QIAGEN Reports Fourth Quarter and Full-Year 2012 Results

           QIAGEN Reports Fourth Quarter and Full-Year 2012 Results

PR Newswire

VENLO, The Netherlands, January 29, 2013

VENLO, The Netherlands, January 29, 2013 /PRNewswire/ --

  oQIAGEN exceeds Q4 and full-year 2012 targets:

  oFull-year 2012: Net sales advance 10% CER (+7% reported) to $1.25 billion
    on growth in all customer classes and regions; adjusted diluted EPS at
    $1.08 per share

  oQ4 2012: Net sales rise 4% CER (+4% reported) to $346.5 million, year-ago
    results included major product tender; adjusted diluted EPS at $0.34 per
    share

  oBuilding on 2012 progress to accelerate innovation and growth in 2013:

  oDriving platform success: Rapid adoption of QIAsymphony automation
    platform set to exceed an installed base of 1,000 systems during 2013

  oSample-to-result next-generation sequencing workflow for clinical research
    and diagnostics on track for 2013 launch

  oAdding content: Over 35 molecular diagnostic assay projects in pipeline;
    exceeding targets for conversion to FDA-approvedtherascreenKRAS
    companion diagnostic

  oGrowing efficiently and effectively: Adjusted operating income margin at
    28% of net sales for full-year 2012, reaches 31% in Q4 2012

  oQIAGEN expects to deliver higher sales and adjusted earnings in 2013

QIAGEN N.V. (NASDAQ: QGEN; Frankfurt Prime Standard: QIA) announced results of
operations for the fourth quarter and full-year 2012, delivering growth in net
sales and adjusted earnings that exceeded targets, and set new goals for
improved sales and adjusted earnings in 2013.

"QIAGEN made significant progress during 2012 on initiatives to drive
innovation and growth. These actions fueled demand for our products across all
of our customer classes and regions, enabling us to exceed our targets for
2012 and deliver double-digit sales growth at constant exchange rates and
adjusted earnings at a faster pace than in 2011," said Peer M. Schatz, Chief
Executive Officer of QIAGEN N.V. "Results for the fourth quarter of 2012 also
exceeded our targets, as we delivered solid growth over the year-ago quarter,
which included sales from a major product tender."

"Although the business environment remains challenging, our strategy is
demonstrating traction and we have set a goal to further improve sales and
adjusted earnings in 2013," Mr. Schatz said. "Multiple growth drivers are
building momentum as we move into 2013. We intend to add to our leadership in
Personalized Healthcare by further expanding our position as the partner of
choice for molecular companion diagnostics as well as by building our assay
portfolio and driving adoption. Growing placements of our QIAsymphony
automation platform are enabling the dissemination of molecular testing, while
our QuantiFERON-TB test is improving the standard of care for latent
tuberculosis (TB). Innovation goals for 2013 include our entry into targeted
areas of next-generation sequencing with workflow solutions for clinical
research and human healthcare, as well as advancing our R&D pipeline of more
than 35 molecular diagnostic assay projects. We will also step up initiatives
to improve efficiency and effectiveness, especially our capabilities to
address the needs of customers. We are well-positioned to achieve our goals
for 2013 and fulfill our mission of making improvements in life possible."

Full-year 2012 results

                                                                    Change
    In $ millions, except per share
    information                                 FY 2012  FY 2011        $  CER
    Net sales                                   1,254.5  1,169.7       7%  10%
    Operating income, adjusted                    356.4    319.6      12%
    Net income, adjusted                          260.7    234.4      11%
    Diluted EPS, adjusted                        $ 1.08   $ 0.98
 
    For information on the adjusted figures, please refer to the
    reconciliation table accompanying this release.
    Adjusted net income and adjusted diluted EPS results represent amounts
    attributable to the owners of QIAGEN N.V.

Net sales advanced at a double-digit pace in constant exchange rates (+10%
CER) in 2012, driven by business expansion in all customer classes -
particularly Molecular Diagnostics and Applied Testing - and all geographic
regions. Contributions from the acquisitions of Ipsogen (acquired in July
2011), Cellestis (acquired in August 2011) and AmniSure (acquired in May 2012)
provided six percentage points of total CER growth, and the rest of the QIAGEN
portfolio provided four percentage points. Currency movements had a negative
impact of three percentage points on reported sales growth.

Operating income rose to $169.8 million in 2012 from the year-ago level of
$99.6 million. Adjusted operating income, which excludes items such as
restructuring and acquisition-related costs, share-based compensation and
amortization of intangible assets, rose 12% to $356.4 million from $319.6
million in 2011. The adjusted operating income margin rose to 28% of net sales
in 2012 from 27% a year earlier, as general and administrative and R&D
investments were lower as a percentage of net sales, and the adjusted gross
margin remained steady at 71% compared to 2011.

Net income attributable to owners of QIAGEN N.V. rose to $129.5 million in
2012 from $96.0 million in 2011, while diluted EPS was $0.54 (based on 240.7
million diluted shares) compared to $0.40 (239.1 million diluted shares).
Adjusted net income attributable to owners of QIAGEN N.V. grew 11% to $260.7
million in 2012 from $234.4 million in 2011, as adjusted diluted EPS rose to
$1.08 from $0.98.

Cash and cash equivalents at December 31, 2012, rose to $394.0 million from
$221.1 million at December 31, 2011. Net cash provided by operating activities
in 2012 included cash restructuring payments, and was unchanged at $245
million compared to 2011. Net cash used in investing activities was $301
million (including cash payments of $132 million for acquisitions), down from
$540 million in 2011. Net cash provided by financing activities was $226
million in 2012 compared to cash used in financing activities of $311 million
in 2011.

"Amid challenging business conditions, QIAGEN has reallocated resources and
established a solid foundation to create enhanced, sustainable growth and
value for shareholders," said Roland Sackers, Chief Financial Officer of
QIAGEN N.V. "We delivered on our sales targets and improved the adjusted
operating income margin, reaching 31% in the fourth quarter. We also further
strengthened our healthy financial position in 2012 through a U.S. private
debt placement on very favorable terms, while also showing a commitment to
shareholders with the launch of a $100 million share repurchase program."

Fourth quarter 2012 results

                                                                    Change
    In $ millions, except per share
    information                                  Q4 2012  Q4 2011       $ CER
    Net sales                                      346.5    334.4      4%  4%
    Operating income, adjusted                     106.0     95.6     11%
    Net income, adjusted                            82.8     73.6     13%
    Diluted EPS, adjusted                         $ 0.34   $ 0.31
    For information on the adjusted figures, please refer to the
    reconciliation table accompanying this release.
    Adjusted net income and adjusted diluted EPS results represent
    amounts attributable to the owners of QIAGEN N.V.

The Molecular Diagnostics and Applied Testing customer classes led the growth
in the fourth quarter of 2012, with net sales up 4% CER against a tough
comparison from results in the 2011 quarter that included a major product
tender. Very strong sales from AmniSure (acquired in May 2012) provided about
two percentage points of CER growth, while the rest of the portfolio
contributed about two percentage points. Excluding the impact of the year-ago
product tender, underlying organic growth was approximately 4% CER. Currency
movements did not have an impact on reported sales growth.

Operating income amounted to $48.9 million in the fourth quarter of 2012
compared to a year-ago quarterly loss of $19.6 million, which included a
restructuring charge for a productivity project. Adjusted operating income,
which excludes items such as restructuring and acquisition-related costs,
share-based compensation and amortization of intangible assets, grew 11% to
$106.0 million from $95.6 million in the fourth quarter of 2011. The adjusted
operating income margin rose to 31% of net sales from 29% in the year-ago
period.

Net income attributable to owners of QIAGEN N.V. amounted to $38.4 million in
the fourth quarter of 2012 compared to a loss of $0.4 million in the year-ago
period. Diluted EPS was $0.16 (based on 241.8 million diluted shares) compared
to $0.00 in the year-ago period (236.7 million diluted shares). Adjusted net
income attributable to owners of QIAGEN N.V. rose 13% to $82.8 million from
$73.6 million in the 2011 quarter, as adjusted diluted EPS was $0.34 in the
fourth quarter of 2012 compared to $0.31 in the year-ago period.

Reconciliations of reported results in accordance with U.S. generally accepted
accounting principles (GAAP) to adjusted results are included in the tables
accompanying this release.

Business review

Geographic regions

The Asia-Pacific / Japan region (+15% CER, 19% of sales) grew at a robust pace
in 2012 on improving demand in China, Japan and top emerging markets such as
India and Korea. Results in the Europe / Middle East / Africa region (+9% CER,
34% of sales) advanced on higher sales in northern European countries and
growth in all customer classes. The Americas (+8% CER, 46% of sales) rose on
higher contributions from Molecular Diagnostics and Applied Testing, more than
offsetting lower revenues in the region from products related to HPV testing.

Product categories

Consumables and related revenues (+10% CER, 86% of sales) rose across all
customer classes in 2012, led by double-digit growth in Molecular Diagnostics
and Applied Testing. In the fourth quarter of 2012, consumables and related
revenues faced a challenging comparison due to the major product tender in the
2011 quarter, rising 4% CER and representing 85% of net sales.

Instrument sales (+11% CER, 14% of sales) benefited during 2012 from demand
for a broad range of QIAGEN instruments. QIAGEN surpassed its 2012 goal for
more than 200 new placements of the QIAsymphony automation platform, exceeding
an installed base of more than 750 platforms since launch in 2008.
Approximately 70% of total QIAsymphony placements as of the end of 2012 have
been with Molecular Diagnostics customers, primarily through reagent rental
agreements where revenues are recognized over a multiyear period. Demand also
has been strong among Applied Testing customers. For the fourth quarter of
2012, instrument sales rose 7% CER and represented 15% of net sales.

Customer classes

An overview of performance in QIAGEN's four customer classes (based on total
sales results including organic growth and acquisitions at CER):

Molecular Diagnostics (2012: +15% CER, 49% of sales) advanced at a
double-digit CER pace in 2012, driven by new products and solid demand for
instruments from the QIAGEN portfolio, particularly the QIAsymphony automation
platform. In Prevention, the QuantiFERON-TB test (acquired with Cellestis in
2011) achieved more than 20% CER pro forma growth in 2012 on initiatives in
the U.S. and Europe to drive greater use of this new "gold standard" test for
latent tuberculosis (TB). Full-year 2012 sales of products used in HPV testing
(16% of sales, -8% CER) performed in line with expectations, as slightly
higher volumes in the U.S. were more than offset by pricing pressure from the
implementation of multiyear customer agreements. Personalized Healthcare
delivered ongoing strong double-digit CER growth on global demand for the
therascreen portfolio of companion diagnostic kits - particularly the KRAS
test launched in mid-2012 after FDA approval for use in metastatic colorectal
cancer patients - as well as higher revenues from co-development projects with
pharmaceutical companies. In Point of Need, the AmniSure assay for premature
rupture of fetal membranes in pregnant women provided important contributions
after its acquisition in May 2012. In the fourth quarter of 2012, net sales
rose 6% CER and represented 52% of sales, more than absorbing the impact of
lower HPV sales in the U.S. and the year-ago delivery of a major product
tender.

Applied Testing (2012: +22% CER, 8% of sales) delivered double-digit growth on
strong demand for consumables used in human identification / forensics,
veterinary medicine and food safety. Instrument sales also advanced at a
double-digit CER rate in 2012, particularly following the early 2012 software
launch enabling customers to use many of these assays on the QIAsymphony
automation platform. In the fourth quarter of 2012, Applied Testing rose 16%
CER over the same period in 2011 and represented 7% of sales.

Pharma (2012: +5% CER, 19% of sales) had higher sales in Europe and the
Asia-Pacific / Japan regions in 2012 on demand for instruments and the
GeneGlobe portfolio of molecular pathway analysis products. However, growth
rates were slower in the second half of the year as restructuring activities
at some pharmaceutical companies impacted results. In the fourth quarter of
2012, Pharma rose 1% CER over the 2011 quarter and represented 18% of sales.

Academia (2012: +1% CER, 24% of sales) achieved modest growth in 2012 as
single-digit CER growth in consumables more than offset weaker instrument
sales. Concerns about future U.S. and European government funding for life
sciences research prompted very cautious spending patterns among some
customers in the U.S. and Europe during the year. In the fourth quarter of
2012, Academia sales were flat (+0% CER) compared to the same period in 2011
and represented 23% of sales. Funding uncertainties in these regions are
expected to continue in 2013.

Accelerating innovation and growth in 2013

QIAGEN is committed to accelerating the pace of innovation and growth in 2013
and building on the progress of strategic initiatives during 2012 to leverage
its leadership in Sample & Assay Technologies across all customer classes.
These goals for 2013 focus on accelerating organic and strategic growth by
continuing to drive platform success, add test content for use in all customer
classes and broaden QIAGEN's geographic presence. Additional goals have been
set to deliver efficiency and effectiveness through optimized resource
allocation, improve QIAGEN's position as an employer of choice and to enhance
customer experience, including through the launch of a new QIAGEN Internet
site in 2013.

Drive platform success

A key element of QIAGEN's growth strategy is securing placements around the
world of the QIAsymphony automation platform, the industry's first modular
sample-to-result system that can process commercial assays as well as a broad
range of laboratory-developed tests. In 2012, QIAGEN exceeded its goal of
reaching an installed base of more than 750 QIAsymphony platforms, building on
the year-end 2011 level of more than 550 platforms. QIAGEN anticipates
continued strong demand for this platform, and is targeting for the installed
base to rise above 1,000 platforms during 2013.

QIAGEN also advanced a strategy in 2012 to create integrated next-generation
sequencing (NGS) workflows that combine innovative instrumentation and
consumables. Products slated for introduction in 2013 include automation for
primary sample-to-result processing of NGS runs. The platform strategy also
includes a breakthrough next-generation benchtop sequencer, now in an advanced
stage of development, as well as new bioinformatics aimed at accelerating NGS
analysis time for higher sample throughput levels. QIAGEN's ambition is to
make next-generation sequencing, now limited mostly to life science research,
a routine and cost-effective tool used in clinical research and healthcare.
During the fourth quarter of 2012, QIAGEN launched its first group of NGS
products that simplify sample preparation and save hands-on time in the
pre-analytical phase, and also eight cancer gene panels for targeted NGS
analysis based on its GeneGlobe portfolio of more than 60,000 molecular
assays.

Add content

A major priority for accelerating growth is adding novel content for use on
instruments in QIAGEN's portfolio, particularly on instruments in the
QIAsymphony platform family. Platforms and consumables, together, drive
growth. Expanding the menu of tests available for a QIAGEN instrument enhances
the value of that platform to laboratories, and increasing the installed base
of an automated system leads to more sales of the test kits.

Building on four major regulatory approvals in 2012, more than 35 new assay
development projects are under way in Molecular Diagnostics for use on the
Rotor-Gene Q and QIAsymphony automation platform. These projects span
applications ranging from blood-borne diseases to women's health, and are a
combination of internal R&D initiatives and external collaboration projects.
QIAGEN also has a deep pipeline of assays in development for use in other
customer classes, particularly Applied Testing.

The U.S. launch of the therascreen KRAS RGQ PCR Kit, which provides guidance
on the use of Erbitux^® (cetuximab) as a treatment in patients with metastatic
colorectal cancer, achieved good early momentum following regulatory approval
in July 2012. Leading U.S. laboratories covering approximately half of the
current KRAS testing volumes in the U.S. have already adopted QIAGEN's KRAS
test, which in many cases has replaced laboratory-developed tests (LDTs).

A second Personalized Healthcare product, the therascreen^® EGFR RGQ PCR Kit,
was submitted in late 2012 to the U.S. Food and Drug Administration (FDA) for
regulatory approval (pre-marketing approval, or PMA) and use in certain types
of lung cancer patients. The EGFR assay is proposed to guide treatment with
afatinib, an investigational oncology compound developed by Boehringer
Ingelheim that was granted FDA priority review status in January 2013 (target
action date in the third quarter of 2013). Other submissions in the U.S. and
Europe are expected to emerge from more than 15 projects that QIAGEN has under
way to co-develop and market companion diagnostics with leading pharmaceutical
and biotech companies. In October, QIAGEN announced a new collaboration with
Bayer HealthCare covering projects in oncology based on a range of existing
and new biomarkers in the QIAGEN portfolio.

Broaden geographic presence

A key growth driver is QIAGEN's expansion in attractive markets around the
world. The top seven emerging markets of Brazil, Russia, India, China, South
Korea, Mexico and Turkey represented 12% of net sales and rose 12% CER in 2012
compared to 2011, and sales were up more than 20% CER when excluding the major
product tender in 2011. QIAGEN expects these top emerging markets to deliver
ongoing double-digit sales growth in 2013.

Grow efficiently and effectively

QIAGEN has implemented several operational improvements during 2012 that are
creating positive changes in its culture since a company-wide project was
launched in November 2011 to enhance productivity and free up resources for
reallocation to growth initiatives. Through creation of the Molecular
Diagnostics and Life Sciences business areas, as well as the integration of
regional marketing activities with sales teams, decision-making has been moved
closer to customers. Integration of R&D activities into the two business areas
also has focused innovation on high-growth markets. Actions are also under way
to optimize capacity utilization at selected sites and capture savings from
shared service functions and outsourcing. QIAGEN expects to implement further
project proposals during 2013 that are designed to improve efficiency and
effectiveness, and these projects could result in additional restructuring
charges.

Strengthening senior leadership team

Dr. Tadd S. Lazarus, a long-time practitioner in infectious diseases with a
wealth of experience in developing clinical diagnostics, has joined QIAGEN as
Chief Medical Officer and will lead a team of medical officers with extensive
industry experience. Dr. Lazarus will be responsible for QIAGEN's overall
medical strategy, including the evaluation and advancement of the diagnostic
assay portfolio as well as the clinical evaluation of new diagnostic tests. He
joins QIAGEN from Gen-Probe Incorporated, where he was Chief Medical Officer
and Vice President of Clinical Affairs. Dr. Lazarus will be based at QIAGEN's
site in Germantown, Maryland, and report to Dr. Helge Lubenow, Senior Vice
President, Head of Business Area Molecular Diagnostics and Member of QIAGEN's
Executive Committee. He will assume direct responsibility for QIAGEN's
diagnostic portfolio in the areas of infectious disease, including sexually
transmitted infections, as well as for women's health, and relationship
building with key opinion leaders.

Progress on $100 million share repurchase program

QIAGEN launched a program launched in October 2012 to purchase up to $100
million of shares (excluding ancillary costs). As of January 25, 2013,
approximately $57 million of the program was completed with the repurchase of
about 3.1 million shares on the Frankfurt Stock Exchange and on NASDAQ at a
volume-weighted average price of EUR 14.11 and $18.84, respectively. QIAGEN
has previously announced a goal to complete the program by March 28, 2013.
Repurchased shares will be held in treasury in order to satisfy various
obligations for exchangeable debt instruments and/or employee share-based
remuneration plans. Information on the progress of the program is available in
the Investor Relations section of QIAGEN's website at http://www.qiagen.com.

2013 outlook

QIAGEN expects to deliver higher net sales and adjusted earnings in 2013,
building on the strong performance in 2012. For the full year, total net sales
are expected to rise about 5-6% CER on a mix of contributions from organic
growth of the business portfolio and from AmniSure (treated as acquisition
until May 2013). Adjusted diluted earnings per share (EPS) are expected to
rise to approximately $1.16-1.18 for full-year 2013. This guidance takes into
account dilution of approximately $0.02-0.03 per share from the net impact of
the new U.S. medical device tax and higher interest expenses incurred through
the U.S. private placement in October 2012 partially offset by effects of the
share repurchase program. These expectations do not take into account
potential sequestration actions in the U.S., which could lead to further
reductions in government funding for life sciences research. Also excluded are
any acquisitions that could be completed in 2013.

Conference call and webcast details

Information on QIAGEN's performance will be presented during a conference call
on Wednesday, January 30, 2013, at 9:30 ET / 14:30 GMT / 15:30 CET. The
corresponding presentation slides will be available for download shortly
before the event at http://www.qiagen.com/goto/ConferenceCall, and a webcast
will be available at this website. A replay will also be made available on
this website.

Use of adjusted results

QIAGEN has regularly reported adjusted results, as well as results considered
on a constant exchange rate basis, to give additional insight into its
financial performance. These adjusted results include adjusted gross profit,
adjusted operating income, adjusted net income attributable to owners of
QIAGEN N.V. and adjusted diluted EPS. Adjusted results are non-GAAP financial
measures that QIAGEN believes should be considered in addition to the reported
results prepared in accordance with generally accepted accounting principles,
but should not be considered as a substitute. QIAGEN believes certain items
should be excluded from adjusted results when they are outside of its ongoing
core operations, vary significantly from period to period, or affect the
comparability of results with its competitors and its own prior periods.
Reconciliations of reported results to adjusted results are included in the
tables accompanying this release.

Tables with detailed financial information can be downloaded in PDF format
from: http://bit.ly/VnxEgD

QIAGEN N.V., a Netherlands holding company, is the leading global provider
ofSample& AssayTechnologies that are used to transform biological materials
into valuable molecular information. Sample technologies are used to isolate
and process DNA, RNA and proteins from biological samples such as blood or
tissue. Assay technologies arethen used to make these isolated biomolecules
visible and ready for interpretation. QIAGENmarkets more than 500
productsaround the world, selling both consumable kits and automation systems
to customers through four customer classes: Molecular Diagnostics (human
healthcare), Applied Testing (forensics, veterinary testing and food safety),
Pharma (pharmaceutical and biotechnology companies) and Academia (life
sciences research).As of December 31, 2012, QIAGEN employed approximately
4,000 people in over 35 locations worldwide. Further information can be found
at http://www.qiagen.com/.

Certain of the statements contained in this news release may be considered
forward-looking statements within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities
Exchange Act of 1934, as amended. To the extent that any of the statements
contained herein relating to QIAGEN's products, markets, strategy or operating
results, including without limitation its expected operating results, new
product developments, new product launches, regulatory submissions, and
financing plans are forward-looking, such statements are based on current
expectations and assumptions that involve a number of uncertainties and risks.
Such uncertainties and risks include, but are not limited to, risks associated
with management of growth and international operations (including the effects
of currency fluctuations, regulatory processes and dependence on logistics),
variability of operating results and allocations between customer classes, the
commercial development of markets for our products in applied testing,
personalized healthcare, clinical research, proteomics, women's health/HPV
testing and nucleic acid-based molecular diagnostics; changing relationships
with customers, suppliers and strategic partners; competition; rapid or
unexpected changes in technologies; fluctuations in demand for QIAGEN's
products (including fluctuations due to general economic conditions, the level
and timing of customers' funding, budgets and other factors); our ability to
obtain regulatory approval of our products; difficulties in successfully
adapting QIAGEN's products to integrated solutions and producing such
products; the ability of QIAGEN to identify and develop new products and to
differentiate and protect our products from competitors' products; market
acceptance of QIAGEN's new products, the consummation of acquisitions, and the
integration of acquired technologies and businesses. For further information,
please refer to the discussions in reports that QIAGEN has filed with, or
furnished to, the U.S. Securities and Exchange Commission (SEC).

Contacts:

Public Relations:

Dr. Thomas Theuringer
Director Public Relations
+49-2103-29-11826
+1-240-686-7425
Email: pr@qiagen.com

http://www.twitter.com/qiagen

http://www.qiagen.com/about/press

Investor Relations:

John Gilardi
VP Corporate Communications
+49-2103-29-11711
+1-240-686-2222

Peter Vozzo
Director, Global Investor Relations
+1-240-686-7400
Email: ir@qiagen.com

http://www.qiagen.com/about/investorrelation

SOURCE Qiagen N.V.
 
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