Current | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000

Applied Biosystems Reports Second Quarter Fiscal 2002 Earnings Per Share of 24 Cents Excluding In-Process R&D Charge

Foster City, CA - January 23, 2002

Applied Biosystems Group (NYSE: ABI), an Applera Corporation business, today reported that earnings per share in the second quarter of fiscal 2002, ended December 31, 2001, were $0.24 per diluted share, excluding a one cent per diluted share non-recurring charge for acquired in-process research and development related to the acquisition of Boston Probes, Inc. during the quarter. Earnings per share in the second quarter of fiscal 2001 were $0.25 per diluted share, excluding a gain of one cent per diluted share from the sale of investments. All per share amounts refer to per share of Applera Corporation-Applied Biosystems Group Common Stock.

Net income in the second quarter of fiscal 2002, excluding non-recurring items, was $51.2 million compared to $56.0 million in the comparable period last year. Operating income in the second quarter of fiscal 2002, excluding non-recurring items, was $68.1 million compared to $76.3 million in the year-earlier quarter. The effects of foreign currency had a negligible impact on year-over-year comparisons of operations.

Net revenues for the Group for the second quarter of fiscal 2002 were $411.1 million compared to $411.0 million in the comparable quarter a year ago. Revenues from instrument sales were $199.7 million, 4 percent lower than a year ago. Revenues from sales of consumables were $150.1 million, unchanged from the level a year ago, while revenues from other sources, including service contracts, royalties, licenses, and contract research, increased 16 percent to $61.3 million from $53.0 million in the same period last year.

Gross margin in the second quarter of fiscal 2002 was 52.2 percent, compared to 51.8 percent in the same period a year ago. The improvement in gross margin was due primarily to product mix and price increases in certain product lines. Research, development, and engineering expenditures in the second quarter of fiscal 2002 increased 26 percent to $52.7 million from $42.0 million a year ago to support a range of R&D initiatives, including the Applied Biosystems portion of the Applera genomics initiative. Research, development, and engineering expenditures as a percentage of sales were 12.8 percent compared to 10.2 percent last year.

For the first six months of fiscal 2002, the Group reported net revenues of $777.7 million compared to $774.6 million in the same period in the prior year. Earnings per diluted share in the first six months of fiscal 2002 were $0.39 compared to $0.44 in the same period last year, excluding non-recurring items in both periods. Excluding non-recurring items, six month net income was $83.4 million compared to $97.4 million in the previous year period and operating income was $111.2 million compared to $134.2 million.

“Applied Biosystems revenues during the second fiscal quarter were a bit softer than we expected,” said Tony L. White, Chief Executive Officer of Applera. “We are in an unusually challenging period. The economic outlook is uncertain, weak capital market conditions have hurt spending by some of our biotechnology customers, and the late passage of the National Institutes of Health’s fiscal 2002 budget is disrupting the normal pattern of sales to government labs. Additionally, we are transitioning to a new era where the emphasis is changing from generating genomic information in ‘Big Biology’ projects such as the sequencing of the human genome to applying that information to specific areas of biomedical research and drug discovery. We believe Applied Biosystems is well positioned for this evolution of our markets, but the change is a factor in difficult year-over-year comparisons. We continue to invest aggressively in R&D spending to support our customers’ needs, and although a higher than usual degree of uncertainty remains, we continue to expect that revenue growth will resume in the June quarter.”

Michael W. Hunkapiller, Ph.D., President, Applied Biosystems, said, “Spending by global pharmaceutical companies remains generally healthy, but biotechnology customers continue to tighten capital spending. Recently introduced Sequence Detection Systems (SDS) for gene expression and single nucleotide polymorphism (SNP) analysis helped the SDS instruments category grow by more than 70 percent over the year-earlier quarter. Revenues from mass spectrometry systems increased approximately 25 percent, led by the new API 4000 mass spectrometer, which continues to penetrate the drug metabolism market.”

As expected, sales of the ABI PRISM® 3700 DNA Analyzer used extensively in Big Biology projects declined sharply from last year’s robust level, more than offsetting higher year-over-year revenues from the Group’s other DNA sequencers, the ABI PRISM® 3100 Genetic Analyzer and the ABI PRISM® 310 Genetic Analyzer. Sales of consumables were strong in TaqMan® reagents for gene expression and SNP analysis. DNA sequencing consumables sales declined largely due to increasing efficiencies (use of smaller sample volumes and dilution of sequencing reagents) by the large genome centers and a decrease in whole genome sequencing at Celera Genomics.

Outlook
Economic and political uncertainties continue to add risk to the business outlook, making forecasting particularly difficult. The Group currently expects diluted earnings per share for fiscal 2002 to be in the range of $0.80 to $0.90. This revised outlook on earnings per share is attributable to the Group’s continued commitment to increase spending on new product development, as well as to lower sales expectations, including the impact from negative currency effects.

Due to the greater than anticipated softness in second fiscal quarter revenues, the Group advises caution about revenues in the third fiscal quarter (March). Third quarter sales currently are expected to be flat to slightly lower than in the comparable quarter a year ago. Contributing factors include the anticipated continuation of current trends in slowed spending by certain commercial customers, expected currency effects stemming from year-to-year weakness in the Japanese yen and, to a lesser extent, the Euro, and delays in the disbursement of U.S. government funds to federal laboratories and U.S. academic grantees following the late adoption, on January 10, 2002, of the FY 2002 budget of the National Institutes of Health.

The Group expects year-on-year sales growth of approximately 10 percent during the fourth quarter of fiscal 2002 (June) and higher sales growth in the first and second quarters of fiscal 2003 (September and December). Factors contributing to the expected higher growth rates starting in the fourth quarter of fiscal 2002 include the impact of new products and spending by U.S. basic research customers as more funds are available from the 15 percent annual increase in funding for the National Institutes of Health approved in the fiscal 2002 U.S. budget.

Research, development, and engineering expenditures are expected to increase, in percentage terms, in the mid to high teens during the balance of fiscal 2002 compared to the comparable period in the prior year. Research, development, and engineering expenses include the Applied Biosystems component of Applera’s anticipated $75 million fiscal 2002 investment in the Applera genomics initiative involving Celera Genomics and Celera Diagnostics, a joint venture between Applied Biosystems and Celera Genomics. The initiative has recently been expanded to include gene validation and expression, which the Company believes will require approximately an additional $25 million investment in fiscal 2003.

The comments in the Outlook Section reflect management’s current outlook. The Company does not have any current intention to update this outlook and plans to revisit the Group’s outlook only once each quarter when financial results are released.

Conference Call & Webcast
A conference call with Applera Corporation and Applied Biosystems executives will be held January 24 at 10 a.m. (ET) with investors and media to discuss these results and management's current financial outlook for the Company. Investors, securities analysts, and representatives of the media calling from the U.S. or Canada who would like to participate should dial 800-598-1707 (code "Applera") between 9:45 and 10:00 a.m. International participants should dial (+1) 706-634-4992. This conference call will also be webcast. Interested parties who wish to listen to the webcast should visit either www.applera.com and go to the Investor Relations section of the web site or www.appliedbiosystems.com and go to the Investor Relations web page within the “About Us” section. An audio replay of the conference call is expected to be available later tomorrow for 10 days. Callers from the U.S. or Canada should dial 800-642-1687. International callers should dial 706-645-9291. The conference ID number is 2832090.

About Applera Corporation and Applied Biosystems
Applera Corporation comprises two operating groups. The Applied Biosystems Group develops and markets instrument-based systems, reagents, software, and contract services to the life science industry and research community. Customers use these tools to analyze nucleic acids (DNA and RNA), small molecules, and proteins to make scientific discoveries, leading to the development of new pharmaceuticals, and to conduct standardized testing. Applied Biosystems is headquartered in Foster City, CA, and reported sales of $1.6 billion during fiscal 2001. The Celera Genomics Group, headquartered in Rockville, MD, is engaged principally in integrating advanced technologies to create therapeutic discovery and development capabilities for internal use and for its customers and collaborators. Celera’s businesses are its online information business and its therapeutics discovery business. The online information business is a leading provider of information based on the human genome and other biological and medical information. Through the therapeutic discovery business, Celera intends to leverage its genomic and proteomic capabilities to identify drug targets and diagnostic marker candidates, and to discover novel therapeutic candidates. Celera Diagnostics, a joint venture between Applied Biosystems and Celera Genomics, is focused on discovery, development, and commercialization of novel diagnostics tests. Information about Applera Corporation, including reports and other information filed by the company with the Securities and Exchange Commission, is available on the World Wide Web at www.applera.com, or by telephoning 800.762.6923. Information about Applied Biosystems is available on the World Wide Web at www.appliedbiosystems.com. Certain statements in this press release, including the Outlook section, are forward-looking. These may be identified by the use of forward-looking words or phrases such as "believe," "expect," "intend," "anticipate," "should," "planned," "estimated," and "potential," among others. These forward-looking statements are based on Applera Corporation's current expectations. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. In order to comply with the terms of the safe harbor, Applera Corporation notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. The risks and uncertainties that may affect the operations, performance, development, and results of Applied Biosystems businesses include but are not limited to (1) rapidly changing technology and dependence on development of new products; (2) sales dependent on customers' capital spending policies and government-sponsored research; (3) claims for patent infringement; (4) significant overseas operations, with attendant exposure to fluctuations in the value of foreign currencies; (5) future growth strategy; (6) electricity shortages and earthquakes; (7) Celera Diagnostics' unproven ability to discover, develop, and commercialize novel diagnostic tests and the uncertainty that Celera Diagnostics will become profitable; and (8) other factors that might be described from time to time in Applera Corporation's filings with the Securities and Exchange Commission.


Notice To Readers: Celera's press releases, presentations and printed remarks are included on this website for historical purposes only. The information contained in these documents should be considered accurate only as of the date of the relevant document. This information may change over time, and therefore visitors to this website should not assume that the information contained in these documents remains accurate at a later time. We do not have any current intention to update any of the information in these documents.