IRIS International Reports Record Q4 and Full Year 2008 Revenue and Earnings

Business Wire, Feb 18, 2009

Record 153 iQ([R])200 Analyzers Sold in Q4; Record Consumable and Service Revenue Up 27%

CHATSWORTH, Calif. -- IRIS INTERNATIONAL, INC. (NASDAQ: IRIS), today announced record fourth quarter 2008 revenue of $26.7 million, an increase of 22% over revenue of $21.9 million in the fourth quarter of 2007, and record full year revenue of $95.5 million for the year ended Dec. 31, 2008, a 13% increase over revenue of $84.3 million for fiscal 2007.

"We are pleased to report the strongest fourth quarter and year end performance in IRIS' nearly 30-year history, with continued strong double digit revenue and earnings growth achieved in both the quarter and full year, despite challenging global economic conditions," stated Cesar Garcia, Chairman, President and Chief Executive Officer. "Significant gains were made in each of our reporting segments, with high margin consumable and service revenue showing the strongest improvement, increasing 27% over last year's fourth quarter, and now accounting for 49% of overall revenue for the year. Instrument shipments remain strong with a record 153 iQ([R])200 analyzers shipped in the fourth quarter, the highest in any quarter since launching the iQ([R])200 in August 2003. We are also pleased with commercial shipments in the fourth quarter of 55 of our new iChem([R])VELOCITY[TM] automated urine chemistry analyzers and iRICELL[TM] integrated urinalysis workstations, and a total of 88 units shipped through year end, since its release to the international marketplace in September 2008. Moving forward, our sales pipeline is solid and we anticipate a record first quarter and full year fiscal 2009," Mr. Garcia said.

2008 Q4 and Year End Highlights:

* Record Q4 2008 revenue of $26.7 million, increased 22% over Q4 2007; record full year 2008 revenue of $95.5 million, increased 13% over fiscal 2007.

* Record diluted EPS of $0.18 for Q4 2008, and record diluted EPS of $0.48 for full year 2008, including $0.04 one-time gain.

* Record IVD consumables and service revenues increased 27% over Q4 2007, and 21% for full year; consumables and service revenues now account for 49% of consolidated revenue for the year.

* Record 153 iQ([R])200 analyzers sold in Q4, and 505 for full year, with more than 2,150 sold to date; year-ago Q4 instrument sales of 132 analyzers.

* iChem([R])VELOCITY[TM] and iRICELL[TM] workstation international shipments of 55 units in Q4 and totaling 88 units shipped through year end, since its launch in September 2008; U.S. FDA 510(k) clearance is pending.

* Consolidated gross margins of 49% in Q4, and 51% for 2008 full year.

* Commenced first stage of clinical study using NADiA[TM]ProsVue[TM] ultra sensitive prostate-specific antigen diagnostic assay.

* Strong debt-free balance sheet with cash and short-term investments of $26.6 million at Dec. 31, after spending approximately $12 million in open market purchases of approximately 1 million IRIS shares under the 2008 stock repurchase program.

For the fourth quarter ended December 31, 2008, IRIS had record revenue of $26.7 million, up 22% from the $21.9 million reported in the fourth quarter of 2007. Net income for the 2008 fourth quarter was a record $3.4 million, or $0.18 per diluted share, compared with net income of $2.7 million, or $0.14 per diluted share in the fourth quarter of 2007. The 2008 fourth quarter diluted EPS includes $0.04 related to the $1.2 million net payment to IRIS as part of the manufacturing transition and licensing agreement signed with IDEXX Laboratories in December 2008. This non-recurring payment has been booked by IRIS primarily as other income and does not impact revenue from operations. Diluted weighted average shares outstanding for the three months ended December 31, 2008 and 2007, were 18.5 million and 19.0 million, respectively.

For the twelve months ended December 31, 2008, IRIS reported record revenue of $95.5 million, a 13% increase over revenue of $84.3 million for full year 2007. Net income for the 2008 full year was a record $9.0 million, or $0.48 per diluted share, compared with net income of $7.5 million, or $0.40 per diluted share in 2007. Included in the full year 2008 net income and diluted EPS is the non-recurring $1.2 million net payment, or approximately $0.04 per share, related to the above-mentioned agreement with IDEXX Laboratories in December. Diluted weighted average shares outstanding for the twelve months ended December 31, 2008 and 2007, were 18.7 million and 18.7 million, respectively.

Strong revenue growth in the fourth quarter was driven by 26% revenue growth in our IVD business unit to $23.4 million, compared with $18.6 million in the fourth quarter of 2007. IVD instrument sales increased by 25% to $11.0 million in the fourth quarter of 2008, compared with $8.9 million in the fourth quarter of 2007. IVD instrument revenue represented 41% of consolidated revenue in the fourth quarter of 2008 and 2007, respectively. IVD consumables and service revenue grew by 27% to a record $12.3 million for the quarter, compared with $9.7 million in the fourth quarter of 2007. There were 153 iQ([R])200 urine microscopy analyzers sold in the quarter and 505 units for the year, increasing the total number of iQ([R])200 analyzers sold to date to more than 2,150 units, generating strong recurring high margin consumable and service revenue which now represents 49% of the consolidated revenue and 57% of the IVD segment revenue. The Sample Processing Division achieved fourth quarter revenue of $3.3 million, approximately at the same level as the fourth quarter of 2007.