Invitrogen Announces First Quarter 2004 Results; Record Sales and Pro Forma Earnings Achieved and Raises Full Year Guidance

Business Wire, April 22, 2004

Business Editors/Health/Medical Writers

BIOWIRE2K

CARLSBAD, Calif.--(BUSINESS WIRE)--April 22, 2004

Invitrogen Corporation (Nasdaq:IVGN) today announced results for the quarter ended March 31, 2004. Revenues for the first quarter reached a record $251.3 million, an increase of 39% over the $180.6 million reported for the first quarter of 2003. Net income for the first quarter was $10.5 million versus $16.9 million for the same quarter in 2003. The reduction in net income was principally due to higher amortization of intangibles from acquired businesses and a $6.8 million charge for the retirement of high cost debt in the quarter. Earnings per share for the first quarter of 2004 was $0.20 per share, as compared to $0.34 per share, reported in the first quarter of 2003.

The Company has regularly reported pro forma results which exclude acquisition-related amortization and other similar costs. First quarter pro forma net income was $35.7 million, or $0.63 per share, compared with pro forma net income in the first quarter of 2003 of $27.2 million, or $0.52 per share. Pro forma net income and pro forma earnings per share increased 31% and 21%, respectively. Reconciliations between Invitrogen's results and pro forma results for the periods reported are presented in the tables below with information also presented on the Company's Investor Relations web page at www.invitrogen.com.

Highlights

-- Grew revenues 39%.

-- Improved pro forma operating margin to 26% from 24% in the

first quarter of 2003.

-- Acquired all of the shares of BioReliance Corporation for $48

per share, providing a strategic entree into the biologic

testing marketplace.

-- Strengthened the senior management team with the addition of

Karen Gibson as Chief Information Officer and Nicolas

Barthelemy as Senior Vice President of Operations.

-- Acquired Protometrix, Inc., a maker of protein array chips, on

April 1, 2004, in an all-cash transaction.

-- Issued $450 million of 1.5% Convertible Senior Notes.

-- Retired $172.5 million of 5.5% Convertible Notes.

-- Raised 2004 full year guidance for pro forma earnings per

share to $2.88.

Conference Call and Webcast Today at 11:00 am Eastern

The Company will discuss its first quarter 2004 results and its business outlook on its conference call at 11:00 am Eastern Time today, including its 2004 guidance. Additional details regarding the call and webcast are included later in this release.

First Quarter Review

Greg Lucier, Invitrogen's President and CEO, commented: "We are very pleased with our performance in the first quarter as we reduced our operating expenses as a percentage of sales, thereby expanding pro forma operating margins to 26%. The businesses we have acquired are integrating nicely. We are accelerating our development and marketing of new products that combine technologies from these acquisitions, bringing innovative solutions to drug research and development. Our PureLink(TM) and Z'LYTE(TM) product families are examples of recent product introductions that combine technologies we obtained through our acquisitions."

The first quarter revenue growth of 39% included 7% from favorable changes in foreign currency exchange rates. The 39% revenue growth was driven by BioDiscovery products, where sales increased 31% in the first quarter of 2004 compared with the same period in 2003, principally due to the acquisition of well-positioned offerings from Molecular Probes and Pan Vera. In addition, BioProduction revenues increased 53% in the first quarter principally related to the inclusion of BioReliance revenues for approximately two months and increased customer demand.

First quarter 2004 gross margin was 56%, compared with 60% in the first quarter of 2003. First quarter 2004 gross margin included $10.3 million in increased costs for inventories acquired with Molecular Probes, which were recorded at fair value under purchase accounting rules. BioDiscovery gross margin increased to 70% in the first quarter of 2004 from 65% last year as the Company has changed its mix toward higher value BioDiscovery offerings. BioProduction gross margin decreased to 46% from 52% in the comparable quarter of 2003, and reflects the lower gross margin BioReliance service business and the higher cost sera inventory purchased in the last year.

Operating income was 10% of revenues in the first quarter of 2004 versus 14% in the first quarter of 2003. Amortization of purchased intangibles increased in the first quarter of 2004 compared with the same period in 2003, reflecting additional amortization for businesses acquired in the past year. Operating income before acquisition-related amortization and other similar costs was 26% of revenues in the first quarter of 2004 compared with 24% in the first quarter of 2003. The operating margins improved as a result of leveraging our operating expenses over a larger revenue base.

First quarter interest income is lower than in the same period of the prior year due to a decline in the yield of our investment portfolio, while interest expense is higher compared to the first quarter of 2003 because of higher debt balances in the 2004 period. A charge of $6.8 million was recognized in the first quarter of 2004 related to the early retirement of $172.5 million in convertible notes.