Full Press Release Details
QIAGEN Provides Update on Business Outlook
Venlo, The Netherlands, July 3, 2002 - QIAGEN N.V. (Nasdaq: QGENF, Neuer Markt:
QIA) today announced an update of the Company's forecasts for its financial
performance in 2002 and 2003.
On a world-wide basis, QIAGEN's customers can be segmented into three groups.
Customers engaged in publicly funded research represent approximately 50% of
QIAGEN's revenue base, customers performing research in pharmaceutical companies
represent approximately 35% and customers in biotechnology companies represent
In terms of geographic distribution of revenues, QIAGEN records approximately
50% of its revenues from customers in the United States and approximately 50%
from customers in Europe, Japan and the rest of the world.
While QIAGEN experienced growth of 21% in the second quarter of 2002 compared to
the second quarter of 2001 from the countries outside the United States, revenue
growth for the same period inside the United States slowed significantly to 5%
from approximately 25% in the second quarter of 2001 compared to the same
quarter of 2000. This decrease in revenue growth led to a shortfall of
approximately $10 million in net sales in the second quarter of 2002 and is
primarily attributed to lower sales from customers in the pharmaceutical, and to
some extent the biotechnology industries, in the United States (together
representing approximately 25% of QIAGEN's global, consolidated revenue base).
Such customers have significantly slowed their spending in recent months, a
phenomenon which was especially evident in the second half of the second quarter
of 2002. Revenues from customers in the pharmaceutical industry in the United
States evidenced rapid growth until early in 2002, at which point they slowed
and in the second quarter of 2002 contracted to levels of net sales which were
actually below those recorded in the second quarter of 2001.
Similarly, in the second quarter of 2002 revenues from customers in the
biotechnology industry in the United States grew at rates well below revenue
growth rates from such customers recorded in both the preceding quarter and also
the same quarter of the prior year while growth in this market segment was lower
than expected, it exceeded growth in net sales from customers in the
pharmaceutical industry.
On a positive note, the academic customer segment in the United States has
recovered significantly after the release of public funding at the National
Institutes of Health in late January 2002. The academic segment is growing
faster than expected and is currently the fastest growing revenue base for
QIAGEN in the United States with growth rates of over 22% for the second quarter
of 2002 compared the same period in 2001. This compares to annualised growth
rates of under 20% recorded in previous quarters.
QIAGEN's core business, consumables for nucleic acid purification and related
applications (in total approximately world-wide 73% of net sales) continued to
post strong growth of approximately 22% in the United States for the second
quarter of 2002 compared to the second quarter of 2001. QIAGEN's sales from
instrumentation solutions and synthetic nucleic acid products have been more
significantly affected by the pharmaceutical research and development slowdown
in the United States due to their historically higher usage of such
instrumentation solutions and synthetic nucleic acid products. Sales from these
two segments decreased compared to sales recorded from such products in the same
quarter of 2001, however, in this weak market environment, QIAGEN believes that
it is gaining market share in those segments as well.
Many industry experts, as well as QIAGEN believe that there is a high
probability that spending growth in the pharmaceutical segment will again
accelerate in late 2002 or early 2003. However, for the purpose of this updated
forecast, QIAGEN is assuming that spending from customers in the pharmaceutical
industry in the United States, and to some extent biotechnology customers, will
be weak for the remainder of the year 2002 and into 2003.
As a result of the above effects, QIAGEN has changed its forecast for net sales
to the following: $73 million for the second quarter 2002 (as compared with
previous guidance of $83 million), $75 million for the third quarter 2002 (as
compared with previous guidance of $91 million) and $80 million for fourth
quarter 2002 (as compared with previous guidance of $98 million). Net sales for
the fiscal year 2002 are estimated to reach approximately $300 million. This
revised forecast is approximately 13% below the Company's previous guidance for
net sales for 2002 of $345 million and 14% above the $264 million in net sales
recorded in 2001. For the year 2003, QIAGEN expects net sales of approximately
$350 million. As mentioned before, this revised guidance assumes continued
weakness in the pharmaceutical and, to some extent, biotechnology markets.
The current forecast for fully diluted earnings per share, excluding acquisition
related charges, is $ 0.05 for the second quarter 2002, $ 0.05 for the third
quarter 2002, and $ 0.06 for the fourth quarter 2002. Fully diluted earnings per
share for the fiscal year 2002 are estimated at approximately $ 0.23. This
revised forecast compares to the Company's previous guidance for fully diluted
earnings per share for 2002 of $ 0.38. Net income for the fiscal year 2002 is
expected to be approximately flat compared to 2001, as QIAGEN's infrastructure
was expanded to prepare for higher revenue levels than actually occurred and
which now are expected to be recorded in approximately six months due to the
changed market environment. Operating expenses are forecasted to grow slower
than net sales in the third and fourth quarter of 2002. QIAGEN forecasts fully
diluted earnings per share for fiscal 2003 to be approximately $ 0.34, an
increase of 48% over fully diluted earnings per share expected in 2002. QIAGEN's
closing share price on the Nasdaq National Market of $10.02 per share recorded
prior to this announcement on July 2, represents a multiple of approximately 29
times this revised earnings per share figure expected for 2003.
QIAGEN expects to releases its complete results for the quarter ended June 30,
2002 on August 05, 2002.
"QIAGEN products are today the undisputed standard for nucleic acid handling,
separation and purification in molecular biology research, molecular diagnostics
and gene therapy," said Dr. Metin Colpan, Chief Executive Officer of QIAGEN N.V.
"We believe that QIAGEN is continuing to expand its market and technology
leadership in these areas, and that we have laid a solid foundation for growth
as our core products continue to replace traditional home-brew methods for these
applications. To date, only 20-25% of those using traditional, home-brew methods
have converted to QIAGEN products. This situation allows many future years of
sustained growth for QIAGEN. In addition, QIAGEN's new product introductions
have been well received by our customers and show significant potential due to
their innovative and well-targeted features. However, even though we believe we
are superbly positioned and have an exciting portfolio and pipeline of products,
demand from two market segments - the pharmaceutical and the biotechnology
industry segments in the United States - has slowed. We believe that this
slowdown is due to temporary factors. While there is a strong case that growth