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Zurich, Switzerland, November 3, 2005 – Tecan, a leading manufacturer of products and solutions for the biopharmaceutical and clinical diagnostic industries, today reported improved third quarter and nine months results for 2005. Consolidated nine months year-to-date sales, which include newly-acquired REMP as of July 1, 2005, reached CHF 236.6 million, an increase of 13.2% over the same period last year (CHF 209.1 million) or 15.0% in local currency. Thereof, organic growth without acquired REMP was 7.8% in Swiss Francs or 9.5% in local currency. As a result of continued efforts to improve operational efficiency, operating profit excluding the one-time closing charge of Tecan Boston showed a clear improvement, reaching CHF 17.0 million (7.2% of sales) for the nine months, compared to CHF 8.8 million in the first half year of 2005 (6.1% of sales).
Third quarter sales reached CHF 92.2 million, an increase of 34.1% compared to CHF 68.8 million last year. Excluding the additional CHF 11.3 million sales contribution of REMP, third quarter sales of Tecan increased by 17.8% in Swiss Francs or 17.1% in local currency. Excluding the one-time cost of CHF 4.9 million for closing the LabCD program, third quarter operating profit increased by 147% to CHF 8.2 million (8.9% of sales). Operating profit as reported increased by 7.8% to CHF 3.3 million (3.6% of sales) compared to CHF 3.1 million in the third quarter of 2004 (4.5% of sales).
Commenting on the results, Thomas Bachmann, Chief Executive Officer of Tecan, remarked: “We are pleased with the initial progress we made, our results show that we are on the right track. Even by excluding the additional contribution of REMP, we posted encouraging third quarter results, with a strong increase in sales and profitability on a comparable basis with 2004. However, our efforts will continue to increase operational efficiencies, to keep the growth momentum and to further improve profitability to reach industry benchmarks.”
For the first nine months, operating profit excluding unusual items reached CHF 17.0 million (7.2% of sales) in 2005 compared to CHF 16.6 millions (7.9% of sales) in 2004. Including one-time unusual items, reported operating profit in the first nine months of 2005 amounted to CHF 12.1 million or 5.1% of sales (incl. CHF 4.9 million for closure of Tecan Boston) compared to CHF 15.0 million or 7.2% of sales in 2004 (incl. CHF 1.6 million for pension provisions). In addition to the one time restructuring charge, key factors that influenced the operating profit were exchange rate effects, product mix changes, investments in R&D projects, increased sales & marketing expenses as well as increased ongoing costs to comply with regulatory requirements.
Nine months net profit amounted to CHF 6.3 million compared to CHF 12.8 million last year. It was also influenced by a negative financial result, due to foreign currency hedging.
The effects of the REMP integration and product mix changes resulted in a gross profit margin decrease of 1.5% of sales compared with the first half year of 2005 and excluding the one time charge.
Sales by markets
In all geographical markets third quarter sales increased, led by a strong performance in North America. Nine-month sales including REMP (3 months) amounted to CHF 113.7 million in North America, an increase of 25.2%, to CHF 100.3 million in Europe, an increase of 3.4% and to CHF 17.9 million in Asia, a decrease of 10.6% (mainly in Japan). Excluding REMP, Tecan’s year-to-date sales (in local currency) in North America grew by 20.3% and 0.7% in Europe while sales in Asia declined by 12.5%.
Business news and highlights in the third quarter of 2005 include:
New International Financial Reporting Standards (IFRS)
Due to the amendments of existing International Accounting Standards (IAS) and the introduction of new International Financial Reporting Standards (IFRS) that are effective as of January 1, 2005, the previous year has been restated accordingly (see tables).
Tecan (www.tecan.com) is a leading global player in the Life Sciences supply industry specializing in the development, production, and distribution of advanced automation solutions enabling drug discovery, genomics, proteomics and diagnostics. Through its REMP subsidiary (www.remp.com), Tecan is the leading supplier of compound and sample storage, management and logistics solutions. Tecan clients are pharmaceutical and biotechnology companies, university research departments and diagnostic laboratories. Founded in Switzerland in 1980, the company has manufacturing, research and development sites in both North America and Europe and maintains a sales and service network in 52 countries. In 2004, Tecan achieved sales of CHF 286.0 million (USD 230.6 million; EUR 185.7 million) and REMP achieved sales of CHF 36.4 million. Registered shares of Tecan Group are traded on the SWX Swiss Exchange (TK: TECN / Reuters: TECZn.S / Valor: 1210019).
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