-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UCzcaGXZauBYnBhl9J4HkVTZu3TlXuJAZuKMtwfPy0NwmAw2PNVg7VEKSv2ywFvS J0Zkw4MtoYOilmrIZ8KFUw== 0001157523-04-009688.txt : 20041022 0001157523-04-009688.hdr.sgml : 20041022 20041022074536 ACCESSION NUMBER: 0001157523-04-009688 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041022 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041022 DATE AS OF CHANGE: 20041022 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: 041090673 BUSINESS ADDRESS: STREET 1: 1910 INNOVATION PARK DRIVE CITY: TUCSON STATE: AZ ZIP: 85737 BUSINESS PHONE: 800-227-2155 MAIL ADDRESS: STREET 1: 1910 INNOVATION PARK DRIVE CITY: TUCSON STATE: AZ ZIP: 85737 8-K 1 a4748236.txt VENTANA MEDICAL SYSTEMS 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 -------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): October 22, 2004 VENTANA MEDICAL SYSTEMS, INC. (Exact name of Registrant as specified in its charter) State of Delaware 000-20931 94-2976937 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification Number) 1910 Innovation Park Drive Tucson, AZ 85737 (Address of principal executive offices) Registrant's telephone number, including area code: (520) 887-2155 N/A (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: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ Item 2.02 Results of Operations and Financial Condition. Financial Statements and Exhibits On October 22, 2004, Ventana Medical Systems (the "Registrant") released financial information with respect to its quarter ended September 30, 2004. The full text of the press release is attached hereto as Exhibit 99.1. The information in this Form 8-K and the exhibit attached hereto shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated be reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. Item 9.01 Financial Statements and Exhibits (c) Exhibits The following exhibit is filed herewith: 99.1 Press release of the Registrant dated October 22, 2004, titled "Ventana Reports Third Quarter Results". 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. VENTANA MEDICAL SYSTEMS, INC. (Registrant) By: /s/ NICHOLAS MALDEN --------------------------------------- Nicholas Malden Senior Vice President, Chief Financial Officer and Secretary Date: October 22, 2004 EXHIBIT INDEX ------------- 99.1 Press release of the Registrant dated October 22, 2004, titled "Ventana Reports Third Quarter Results". EX-99.1 2 a4748236ex991.txt PRESS RELEASE EXHIBIT 99.1 Ventana Reports Third Quarter Results; 23% Revenue Growth / 67% Increase in Pro Forma Net Income / Outlook Raised TUCSON, Ariz.--(BUSINESS WIRE)--Oct. 22, 2004--Ventana Medical Systems, Inc. (Nasdaq:VMSI), today reported sales of $39.3 million for the quarter ending September 30, 2004, a 23% increase over third quarter 2003. Pro forma net income for the third quarter was $5.5 million, or $0.31 per diluted share, excluding the previously announced $1.8 million pre-tax ($1.4 million tax-effected, or $0.08 per share) non-cash charge to write-off the value of certain imaging technology related intangibles and other assets in connection with the TriPath Imaging supply agreement. Including the non-cash charge, the Company reported Generally Accepted Accounting Principles ("GAAP") net income for the third quarter of $4.1 million, or $0.23 per diluted share, compared with GAAP net income of $3.3 million and $0.19 per diluted share in the third quarter of 2003. THIRD QUARTER 2004 "Reagent and other revenues grew 35% versus last year's third quarter," commented Christopher Gleeson, Ventana's President and Chief Executive Officer. "Clinical placement rates were solid, with continued strong demand for our BenchMark(R) XT and LT systems. As anticipated, we continue to see some slowing in capital purchases in the third quarter in our research business." Gross margin was 76% in the quarter versus 75% in the third quarter of 2003, reflecting the on-going revenue mix shift to consumables and volume-based manufacturing efficiencies. R&D investment was $5.4 million in the quarter, up 7% versus third quarter 2003. This increase was driven primarily by our new platform development programs for the histology market and by our reagent chemistry application initiatives for the histology, cytology, and molecular discovery/research businesses. The third quarter also saw the Company announce a comprehensive licensing and supply agreement with Quantum Dot Corporation relating to their Qdot(R) nanocrystal technology for in vitro diagnostic applications in anatomic pathology and cytology. In addition, Ventana launched its TheraDx(TM) c-KIT diagnostic kit for use in conjunction with the Novartis drug Gleevec(R). This test is the world's first FDA-approved diagnostic using a rabbit monoclonal antibody. The Company also obtained, during the third quarter, the exclusive rights to sell and distribute worldwide a Ventana-branded version of TriPath Imaging's interactive histology imaging system. YEAR-TO-DATE 2004 Net sales for the nine months ended September 30, 2004, increased 25% to $118.1 million from $94.7 million for the same period in 2003. Reagents and other revenues grew by 33% year-over-year. Gross margins improved 180 basis points, and R&D spending increased by 11%. Pro-forma year-to-date 2004 net income, excluding the aforementioned tax-effected third quarter non-cash charge, was $14.1 million, or $0.79 per diluted share. Year-to-date GAAP net income was $12.7 million, compared with $8.0 million last year. Year-to-date GAAP earnings per diluted share was $0.71 versus $0.47 for the comparable period last year. CALENDAR YEAR 2004 AND 2005 OUTLOOK The Company has further raised its guidance for 2004. The Company now advises it expects that full year sales will be in the range of $161M to $162.5M. Full year pro-forma and GAAP earnings (which includes the aforementioned third-quarter non-cash charge) will be in a range of $1.20 to $1.22 and $1.13 to $1.15 per diluted share, respectively. The Company also reconfirmed its earlier guidance for 2005, advising that it expects revenues between $192M and $194M and EPS consistent with the currently published consensus of approximately $1.43 to $1.46 per diluted share. CONFERENCE CALL Ventana will hold a conference call to discuss third-quarter 2004 results and the outlook for the full year at 10:00 a.m. EST on Friday, October 22, 2004. The call can be accessed live and will be available for replay over the Internet via www.viavid.net. Ventana develops, manufactures, and markets instrument/reagent systems that automate slide preparation and staining in clinical histology and drug discovery laboratories worldwide. Ventana'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. This press release contains forward-looking statements within the meaning of the Federal Securities laws. These forward-looking statements include: our current financial outlook for the fourth-quarter of 2004, expected revenue growth for 2005, and operating margins for 2005. 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. Financial Tables Follow Ventana Medical Systems, Inc. Condensed Consolidated Balance Sheets (in thousands, except per share data) Sept.30, Dec. 31, ASSETS 2004 2003 -------- -------- Current assets: Cash and cash equivalents $ 20,523 $ 19,711 Short-term investments 20,104 19,974 Trade accounts receivable, net 27,358 27,398 Inventories, net 13,102 10,483 Prepaid expenses 1,244 594 Deferred tax assets 3,229 3,200 Other current assets 779 967 -------- -------- Total current assets 86,339 82,327 Property and equipment, net 48,700 42,516 Goodwill 2,804 2,804 Intangible assets, net 5,885 3,982 Deferred tax assets, net of current portion 5,602 5,602 Other assets 4,867 3,983 -------- -------- Total assets $154,197 $141,214 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 11,207 $ 10,081 Other current liabilities 21,615 16,497 -------- -------- Total current liabilities 32,822 26,578 Long-term debt 2,041 2,260 Commitments and Contingencies Stockholders' equity: Common stock - $.001 par value; 50,000 shares authorized; 17,378 and 16,709 shares issued and outstanding at September 30, 2004 and December 31, 2003, respectively 17 17 Additional paid-in capital 162,594 154,395 Accumulated deficit (22,489) (35,149) Accumulated other comprehensive loss (186) (171) Treasury stock - 584 shares and 250 shares at cost at September 30, 2004 and December 31, 2003, respectively (20,602) (6,716) Total stockholders' equity 119,334 112,376 -------- -------- Total liabilities and stockholders' equity $154,197 $141,214 ======== ======== Ventana Medical Systems, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2004 2003 2004 2003 Sales: ------- ------- -------- ------- Reagents and other $34,308 $25,436 $ 99,199 $74,338 Instruments 4,994 6,524 18,929 20,333 ------- ------- -------- ------- Total net sales 39,302 31,960 118,128 94,671 Cost of goods sold 9,236 7,861 29,950 25,715 ------- ------- -------- ------- Gross profit 30,066 24,099 88,178 68,956 Operating expenses: Research and development 5,421 5,057 15,741 14,224 Selling, general and administrative 17,638 15,207 54,188 45,515 Special charges 1,758 - 1,758 - Amortization of intangible assets 307 466 924 1,385 ------- ------- -------- ------- Income from operations 4,942 3,369 15,567 7,832 Interest and other income 126 (33) 211 350 ------- ------- -------- ------- Income before taxes 5,068 3,336 15,778 8,182 Provision for income taxes (1,004) (47) (3,118) (176) ------- ------- -------- ------- Net income $ 4,064 $ 3,289 $ 12,660 $ 8,006 ======= ======= ======== ======= Earnings per common share: --Basic $ 0.24 $ 0.20 $ 0.76 $ 0.49 ======= ======= ======== ======= --Diluted $ 0.23 $ 0.19 $ 0.71 $ 0.47 ======= ======= ======== ======= Shares used in computing earnings per common share: --Basic 16,805 16,492 16,756 16,387 ======= ======= ======== ======= --Diluted 17,918 17,730 17,869 17,165 ======= ======= ======== ======= Ventana Medical Systems, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) Nine Months Ended September 30, ----------------- 2004 2003 -------- ------- Operating activities: Net income $ 12,660 $ 8,006 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 6,105 6,745 Non-cash intangibles and property and equipment charges 1,758 - Changes in operating assets and liabilities 1,925 2,958 -------- ------- Net cash provided by operating activities 22,448 17,709 Investing activities: Purchase of property and equipment (11,948) (5,018) Purchase of intangible assets (3,605) (287) Purchases of short-term investments (15,348) - Proceeds from sale of short-term investments 15,135 - -------- ------- Net cash used in investing activities (15,766) (5,305) Financing activities: Issuance of common stock 8,199 6,413 Repayments of debt (219) (35) Purchases of common stock for treasury (13,886) (1,650) -------- ------- Net cash (used in) provided by financing activities (5,906) 4,728 Effect of exchange rate change on cash and cash equivalents 36 (46) -------- ------- Net (decrease) increase in cash and cash equivalents 812 17,086 Cash and cash equivalents, beginning of period 19,711 18,708 -------- ------- Cash and cash equivalents, end of period $ 20,523 $35,794 ======== ======= CONTACT: Ventana Medical Systems, Inc. Christopher M. Gleeson, 520-229-3787 or Nick Malden, 520-229-3857 -----END PRIVACY-ENHANCED MESSAGE-----