Third Quarter Highlights
-- Overall Revenues up 48%
-- Special Stain systems help instrument revenues grow 55%
-- Operating Income increases 172%
TUCSON, Ariz., Oct. 22 /PRNewswire/ -- Ventana Medical Systems, Inc.
(Nasdaq: VMSI), the global leader in providing automated instrument-reagent
systems to histology labs, today reported strong revenue and operating income
growth for the third quarter ended September 30, 1999. Management also
reported good progress with the rollout of its new Special Stain slide
staining system.
"Third quarter revenues were up 48% compared to the same prior year
quarter reflecting strength across all product lines and geographies,"
commented Chris Gleeson, President & CEO. "Instrument revenues were up 55%
versus the prior year due to growing acceptance of our new Special Stain
system while reagent and other revenues were up 45% indicating ongoing
strength in our base business," added Gleeson.
"The quality of our third quarter results improved versus the year ago
quarter with a 172% increase in operating income to $1.5 million from $544,000
in the prior year," commented Gleeson. "We booked a large foreign currency
gain in the third quarter of 1998 which is why, despite strong operating
income growth, our diluted earnings per share of $0.11 are only up 38% versus
the year ago quarter."
Net sales for the three months ended September 30, 1999, increased to a
record $16.4 million from $11.1 million for the same period in 1998. Net
income for the third quarter was $1.5 million, up 34% from the $1.1 million
recorded in the prior year comparable quarter. Earnings per diluted share of
$0.11 increased 38% from the $0.08 per share reported in the third quarter of
1998.
Net sales for the nine months ended September 30, 1999, increased to a
record of $48.4 million from $33.0 million for the same period in 1998, a 46%
increase. Net income for the nine months ending September 30 was up 35% to
$4.4 million for 1999 compared to $3.3 million in 1998. Diluted earnings per
share of $0.31 for the first nine months of the year compares with $0.23 for
the comparable prior year period, a 35% increase.
"While balance sheet management has become an area of management focus,
our report card for the third quarter is mixed," Gleeson commented. "Our
days-receivable-outstanding (DSO) climbed to 100 days from 86 days reported at
the end of the second quarter due to the implementation of a new Oracle
management information system on July 1 that delayed the mailing of July
invoices and statements until August," added Gleeson. "However, our
collections have been strong during the first three weeks of October and we
are bringing our receivable balances back into line." Gleeson noted that
Ventana is currently free of any bank borrowings despite $1.4 million in
borrowings on September 30, that domestic receivables had declined by more
than $2.0 million since September 30, and that the Company has operated on a
slightly positive cash flow basis since June 30. "With our new Oracle system
functioning smoothly, we expect to bring our DSO's down to second quarter
levels or better when we announce fourth quarter results," Gleeson further
added. He also mentioned that Ventana had made progress in managing other
asset accounts. Days-inventory-on-hand declined to 199 days from 232 days on
June 30, a $901,000 reduction.
Ventana also noted that it was making sound progress with the rollout of
its new Special Stains system. "Our strong instrument sales results for the
third quarter were in part due to a number of customers on our deferred
purchase program for the Special Stains system. Customers on the program are
allowed free limited use of the system while contracting to buy a specific
amount of reagents. A large number of those program customers have developed
strong confidence with the system's performance, resulting in increased system
sales," commented Gleeson. "We believe our Special Stains system will, over
time, enjoy the same level of success as our flagship immunohistochemistry
systems."
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 the
expected results. The risks and uncertainties that may affect the results of
the company's business may include general economic conditions, market
acceptance of new automated histology products, continued success in asset
management and other factors that are described in the company's specific
filings with the Securities and Exchange Commission.
Ventana develops, manufactures and markets instrument/reagent 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.
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."
Ventana Medical Systems, Inc.
Consolidated Statements of Operations
(in thousands except per share data)
(Unaudited)
Three Months Ended:
September 30 '99/'98
1999 1998 % Change
Sales:
Instruments $4,733 $3,047 55%
Reagents and other 11,679 8,061 45%
Total net sales 16,412 11,108 48%
Cost of goods sold 5,148 3,303 56%
Gross profit 11,264 7,805 44%
Operating expenses:
Research and development 1,696 1,435 18%
Selling, general and administrative 7,829 5,699 37%
Nonrecurring expenses -- -- --
Amortization of intangibles 256 128 100%
Income from operations 1,483 543 173%
Other income 44 594 -93%
Pretax income $1,527 $1,137 34%
Provision for income tax -- -- --
Net income $1,527 $1,137 34%
Basic earnings per share $0.11 $0.09 22%
Diluted earnings per share $0.11 $0.08 38%
Ventana Medical Systems, Inc.
Consolidated Statements of Operations
(in thousands except per share data)
(Unaudited)
Nine Months Ended:
September 30 '99/'98
1999 1998 % Change
Sales:
Instruments $14,579 $10,469 39%
Reagents and other 33,780 22,576 50%
Total net sales 48,359 33,045 46%
Cost of goods sold 14,901 10,233 46%
Gross profit 33,458 22,812 47%
Operating expenses:
Research and development 5,232 4,026 30%
Selling, general and administrative 23,104 16,220 42%
Nonrecurring expenses -- -- 0%
Amortization of intangibles 767 382 101%
Income from operations 4,355 2,184 99%
Other income 46 1,066 -96%
Pretax income $4,401 $3,250 35%
Provision for income tax -- -- 0%
Net income $4,401 $3,250 35%
Basic earnings per share $0.33 $0.24 36%
Diluted earnings per share $0.30 $0.22 37%
Ventana Medical Systems, Inc.
Consolidated Balance Sheet
(in thousands except share data)
September December Inc/(Dec)
ASSETS 30, 1999 31, 1998 $ Amt %
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $971 $2,424 (1,453) -60%
Accounts receivable 18,060 16,531 1,529 9%
Inventories 11,261 11,009 252 2%
Prepaid expenses 1,124 645 479 74%
Other current assets 1,452 1,142 310 27%
Total current assets 32,868 31,751 1,117 4%
Property and equipment, net 15,692 9,937 5,755 58%
Intangibles, net 14,332 14,592 (260) -2%
Total assets $62,892 $56,280 $6,612 12%
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $3,029 $3,536 (507) -14%
Other current liabilities 6,326 5,053 1,273 25%
Total current liabilities 9,355 8,589 766 9%
Long term debt 1,764 1,907 (143) -7%
Stockholders' equity:
Common stock - $.001 par value;
50,000,000 shares authorized;
13,568,631 and 13,421,819
shares issued and outstanding
at September 30, 1999 and
December 31, 1998, respectively 13 13 -- 0%
Additional Paid-In Capital 80,209 78,716 1,493 2%
Accumulated deficit (27,751) (32,152) 4,401 -14%
Cumulative foreign currency
translation adjustment (98) (193) 95 -49%
Treasury stock - 40,000 shares,
at cost (600) (600) -- 0%
Total stockholders' equity 51,773 45,784 5,989 13%
Total liabilities and
stockholders' equity $62,892 $56,280 $6,612 12%
Note: The consolidated balance sheet at December 31, 1998 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
1999 1998
Operating activities:
Net income $4,401 $3,250
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 2,769 1,990
Changes in operating assets and liabilities, net (3,157) (6,301)
Net cash provided by operating activities 4,013 (1,061)
Investing activities:
Purchase of property and equipment, net (7,718) (2,113)
Purchase of intangible assets, net (546) --
Net cash used in investing activities (8,264) (2,113)
Financing activities:
Issuance of debt 1,400 1,835
Issuance of stock 1,493 --
Net cash provided by financing activities 2,893 1,835
Effect of exchange rate change on cash (95) (288)
Net (decrease) increase in cash and cash
equivalents (1,453) (1,627)
Cash and cash equivalents, beginning of period 2,424 18,902
Cash and cash equivalents, end of period $971 $17,275
SOURCE Ventana Medical Systems, Inc.
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CONTACT:
Christopher Gleeson, President and Chief
Executive Officer of Ventana Medical Systems, Inc., 520-887-2155;
or Analysts, Kathy Brunson, or Media, Joyce Hanson, 312-266-7800,
both of The Financial Relations Board for Ventana Medical
Systems, Inc.
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