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0001102624-06-000291.txt : 20061020
0001102624-06-000291.hdr.sgml : 20061020
20061020082521
ACCESSION NUMBER: 0001102624-06-000291
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20061020
ITEM INFORMATION: Financial Statements and Exhibits
FILED AS OF DATE: 20061020
DATE AS OF CHANGE: 20061020
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: VENTANA MEDICAL SYSTEMS INC
CENTRAL INDEX KEY: 0000893160
STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
IRS NUMBER: 942976937
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-20931
FILM NUMBER: 061154381
BUSINESS ADDRESS:
STREET 1: 1910 INNOVATION PARK DRIVE
CITY: TUCSON
STATE: AZ
ZIP: 85755
BUSINESS PHONE: 800-227-2155
MAIL ADDRESS:
STREET 1: 1910 INNOVATION PARK DRIVE
CITY: TUCSON
STATE: AZ
ZIP: 85755
8-K
1
ventana8k.htm
VENTANA MEDICAL SYSTEMS 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
|
Date of Report: October 20, 2006
(Date of earliest event reported)
|
Ventana Medical Systems, Inc.
(Exact name of registrant as specified in its charter)
|
|
Delaware
(State or other jurisdiction of incorporation)
|
000-20931
(Commission File Number)
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94-2976937
(IRS Employer Identification Number)
|
|
1910 E. Innovation Park Drive, Tucson
(Address of principal executive offices)
|
|
85755
(Zip Code)
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520-887-2155 (Registrant's telephone number, including area code)
|
|
Not Applicable (Former Name or Former Address, if changed since last report)
|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
- o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
- o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
- o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
- o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 9.01. Financial Statements and Exhibits
(a) Financial statements:
None
(b) Pro forma financial information:
None
(c) Shell company transactions:
None
(d) Exhibits
Press Release of Ventana Medical Systems, Inc. dated October 20, 2006.
99.1 Press Release of Ventana Medical Systems, Inc. dated October 20, 2006
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
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Dated: October 20, 2006
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VENTANA MEDICAL SYSTEMS, INC.
By: /s/ Nicholas Malden
Nicholas Malden
Senior Vice President, Chief Financial Officer and Secretary
|
Exhibit Index
|
Exhibit No. |
Description |
99.1 |
Press Release of Ventana Medical Systems, Inc. dated October 20, 2006 |
EX-99
2
ventanamedicalsyste.htm
VENTANA MEDICAL SYSTEMS PRESS RELEASE
Ventana Reports Third Quarter Results
TUCSON, AZ -- 10/20/2006 -- Ventana Medical Systems, Inc. (NASDAQ: VMSI),
today reported sales of $59.0 million for the quarter ending September 30,
2006, a 16% increase over third quarter 2005. Net income for the third
quarter was $7.8 million, or $0.22 per diluted share compared with net
income of $3.6 million and $0.10 per diluted share for the same period last
year. Current period results include net expenses of $0.9 million, or $0.02
per share for share-based compensation and $0.4 million, or $0.01 per share
for costs associated with the previously announced Vision transaction.
Third quarter results for 2005 include a net non-cash charge of $3.3
million, or $0.09 per diluted share to record a potential liability
associated with the on-going litigation with Cytologix.
Reagents and other revenues grew 18% versus the third quarter of 2005,
while instrument revenues increased by 8% versus the comparable period in
2005. Gross margin was 76.6% in the quarter versus 75.5% in the third
quarter of 2005. R&D investment was $7.7 million in the quarter, up 19%
versus third quarter 2005.
"Our core advanced staining business continues to perform well with strong
placements and solid consumables growth," commented Christopher Gleeson,
President and CEO. Gleeson went on to say that, "Placements and thus
revenues associated with our new primary staining system, Symphony, were
somewhat lower than originally expected as a result of our decision to
extend the period of our limited launch. Importantly, the first of several
external studies supporting the superior clinical utility of the Symphony
system compared to traditional methods has been completed and will be
published in early 2007."
YEAR-TO-DATE 2006
Net sales for the nine months ended September 30, 2006 were $172.1 million,
a 19% increase over the same period in 2005. Reagents and other revenues
grew by 20% year-over-year while gross margins improved 100 basis points
and R&D spending increased by 22%. Net income was $20.1 million
year-to-date, or $0.55 per diluted share compared with net income of $14.9
million and $0.40 per diluted share for the same period last year. Current
year results include net expenses of $3.0 million, or $0.09 per share for
share-based compensation as a result of the adoption of SFAS 123R on
January 1, 2006 and the above mentioned Vision transaction related
expenses. Results from last year include the aforementioned net non-cash
charge of $3.3 million, or $0.09 per diluted share to record a potential
liability associated with the on-going litigation with Cytologix.
CALENDAR YEAR 2006 and 2007 OUTLOOK
The Company has maintained its guidance for 2006 advising that it expects
full year sales to be within a range of approximately $236.0 million to
$238.0 million and non-GAAP diluted earnings per share to be approximately
$0.95 which, when adjusted for the impact of share-based compensation
expense, will be $0.86.
The Company also provided general guidance for 2007, advising that it
anticipates revenues and EPS consistent with the currently published range
before adjustment for share-based compensation.
INVESTOR CONFERENCE CALL
Ventana will hold a conference call to discuss third quarter 2006 results
and the outlook for the full year at 10:00 a.m. eastern on Friday, October
20, 2006. The call can be accessed live and will be available for replay
over the Internet via
http://phx.corporate-ir.net/phoenix.zhtml?
p=irol-eventDetails&c=79080&eventID=1400465.
ABOUT VENTANA
Ventana develops, manufactures, and markets instrument/reagent systems that
automate tissue preparation and slide staining in clinical histology and
drug discovery laboratories worldwide. The Company's clinical systems are
important tools used in the diagnosis and treatment of cancer and
infectious diseases. Ventana's drug discovery systems are used to
accelerate the discovery of new drug targets and evaluate the safety of new
drug compounds.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements within the meaning
of the Federal Securities laws. These forward-looking statements include
our expected revenue growth and profitability for 2006 and 2007. These
forward-looking statements are subject to numerous risks and uncertainties,
and actual results may vary materially. We may not achieve anticipated
future operating results, and product development activities may not be as
successful as we expect in terms of the timing of product availability to
the market or customer rates of adoption. Other risks and uncertainties
include risks associated with the development, manufacturing, marketing,
and sale of medical products, competitive factors, general economic
conditions, legal disputes, and government actions, and those other risks
and uncertainties contained in our most recent Annual Report filed with the
Securities and Exchange Commission (SEC) on Form 10-K, and all subsequent
SEC filings. Copies of filings made with the SEC are available through the
SEC's electronic data gathering analysis retrieval system (EDGAR) at
www.sec.gov. We undertake no obligation following the date of this release
to update or revise our forward-looking statements or to update the reasons
actual results could differ materially from those anticipated in
forward-looking statements. We caution you not to place undue reliance
upon any such forward-looking statements, which speak only as of the date
such statements are made. Past performance is not indicative of future
results. We cannot guarantee any future operating results, activity,
performance, or achievement.
Visit the Ventana Medical Systems, Inc., website at www.ventanamed.com.
VENTANA MEDICAL SYSTEMS, INC.
GAAP CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
September December
30, 31,
2006 2005
--------- ---------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 16,589 $ 17,519
Short-term investments 54,376 27,892
Trade accounts receivable, net of allowance for
doubtful accounts of $1,744 and $1,536,
respectively 43,935 38,170
Inventories, net 19,515 12,888
Deferred tax assets 8,706 7,969
Prepaids and other current assets 4,153 2,412
--------- ---------
Total current assets 147,274 106,850
Property and equipment, net 61,395 54,195
Deferred tax assets, net of current portion 13,858 13,056
Long-term investments 1,907 6,209
Goodwill 2,804 2,804
Intangible assets, net 6,889 8,779
Capitalized software development costs, net 3,098 2,741
Other assets 1,755 1,898
--------- ---------
Total assets $ 238,980 $ 196,532
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,340 $ 10,660
Other current liabilities 35,190 30,954
--------- ---------
Total current liabilities 51,530 41,614
Long-term debt 1,900 1,996
Other long-term liabilites 680 618
Commitments and Contingencies
Stockholders' equity
Common stock -- $.001 par value; 100,000 shares
authorized, 37,009 and 36,226 shares issued and
outstanding at September 30, 2006 and December 31,
2005 respectively 37 36
Additional paid-in-capital 222,373 199,580
Deferred share-based compensation - (382)
Accumulated income 31,704 11,628
Accumulated other comprehensive income (loss) 2,391 (783)
Treasury stock - 2,516 and 2,140 shares, at cost,
at September 30, 2006 and December 31, 2005,
respectively (71,635) (57,775)
--------- ---------
Total stockholders' equity 184,870 152,304
--------- ---------
Total liabilities and stockholders'
equity $ 238,980 $ 196,532
========= =========
Ventana Medical Systems, Inc.
GAAP Condensed Consolidated Statements of Operations
(in thousands except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -------------------
2006 2005 2006 2005
-------- -------- --------- ---------
Sales:
Reagents and other $ 50,623 $ 42,917 $ 149,612 $ 124,623
Instruments 8,355 7,820 22,509 20,255
-------- -------- --------- ---------
Total net sales 58,978 50,737 172,121 144,878
Cost of goods sold (1) 13,807 12,438 40,975 36,025
-------- -------- --------- ---------
Gross margin 45,171 38,299 131,146 108,853
Operating expenses:
Research and development (2) 7,717 6,487 23,539 19,312
Selling, general and
administrative (3) 25,840 21,200 76,782 60,893
Amortization of intangible assets 596 576 1,838 1,531
Special charge - 5,000 - 5,000
-------- -------- --------- ---------
Income from operations 11,018 5,036 28,987 22,117
Interest and other income 592 263 2,149 660
-------- -------- --------- ---------
Income before taxes 11,610 5,299 31,136 22,777
Provision for income taxes 3,779 1,748 11,060 7,872
-------- -------- --------- ---------
Net income $ 7,831 $ 3,551 $ 20,076 $ 14,905
======== ======== ========= =========
Net income per common share:
--Basic $ 0.23 $ 0.10 $ 0.59 $ 0.43
======== ======== ========= =========
--Diluted $ 0.22 $ 0.10 $ 0.55 $ 0.40
======== ======== ========= =========
Shares used in computing net income
per common share:
--Basic 34,472 34,489 34,225 34,447
======== ======== ========= =========
--Diluted 36,350 36,879 36,184 36,891
======== ======== ========= =========
(1) amounts include share-based
compensation expense $ 58 $ - $ 141 $ -
(2) amounts include share-based
compensation expense $ 250 $ 21 $ 791 $ 69
(3) amounts include share-based
compensation expense $ 932 $ - $ 2,865 $ -
Ventana Medical Systems, Inc.
Reconciliation of GAAP Net Income to Pro Forma Non-GAAP Net Income
(in thousands except per share data)
(Unaudited)
The following represents a reconciliation of GAAP net income to pro forma
non-GAAP net income:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
GAAP net income $ 7,831 $ 3,551 $ 20,076 $ 14,905
Stock-based compensation:
Stock options and restricted
stock 1,240 21 3,797 69
Vision-related acquisition costs 608 - 608 -
Cytologix litigation accrual - 5,000 - 5,000
Income tax effects (578) (1,732) (1,378) (1,749)
-------- -------- -------- --------
Non-GAAP net income $ 9,101 $ 6,840 $ 23,103 $ 18,225
======== ======== ======== ========
Pro Forma Non-GAAP Adjustments
The above pro forma non-GAAP adjustments are based upon our unaudited
condensed consolidated statements of operations for the periods shown. The
pro-forma non-GAAP financial information, which excludes in 2006 the
effects of SFAS 123R, Share-Based Payment and Vision System Limited
acquisition-related costs and in 2005 a non-cash charge to record a
potential liability associated with the on-going litigation with Cytologix,
is not in accordance with U.S. generally accepted accounting principles
(GAAP). The Company believes that this non-GAAP financial measure provides
meaningful supplemental information to both management and investors that
is indicative of the Company's core operating results and facilitates
comparison of operating results across reporting periods. This non-GAAP
measure should not be viewed in isolation to or as a substitute for the
Company's financial results or guidance in accordance with GAAP.
Assumptions regarding the valuation of stock-based compensation and the
timing of events, such as the issuance of new share-based compensation
awards and the realization of tax benefits, may differ from actual results.
Ventana Medical Systems, Inc.
Pro Forma Non-GAAP Condensed Consolidated Statements of Operations
(in thousands except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Sales:
Reagents and other $ 50,623 $ 42,917 $ 149,612 $ 124,623
Instruments 8,355 7,820 22,509 20,255
--------- --------- --------- ---------
Total net sales 58,978 50,737 172,121 144,878
Cost of goods sold 13,749 12,438 40,834 36,025
--------- --------- --------- ---------
Gross margin 45,229 38,299 131,287 108,853
Operating expenses:
Research and development 7,467 6,466 22,748 19,243
Selling, general and
administrative 24,300 21,200 73,309 60,893
Amortization of intangible assets 596 576 1,838 1,531
Special charge - - - -
--------- --------- --------- ---------
Income from operations 12,866 10,057 33,392 27,186
Interest and other income 592 263 2,149 660
--------- --------- --------- ---------
Income before taxes 13,458 10,320 35,541 27,846
Provision for income taxes 4,357 3,480 12,438 9,621
--------- --------- --------- ---------
Net income $ 9,101 $ 6,840 $ 23,103 $ 18,225
========= ========= ========= =========
Net income per common share:
--Basic $ 0.26 $ 0.20 $ 0.68 $ 0.53
========= ========= ========= =========
--Diluted $ 0.25 $ 0.19 $ 0.64 $ 0.49
========= ========= ========= =========
Shares used in computing net income
per common share:
--Basic 34,472 34,489 34,225 34,447
========= ========= ========= =========
--Diluted 36,350 36,879 36,184 36,891
========= ========= ========= =========
Pro Forma Non-GAAP Statements
The above pro forma non-GAAP statements are based upon our unaudited
consolidated statements of operations for the periods shown, giving effect
to the adjustments shown in the attached reconciliation. The presentation
is not in accordance with U.S. generally accepted accounting principles
(GAAP). The Company believes that pro forma non-GAAP reporting provides
meaningful supplemental information to both management and investors that
is indicative of the Company's core operating results and facilitates
comparison of operating results across reporting periods. The pro forma
non-GAAP financial information presented herein should not be viewed in
isolation to or as a substitute for the Company's financial results or
guidance in accordance with GAAP.
Ventana Medical Systems, Inc.
GAAP Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Nine Months Ended
September 30,
------------------
2006 2005
-------- --------
Net income $ 20,076 $ 14,905
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 12,267 7,983
Share-based compensation expense related to employee
stock options and employee stock purchases 3,797 -
Deferred income taxes (3,439) 785
Tax benefit from employee stock option plans 7,487 4,381
Non-cash litigation charge - 5,000
Excess tax benefits from share-based compensation (7,607) -
Change in operating assets and liabilities:
Accounts receivable (5,765) (359)
Inventory (6,627) (3,612)
Other assets (1,073) (1,395)
Accounts payable 5,587 336
Other liabilities 4,342 (208)
-------- --------
Net cash provided by operating activities 29,045 27,816
Cash flows from investing activities:
Purchase of property and equipment (17,630) (11,956)
Purchase of intangible assets (736) (2,301)
Purchases of short-term investments (188,865) (46,700)
Proceeds from sale of short-term investments 171,568 28,300
-------- --------
Net cash used in investing activities (35,663) (32,657)
Cash flows from financing activities:
Issuance of common stock 11,382 11,622
Purchases of common stock for treasury (13,394) (30,521)
Excess tax benefits from share-based compensation 7,607 -
Repayments of debt (350) (162)
-------- --------
Net cash provided by (used in) financing
activities 5,245 (19,061)
Effect of exchange rate change on cash and cash
equivalents 443 (849)
-------- --------
Net decrease in cash and cash equivalents (930) (24,751)
Cash and cash equivalents, beginning of period 17,519 33,354
-------- --------
Cash and cash equivalents, end of period $ 16,589 $ 8,603
======== ========
Supplemental cash flow information:
Income taxes paid $ 6,171 $ 428
Interest paid $ 76 $ 53
Non-cash investing and financing activities:
Tendered common stock for stock option
exercises $ 466 $ 338
Contact:
Christopher M. Gleeson
President and CEO
(520) 229-3787
Nick Malden
Chief Financial Officer
(520) 229-3857
VENTANA MEDICAL SYSTEMS, INC.
1910 E. Innovation Park Drive
Tucson, Arizona 85755
(520) 887-2155
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