Celera Genomics Reports Fourth Quarter and Fiscal 2002 Results
Rockville, MD - July 25, 2002
Celera Genomics Group (NYSE: CRA), an Applera Corporation business, today reported results for its fourth quarter and its fiscal year ended June 30, 2002. All per share amounts refer to per share of Applera Corporation-Celera Genomics Group Common Stock.
For the quarter ended June 30, 2002, Celera Genomics reported a net loss before special items of $23.1 million, or $0.33 per share, compared to $34.5 million, or $0.56 per share in the same period last year. The lower net loss was attributable primarily to the non-amortization of goodwill during fiscal 2002 and lower cost of sales and SG&A expenses. Higher development expenses within the Celera Diagnostics joint venture with Applied Biosystems and lower interest income partially offset these factors. Included in the quarter's results is a $2.8 million special charge related to the restructuring announced in June and a $6.0 million write-down of investments. Including special items, the net loss was $28.8 million, or $0.42 per share, compared with $101.7 million, or $1.66 per share, for the same quarter in fiscal 2001. Included in the fourth quarter fiscal 2001 result is a pretax special charge of $69.1 million for the impairment of goodwill and other intangible assets related to Paracel.
Revenues for the quarter increased to $28.1 million from $27.4 million for the same quarter in fiscal 2001. Online/Information Business revenue was $19.8 million, compared to $14.2 million in the same period last year. An increase in subscription revenue was offset by lower contract sequencing revenue resulting from Celera's decision not to pursue additional non-strategic service business, and the loss of revenues attributable to businesses sold earlier in fiscal 2002.
Excluding special items, Celera reported a fiscal 2002 net loss of $86.1 million, or $1.30 per share, compared to a net loss of $119.0 million, or $1.96 per share, for fiscal 2001. Special items during fiscal 2002 included a $99.0 million non-cash charge related to the acquired in-process R&D associated with the Axys acquisition, $25.9 million of special charges related to the Paracel business, and the fiscal fourth quarter 2002 items described above. Including the special items, the reported net loss for fiscal 2002 was $211.8 million, or $3.21 per share, compared with a prior year net loss of $186.2 million, or $3.07 per share. Total revenues for the fiscal year were $120.9 million, compared to $89.4 million last year. Online revenues were $72.7 million, compared to $48.4 million for fiscal year 2001. During fiscal 2002, the Group's cash and short-term investments decreased by approximately $107 million to approximately $889 million.
"Celera has concluded a challenging year of transformation with a promising preclinical pipeline, solid technology platforms, and an organization aligned with its drug discovery strategy," said Tony L. White, Applera's Chief Executive Officer. "Celera has assembled the core leadership and organization to build shareholder value and to drive future success."
"We have refined our drug discovery focus, and established a foundation on which we plan to build downstream development capabilities and a clinical portfolio. In addition, we have significantly reduced our cash burn while expanding the staff dedicated to therapeutic discovery," said Kathy Ordoņez, President, Celera Genomics. "We intend to focus on our preclinical pipeline and new target identification, and to make decisions regarding the future direction of existing unpartnered small molecule programs."
Celera Genomics has reported a number of developments in its business over the last three months, including:
Celera Diagnostics Joint Venture
Celera Diagnostics is a 50/50 joint venture between Applied Biosystems and Celera Genomics that was formed in April 2001. Fiscal 2002 fourth quarter revenues for Celera Diagnostics were $2.8 million, compared to $1.6 million in the same period last year, primarily due to higher sales of its cystic fibrosis reagents. Applied Biosystems will continue to distribute Celera Diagnostics' products and record end-user sales through September 2002. End-user product sales were $3.6 million, compared to $2.0 million in the comparable year-earlier period. Net cash use was $15.2 million in the fiscal 2002 fourth quarter. The pre-tax loss for the quarter was $14.5 million, compared to $5.0 million in the same period last year.
Revenues for fiscal 2002 were $9.2 million, which corresponds to end-user product sales of $11.6 million. For fiscal 2002, the pre-tax loss was $44.7 million, and the net cash use was $45.9 million. At the conclusion of fiscal 2002, Celera Diagnostics had 173 employees.
Developments at Celera Diagnostics over the last three months include the following:
Celera Genomics Outlook
Celera Diagnostics Joint Venture Outlook
The comments in these Outlook sections reflect management's current outlook. The Company does not have any current intention to update this outlook and plans to revisit the outlook for its businesses only once each quarter when financial results are announced.
Conference Call & Webcast
A conference call with Applera Corporation and Celera Genomics executives will be held July 25, at 10:00 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 who would like to participate should dial (+1) 706.634.4992 (code "applera") between 9:45 a.m. and 10:00 a.m. 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.celera.com and go to the Investor section. A digital recording will be available two hours after the completion of the conference call from July 25 to August 3, 2002. Interested parties should call 706.645.9291 and enter Conference ID 4347065.
About Applera Corporation and Celera Genomics
Applera Corporation comprises two operating groups. The Celera Genomics Group, located in Rockville, MD, and South San Francisco, CA, is engaged principally in integrating advanced technologies to discover and develop new therapeutics. Celera intends to leverage its proteomic technology platform and bioinformatics capability to identify drug targets and diagnostic marker candidates, and to discover novel therapeutic candidates. Its Celera Discovery SystemTM online platform, marketed exclusively through the Knowledge Business of Applied Biosystems, is an integrated source of information based on the human genome and other biological and medical sources. The Applied Biosystems Group (NYSE:ABI) develops and markets instrument-based systems, reagents, software, and contract services to the life science industry and research community. Applied Biosystems is headquartered in Foster City, CA, and reported sales of $1.6 billion during fiscal 2002. Celera Diagnostics, a 50/50 joint venture between Applied Biosystems and Celera Genomics, is focused on discovery, development, and commercialization of novel diagnostic tests. Information about Applera Corporation, including reports and other information filed by the company with the Securities and Exchange Commission, is available at www.applera.com, or by telephoning 800.762.6923. Information about Celera Genomics is available at www.celera.com.
Certain statements in this press release, including the Outlook sections, are forward-looking. These may be identified by the use of forward-looking words or phrases such as "believe," "expect," "intend," "anticipate," "should," "planned," 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 Celera Genomics' businesses include but are not limited to (1) operating losses are expected for the foreseeable future; (2) reliance on Applied Biosystems' emerging and unproven Knowledge Business for incremental revenues to Celera Genomics from the Celera Discovery System and Celera Genomics' related information assets; (3) Celera Genomics' and Celera Diagnostics' unproven ability to discover, develop, or commercialize proprietary therapeutic or diagnostic products, the risk that clinical trials of products they do discover and develop will not proceed as anticipated or may not be successful, the uncertainty that such products will not be accepted and adopted by the market, and the risk that that such products will not receive required regulatory approvals; (4) reliance on existing and future collaborations, including, in the case of Celera Diagnostics, its strategic alliance with Abbott Laboratories, which may not be successful; (5) Celera Genomics' reliance on access to biological materials and related clinical and other information, which may be in limited supply or access to which may be limited; (6) intense competition in the industries in which Celera Genomics and Celera Diagnostics operate; (7) potential product liability or other claims against Celera Genomics or Celera Diagnostics as a result of the testing or use of their products; (8) Celera Genomics' reliance on scientific and management personnel having the technical background necessary for Celera Genomics' business; (9) potential liabilities of Celera Genomics related to use of hazardous materials; (10) uncertainty of the availability of intellectual property protection and the ability to protect trade secrets, and the risk of infringement claims; (11) Celera Genomics' dependence on computer hardware, software, and Internet applications; (12) legal, ethical, and social issues which could affect demand for Celera Genomics' products; (13) risks associated with future acquisitions by Celera Genomics, including that they may be unsuccessful; (14) uncertainty of the outcome of existing stockholder litigation; (15) the possibility of delays in making Celera Diagnostics' manufacturing facility fully operational, and Celera Diagnostics' unproven ability to scale up manufacturing as products sales increase; (16) the risk that certain raw materials and equipment required by Celera Diagnostics may not be available or may not be available at acceptable prices; and (17) other factors that might be described from time to time in Applera Corporation's filings with the Securities and Exchange Commission. All information in this press release is as of the date of the release, and Applera does not undertake any duty to update this information, including any forward-looking statements, unless required by law.
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