MDCC Molecular Devices (MM)

SUNNYVALE, Calif., Feb. 7 /PRNewswire-FirstCall/ -- Molecular Devices Corporation (NASDAQ:MDCC) today announced record revenues and earnings for the quarter ended December 31, 2005. Revenues for the quarter were a record $52.5 million, or an increase of 10% compared to the same period last year. Eliminating the effects of foreign currency translation, revenues for the quarter grew 14% over the prior year. Revenues for the year were a record $181.2 million, or an increase of 22% over 2004. On a GAAP basis, operating income for the fourth quarter of 2005 increased 77% to $9.2 million, from $5.2 million in same period last year. On a non- GAAP basis, excluding restructuring and other charges of $1.4 million in the fourth quarter of 2005 and $1.2 million in the same period last year, operating income increased 67% to $10.6 million in the fourth quarter of 2005 from $6.3 million in the fourth quarter of 2004. On a non-GAAP basis, excluding the restructuring charges and a charge for acquired in-process research and development in 2004, operating income for the full year 2005 increased 49% to $26.5 million from $17.7 million in 2004. On a GAAP basis, fully diluted earnings per share for the fourth quarter of 2005 were $0.34. On a non-GAAP basis, excluding the impact of the restructuring and other charges in both periods, as well as the gain from the sale of the equity investment in the fourth quarter of 2004, fully diluted earnings per share increased 63% to $0.39 in the fourth quarter of 2005 from $0.24 in the same period last year. On a non-GAAP basis, fully diluted EPS for the full year 2005 increased 34% to $0.98 in 2005 from $0.73 in 2004. A table reconciling operating income and fully diluted earnings per share on a GAAP and non-GAAP basis is provided immediately following the Condensed Consolidated Balance Sheets. "We are encouraged by our fourth quarter results, as we saw good growth in both our life sciences and drug discovery product families," stated Joseph D. Keegan, Ph.D., Molecular Devices' President and Chief Executive Officer. "This quarter produced record revenues for our SpectraMax(R), Genepix(R), FLIPR(R), High-throughput Electrophysiology and High-content Imaging product lines. Our global expansion contributed to both top and bottom line growth, and despite a negative currency headwind, we produced record revenues in North America, Europe and the rest of the world. Finally, we continue to feel confident that our life sciences and drug discovery markets will remain stable in the near-term." The Company also established guidance for the first quarter of 2006 and updated guidance for the full year 2006. For the first quarter of 2006, the Company anticipates revenues of $40 to $42 million and non-GAAP fully diluted earnings per share of $0.15 to $0.17. For the full year 2006, the Company anticipates revenues of $190 to $200 million and non-GAAP fully diluted earnings per share of $1.10 to $1.20. The 2006 guidance with respect to fully diluted earnings per share excludes the impact of expensing stock options under SFAS 123R, "Share-Based Payment." Information with respect to the exclusion of the impact of SFAS 123R is provided immediately following the Condensed Consolidated Balance Sheets. Conference Call Information An earnings announcement conference call is scheduled for Wednesday, February 8, 2006, at 8:00 a.m. PST (11:00 a.m. EST). Interested parties can participate in the call by dialing 877-502-9272 (domestic) or 913-981-5581 (international). Replay dial-in numbers are 888-203-1112 (domestic) and 719-457-0820 (international), and the access code for the replay is 4264377. Investors can also access a live web-cast of the call through a link posted on the investor page on Molecular Devices' website (http://www.moleculardevices.com/). A replay of the web-cast will be available at this location from February 8, 2006, to such time as the Company reports its financial results for the first quarter of 2006. About Molecular Devices Corporation Molecular Devices Corporation is a leading supplier of high-performance bioanalytical measurement systems that accelerate and improve drug discovery and other life sciences research. The Company's systems and consumables enable pharmaceutical and biotechnology companies to leverage advances in genomics, proteomics and parallel chemistry to facilitate the high-throughput and cost-effective identification and evaluation of drug candidates. The Company's solutions are based on its advanced core technologies that integrate its expertise in engineering, molecular and cell biology and chemistry. Molecular Devices enables its customers to improve research productivity and effectiveness, which ultimately accelerates the complex process of discovering and developing new drugs. This press release contains "forward-looking" statements, including statements related to future revenues and earnings and future reporting of financial results or changes to prior financial results. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "will," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of Molecular Devices Corporation to differ materially from those indicated by these forward-looking statements, including, among others, risks related to variations in the amount of time that it takes for the Company to sell its products and collect accounts receivable, the timing of customer orders and the Company's dependence on orders that are shipped in the same quarter, which gives the Company limited visibility of future product shipments, risks related to increased competition, risks associated with the Company's need to develop new and enhanced products, uncertainties related to the reporting of the adjustments noted in the footnote herein to our Condensed Consolidated Statements of Income and potential similar adjustments in prior periods and other risks detailed from time to time in the Company's SEC reports, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2005. Molecular Devices Corporation does not undertake any obligation to update forward-looking statements. MOLECULAR DEVICES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) Three Months Ended Year Ended December 31, December 31, 2005 2004 2005* 2004 (unaudited) (unaudited) REVENUES $52,458 $47,485 $181,215 $148,529 COST OF REVENUES 19,492 18,154 69,531 56,274 GROSS PROFIT 32,966 29,331 111,684 92,255 OPERATING EXPENSES: Research and development 6,325 6,880 25,281 22,038 Selling, general and administrative 16,031 16,105 59,885 52,469 Acquired in-process research and development -- -- -- 5,000 Restructuring and other charges 1,427 1,157 1,427 1,157 Total operating expenses 23,783 24,142 86,593 80,664 INCOME FROM OPERATIONS 9,183 5,189 25,091 11,591 Gain on sale of equity securities -- 18,288 -- 18,288 Interest and other income (expense), net (32) 6 (615) 132 INCOME BEFORE TAXES 9,151 23,483 24,476 30,011 Income tax provision (3,392) (8,916) (8,580) (12,778) NET INCOME $5,759 $14,567 $15,896 $17,233 BASIC NET INCOME PER SHARE $0.35 $0.84 $0.95 $1.08 DILUTED NET INCOME PER SHARE $0.34 $0.81 $0.93 $1.04 SHARES USED IN COMPUTING BASIC NET INCOME PER SHARE 16,578 17,363 16,783 16,028 SHARES USED IN COMPUTING DILUTED NET INCOME PER SHARE 17,084 17,889 17,147 16,532 *"Interest and other income (expense), net" of $(615) includes adjustments totaling $(602) related to inter-company foreign exchange transaction losses that should have been recorded in "Interest and other income (expense), net" during the first three quarters of 2005. The Company plans to include these adjustments, and potentially similar adjustments in prior periods (including the quarter ended December 31, 2004), in its quarterly financial information included in its Form 10-K for the year ended December 31, 2005, to be filed on or about March 16, 2006. MOLECULAR DEVICES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, December 31, 2005 2004 ASSETS (unaudited) Current assets: Cash and cash equivalents $28,908 $30,175 Accounts receivable, net 41,197 36,995 Inventories, net 23,082 25,785 Deferred tax assets 5,873 9,654 Prepaids and other current assets 2,728 2,780 Total current assets 101,788 105,389 Equipment and leasehold improvements, net 9,902 11,762 Other assets 145,611 138,078 $257,301 $255,229 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $7,561 $7,085 Accrued liabilities 31,188 30,748 Total current liabilities 38,749 37,833 Long-term liabilities: Other long-term liabilities 993 1,452 Deferred tax liabilities 4,486 5,324 Total long-term liabilities 5,479 6,776 Stockholders' equity 213,073 210,620 $257,301 $255,229 HISTORICAL NON-GAAP RECONCILIATION (unaudited) (in thousands, except per share amounts) Three Months Ended Year Ended December 31, December 31, 2005 2004 2005 2004 OPERATING INCOME - GAAP BASIS $9,183 $5,189 $25,091 $11,591 Acquired in-process research and development -- -- -- 5,000 Restructuring and other charges 1,427 1,157 1,427 1,157 NON-GAAP OPERATING INCOME $10,610 $6,346 $26,518 $17,748 GAAP FULLY DILUTED EARNINGS PER SHARE $0.34 $0.81 $0.93 $1.04 Acquired in-process research and development -- -- -- 0.30 Restructuring and other charges 0.08 0.06 0.08 0.07 Gain on sale of equity securities -- (1.02) -- (1.11) Income tax impact of non-recurring items (0.03) 0.39 (0.03) 0.43 NON-GAAP FULLY DILUTED EARNINGS PER SHARE $0.39 $0.24 $0.98 $0.73 FULLY DILUTED SHARES 17,084 17,889 17,147 16,532 NON-GAAP FINANCIAL GUIDANCE Molecular Devices Corporation's non-GAAP guidance for the first quarter and full year 2006 with respect to fully diluted earnings per share excludes the impact of the adoption of SFAS 123R, "Share-Based Payment." Molecular Devices will adopt SFAS 123R in the first quarter of 2006 and although expected to be material, Molecular Devices cannot predict the impact of the adoption of SFAS 123R at this time because it will depend on the assumptions used and the levels of share-based payments granted in the future. Accordingly, Molecular Devices cannot estimate GAAP fully diluted earnings per share for the first quarter and full year 2006 at this time with any degree of certainty. NON-GAAP MEASURES Each non-GAAP financial measure presented in this press release is included because Molecular Devices Corporation's management uses this information for internal planning and forecasting purposes as well as to monitor and evaluate on-going operating results and trends excluding the impact of the adoption of SFAS 123R and the unusual items related to restructurings and the acquisition of Axon Instruments in July 2004. Molecular Devices' management believes that with respect to such historical non-GAAP financial measures, such measures are also useful for investors because the charges for restructuring and for acquired in-process research and development related to the Axon acquisition are the result of transactions that are unusual due to their nature, size and frequency. Consequently, excluding these charges from Molecular Devices' operating results provides investors an important insight into Molecular Devices' operating results and related trends of its core business. In addition, excluding the impact of SFAS 123R from Molecular Devices' financial guidance provides meaningful supplementary information to both management and investors that is indicative of Molecular Devices' core anticipated operating results and enhances an overall understanding of Molecular Devices' prospects for the future. First Call Analyst: FCMN Contact: mariah_salvi@moldev.com DATASOURCE: Molecular Devices Corporation CONTACT: Tim Harkness of Molecular Devices Corporation, +1-408-747-3533 Web site: http://www.moleculardevices.com/

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