MDCC Molecular Devices (MM)

SUNNYVALE, Calif., Feb. 1 /PRNewswire-FirstCall/ -- Molecular Devices Corporation (NASDAQ:MDCC) today announced revenues and earnings for the quarter and year ended December 31, 2006. Revenues for the fourth quarter of 2006 were $52.8 million and revenues for the year ended December 31, 2006 were $186.4 million. Operating income on a GAAP basis was $7.2 million for the fourth quarter of 2006, and $16.6 million for the year ended December 31, 2006. Operating income on a non-GAAP basis was $8.7 million for the fourth quarter of 2006, and $26.2 million for the year ended December 31, 2006. Tables reconciling operating income on a GAAP and non-GAAP basis are provided immediately following the Condensed Consolidated Balance Sheets. Fully diluted earnings per share on a GAAP basis were $0.24 for the fourth quarter of 2006 and $0.54 for the year ended December 31, 2006. Fully diluted earnings per share on a non-GAAP basis were $0.34 in the fourth quarter of 2006, and $0.98 for the year ended December 31, 2006. Tables reconciling fully diluted earnings per share on a GAAP and non-GAAP basis are provided immediately following the Condensed Consolidated Balance Sheets. 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 the statements related to 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, 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, 2006. 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, 2006 2005 2006 2005 ----------------- ------------------ (unaudited) (unaudited) REVENUES * $52,845 $52,689 $186,412 $181,951 COST OF REVENUES * 19,471 19,723 70,065 70,267 ------- ------- -------- -------- GROSS PROFIT 33,374 32,966 116,347 111,684 ------- ------- -------- -------- OPERATING EXPENSES: Research and development 6,328 6,325 23,362 25,281 Selling, general and administrative 19,546 16,031 71,826 59,885 Acquired in-process research and development -- -- 4,272 -- Restructuring and other charges 331 1,427 331 1,427 ------- ------- -------- -------- Total operating expenses 26,205 23,783 99,791 86,593 ------- ------- -------- -------- INCOME FROM OPERATIONS 7,169 9,183 16,556 25,091 Gain on sale of equity securities 567 -- 2,235 -- Translation gain on liquidation of subsidiaries 1,413 -- 1,413 -- Interest and other income (expense), net 98 (32) 439 (615) ------- ------- -------- -------- INCOME BEFORE TAXES 9,247 9,151 20,643 24,476 Income tax provision (5,276) (3,392) (11,503) (8,580) ------- ------- -------- -------- NET INCOME $3,971 $5,759 $9,140 $15,896 ======= ======= ======== ======== BASIC NET INCOME PER SHARE $0.24 $0.35 $0.55 $0.95 ======= ======= ======== ======== DILUTED NET INCOME PER SHARE $0.24 $0.34 $0.54 $0.93 ======= ======= ======== ======== SHARES USED IN COMPUTING BASIC NET INCOME PER SHARE 16,485 16,578 16,676 16,783 ======= ======= ======== ======== SHARES USED IN COMPUTING DILUTED NET INCOME PER SHARE 16,671 17,084 17,047 17,147 ======= ======= ======== ======== * For the three months ended December 31, 2005 and the years ended December 31, 2005 and 2006, Revenues included an increase of $231,000, $736,000 and $674,000, respectively, related to reclassification of freight recovered from Cost of Revenues to Revenues. Cost of Revenues has been increased accordingly, and there was no effect on gross profit, operating income or net income. The Company plans to include these adjustments, and potentially similar adjustments in prior periods, in its financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2006, which is currently expected to be filed on or about March 16, 2007. MOLECULAR DEVICES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, December 31, 2006 2005 ----------------------------- ASSETS (unaudited) Current assets: Cash and cash equivalents $22,824 $28,908 Accounts receivable, net 39,098 41,197 Inventories, net 29,435 23,197 Deferred tax assets 3,493 5,873 Prepaids and other current assets 3,923 2,353 ---------- ---------- Total current assets 98,773 101,528 Equipment and leasehold improvements, net 10,774 9,902 Other assets 151,769 145,986 ---------- ---------- $261,316 $257,416 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $7,091 $7,676 Accrued liabilities 32,419 31,188 ---------- ---------- Total current liabilities 39,510 38,864 Long-term liabilities: Other long-term liabilities 1,289 993 Deferred tax liabilities 4,218 4,486 ---------- ---------- Total long-term liabilities 5,507 5,479 Stockholders' equity 216,299 213,073 ---------- ---------- $261,316 $257,416 ========== ========== HISTORICAL NON-GAAP RECONCILIATION (unaudited) (in thousands, except per share amounts) Three Months Ended December 31, 2006 ------------------------------------- Non-GAAP Adjustments ------------------------ Other reconciling GAAP FAS 123R items Non-GAAP ------------------------------------- REVENUES $52,845 $-- $-- $52,845 COST OF REVENUES 19,471 (94) -- 19,377 ------------------------------------- GROSS PROFIT 33,374 94 -- 33,468 ------------------------------------- OPERATING EXPENSES: Research and development 6,328 (270) -- 6,058 Selling, general and administrative 19,546 (831) -- 18,715 Restructuring and other charges 331 -- (331) -- ------------------------------------- Total operating expenses 26,205 (1,101) (331) 24,773 ------------------------------------- INCOME FROM OPERATIONS 7,169 1,195 331 8,695 Gain on sale of equity securities 567 -- (567) -- Translation gain on liquidation of subsidiaries 1,413 -- (1,413) -- Interest and other income (expense), net 98 -- -- 98 ------------------------------------- INCOME BEFORE TAXES 9,247 1,195 (1,649) 8,793 Income tax provision (5,276) 111 1,967 (3,198) ------------------------------------- NET INCOME $3,971 $1,306 $318 $5,595 ===================================== BASIC NET INCOME PER SHARE $0.24 $0.08 $0.02 $0.34 ===================================== DILUTED NET INCOME PER SHARE $0.24 $0.08 $0.02 $0.34 ===================================== SHARES USED IN COMPUTING BASIC NET INCOME PER SHARE 16,485 16,485 16,485 16,485 ===================================== SHARES USED IN COMPUTING DILUTED NET INCOME PER SHARE * 16,671 16,671 16,671 16,671 ===================================== HISTORICAL NON-GAAP RECONCILIATION (unaudited) (in thousands, except per share amounts) Twelve Months Ended December 31, 2006 ------------------------------------- Non-GAAP Adjustments ------------------------ Other reconciling GAAP FAS 123R items Non-GAAP ------------------------------------- REVENUES $186,412 $-- $-- $186,412 COST OF REVENUES 70,065 (408) -- 69,657 ------------------------------------- GROSS PROFIT 116,347 408 -- 116,755 ------------------------------------- OPERATING EXPENSES: Research and development 23,362 (1,097) -- 22,265 Selling, general and administrative 71,826 (3,511) -- 68,315 Acquired in-process research and development 4,272 -- (4,272) -- Restructuring and other charges 331 -- (331) -- ------------------------------------- Total operating expenses 99,791 (4,608) (4,603) 90,580 ------------------------------------- INCOME FROM OPERATIONS 16,556 5,016 4,603 26,175 Gain on sale of equity securities 2,235 -- (2,235) -- Translation gain on liquidation of subsidiaries 1,413 -- (1,413) -- Interest and other income, net 439 -- -- 439 ------------------------------------- INCOME BEFORE TAXES 20,643 5,016 955 26,614 Income tax provision (11,503) (930) 2,601 (9,832) ------------------------------------- NET INCOME $9,140 $4,086 $3,556 $16,782 ===================================== BASIC NET INCOME PER SHARE $0.55 $0.25 $0.21 $1.01 ===================================== DILUTED NET INCOME PER SHARE $0.54 $0.24 $0.21 $0.98 ===================================== SHARES USED IN COMPUTING BASIC NET INCOME PER SHARE 16,676 16,676 16,676 16,676 ===================================== SHARES USED IN COMPUTING DILUTED NET INCOME PER SHARE * 17,047 17,047 17,047 17,047 ===================================== * For the three and twelve months ended December 31, 2006, the Company did not adjust the shares used in computing non-GAAP diluted net income per share to conform to what the diluted shares would have been had it applied prior accounting standards. The difference between the shares calculated by applying FAS 123R and calculated under prior accounting standards for the three and twelve months ended December 31, 2006 was approximately 0.1 million shares and is immaterial. 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 FAS 123R and the unusual items related to the gain on the sale of an equity investment, translation gain on liquidation of subsidiaries, write-off of acquired in-process research and development, and restructuring charges. Molecular Devices' management believes that such non-GAAP financial measures are also useful for investors because the gain on the sale of an equity investment, translation gain on liquidation of subsidiaries, write-off of acquired in-process research and development, and restructuring charges are the results of transactions that are unusual due to their nature, size and frequency. In addition, excluding the impact of FAS 123R permits a more direct comparison to results in 2005, at which time FAS 123R had not yet been adopted. Consequently, excluding the impact of FAS 123R, the gain on the sale of an equity investment, translation gain on liquidation of subsidiaries, write-off of acquired in-process research and development, and restructuring charges from Molecular Devices' operating results provides investors an important insight into Molecular Devices' operating results and related trends of its core business. Finally, Molecular Devices has historically reported similar non-GAAP financial measures to its investors and believes that the inclusion of comparative numbers provides consistency in its financial reporting. 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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