the electron microscopy line business and the
impact of foreign exchange, net sales improved 18% over the first six months
of 2000. Gross margins improved more than 360 basis points and R&D spending
increased by 31%. The $1.1 million net loss compared with a $24.5 million net
loss in 2000. Year-to-date loss per share of $0.07 compared with a $1.71 loss
per share for the comparable period last year.
CALENDAR-YEAR 2001 OUTLOOK
Ventana confirmed the 2001 full-year guidance of revenues in a range of
$85 million to $90 million and earnings per share consistent with the current
consensus. "We are satisfied with our year-to-date momentum coming out of the
second quarter and are broadly maintaining our existing guidance for the full
year," commented Gleeson.
CONFERENCE CALL
Ventana will hold a conference call to discuss second-quarter 2001 results
and the outlook for the remainder of the year at 10:00 a.m. EDT on Friday,
July 20, 2001. 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.
For more information on Ventana Medical Systems, Inc. via facsimile at no
additional cost, Simply dial 1-800-PRO-INFO and enter the stock symbol "VMSI."
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:
June 30
2001 2000
Sales:
Reagents and other $15,143 $12,304
Instruments 6,195 6,419
Total net sales 21,338 18,723
Cost of goods sold 7,051 18,782
Gross profit (loss) 14,287 (59)
Operating expenses:
Research and development 3,850 3,461
Selling, general and administrative 10,221 14,930
Nonrecurring expenses - 4,519
Amortization of intangibles 382 391
(Loss) from operations (166) (23,360)
Other income 286 452
Pretax income (loss) 120 (22,908)
Provision for income tax 105 -
Net income (loss) $15 $(22,908)
Earnings per share $- $(1.52)
Outstanding Shares: 16,722 15,097
Ventana Medical Systems, Inc.
Consolidated Statements of Operations
(in thousands except per share data)
(Unaudited)
Six Months Ended:
June 30
2001 2000
Sales:
Reagents and other $28,907 $24,305
Instruments 11,711 11,544
Total net sales 40,618 35,849
Cost of goods sold 13,226 24,752
Gross profit 27,392 11,097
Operating expenses:
Research and development 7,156 5,445
Selling, general and administrative 20,980 22,890
Nonrecurring expenses - 4,519
Amortization of intangibles 754 669
(Loss) from operations (1,498) (22,426)
Other income 625 404
(Loss) before taxes and cumulative
effect of accounting change (873) (22,022)
Provision for income tax 239 350
(Loss) before cumulative effect of
accounting change (1,112) (22,372)
Cumulative effect of accounting
change,
net of tax - (2,154)
Net (loss) $(1,112) $(24,526)
Earnings per share $(0.07) $(1.71)
Outstanding Shares: 15,790 14,366
Ventana Medical Systems, Inc.
Consolidated Balance Sheet
(in thousands except share data)
(Unaudited)
June 30, December 31,
ASSETS 2001 2000
Current assets:
Cash and cash equivalents $25,938 $38,512
Accounts receivable 13,911 16,682
Inventories 9,397 8,100
Prepaid expenses 408 460
Deferred tax benefit, current
portion 4,817 4,817
Other current assets 422 492
Total current assets 54,893 69,063
Property and equipment, net 31,706 22,329
Intangibles, net 11,084 11,887
Other assets 2,704 2,318
Deferred tax benefit, long-term
portion 3,985 3,985
Total assets $104,372 $109,582
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $4,625 $5,943
Other current liabilities 7,422 13,143
Total current liabilities 12,047 19,086
Long-term debt 2,804 3,408
Stockholders' equity:
Common stock - $.001 par value;
50,000,000 shares
authorized; 15,975,046 and
15,444,122 shares
issued and outstanding at June
30, 2001 and
December 31, 2000, respectively 16 15
Additional paid-in capital 138,365 134,862
Accumulated deficit (47,748) (46,636)
Cumulative foreign currency
translation adjustment (512) (553)
Treasury stock - 40,000 shares, at
cost (600) (600)
Total stockholders' equity 89,521 87,088
Total liabilities and stockholders'
equity $104,372 $109,582
Ventana Medical Systems, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Six Months Ended
June
2001 2000
Operating activities:
Net (loss) $(1,112) $(24,526)
Adjustments to reconcile net income to
cash provided
by operating activities:
Cumulative effect of accounting
change - 2,154
Depreciation and amortization 3,194 2,617
Benefit from deferred taxes - 1,286
Non-cash intangibles and property
and equipment charges - 7,914
Changes in operating assets and
liabilities, net (5,790) 8,432
Net cash used in operating activities (3,708) (2,123)
Investing activities:
Purchase of property and equipment,
net (11,807) (6,279)
Purchase of intangible assets, net - (2,390)
Net cash used in investing activities (11,807) (8,669)
Financing activities:
Net proceeds from private placement - 46,847
Repayment of debt (604) (71)
Issuance of stock - net 3,504 5,610
Net cash provided by financing
activities 2,900 52,386
Effect of exchange rate change on cash 41 36
Net (decrease) increase in cash and
cash equivalents (12,574) 41,630
Cash and cash equivalents, beginning
of period 38,512 1,787
Cash and cash equivalents, end of
period $25,938 $43,417
SOURCE Ventana Medical Systems, Inc.
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Related links:
http://www.ventanadiscovery.com
CONTACT:
Christopher Gleeson, President and CEO,
+1-520-690-3557, or Nick Malden, Vice President and CFO,
+1-520-690-2794, both of Ventana Medical Systems, Inc.
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