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Last updated on April 18, 2014 at 14:37 EDT

QIAGEN Reports Fourth Quarter and Full-Year 2012 Results

January 29, 2013

VENLO, The Netherlands, January 29, 2013 /PRNewswire/ –

        - QIAGEN exceeds Q4 and full-year 2012 targets:
        - Full-year 2012: Net sales advance 10% CER (+7% reported) to $1.25 billion on
          growth in all customer classes and regions; adjusted diluted EPS at $1.08 per share
        - Q4 2012: Net sales rise 4% CER (+4% reported) to $346.5 million, year-ago
          results included major product tender; adjusted diluted EPS at $0.34 per share
        - Building on 2012 progress to accelerate innovation and growth in 2013:
        - Driving platform success: Rapid adoption of QIAsymphony automation platform
          set to exceed an installed base of 1,000 systems during 2013
        - Sample-to-result next-generation sequencing workflow for clinical research and
          diagnostics on track for 2013 launch
        - Adding content: Over 35 molecular diagnostic assay projects in pipeline;
          exceeding targets for conversion to FDA-approved therascreen KRAS companion diagnostic
        - Growing efficiently and effectively: Adjusted operating income margin at 28%
          of net sales for full-year 2012, reaches 31% in Q4 2012
        - QIAGEN expects to deliver higher sales and adjusted earnings in 2013

QIAGEN N.V. (NASDAQ: QGEN; Frankfurt Prime Standard: QIA) announced results of
operations for the fourth quarter and full-year 2012, delivering growth in net sales and
adjusted earnings that exceeded targets, and set new goals for improved sales and adjusted
earnings in 2013.

“QIAGEN made significant progress during 2012 on initiatives to drive innovation and
growth. These actions fueled demand for our products across all of our customer classes
and regions, enabling us to exceed our targets for 2012 and deliver double-digit sales
growth at constant exchange rates and adjusted earnings at a faster pace than in 2011,”
said Peer M. Schatz, Chief Executive Officer of QIAGEN N.V. “Results for the fourth
quarter of 2012 also exceeded our targets, as we delivered solid growth over the year-ago
quarter, which included sales from a major product tender.”

“Although the business environment remains challenging, our strategy is demonstrating
traction and we have set a goal to further improve sales and adjusted earnings in 2013,”
Mr. Schatz said. “Multiple growth drivers are building momentum as we move into 2013. We
intend to add to our leadership in Personalized Healthcare by further expanding our
position as the partner of choice for molecular companion diagnostics as well as by
building our assay portfolio and driving adoption. Growing placements of our QIAsymphony
automation platform are enabling the dissemination of molecular testing, while our
QuantiFERON-TB test is improving the standard of care for latent tuberculosis (TB).
Innovation goals for 2013 include our entry into targeted areas of next-generation
sequencing with workflow solutions for clinical research and human healthcare, as well as
advancing our R&D pipeline of more than 35 molecular diagnostic assay projects. We will
also step up initiatives to improve efficiency and effectiveness, especially our
capabilities to address the needs of customers. We are well-positioned to achieve our
goals for 2013 and fulfill our mission of making improvements in life possible.”

Full-year 2012 results

                                                                        Change
        In $ millions, except per share
        information                                 FY 2012  FY 2011        $  CER
        Net sales                                   1,254.5  1,169.7       7%  10%
        Operating income, adjusted                    356.4    319.6      12%
        Net income, adjusted                          260.7    234.4      11%
        Diluted EPS, adjusted                        $ 1.08   $ 0.98

        For information on the adjusted figures, please refer to the
        reconciliation table accompanying this release.
        Adjusted net income and adjusted diluted EPS results represent amounts
        attributable to the owners of QIAGEN N.V.

Net sales advanced at a double-digit pace in constant exchange rates (+10% CER) in
2012, driven by business expansion in all customer classes – particularly Molecular
Diagnostics and Applied Testing – and all geographic regions. Contributions from the
acquisitions of Ipsogen (acquired in July 2011), Cellestis (acquired in August 2011) and
AmniSure (acquired in May 2012) provided six percentage points of total CER growth, and
the rest of the QIAGEN portfolio provided four percentage points. Currency movements had a
negative impact of three percentage points on reported sales growth.

Operating income rose to $169.8 million in 2012 from the year-ago level of $99.6
million. Adjusted operating income, which excludes items such as restructuring and
acquisition-related costs, share-based compensation and amortization of intangible assets,
rose 12% to $356.4 million from $319.6 million in 2011. The adjusted operating income
margin rose to 28% of net sales in 2012 from 27% a year earlier, as general and
administrative and R&D investments were lower as a percentage of net sales, and the
adjusted gross margin remained steady at 71% compared to 2011.

Net income attributable to owners of QIAGEN N.V. rose to $129.5 million in 2012 from
$96.0 million in 2011, while diluted EPS was $0.54 (based on 240.7 million diluted shares)
compared to $0.40 (239.1 million diluted shares). Adjusted net income attributable to
owners of QIAGEN N.V. grew 11% to $260.7 million in 2012 from $234.4 million in 2011, as
adjusted diluted EPS rose to $1.08 from $0.98.

Cash and cash equivalents at December 31, 2012, rose to $394.0 million from $221.1
million at December 31, 2011. Net cash provided by operating activities in 2012 included
cash restructuring payments, and was unchanged at $245 million compared to 2011. Net cash
used in investing activities was $301 million (including cash payments of $132 million for
acquisitions), down from $540 million in 2011. Net cash provided by financing activities
was $226 million in 2012 compared to cash used in financing activities of $311 million in
2011.

“Amid challenging business conditions, QIAGEN has reallocated resources and
established a solid foundation to create enhanced, sustainable growth and value for
shareholders,” said Roland Sackers, Chief Financial Officer of QIAGEN N.V. “We delivered
on our sales targets and improved the adjusted operating income margin, reaching 31% in
the fourth quarter. We also further strengthened our healthy financial position in 2012
through a U.S. private debt placement on very favorable terms, while also showing a
commitment to shareholders with the launch of a $100 million share repurchase program.”

Fourth quarter 2012 results

                                                                        Change
        In $ millions, except per share
        information                                  Q4 2012  Q4 2011       $ CER
        Net sales                                      346.5    334.4      4%  4%
        Operating income, adjusted                     106.0     95.6     11%
        Net income, adjusted                            82.8     73.6     13%
        Diluted EPS, adjusted                         $ 0.34   $ 0.31

        For information on the adjusted figures, please refer to the
        reconciliation table accompanying this release.
        Adjusted net income and adjusted diluted EPS results represent
        amounts attributable to the owners of QIAGEN N.V.

The Molecular Diagnostics and Applied Testing customer classes led the growth in the
fourth quarter of 2012, with net sales up 4% CER against a tough comparison from results
in the 2011 quarter that included a major product tender. Very strong sales from AmniSure
(acquired in May 2012) provided about two percentage points of CER growth, while the rest
of the portfolio contributed about two percentage points. Excluding the impact of the
year-ago product tender, underlying organic growth was approximately 4% CER. Currency
movements did not have an impact on reported sales growth.

Operating income amounted to $48.9 million in the fourth quarter of 2012 compared to a
year-ago quarterly loss of $19.6 million, which included a restructuring charge for a
productivity project. Adjusted operating income, which excludes items such as
restructuring and acquisition-related costs, share-based compensation and amortization of
intangible assets, grew 11% to $106.0 million from $95.6 million in the fourth quarter of
2011. The adjusted operating income margin rose to 31% of net sales from 29% in the
year-ago period.

Net income attributable to owners of QIAGEN N.V. amounted to $38.4 million in the
fourth quarter of 2012 compared to a loss of $0.4 million in the year-ago period. Diluted
EPS was $0.16 (based on 241.8 million diluted shares) compared to $0.00 in the year-ago
period (236.7 million diluted shares). Adjusted net income attributable to owners of
QIAGEN N.V. rose 13% to $82.8 million from $73.6 million in the 2011 quarter, as adjusted
diluted EPS was $0.34 in the fourth quarter of 2012 compared to $0.31 in the year-ago
period.

Reconciliations of reported results in accordance with U.S. generally accepted
accounting principles (GAAP) to adjusted results are included in the tables accompanying
this release.

Business review

Geographic regions

The Asia-Pacific / Japan region (+15% CER, 19% of sales) grew at a robust pace in 2012
on improving demand in China, Japan and top emerging markets such as India and Korea.
Results in the Europe / Middle East / Africa region (+9% CER, 34% of sales) advanced on
higher sales in northern European countries and growth in all customer classes. The
Americas (+8% CER, 46% of sales) rose on higher contributions from Molecular Diagnostics
and Applied Testing, more than offsetting lower revenues in the region from products
related to HPV testing.

Product categories

Consumables and related revenues (+10% CER, 86% of sales) rose across all customer
classes in 2012, led by double-digit growth in Molecular Diagnostics and Applied Testing.
In the fourth quarter of 2012, consumables and related revenues faced a challenging
comparison due to the major product tender in the 2011 quarter, rising 4% CER and
representing 85% of net sales.

Instrument sales (+11% CER, 14% of sales) benefited during 2012 from demand for a
broad range of QIAGEN instruments. QIAGEN surpassed its 2012 goal for more than 200 new
placements of the QIAsymphony automation platform, exceeding an installed base of more
than 750 platforms since launch in 2008. Approximately 70% of total QIAsymphony placements
as of the end of 2012 have been with Molecular Diagnostics customers, primarily through
reagent rental agreements where revenues are recognized over a multiyear period. Demand
also has been strong among Applied Testing customers. For the fourth quarter of 2012,
instrument sales rose 7% CER and represented 15% of net sales.

Customer classes

An overview of performance in QIAGEN’s four customer classes (based on total sales
results including organic growth and acquisitions at CER):

Molecular Diagnostics (2012: +15% CER, 49% of sales) advanced at a double-digit CER
pace in 2012, driven by new products and solid demand for instruments from the QIAGEN
portfolio, particularly the QIAsymphony automation platform. In Prevention, the
QuantiFERON-TB test (acquired with Cellestis in 2011) achieved more than 20% CER pro forma
growth in 2012 on initiatives in the U.S. and Europe to drive greater use of this new
“gold standard” test for latent tuberculosis (TB). Full-year 2012 sales of products used
in HPV testing (16% of sales, -8% CER) performed in line with expectations, as slightly
higher volumes in the U.S. were more than offset by pricing pressure from the
implementation of multiyear customer agreements. Personalized Healthcare delivered ongoing
strong double-digit CER growth on global demand for the therascreen portfolio of companion
diagnostic kits – particularly the KRAS test launched in mid-2012 after FDA approval for
use in metastatic colorectal cancer patients – as well as higher revenues from
co-development projects with pharmaceutical companies. In Point of Need, the AmniSure
assay for premature rupture of fetal membranes in pregnant women provided important
contributions after its acquisition in May 2012. In the fourth quarter of 2012, net sales
rose 6% CER and represented 52% of sales, more than absorbing the impact of lower HPV
sales in the U.S. and the year-ago delivery of a major product tender.

Applied Testing (2012: +22% CER, 8% of sales) delivered double-digit growth on strong
demand for consumables used in human identification / forensics, veterinary medicine and
food safety. Instrument sales also advanced at a double-digit CER rate in 2012,
particularly following the early 2012 software launch enabling customers to use many of
these assays on the QIAsymphony automation platform. In the fourth quarter of 2012,
Applied Testing rose 16% CER over the same period in 2011 and represented 7% of sales.

Pharma (2012: +5% CER, 19% of sales) had higher sales in Europe and the Asia-Pacific /
Japan regions in 2012 on demand for instruments and the GeneGlobe portfolio of molecular
pathway analysis products. However, growth rates were slower in the second half of the
year as restructuring activities at some pharmaceutical companies impacted results. In the
fourth quarter of 2012, Pharma rose 1% CER over the 2011 quarter and represented 18% of
sales.

Academia (2012: +1% CER, 24% of sales) achieved modest growth in 2012 as single-digit
CER growth in consumables more than offset weaker instrument sales. Concerns about future
U.S. and European government funding for life sciences research prompted very cautious
spending patterns among some customers in the U.S. and Europe during the year. In the
fourth quarter of 2012, Academia sales were flat (+0% CER) compared to the same period in
2011 and represented 23% of sales. Funding uncertainties in these regions are expected to
continue in 2013.

Accelerating innovation and growth in 2013

QIAGEN is committed to accelerating the pace of innovation and growth in 2013 and
building on the progress of strategic initiatives during 2012 to leverage its leadership
in Sample & Assay Technologies across all customer classes. These goals for 2013 focus on
accelerating organic and strategic growth by continuing to drive platform success, add
test content for use in all customer classes and broaden QIAGEN’s geographic presence.
Additional goals have been set to deliver efficiency and effectiveness through optimized
resource allocation, improve QIAGEN’s position as an employer of choice and to enhance
customer experience, including through the launch of a new QIAGEN Internet site in 2013.

Drive platform success

A key element of QIAGEN’s growth strategy is securing placements around the world of
the QIAsymphony automation platform, the industry’s first modular sample-to-result system
that can process commercial assays as well as a broad range of laboratory-developed tests.
In 2012, QIAGEN exceeded its goal of reaching an installed base of more than 750
QIAsymphony platforms, building on the year-end 2011 level of more than 550 platforms.
QIAGEN anticipates continued strong demand for this platform, and is targeting for the
installed base to rise above 1,000 platforms during 2013.

QIAGEN also advanced a strategy in 2012 to create integrated next-generation
sequencing (NGS) workflows that combine innovative instrumentation and consumables
[http://www.qiagen.com/about/pressreleases/pressreleaseview.aspx?PressReleaseID=397&lang=EN ]
. Products slated for introduction in 2013 include automation for primary
sample-to-result processing of NGS runs. The platform strategy also includes a
breakthrough next-generation benchtop sequencer, now in an advanced stage of development,
as well as new bioinformatics aimed at accelerating NGS analysis time for higher sample
throughput levels. QIAGEN’s ambition is to make next-generation sequencing
[http://www.qiagen.com/about/pressreleases/pressreleaseview.aspx?PressReleaseID=397&lang=EN ]
, now limited mostly to life science research, a routine and cost-effective tool used in
clinical research and healthcare
[http://www.qiagen.com/about/pressreleases/pressreleaseview.aspx?PressReleaseID=384&lang=EN ]
. During the fourth quarter of 2012, QIAGEN launched its first group of NGS products that
simplify sample preparation and save hands-on time in the pre-analytical phase, and also
eight cancer gene panels for targeted NGS analysis based on its GeneGlobe portfolio of
more than 60,000 molecular assays.

Add content

A major priority for accelerating growth is adding novel content for use on
instruments in QIAGEN’s portfolio, particularly on instruments in the QIAsymphony platform
family. Platforms and consumables, together, drive growth. Expanding the menu of tests
available for a QIAGEN instrument enhances the value of that platform to laboratories, and
increasing the installed base of an automated system leads to more sales of the test kits.

Building on four major regulatory approvals in 2012, more than 35 new assay
development projects are under way in Molecular Diagnostics for use on the Rotor-Gene Q
and QIAsymphony automation platform. These projects span applications ranging from
blood-borne diseases to women’s health, and are a combination of internal R&D initiatives
and external collaboration projects. QIAGEN also has a deep pipeline of assays in
development for use in other customer classes, particularly Applied Testing.

The U.S. launch of the therascreen KRAS RGQ PCR Kit, which provides guidance on the
use of Erbitux(R) (cetuximab) as a treatment in patients with metastatic colorectal
cancer, achieved good early momentum following regulatory approval in July 2012. Leading
U.S. laboratories covering approximately half of the current KRAS testing volumes in the
U.S. have already adopted QIAGEN’s KRAS test, which in many cases has replaced
laboratory-developed tests (LDTs).

A second Personalized Healthcare product, the therascreen(R)EGFR
[http://www.qiagen.com/about/pressreleases/pressreleaseview.aspx?PressReleaseID=401&lang=EN ]
RGQ PCR
[http://www.qiagen.com/about/pressreleases/pressreleaseview.aspx?PressReleaseID=401&lang=EN ]
Kit, was submitted in late 2012 to the U.S. Food and Drug Administration (FDA) for
regulatory approval (pre-marketing approval, or PMA) and use in certain types of lung
cancer patients. The EGFR assay is proposed to guide treatment with afatinib, an
investigational oncology compound developed by Boehringer Ingelheim that was granted FDA
priority review status in January 2013 (target action date in the third quarter of 2013).
Other submissions in the U.S. and Europe are expected to emerge from more than 15 projects
that QIAGEN has under way to co-develop and market companion diagnostics with leading
pharmaceutical and biotech companies. In October, QIAGEN announced a new collaboration
with Bayer HealthCare covering projects in oncology based on a range of existing and new
biomarkers in the QIAGEN portfolio.

Broaden geographic presence

A key growth driver is QIAGEN’s expansion in attractive markets around the world. The
top seven emerging markets of Brazil, Russia, India, China, South Korea, Mexico and Turkey
represented 12% of net sales and rose 12% CER in 2012 compared to 2011, and sales were up
more than 20% CER when excluding the major product tender in 2011. QIAGEN expects these
top emerging markets to deliver ongoing double-digit sales growth in 2013.

Grow efficiently and effectively

QIAGEN has implemented several operational improvements during 2012 that are creating
positive changes in its culture since a company-wide project was launched in November 2011
to enhance productivity and free up resources for reallocation to growth initiatives.
Through creation of the Molecular Diagnostics and Life Sciences business areas, as well as
the integration of regional marketing activities with sales teams, decision-making has
been moved closer to customers. Integration of R&D activities into the two business areas
also has focused innovation on high-growth markets. Actions are also under way to optimize
capacity utilization at selected sites and capture savings from shared service functions
and outsourcing. QIAGEN expects to implement further project proposals during 2013 that
are designed to improve efficiency and effectiveness, and these projects could result in
additional restructuring charges.

Strengthening senior leadership team

Dr. Tadd S. Lazarus, a long-time practitioner in infectious diseases with a wealth of
experience in developing clinical diagnostics, has joined QIAGEN as Chief Medical Officer
and will lead a team of medical officers with extensive industry experience. Dr. Lazarus
will be responsible for QIAGEN’s overall medical strategy, including the evaluation and
advancement of the diagnostic assay portfolio as well as the clinical evaluation of new
diagnostic tests. He joins QIAGEN from Gen-Probe Incorporated, where he was Chief Medical
Officer and Vice President of Clinical Affairs. Dr. Lazarus will be based at QIAGEN’s site
in Germantown, Maryland, and report to Dr. Helge Lubenow, Senior Vice President, Head of
Business Area Molecular Diagnostics and Member of QIAGEN’s Executive Committee. He will
assume direct responsibility for QIAGEN’s diagnostic portfolio in the areas of infectious
disease, including sexually transmitted infections, as well as for women’s health, and
relationship building with key opinion leaders.

Progress on $100 million share repurchase program

QIAGEN launched a program launched in October 2012 to purchase up to $100 million of
shares (excluding ancillary costs). As of January 25, 2013, approximately $57 million of
the program was completed with the repurchase of about 3.1 million shares on the Frankfurt
Stock Exchange and on NASDAQ at a volume-weighted average price of EUR 14.11 and $18.84,
respectively. QIAGEN has previously announced a goal to complete the program by March 28,
2013. Repurchased shares will be held in treasury in order to satisfy various obligations
for exchangeable debt instruments and/or employee share-based remuneration plans.
Information on the progress of the program is available in the Investor Relations section
of QIAGEN’s website at http://www.qiagen.com.

2013 outlook

QIAGEN expects to deliver higher net sales and adjusted earnings in 2013, building on
the strong performance in 2012. For the full year, total net sales are expected to rise
about 5-6% CER on a mix of contributions from organic growth of the business portfolio and
from AmniSure (treated as acquisition until May 2013). Adjusted diluted earnings per share
(EPS) are expected to rise to approximately $1.16-1.18 for full-year 2013. This guidance
takes into account dilution of approximately $0.02-0.03 per share from the net impact of
the new U.S. medical device tax and higher interest expenses incurred through the U.S.
private placement in October 2012 partially offset by effects of the share repurchase
program. These expectations do not take into account potential sequestration actions in
the U.S., which could lead to further reductions in government funding for life sciences
research. Also excluded are any acquisitions that could be completed in 2013.

Conference call and webcast details

Information on QIAGEN’s performance will be presented during a conference call on
Wednesday, January 30, 2013, at 9:30 ET / 14:30 GMT / 15:30 CET. The corresponding
presentation slides will be available for download shortly before the event at
http://www.qiagen.com/goto/ConferenceCall, and a webcast will be available at this
website. A replay will also be made available on this website.

Use of adjusted results

QIAGEN has regularly reported adjusted results, as well as results considered on a
constant exchange rate basis, to give additional insight into its financial performance.
These adjusted results include adjusted gross profit, adjusted operating income, adjusted
net income attributable to owners of QIAGEN N.V. and adjusted diluted EPS. Adjusted
results are non-GAAP financial measures that QIAGEN believes should be considered in
addition to the reported results prepared in accordance with generally accepted accounting
principles, but should not be considered as a substitute. QIAGEN believes certain items
should be excluded from adjusted results when they are outside of its ongoing core
operations, vary significantly from period to period, or affect the comparability of
results with its competitors and its own prior periods. Reconciliations of reported
results to adjusted results are included in the tables accompanying this release.

Tables with detailed financial information can be downloaded in PDF format from:

http://bit.ly/VnxEgD

QIAGEN N.V., a Netherlands holding company, is the leading global provider of Sample &
Assay Technologies that are used to transform biological materials into valuable molecular
information. Sample technologies are used to isolate and process DNA, RNA and proteins
from biological samples such as blood or tissue. Assay technologies are then used to make
these isolated biomolecules visible and ready for interpretation. QIAGEN markets more than
500 products around the world, selling both consumable kits and automation systems to
customers through four customer classes: Molecular Diagnostics (human healthcare), Applied
Testing (forensics, veterinary testing and food safety), Pharma (pharmaceutical and
biotechnology companies) and Academia (life sciences research). As of December 31, 2012,
QIAGEN employed approximately 4,000 people in over 35 locations worldwide. Further
information can be found at http://www.qiagen.com/.

Certain of the statements contained in this news release may be considered
forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of
1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended.
To the extent that any of the statements contained herein relating to QIAGEN’s products,
markets, strategy or operating results, including without limitation its expected
operating results, new product developments, new product launches, regulatory submissions,
and financing plans are forward-looking, such statements are based on current expectations
and assumptions that involve a number of uncertainties and risks. Such uncertainties and
risks include, but are not limited to, risks associated with management of growth and
international operations (including the effects of currency fluctuations, regulatory
processes and dependence on logistics), variability of operating results and allocations
between customer classes, the commercial development of markets for our products in
applied testing, personalized healthcare, clinical research, proteomics, women’s
health/HPV testing and nucleic acid-based molecular diagnostics; changing relationships
with customers, suppliers and strategic partners; competition; rapid or unexpected changes
in technologies; fluctuations in demand for QIAGEN’s products (including fluctuations due
to general economic conditions, the level and timing of customers’ funding, budgets and
other factors); our ability to obtain regulatory approval of our products; difficulties in
successfully adapting QIAGEN’s products to integrated solutions and producing such
products; the ability of QIAGEN to identify and develop new products and to differentiate
and protect our products from competitors’ products; market acceptance of QIAGEN’s new
products, the consummation of acquisitions, and the integration of acquired technologies
and businesses. For further information, please refer to the discussions in reports that
QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).

Contacts:

        Public Relations:

        Dr. Thomas Theuringer
        Director Public Relations
        +49-2103-29-11826
        +1-240-686-7425
        Email: pr@qiagen.com

http://www.twitter.com/qiagen

http://www.qiagen.com/about/press

        Investor Relations:

        John Gilardi
        VP Corporate Communications
        +49-2103-29-11711
        +1-240-686-2222

        Peter Vozzo
        Director, Global Investor Relations
        +1-240-686-7400
        Email: ir@qiagen.com

http://www.qiagen.com/about/investorrelation

SOURCE Qiagen N.V.


Source: PR Newswire