104 Instrument Modules Placed in The Quarter
TUCSON, Ariz., Oct. 22 /PRNewswire/ -- Ventana Medical Systems, Inc.
(Nasdaq: VMSI) today reported a 39% increase in sales for the quarter ended
September 30, 1998, compared to the same quarter last year. During the
quarter, 104 instrument modules were placed. The Company's sales and gross
profit growth were significant factors in the Company recording its eighth
consecutive quarterly profit, excluding one time litigation charges reported
in last year's second quarter.
Net sales for the third quarter ended September 30, 1998 increased to
$11.1 million from $8.0 million for the same period in 1997. Third quarter
net income was $1,137,000 or $.08 per diluted share compared to $113,000 or
$.01 per diluted share for the year ago quarter.
"Three positive trends in our business fundamentals underlie our strong
third quarter results," commented Hank Pietraszek, president and chief
executive officer. "Instrument placements remain strong as evidenced by our
42% increase in instrument sales. In fact, we placed 104 IHC modules directly
with customers in the third quarter compared with 74 modules during the same
prior year period. Further, our consumable usage per instrument remains
robust as evidenced by 37% growth versus prior year. Finally, our gross
margins continue to strengthen, growing by 160 basis points from last year to
slightly above 70% in the September 30th quarter." Pietraszek added, "Due to
the imminent shipment of special stains modules and the introduction of in
situ hybridization modules next year, we now refer to module placements rather
than system placements. Each module is a revenue generating placement, and
each NexES system can have up to eight modules."
Mr. Pietraszek went on to add "that the modest decline in revenues between
the second and third quarter was caused by the seasonality of the company's
European operations and the termination of its distribution arrangement with
DAKO."
Pietraszek noted that "research and development spending growth of 104% in
the third quarter, as compared to the same prior year quarter, represented
spending on a strong new product pipeline including the recently launched
special stains instrument."
Net sales for the nine-month period ended September 30, 1998 of
$33.0 million were up 47% from $22.4 million in the prior year comparable
period. Net income for the nine months of 1998 was $3,250,000, as opposed to
a loss of $1,056,000 in the comparable prior year period and diluted earnings
per share for the nine months of 1998 were $.22 per share versus a loss of
$.08 per share in the prior year 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 instrument/reagents systems
that automate tissue preparation and slide staining in histology laboratories
worldwide. Ventana's systems are important tools used in the diagnosis and
treatment of cancer and infectious diseases.
VENTANA MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(Unaudited)
Three Months Ended:
September 30,
1998 1997
Sales:
Instruments $3,047 $2,142
Reagents and other 8,061 5,872
Total net sales 11,108 8,014
Cost of goods sold 3,303 2,511
Gross profit 7,805 5,503
Operating expenses:
Research and development 1,435 702
Selling, general and administrative 5,699 4,555
Nonrecurring expenses -- --
Amortization of intangibles 128 128
Income from operations 543 118
Other income 594 (5)
Net income $1,137 $113
Basic earnings per share $.09 $.01
Diluted earnings per share $.08 $.01
VENTANA MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
(Unaudited)
Nine Months Ended:
September 30,
1998 1997
Sales:
Instruments $10,469 $6,032
Reagents and other 22,576 16,393
Total net sales 33,045 22,425
Cost of goods sold 10,233 7,992
Gross profit 22,812 14,433
Operating expenses:
Research and development 4,026 2,145
Selling, general and administrative 16,220 11,563
Nonrecurring expenses -- 1,656
Amortization of intangibles 382 382
Income from operations 2,184 (1,313)
Other income 1,066 257
Net income $3,250 $(1,056)
Basic earnings (loss) per share $.24 $(.08)
Diluted earnings (loss) per share $.22 $(.08)
VENTANA MEDICAL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands except share data)
September 30, December 31,
ASSETS 1998 1997
(Unaudited) (Note)
Current assets:
Cash and cash equivalents $17,275 $18,902
Accounts receivable 11,581 8,047
Inventories 8,157 5,134
Other current assets 3,073 2,109
Total current assets 40,086 34,192
Property and equipment, net 6,901 6,105
Intangibles, net 7,637 8,055
Total assets $54,624 $48,352
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $2,374 $2,584
Other current liabilities 3,224 2,894
Total current liabilities 5,598 5,478
Long term debt 1,826 471
Stockholders' equity:
Common stock - $0.001 par value; 50,000,000
shares authorized; 13,368,526 and 13,247,226
shares issued and outstanding at September 30,
1998 and December 31, 1997, respectively 13 13
Additional Paid-In Capital 78,148 76,313
Accumulated deficit (30,532) (33,782)
Cumulative foreign currency
translation adjustment (429) (141)
Total stockholders' equity 47,200 42,403
Total liabilities and stockholders' equity $54,624 $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)
Nine Months Ended:
September 30,
1998 1997
Operating activities:
Net income $3,250 $(1,056)
Adjustments to reconcile net income (loss)
to cash used in operating activities:
Depreciation and amortization 1,990 1,505
Changes in operating assets and
liabilities, net (6,301) (2,258)
Net cash provided by (used in)
operating activities (1,061) (1,809)
Investing activities:
Purchase of property and equipment, net (2,113) (3,142)
Purchase of intangible assets -- (43)
Net cash used in investing activities (2,113) (3,185)
Financing activities:
Issuance (repayment) of debt (including
amounts from related parties) and stock 1,835 (10,321)
Net proceeds from public offering -- 26,138
Net cash provided by financing activities 1,835 15,817
Effect of exchange rate change on cash (288) 47
Net increase in cash and cash equivalents (1,627) 10,870
Cash and cash equivalents,
beginning of period 18,902 11,067
Cash and cash equivalents, end of period $17,275 $21,937
SOURCE Ventana Medical Systems, Inc.
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CONTACT:
Henry T. Pietraszek, President and Chief
Executive Officer of Ventana Medical Systems, Inc., 520-887-2155;
or Bill Murphy, General Inquiries, or Kathy Brunson, Analyst
Contact, or Darcy Bretz, Media Inquiries, 312-266-7800, all of
the Financial Relations Board for Ventana Medical Systems, Inc.
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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