PE Biosystems Reports 30 Percent Increase in Third Quarter Earnings Per Share to 26 Cents

Business Wire, April 26, 2000

Health/Medical Writers

FOSTER CITY, Calif.--(BW HealthWire)--April 26, 2000

Revenues Rise 20 Percent and Operating Profit Increases 23 Percent

PE Biosystems Group (NYSE: PEB), a PE Corporation business, today reported that income from continuing operations in the third quarter ended March 31, 2000 increased 35 percent to $56.1 million, or $0.26 per diluted share, from $41.6 million, or $0.20 per diluted share, in the prior year. Income statement comparisons exclude the results of PE Biosystems' interest in Tecan, which was sold during the fourth quarter of fiscal 1999, and special items incurred in fiscal 1999.

Total net revenues for the Group for the third quarter were $368.1 million, an increase of 20 percent over the year-earlier quarter. Operating income for the third quarter of the current fiscal year was $72.5 million, a 23 percent increase over the comparable quarter last year. The Group's operating profit margin in the current quarter was 19.7 percent compared to 19.2 percent in the third quarter of fiscal 1999.

Foreign currency had a negligible net impact on this quarter's revenues and operating income, as weakness in the euro was offset by strengthening in the Japanese yen. The Group's foreign currency management program resulted in a gain of $5.1 million, reflected in other income.

For the first nine months of the current fiscal year, the PE Biosystems Group reported net revenues of $996.3 million, 25 percent higher than in the year-earlier period. Income from continuing operations was $129.6 million, a 40 percent increase over the previous year period. On a per share basis, income from continuing operations was $0.60 per diluted share for the nine month period compared to $0.45 per diluted share for the same period a year ago, a 33 percent increase. Operating income, excluding special items, of $182.6 million was 38 percent higher than in the comparable period of fiscal 1999, and operating profit margin was 18.3 percent compared to 16.7 percent.

Tony L. White, chairman, president and chief executive officer of PE Corporation, said, "The continuation of strong revenue and earnings growth at PE Biosystems in the third quarter reflects the needs of our customers in basic medical research, pharmaceutical development, and applied markets for the most sophisticated, automated, and cost-effective life science tools. Our corporate mission is to remain the innovation leader in this field. We are extremely pleased to have recently announced new products and initiatives in proteomics and a new genetic analyzer system, the ABI Prism 3100, which we expect to be important contributors to our future performance."

"Our third quarter 2000 results signal the continued strength of our business across multiple product lines," said Michael W. Hunkapiller, Ph.D., president of PE Biosystems. "Revenues grew substantially in genetic analysis reagents used in a variety of whole genome DNA sequencing projects and in applied genetic analysis markets such as forensics and human diagnostics. Revenues in genetic analysis also reflected continued demand for the ABI Prism 3700 DNA Analyzer, our production sequencing system, and our other DNA sequencing systems. Demand also continues to be strong for our sequence detection systems, which are used to study gene expression, and for our high-performance mass spectrometry instruments, which analyze drug metabolism and protein structure."

Revenue growth in the third quarter compared to the same period in the prior year was particularly strong in Japan and elsewhere in Asia even excluding the favorable effects of currency. Higher revenues in Japan reflected increased government funding for genomics-related research. Growth in Europe was moderated by negative currency effects and, as in the United States, by comparison to an unusually strong third quarter in 1999 when the Group began bulk shipments of the ABI Prism 3700 to leading genome researchers.

Significant recent developments include:

-- Announcement of the ABI Prism 3100, a fully automated 16-lane

capillary electrophoresis genetic analyzer. This new system

will complement the existing genetic analyzer product line and

provide new levels of automation and versatility to customers

who do not require the production-scale throughput of the 3700

system.

-- The introduction of new systems for proteomics markets, the

QSTAR(TM) Pulsar and Proteomics Solution 1(TM). QSTAR Pulsar

combines two mass spectrometry technologies, quadrupole and

TOF (time-of-flight), and enables improved sensitivity,

resolution, and accuracy for analyzing low levels of unknown

proteins. QSTAR Pulsar is Windows NT-compatible. Proteomics

Solution 1 is the first automated system for protein

identification which integrates sample preparation, MALDI

(matrix assisted laser desorption ionization)-TOF mass

spectrometry, and online database searching.

-- Establishing a Proteomics Research Center to define novel

tools for proteomics, focus on the advancement of the science

of proteomics, and develop practical application-based systems