Exhibit 99.1
DADE BEHRING INC. | Tel: +1 (847) 267-5300 |
1717 Deerfield Road | Fax: +1 (847) 267-1699 |
P.O. Box 778 |
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Deerfield, IL 60015-0778 |
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Contact: Nancy Krejsa 1 (847) 267-5483
DADE BEHRING REPORTS 42 PERCENT EARNINGS PER SHARE GROWTH
ON 8 PERCENT REVENUE GROWTH IN SECOND QUARTER 2007
Company repurchases $122 million of common stock
Deerfield, IL (July 25, 2007) ¾ Dade Behring Holdings, Inc. (NASDAQ:DADE) today reported second quarter earnings per share of $0.61, an increase of 18 cents or 42 percent over the same quarter in 2006, and also reported revenue of $481 million, an increase of 8.2 percent. On a constant currency basis1, second quarter 2007 revenue grew 5.2 percent. Earnings per share for the six months ended June 2007 of $1.08 increased $0.27 or 33 percent over the similar period in 2006, and six-month revenue increased 9.3 percent to $940 million, representing 6.1 percent growth on a constant currency basis.
“Our strong financial performance is directly related to our people and their ability to consistently execute our customer excellence business strategy,” said Jim Reid-Anderson, Chairman, President and CEO, Dade Behring. “We are highly focused on providing world-class products and service to our 25,000 clinical laboratory customers around the globe.”
Cash flow from operations, after investing activities and excess tax benefits from stock-based compensation, was $56 million and $106 million for the quarter and six months ended June 30, 2007, respectively. Cash earnings per share2 for the second quarter was
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$0.97 as compared to $0.68 in the second quarter of 2006, and was $1.83 for the first six months of 2007 as compared to $1.31 for the same period in 2006.
The company’s worldwide installed base of instruments was 41,400 as of June 30, 2007, an increase of 5.5 percent over the period ended June 30, 2006. During the second quarter, the company completed the bi-annual review of its installed base and removed approximately 400 units from the data base, which negatively impacted the second quarter installed base growth rate by approximately 1.0 percent.
During the quarter, the company repurchased $122 million of its common stock, and during the first six months of the year it repurchased $179 million of its shares. Since the inception of its share repurchase plan in the third quarter of 2005, the company has repurchased $583 million or 15 percent of the outstanding shares. As of June 30, 2007, 0.6 million shares remain authorized for repurchase under the current program.
In the second quarter, the company recorded a $3.1 million tax benefit related to a reduction in the company’s reserve for uncertain tax positions, which favorably impacted earnings per share by $0.04.
Operational Highlights
· U.S. revenue grew 5.8 percent and 6.9 percent over the second quarter and first six months of 2006, respectively. Revenue outside of the United States grew 4.8 percent and 5.6 percent for the similar periods on a constant currency basis.
· Global core-product reagent, service and operating lease revenue grew 3.8 percent in the second quarter and 5.4 percent for the first six months of the year, on a constant currency basis.
· Operating income, as a percent of sales, was 16.8 percent and 16.3 percent for the quarter and six months ended June 30, 2007.
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Second Quarter 2007 Announcements
During the second quarter, Dade Behring introduced the QCC PowerPak™ Package—a performance enhancement tool for the Dimension® systems that adds new automated features, allowing more “hands-off” time for clinical laboratory personnel.
Dade Behring also announced the signing of a three-year agreement with Novation, the healthcare contracting services company of VHA Inc. and the University HealthSystem Consortium (UHC). The agreement provides Novation’s 2,500 alliance members with continued access to Dade Behring’s entire portfolio of chemistry products.
In addition, Premier Inc. healthcare alliance recognized Dade Behring for the second consecutive year with the prestigious Pinnacle Award for supplier performance that meets and exceeds the expectations of Premier and its members.
Conference Call Cancelled
In light of the announcement today by Dade Behring and Siemens, of the companies’ definitive agreement for Siemens to acquire Dade Behring for $77.00 per share in cash, Dade Behring has cancelled its scheduled earnings conference call.
About Dade Behring
With 2006 revenue of more than $1.7 billion, Dade Behring is the world’s largest company solely dedicated to clinical diagnostics. It offers a wide range of products, systems and services designed to meet the day-to-day needs of clinical laboratories, delivering innovative solutions to customers and enhancing the quality of life for patients. Additional company information is available on the Internet at www.dadebehring.com.
This press release may contain “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward statements include information regarding the intent, belief or current expectation of the company and members of its senior management team, including, without limitation, expectations regarding prospective performance and opportunities and the outlook for the company’s businesses, performance, opportunities and regulatory approval. In addition, the company is in the process of a major new product launch, which involves risks and uncertainties regarding product performance, costs of introduction and support, and customer acceptance. Investors are cautioned that any
such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by the company.
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1. “Constant currency” is not a U.S. GAAP defined measure. The Company believes this measure provides a meaningful analysis of the underlying activity, since it eliminates the effect of changes in foreign currency exchange rates. Changes on a constant currency basis have been calculated by comparing reported current year amounts to prior year amounts in local currency translated at the foreign currency exchange rates for the current year. “Constant currency,” as defined or presented by the Company, may not be comparable to similarly titled measures reported by other companies.
2. “Cash earnings per share” is not a U.S. GAAP defined measure. The Company believes this measure provides meaningful profitability metrics, given current accumulated tax loss carryforwards and the net depreciation/amortization impacts relating to the revaluation of assets during the Company’s 2002 restructuring.
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Dade Behring Holdings, Inc.
Revenue By Product Line
and Region (unaudited)
(Dollars in millions)
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| Quarter Ended June 30, |
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| % Change |
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| On a Constant |
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Product Line |
| 2007 |
| 2006 |
| Reported |
| Currency Basis* |
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Core Products |
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Core Chemistry |
| $ | 314.4 |
| $ | 295.1 |
| 6.6 | % | 3.9 | % |
Hemostasis |
| 91.0 |
| 79.9 |
| 13.9 | % | 9.3 | % | ||
Microbiology |
| 44.4 |
| 41.2 |
| 7.8 | % | 7.5 | % | ||
Infectious Disease Diagnostics |
| 23.6 |
| 21.8 |
| 7.9 | % | 1.8 | % | ||
Total Core Products |
| 473.4 |
| 438.0 |
| 8.1 | % | 5.1 | % | ||
Non-Core Products |
| 7.4 |
| 6.5 |
| 14.6 | % | 9.5 | % | ||
Total |
| $ | 480.8 |
| $ | 444.5 |
| 8.2 | % | 5.2 | % |
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Region |
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United States |
| $ | 215.9 |
| $ | 204.1 |
| 5.8 | % | 5.8 | % |
Non-U.S. |
| 264.9 |
| 240.4 |
| 10.2 | % | 4.8 | % | ||
Total |
| $ | 480.8 |
| $ | 444.5 |
| 8.2 | % | 5.2 | % |
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| Six-Months Ended June 30, |
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| % Change |
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| On a Constant |
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Product Line |
| 2007 |
| 2006 |
| Reported |
| Currency Basis* |
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Core Products |
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Core Chemistry |
| $ | 614.7 |
| $ | 570.1 |
| 7.8 | % | 5.0 | % |
Hemostasis |
| 178.7 |
| 156.8 |
| 14.0 | % | 9.3 | % | ||
Microbiology |
| 85.9 |
| 77.3 |
| 11.2 | % | 10.6 | % | ||
Infectious Disease Diagnostics |
| 46.0 |
| 43.1 |
| 6.8 | % | 0.3 | % | ||
Total Core Products |
| 925.3 |
| 847.3 |
| 9.2 | % | 6.1 | % | ||
Non-Core Products |
| 14.7 |
| 12.9 |
| 13.3 | % | 8.5 | % | ||
Total |
| $ | 940.0 |
| $ | 860.2 |
| 9.3 | % | 6.1 | % |
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Region |
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United States |
| $ | 426.9 |
| $ | 399.4 |
| 6.9 | % | 6.9 | % |
Non-U.S. |
| 513.1 |
| 460.8 |
| 11.3 | % | 5.6 | % | ||
Total |
| $ | 940.0 |
| $ | 860.2 |
| 9.3 | % | 6.1 | % |
* “Constant currency” is not a U.S. GAAP defined measure. The company believes this measure provides a meaningful analysis of the underlying activity, since it eliminates the effect of changes in foreign currency exchange rates. The change in sales on a constant currency basis has been calculated by comparing reported current year sales to prior year sales in local currency translated at the foreign currency exchange rates for the current year. “Constant currency,” as defined or presented by the company, may not be comparable to similarly titled measures reported by other companies.
Dade Behring Holdings, Inc.
Consolidated Balance Sheets (unaudited)
|
| June 30, |
| December 31, |
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(Dollars in millions, except share-related data) |
| 2007 |
| 2006 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
| $ | 51.6 |
| $ | 24.4 |
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Accounts receivable, net |
| 390.9 |
| 359.5 |
| ||
Inventories |
| 234.6 |
| 189.7 |
| ||
Prepaid expenses and other current assets |
| 16.9 |
| 23.2 |
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Deferred income taxes |
| 91.1 |
| 115.9 |
| ||
Total current assets |
| 785.1 |
| 712.7 |
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Property, plant and equipment, net |
| 493.2 |
| 488.5 |
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Deferred income taxes |
| 148.9 |
| 138.6 |
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Intangible assets, net |
| 325.3 |
| 339.0 |
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Goodwill |
| 168.6 |
| 169.6 |
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Other assets |
| 30.3 |
| 27.0 |
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Total assets |
| $ | 1,951.4 |
| $ | 1,875.4 |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Short-term debt |
| $ | 5.3 |
| $ | 14.8 |
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Accounts payable |
| 83.3 |
| 78.9 |
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Accrued liabilities |
| 280.7 |
| 273.6 |
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Total current liabilities |
| 369.3 |
| 367.3 |
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Long-term debt |
| 595.0 |
| 495.0 |
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Deferred income taxes |
| 32.4 |
| 33.5 |
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Other liabilities |
| 189.4 |
| 170.4 |
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Total liabilities |
| 1,186.1 |
| 1,066.2 |
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Commitments and contingencies |
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Shareholders’ equity: |
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Common stock: $.01 par value; 150,000,000 shares authorized at June 30, 2007 and December 31, 2006, respectively; 80,153,423 and 82,860,364 shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively |
| 0.8 |
| 0.8 |
| ||
Additional paid-in capital |
| 335.5 |
| 475.0 |
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Retained earnings |
| 381.3 |
| 299.1 |
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Accumulated other comprehensive income |
| 47.7 |
| 34.3 |
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Total shareholders’ equity |
| 765.3 |
| 809.2 |
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Total liabilities and shareholders’ equity |
| $ | 1,951.4 |
| $ | 1,875.4 |
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Dade Behring Holdings, Inc.
Consolidated Statements of Operations (unaudited)
|
| Quarter Ended June 30, |
| Six-Months Ended June 30, |
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(Dollars in millions, except per share data) |
| 2007 |
| 2006 |
| 2007 |
| 2006 |
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Net sales |
| $ | 480.8 |
| $ | 444.5 |
| $ | 940.0 |
| $ | 860.2 |
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Cost of goods sold |
| 215.3 |
| 198.3 |
| 423.2 |
| 381.4 |
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Gross profit |
| 265.5 |
| 246.2 |
| 516.8 |
| 478.8 |
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Operating costs and expenses: |
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Marketing and administrative expenses |
| 146.2 |
| 141.2 |
| 287.6 |
| 278.4 |
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Research and development expenses |
| 39.1 |
| 41.1 |
| 77.4 |
| 78.5 |
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Restructuring expense (income) |
| (0.5 | ) | — |
| (1.0 | ) | — |
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Income from operations |
| 80.7 |
| 63.9 |
| 152.8 |
| 121.9 |
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Other income (expense): |
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Interest expense |
| (9.8 | ) | (5.7 | ) | (19.1 | ) | (12.1 | ) |
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Interest income |
| 1.7 |
| 1.4 |
| 2.9 |
| 2.5 |
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Foreign exchange (loss) gain |
| (1.0 | ) | (1.7 | ) | (2.1 | ) | 0.3 |
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Other |
| 0.1 |
| (0.1 | ) | (1.9 | ) | (0.4 | ) |
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Income before income tax expense |
| 71.7 |
| 57.8 |
| 132.6 |
| 112.2 |
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Income tax expense |
| 21.4 |
| 20.2 |
| 42.2 |
| 40.4 |
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Net income |
| $ | 50.3 |
| $ | 37.6 |
| $ | 90.4 |
| $ | 71.8 |
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Basic shares outstanding |
| 81.3 million |
| 86.9 million |
| 81.9 million |
| 87.3 million |
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Diluted shares outstanding |
| 83.0 million |
| 88.3 million |
| 83.4 million |
| 88.9 million |
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Basic earnings per common share |
| $ | 0.62 |
| $ | 0.43 |
| $ | 1.10 |
| $ | 0.82 |
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Diluted earnings per common share |
| $ | 0.61 |
| $ | 0.43 |
| $ | 1.08 |
| $ | 0.81 |
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Operating Cash Flow to Cash Earnings reconciliation: |
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Operating Cash Flow |
| $ | 95.1 |
| $ | 53.5 |
| $ | 177.5 |
| $ | 128.5 |
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Net changes in balance sheet items not in earnings; loss on disposal of fixed assets |
| 8.0 |
| 29.1 |
| 17.7 |
| 30.3 |
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Capital expenditures and investment in licensing agreements |
| (39.9 | ) | (39.4 | ) | (75.7 | ) | (75.6 | ) |
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Restructuring expense (income) |
| (0.5 | ) | — |
| (1.0 | ) | — |
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Income tax expense |
| 21.4 |
| 20.2 |
| 42.2 |
| 40.4 |
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Cash paid during the period for taxes |
| (3.8 | ) | (3.8 | ) | (8.2 | ) | (6.6 | ) |
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Cash Earnings (*) |
| $ | 80.3 |
| $ | 59.6 |
| $ | 152.5 |
| $ | 117.0 |
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Net income to Cash Earnings reconciliation: |
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Net income |
| $ | 50.3 |
| $ | 37.6 |
| $ | 90.4 |
| $ | 71.8 |
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Depreciation and amortization (including amortization of debt issuance costs) |
| 46.7 |
| 40.0 |
| 92.5 |
| 77.0 |
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Capital expenditures and investment in licensing agreements |
| (39.9 | ) | (39.4 | ) | (75.7 | ) | (75.6 | ) |
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Stock-based compensation expense |
| 6.1 |
| 5.0 |
| 12.3 |
| 10.0 |
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Restructuring expense (income) |
| (0.5 | ) | — |
| (1.0 | ) | — |
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Income tax expense |
| 21.4 |
| 20.2 |
| 42.2 |
| 40.4 |
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Cash paid during the period for taxes |
| (3.8 | ) | (3.8 | ) | (8.2 | ) | (6.6 | ) |
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Cash Earnings (*) |
| $ | 80.3 |
| $ | 59.6 |
| $ | 152.5 |
| $ | 117.0 |
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(*) “Cash earnings” is not a U.S. GAAP defined measure. The company believes this measure provides meaningful profitability metrics, given current accumulated tax loss carryforwards and the net depreciation/amortization impacts relating to the revaluation of assets during the company’s 2002 restructuring.
Dade Behring Holdings, Inc.
Consolidated Statements of Cash Flows (unaudited)
|
| Six-Months Ended |
| Six-Months Ended |
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(Dollars in millions) |
| June 30, 2007 |
| June 30, 2006 |
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Operating Activities: |
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Net income |
| $ | 90.4 |
| $ | 71.8 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization expense |
| 92.5 |
| 77.0 |
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Net loss on disposal of fixed assets |
| 1.5 |
| 2.6 |
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Stock-based compensation expense |
| 12.3 |
| 10.0 |
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Restructuring reserves |
| (1.0 | ) | — |
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Deferred income taxes |
| 30.8 |
| 16.8 |
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Changes in balance sheet items |
| (49.0 | ) | (49.7 | ) |
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Net cash flow provided by operating activities |
| 177.5 |
| 128.5 |
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Investing Activities: |
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Capital expenditures |
| (74.3 | ) | (75.0 | ) |
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Investment in licensing agreements |
| (1.4 | ) | (0.6 | ) |
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Net cash flow utilized for investing activities |
| (75.7 | ) | (75.6 | ) |
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Financing Activities: |
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Net borrowings (repayments) related to short-term debt |
| (9.6 | ) | 3.6 |
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Borrowings under revolving credit facility |
| 179.9 |
| 323.7 |
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Repayments of borrowings under revolving credit facility |
| (79.9 | ) | (291.1 | ) |
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Payment of debt issuance costs |
| (0.9 | ) | — |
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Proceeds from exercise of stock options |
| 12.9 |
| 11.4 |
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Proceeds from employee stock purchase plan |
| 5.0 |
| 5.2 |
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Excess tax benefits from stock-based compensation |
| 3.9 |
| 12.9 |
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Repurchases of common stock |
| (178.8 | ) | (121.8 | ) |
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Dividends paid |
| (8.2 | ) | (8.7 | ) |
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Net cash flow utilized for financing activities |
| (75.7 | ) | (64.8 | ) |
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Effect of foreign exchange rates on cash |
| 1.1 |
| 0.7 |
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Net increase (decrease) in cash and cash equivalents |
| 27.2 |
| (11.2 | ) |
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Cash and Cash Equivalents: |
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Beginning of Period |
| 24.4 |
| 34.6 |
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End of Period |
| $ | 51.6 |
| $ | 23.4 |
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