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Operating profit increases by 38 % to CHF 39.0 million.
Hombrechtikon/Zurich, Switzerland, October 31, 2000 – TECAN, the leading global provider of laboratory automation systems for the life sciences industry, today reported worldwide sales of CHF 190.2 million for the nine months ending September 30th, 2000, compared with CHF 136,8 million in the same period in 1999, an increase of 39.0%. In local currencies, sales increased by 30%. Operating profit increased by 38.2% to CHF 39.0 million from CHF 28.2 million a year earlier, despite the fact that operating profit benefited, in 1999, from capitalized R&D costs of CHF 3.6 million. Net profit for the first nine months of the year increased by 35.7% to CHF 24.6 million (1999: CHF 18.1 million).
For the third quarter 2000, worldwide sales reached CHF 66.2 million, compared with CHF 50.4 million in the same period in 1999, an increase of 31.5%. In local currencies, sales increased by 24.8%. Net profit increased by 26.9% to CHF 9.4 million (1999: CHF 7.4 million). Third quarter results include the amortization of goodwill and other expenses resulting from acquisition of Gamera Bioscience in July 2000.
In Genomics and Proteomics, Tecan continued to post above average growth rates with sales reaching CHF 32.3 million or 17.0% of total sales, for the first nine month of the year, compared to CHF 21 million recorded for the entire year 1999. This excellent performance was led by strong demand for Tecan’s fully automated high throughput systems to prepare and extract DNA and in functional Genomics for the discovery and scoring of genome variations (SNP Single Nucleotide Polymorphism). In September 2000, Tecan had announced the conclusion of a non-exclusive agreement with Orchid Biosciences Inc., under which Tecan will supply Orchid with its state-of-the-art systems solutions for DNA processing.
Drug discovery sales reached CHF 85.0 million or 44.7% of total sales due to continued strong demand in the United States, the UK, Japan and Germany.
Diagnostics sales amounted to CHF 72.9 million or 38.3% of total sales led by a strong performance in Europe and the United States. Less than two months after launch, sales of the Genesis FE 500 workcell, developed by Tecan and co-marketed with US-based Abbott, have developed well, considering the complexity of installing the workcell in widely-differing laboratory environments. Reactions from leading laboratories in the United States and Europe, which have been the first to order the workcell, are very positive. Impressed by the performance of the workcell, customers praised the Genesis FE 500 for its ease of installation and set up, short training time, broad instruments specifications and user-friendliness above the usual standards of laboratory instruments.
“We are pleased with our performance for the first nine months, which are above our initial financial objectives for the year,” said Emile Sutcliffe, CEO of the TECAN Group. “Our successful entry in the field of genomics / proteomics as well as strong demand for our drug discovery and diagnostics products is the basis for continued growth in sales and profits. As we move ahead, our intention is to continue our strategic move towards delivering innovative and high-value-added products and services for the life sciences industry.”
All geographical markets posted significant sales growth. In America, sales accounted for 48.3% of company sales during the first nine months of the year, reaching CHF 91.9 million (1999: CHF 63.3m), up 45.2% in Swiss Francs or 29.5% in local currencies. This was due to a solid performance in the field of Genomics and drug discovery.
Representing 44.0% of total sales, European sales reached CHF 83.8 million during the first nine months of the year (1999: CHF 64.3m), a 30.2% increase over last year (30.4% in local currencies). Asia, representing 7.7% of total sales, posted a gain of 58.0% (or 29.7% in local currencies) to CHF 14.6 million (1999: CHF 9.2m).
Tecan’s gross profit margin for the first nine months stayed at a high level of 68.0% compared with 68.3% a year earlier. Gross R&D expenses for the first nine months represented CHF 19.4 million or 10.2% of total sales (1999: CHF 19.7m or 14.4% of sales).
Operating profit increased by 38.2% to CHF 39.0 million or 20.5% of sales during the first nine months (1999: CHF 28.2m or 20.6% of sales), despite the fact that 1999 operating profit benefited from capitalized R&D costs in the amount of CHF 3.6 million. Included in the operating expenses are the amortization of goodwill from the acquisition of Gamera Bioscience in July 2000 and the amortization of capitalized R&D costs with a total amount of CHF 1.7 million in the first nine months.
The net financial result (CHF - 0.7 million) was slightly negative during the period, due to the impact of currency losses from operative hedge transactions caused by the further strengthening of the dollar versus the Swiss Franc. The good operating results in high tax countries explains the overall income tax rate of 35% (1999: 34%) which could only partly be offset by tax benefits effected by the implementation of the Swiss holding company.
Net profit reached for the first nine month CHF 24.6 million, up 35.7% or 12.9% of sales (1999: CHF 18.1m or 13.2% of sales).
Tecan anticipates significant sales growth also in the fourth quarter, which has traditionally been a strong quarter for the company. For the full year 2000, the company expects financial results to be in line with the performance achieved so far.