TUCSON, Ariz., July 23 /PRNewswire/ -- Ventana Medical Systems, Inc.
(Nasdaq: VMSI) today reported record revenues and net income for the second
quarter ended June 30, 1998. Net income in the second quarter of $1,302,000
was significantly better than the $1,378,000 net loss recorded in the same
period of the prior year. The prior year loss included a non-recurring
expense of $1.7 million from a patent infringement award.
Revenues for the quarter ended June 30, 1998 were $11.6 million and
represented a 55% increase over revenues in the comparable year ago period.
Instrument revenues of $3.8 million in the second quarter of 1998 represented
a 99% increase over the prior year period. Consumable revenues of
$7.8 million in the second quarter were up 40% from the year earlier period.
Basic and diluted earnings per share in the second quarter were $.10 and $.09
respectively, compared with a basic and diluted net loss per share of $.11 in
the prior year second quarter.
"The reported results for the second quarter further point to the success
of our strategies for automating the IHC market worldwide and increasing our
consumable usage per instrument in our installed base," commented Hank
Pietraszek, President and Chief Executive Officer. "Worldwide placements in
the quarter of 124 instruments were up 46% over the 85 instruments placed in
the second quarter of last year and brought our installed base to 1,434
instruments. More importantly, placements excluding TechMate instrument
shipments to our former European distributor, DAKO, increased 102% from 54 in
the second quarter of 1997 to 109 in the most recent quarter. The recent
termination of the distribution agreement with DAKO makes this comparison more
relevant," Pietraszek commented.
Pietraszek further commented, "Gross margins in the second quarter of
70% were significantly higher than the 63% recorded in the same quarter of the
prior year due to better instrument margins from the NexES IHC module in the
quarter than we generated from the ES last year and due to volume-related
manufacturing efficiencies. Our instrument and consumable revenue growth
rates in the second quarter of 1998 as compared to 1997 accelerated from the
comparable growth rates in the first quarter."
Pietraszek added: "Research and development spending growth of 95% in the
second quarter, as compared to the same prior year quarter, is a measure of
the company's commitment to new product development, with spending focused in
the short term on the soon to be launched special stains and in situ
hybridization modules to the NexES system."
Revenues for the six-month period ended June 30, 1998 of $21.9 million
were up 52% from $14.4 million reported last year. Net income for the six-
month period of $2.1 million was up significantly from the net loss of
$1.2 million reported last year. In addition, diluted and basic earnings per
share were $.14 and $.16 respectively in the six-month period ended June 30,
1998, up from the diluted and basic net loss per share of $.09 reported for
the same year ago period.
Safe Harbor Statement: Statements in this press release which are not
strictly historical are "forward-looking" statements that are made pursuant to
the Safe Harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements involve known and unknown risks, which may
cause the company's actual results in the future to differ materially from
expected results. The risks and uncertainties that may affect the results of
the company's business are described in the company's specific filings with
the Securities and Exchange Commission.
Ventana develops, manufactures and markets proprietary instrument/reagent
systems that automate immunohistochemistry ("IHC") and in situ hybridization
("ISH") tests for the analysis of cells and tissues on microscope slides.
These tests are important tools used in the diagnosis and treatment of cancer.
VENTANA MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(Unaudited)
Three Months Ended:
June 30,
1998 1997
Sales:
Instruments $3,827 $1,919
Reagents and other 7,755 5,534
Total net sales 11,582 7,453
Cost of goods sold 3,477 2,780
Gross profit 8,105 4,673
Operating expenses:
Research and development 1,391 714
Selling, general and
administrative 5,547 3,630
Nonrecurring expenses -- 1,656
Amortization of intangibles 127 127
Income from operations 1,040 (1,454)
Other income 262 76
Net income $1,302 $(1,378)
Basic earnings per share $.10 $(.11)
Diluted earnings per share $.09 $(.11)
VENTANA MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(Unaudited)
Six Months Ended:
June 30,
1998 1997
Sales:
Instruments $7,422 $3,890
Reagents and other 14,515 10,521
Total net sales 21,937 14,411
Cost of goods sold 6,930 5,481
Gross profit 15,007 8,930
Operating expenses:
Research and development 2,591 1,443
Selling, general and
administrative 10,521 7,008
Nonrecurring expenses -- 1,656
Amortization of intangibles 254 254
Income from operations 1,641 (1,431)
Other income 472 262
Net income $2,113 $(1,169)
Basic earnings per share $.16 $(.09)
Diluted earnings per share $.14 $(.09)
VENTANA MEDICAL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands except share data)
June 30, December 31,
ASSETS 1998 1997
(Unaudited) (Note)
Current assets:
Cash and cash equivalents $19,178 $18,902
Accounts receivable 10,696 8,047
Inventories 7,141 5,134
Other current assets 1,781 2,109
Total current assets 38,796 34,192
Property and equipment, net 6,635 6,105
Intangibles, net 7,776 8,055
Total assets $53,207 $48,352
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $2,637 $2,584
Other current liabilities 2,765 2,894
Total current liabilities 5,402 5,478
Long term debt 1,817 471
Stockholders' equity:
Common stock - $0.001 par value;
50,000,000 shares authorized;
13,333,356 and 13,247,226 shares
issued and outstanding at June 30,
1998 and December 31, 1997,
respectively 13 13
Additional Paid-In Capital 77,821 76,313
Accumulated deficit (31,669) (33,782)
Cumulative foreign currency
translation adjustment (177) (141)
Total stockholders' equity 45,988 42,403
Total liabilities, preferred stock,
and stockholders' equity $53,207 $48,352
Note: The consolidated balance sheet at December 31, 1997 has been
derived from the audited financial statements at that date but does not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
VENTANA MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Six Months Ended:
June 30,
1998 1997
Operating activities:
Net income $2,113 $(1,169)
Adjustments to reconcile net loss
to cash used in operating
activities:
Depreciation and amortization 1,189 793
Changes in operating assets
and liabilities, net (3,325) 826
Net cash provided by
operating activities (23) 450
Investing activities:
Purchase of property and
equipment, net (1,173) (1,651)
Purchase of intangible
assets -- (44)
Net cash provided by
(used in ) investing
activities (1,173) (1,695)
Financing activities:
Issuance (repayment) of
debt (including amounts from
related parties) and stock 1,508 (10,397)
Net proceeds from
public offering -- 26,138
Net cash provided by
financing activities 1,508 15,741
Effect of exchange rate
change on cash (36) 55
Net increase in cash and
cash equivalents 276 14,551
Cash and cash equivalents,
beginning of period 18,902 11,067
Cash and cash equivalents,
end of period $19,178 $25,618
SOURCE Ventana Medical Systems, Inc.
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CONTACT:
Henry T. Pietraszek, President and Chief
Executive Officer of Ventana Medical Systems, 520-887-2155; or
Bill Murphy, General Inquiries, Kathy Brunson, Analyst Contact,
or Bess Gallanis, Media Inquiries, 312-266-7800, all of The
Financial Relations Board
NOTE TO EDITORS: For more information on Ventana Medical Systems,
Inc. via facsimile at no additional cost, simply dial
1-800-PRO-INFO and enter the company code 273.
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