Celera (NYSE:CRA), an Applera Corporation business, today reported net
revenues of $39.5 million for the third quarter of fiscal 2008, compared
to $9.8 million in the prior year quarter. The third quarter fiscal 2008
results included net revenues from Berkeley HeartLab, Inc. (BHL) and
Atria Genetics Inc., which were acquired during the second quarter of
fiscal 2008. Excluding revenues from these acquisitions, Celera’s
net revenues in the third quarter of fiscal 2008 were $14.7 million.
For the third quarter of fiscal 2008, Celera reported a net loss of $7.4
million, or $0.09 per share, compared to a net loss of $4.5 million, or
$0.06 per share, for the prior year quarter. Results for both periods
were affected by the specified items described in the reconciliation
below. Third quarter fiscal 2008 loss per share on a non-GAAP basis,
excluding the specified items described below, was $0.01, compared to a
loss of $0.06 per share for the prior year quarter. All per share
amounts refer to Applera Corporation-Celera Group Common Stock.
“Celera’s business
continues to grow as it prepares for its anticipated separation from
Applera,” said Tony L. White, Chairman,
President and Chief Executive Officer of Applera Corporation. “As
planned, we filed a registration statement with the Securities and
Exchange Commission and are continuing to target completion of the
separation process by the end of June.”
“We’re pleased with
the contributions Berkeley HeartLab and Atria Genetics are making to
Celera’s performance,”
said Kathy Ordoñez, President of Celera. “We
are now test marketing our new KIF6 genetic assay at Berkeley
HeartLab that identifies people with elevated genetic risk for coronary
heart disease that is ameliorated by statin therapy, and are very
impressed with the initial adoption of the test among a select group of
physicians and patients.”
For the third quarters of fiscal 2008 and 2007, Celera recorded items
that affected the comparability of results. For the third quarter of
fiscal 2008, these items increased the loss before taxes by $8.4
million. These pre-tax items included: restructuring costs of $2.2
million; costs associated with Celera’s
separation from Applera of $1.1 million; an investment write-down of
$3.1 million; amortization of purchased intangible assets of $2.5
million related to the acquisitions of BHL and Atria Genetics; and a
gain of $1.1 million from a legal settlement. Also included in the
pre-tax items was a charge of $0.6 million related to a settlement of
litigation by Abbott Laboratories, Celera’s
alliance partner, with Innogenetics N.V., as described below. The tax
provision for the third quarter of fiscal 2008 included a charge of $0.7
million related to R&D tax credits.
Results for the third quarter of fiscal 2007 included a tax benefit of
approximately $0.4 million for R&D credits.
The following table summarizes the impact of these items on EPS
calculations:
Reconciliation of GAAP amounts to Non-GAAP amounts
(Dollar amounts in millions)
Three months ended March 31, 2008
Three months ended March 31, 2007
GAAP amounts
Adj.
Non-GAAP amounts
GAAP amounts
Adj.
Non-GAAP amounts
Operating loss
$
(10.5
)
$
(5.3
)
$
(5.2
)
$
(15.7
)
$
-
$
(15.7
)
Loss before income taxes
(10.0
)
(8.4
)
(1.6
)
(8.2
)
(8.2
)
Benefit for income taxes
2.6
2.0
0.6
3.7
0.4
3.3
Net loss
(7.4
)
(6.4
)
(1.0
)
(4.5
)
0.4
(4.9
)
Total diluted loss per share
$
(0.09
)
$
(0.08
)
$
(0.01
)
$
(0.06
)
$
-
$
(0.06
)
Financial Highlights
Celera has three categories of revenue: Product sales, including
equalization payments from Abbott, Service revenues, and Royalty,
Licenses and Milestone revenue. Product sales consist of Celera’s
portion of sales of Atria human leukocyte antigen (HLA) products and
shipments of Celera-manufactured products to Abbott, at cost.
Equalization payments result from an equal sharing of alliance profits
and losses between the alliance partners and vary each period depending
on the relative income and expense contribution of each partner. Service
revenues consist primarily of sales by BHL.
Revenues by category for the third quarter of fiscal 2008 compared to
the prior year quarter were: $9.1 million for Product sales compared
to $6.3 million in the prior year quarter, primarily due to sales of
Atria HLA products and a slightly higher equalization payment from
Abbott; Royalty, Licenses and Milestone revenue was $7.8 million
compared to $3.5 million in the prior quarter, primarily due to higher
licensing and royalty revenues; and revenues from Services were $22.6
million in the third quarter of fiscal 2008. As noted above, BHL was
acquired in the second quarter of fiscal 2008.
R&D expenses for the third quarter of fiscal 2008 were $10.2 million,
compared to $13.0 million in the prior year quarter, primarily
reflecting the decrease in proteomic-based target discovery and
validation related activities. SG&A expenses for the third quarter of
fiscal 2008 increased to $21.3 million from $7.1 million in the prior
year quarter, primarily due to expenditures relating to BHL service
revenues.
At March 31, 2008, the Group’s cash and
short-term investments were approximately $338 million, compared to
approximately $342 million at December 31, 2007.
Supplemental Financial Information
For the third quarter of fiscal 2008, total end-user sales of products
in the alliance with Abbott were $30.8 million compared to $24.3
million in the prior year quarter. Increased sales of HIV, HCV and HBV
RealTime™ viral load assays used on
the m2000™ system and thrombosis
analyte specific reagents (ASRs) all contributed to the year-over-year
growth. These increased sales were partially offset by lower sales of
cystic fibrosis reagents and the removal of the HCV genotyping ASRs
due to the injunction against sales of these products by Abbott
previously issued in the litigation with Innogenetics N.V. Following
the settlement of this litigation as described below, these ASRs have
been reintroduced onto the menu of ASRs offered through the alliance,
and efforts are underway to register the HCV genotyping assays for use
on the m2000 system.
Business and Scientific Developments
Following the publication of three papers in the Journal of the
American College of Cardiology in January 2008 describing the
identification of variant in a gene called KIF6 that conveys up
to a 55 percent increased risk for coronary heart disease, which is
virtually eliminated by statin therapy, BHL completed the development
and validation of a laboratory service assay for KIF6 genotypes
in March and began offering the test to a select group of physicians
participating in a trial market. Uptake of the KIF6 assay to
date has been strong and thus far appears to be outperforming
previously successful trial markets conducted by BHL, such as Apo E,
NT-proBNP, and Lp-PLA2 tests at the same
stage of trial marketing. The test market is expected to refine
pricing, positioning and reimbursement for the KIF6 test and is
targeted to be completed by the end of the current quarter, in
anticipation of a full scale launch of KIF6 testing service at
BHL over the summer.
In April, Celera and Abbott were awarded a bone marrow registry tender
by the French National Blood Service, or Etablissement Français
du Sang, for high resolution HLA typing using Celera’s
HLA sequenced-based testing products. The term of the award is for
three years and is effective immediately. It is anticipated that
approximately 45,000 individuals will be tested over the coming three
years, with each one tested over multiple loci for registry
requirements, representing approximately 200,000 HLA tests performed
on these repository samples. HLA sequenced-based testing is part of
the Atria Genetics product portfolio that was acquired by Celera in
October 2007, and now is a part of Celera’s
in vitro diagnostic product business.
In April, Abbott and Innogenetics N.V., Ghent, Belgium, settled a
patent infringement suit covering the U.S. sale of HCV genotyping
products. Innogenetics did not name Celera as a party in this lawsuit,
but Celera had an interest in these products and in the outcome of the
litigation because the products are manufactured by Celera and sold
through its alliance with Abbott. The settlement included a
non-exclusive worldwide license for Abbott to sell HCV genotyping
products based on real-time PCR technology, and Abbott has also been
given access to key Innogenetics patents in the area of hepatitis B
virus (HBV) for the development and marketing of its own molecular
diagnostic tests.
In April, Celera granted a two year exclusive license agreement to
Merck & Co., Inc. providing Merck with access to up to ten cancer
targets for the development of RNA interference-based therapeutics.
In March, Celera and its collaborators published a paper in the Journal
of the American Medical Association describing the identification
of several novel gene variants; each variant is associated with
approximately 50 percent increased risk of deep vein thrombosis.
In February, Applera’s Board of Directors
authorized management to pursue a possible separation of the Celera
Group from Applera, and authorized the filing of a registration
statement with the Securities and Exchange Commission. This
registration statement was filed on February 29 and is currently
undergoing SEC review.
In February, Celera and Geisinger Health System entered into a
research collaboration with the aim of developing a diagnostic assay
for increased risk of non-alcoholic steatohepatitis by evaluating
Celera’s numerous genetic findings in liver
diseases, including the Cirrhosis Risk Score™,
in the Geisinger bank of more than 600 liver tissue and blood
case-control samples.
Within the alliance with Abbott, the Chlamydia and Gonorrhea assays
that run on the m2000 system were submitted during the quarter
to the U.S. Food and Drug Administration for 510(k) review. Also
within the alliance, Abbott completed the optimization of an assay for
human papillomavirus (HPV) in Europe. Field trials are being developed
as early access partners are identified, and it is anticipated that
this assay will be approved for launch in Europe in the first half of
calendar 2009.
Celera Outlook
Celera anticipates that its fiscal 2008 financial performance could be
affected by various factors including: global economic uncertainty; the
ability of Celera to successfully integrate the operations of BHL and
Atria; demand for current and new diagnostic products and services,
including demand for BHL services and Atria products; adoption of the m2000
system in the U.S. and other markets; potential revenue from technology
licenses and collaborations; and potential changes to the U.S. Food and
Drug Administration regulations governing the sale of products and
services. Subject to the inherent uncertainty associated with these
factors, Celera has the following expectations regarding its financial
performance for fiscal 2008:
Total reported revenues are anticipated to be $135 - $140 million.
Reported R&D expenses are anticipated to be $40 - $45 million, and
SG&A expenses are anticipated to be $70 - $75 million.
Celera anticipates that it will be profitable on a non-GAAP basis for
fiscal 2008, although non-GAAP earnings may be near break-even for the
fourth quarter, which is expected to include, among other things,
ongoing integration expenses from the Berkeley HeartLab and Atria
Genetics acquisitions and internal costs incurred in preparation for
becoming an independent public company.
Amortization of intangibles relating to acquisitions, which are
excluded in the determination of non-GAAP earnings per share, are
expected to be approximately $0.06 per share for the fiscal year.
The total pre-tax impact of FAS 123R in fiscal 2008 is expected to be
approximately $6.5 million, with an EPS impact of approximately $0.05.
Celera currently anticipates it will end the fiscal year with $330 -
$340 million in cash and short-term investments, due in part to
payments to the alliance with Abbott for the settlement charge
associated with the Innogenetics litigation and working capital
requirements.
Other risks and uncertainties that may affect Celera’s
financial performance are detailed in the Forward-Looking Statements
section of this release.
The comments in the Outlook section of this press release reflect
management’s current outlook. The Company
does not have any current intention to update this Outlook and plans to
revisit the outlook for its businesses only once each quarter when
financial results are announced.
Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, both historical
and forward-looking, and including earnings per share adjusted to
exclude some costs, expenses, gains and losses and other specified
items. These measures are not in accordance with, or an alternative for,
generally accepted accounting principles, or GAAP, and may be different
from non-GAAP financial measures used by other companies. Among the
items included in GAAP earnings but excluded for purposes of determining
adjusted earnings or other non-GAAP financial measures that we present
are: gains or losses from sales of operating assets and investments;
restructuring charges, including severance charges; charges and
recoveries relating to significant legal proceedings; asset impairment
charges; amortization of acquired intangibles; costs incurred in
connection with the anticipated separation of Celera from Applera;and special tax items. We believe the presentation of non-GAAP
financial measures provides useful information to management and
investors regarding various financial and business trends relating to
our financial condition and results of operations, and that when GAAP
financial measures are viewed in conjunction with non-GAAP financial
measures, investors are provided with a more meaningful understanding of
our ongoing operating performance. In addition, these non-GAAP financial
measures are among the primary indicators we use as a basis for
evaluating performance, allocating resources, setting incentive
compensation targets, and planning and forecasting future periods.
Non-GAAP financial measures are not intended to be considered in
isolation or as a substitute for GAAP financial measures. To the extent
this release contains historical non-GAAP financial measures, we have
also provided corresponding GAAP financial measures for comparative
purposes. However, in the case of forward-looking non-GAAP financial
measures, we have not provided corresponding forward-looking GAAP
financial measures because these measures are not accessible to us. We
cannot predict the occurrence, timing, or amount of all non-GAAP items
that we exclude from our non-GAAP financial measures but which could
potentially be significant to the calculation of our GAAP financial
measures for future fiscal periods.
Conference Call & Webcast
A conference call with Applera Corporation executives will be held today
at 11:00 a.m. (ET) to discuss these results and other matters related to
the businesses. The call will be formatted to focus on each of the
Applera businesses separately. The Applied Biosystems Group portion of
the call will start at 11:00 a.m. (ET). The Celera Group portion of the
call will start at 11:45 a.m. (ET), or immediately following the end of
the Applied Biosystems portion of the call, if later.
During each segment, the management team will make prepared remarks and
answer questions from securities analysts and investment professionals.
Investors, securities analysts, representatives of the media and other
interested parties who would like to participate should dial
617.614.6205 and enter passcode 15155917 at any time from 10:45 a.m.
(ET) until the end of the call. This conference call will also be
webcast. Interested parties who wish to listen to the webcast should
visit the “Investors & Media”
section of either www.applera.com, www.celera.com,
or www.appliedbiosystems.com.
A digital recording will be available approximately two hours after the
completion of the conference call on April 24 until May 8, 2008.
Interested parties should call 617-801-6888 and enter passcode 84165724.
About Applera Corporation and Celera
Applera Corporation consists of two operating groups. Celera is a
diagnostics business delivering personalized disease management through
a combination of products and services incorporating proprietary
discoveries. Berkeley HeartLab, a subsidiary of Celera, offers services
to predict cardiovascular disease risk and optimize patient management.
Celera also commercializes a wide range of molecular diagnostic products
through its strategic alliance with Abbott and has licensed other
relevant diagnostic technologies developed to provide personalized
disease management in cancer and liver diseases. Applied Biosystems
serves the life science industry and research community by developing
and marketing instrument-based systems, consumables, software, and
services. Customers use these tools to analyze nucleic acids (DNA and
RNA), small molecules, and proteins to make scientific discoveries and
develop new pharmaceuticals. Applied Biosystems’
products also serve the needs of some markets outside of life science
research, which we refer to as “applied
markets,” such as the fields of: human
identity testing (forensic and paternity testing); biosecurity, which
refers to products needed in response to the threat of biological
terrorism and other malicious, accidental, and natural biological
dangers; and quality and safety testing, such as testing required for
food and pharmaceutical manufacturing. Applied Biosystems is
headquartered in Foster City, CA, and reported sales of approximately
$2.1 billion during fiscal 2007. Information about Applera Corporation,
including reports and other information filed by the company with the
Securities and Exchange Commission, is available at http://www.applera.com,
or by telephoning 800.762.6923. Information about Celera is available at http://www.celera.com.
Forward-Looking Statements
Certain statements in this press release, including the Outlook section,
are forward-looking. These may be identified by the use of
forward-looking words or phrases such as “believe,”“expect,”“should,”“anticipate,” and “intend,”
among others. These forward-looking statements are based on Applera
Corporation’s current expectations. The
Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for such forward-looking statements. In order to comply with the
terms of the safe harbor, Applera Corporation notes that a variety of
factors could cause actual results and experience to differ materially
from the anticipated results or other expectations expressed in such
forward-looking statements. The risks and uncertainties that may affect
the operations, performance, development, and results of Celera’s
business include but are not limited to: (1) Celera may not successfully
integrate the business and workforce of Berkeley HeartLab, which has
approximately doubled Celera’s workforce, and
it may not successfully operate and grow this business as planned, among
other reasons due to the fact Berkeley operates in the regulated
clinical laboratory testing market, a new business area for Celera; (2)
the sale of clinical laboratory testing services and diagnostic products
is dependent on government insurance programs such as Medicare and
private insurance companies accepting the use of those services and
products as medically necessary and worthy of reimbursement; (3) the
revenue generated from the sale of clinical laboratory testing services
and diagnostic products is highly dependent on the amounts that these
government and private payors will pay for the services and products,
and these amounts may be reduced in response to ongoing efforts by these
payors to control healthcare costs; (4) Celera’s
clinical laboratory testing services are subject to a wide variety of
federal and state laws and regulations that govern, for example,
clinical testing of human specimens, improper kickbacks or referrals to
healthcare providers, and the privacy and security of patient data, and
failure to comply with these laws and regulations could cause an
interruption in operations, damage to our reputation, exclusion from
participation in healthcare programs, fines or other legal penalties,
and damages payable to patients or others; (5) Celera depends on
physicians, laboratories, and others to collect and process patient
specimens and send them overnight via Federal Express to its clinical
laboratory for testing, and any interruption or delay in the delivery of
specimens could cause them to spoil, prevent testing, and harm Celera’s
business; (6) Celera’s commercialization of
diagnostic products is substantially dependent on maintaining its
existing strategic alliance with Abbott Laboratories and entering into
new collaborations, alliances, and similar arrangements with other
companies, which may not be successful; (7) clinical trials of
diagnostic products may not proceed as anticipated, may take several
years and be very expensive, and may not be successful; (8) diagnostic
products may not receive required regulatory clearances or approvals;
(9) the markets for clinical laboratory testing services and diagnostic
products are very competitive, healthcare providers may prefer to use
better-known laboratories for clinical testing, and healthcare providers
may not accept new diagnostic products developed by Celera or its
collaborators; (10) the U.S. Food and Drug Administration has issued an
interpretation of the regulations governing the sale of Analyte Specific
Reagent products which could harm Celera's business because the
interpretation may require regulatory clearance or approval for some
existing Celera and Abbott products that to date have been sold without
clearance or approval, and because it may make development of new
Analyte Specific Reagent products more difficult; (11) the FDA has
issued draft guidance on a new class of complex laboratory-developed
tests that may require our clinical laboratory to obtain regulatory
clearance or approval before it can perform these tests and that may
require other laboratories to obtain regulatory clearance or approval
for these complex tests before they can perform clinical testing using
our diagnostic products or based on intellectual property licensed from
us; (12) Celera relies on access to biological materials and related
clinical and other information for some of its research and development
efforts, and such materials and information may be in limited supply or
inaccessible to Celera; (13) Celera may be subject to product liability
or other claims as a result of its clinical laboratory testing services
or the testing or use of its or its collaborators’
or licensees’ diagnostic products; (14)
Celera relies on scientific and management personnel having the
necessary training and technical backgrounds and also on collaborations
with scientific and clinical experts at academic and other institutions
who may not be available to Celera or who may compromise the
confidentiality of Celera’s proprietary
information; (15) Celera may be subject to liabilities related to its
use, manufacture, sale, and distribution of hazardous materials; (16)
Celera’s ability to protect its intellectual
property is uncertain, its ability to protect its trade secrets is
limited, Celera is subject to the risk of infringement claims, and it
may need to license intellectual property from third parties to avoid or
settle such claims; (17) Celera is dependent on the operation of
computer hardware, software, and Internet applications and related
technology; (18) an adverse outcome in legal proceedings involving
Abbott could harm Celera’s business and
subject it to liabilities; (19) legal, ethical, and social issues
related to the use of genetic information could adversely affect demand
for Celera’s clinical laboratory testing
services and diagnostic products; (20) future acquisitions by Celera may
not be successful, may divert management from operations, may cause
dilution, and may result in impairment or other charges; (21) the
outcome of the existing stockholder litigation is uncertain; (22) Celera
relies on a single laboratory testing facility and a single
manufacturing facility, it would be difficult to repair, replace, or
expand these facilities on a timely basis should that be necessary due
to, for example, significant damage caused by natural disaster or other
events or a substantial and unexpected increase in demand for products
or services, and Celera does not have any backup facilities or
arrangements should these events occur; (23) Celera relies on a single
supplier or a limited number of suppliers for some kits used for its
clinical laboratory testing services and some key components for
manufacturing its diagnostic products; and (24) other factors that might
be described from time to time in Applera Corporation’s
filings with the Securities and Exchange Commission. All information in
this press release is as of the date of the release, and Applera does
not undertake any duty to update this information, including any
forward-looking statements, unless required by law.
Copyright 2008 Applera Corporation. All Rights Reserved. AB(Design) and
Celera and ViroSeq are registered trademarks, and Applied Biosystems and
Applera are trademarks of Applera Corporation or its subsidiaries in the
U.S. and/or certain other countries. Berkeley HeartLab is a wholly-owned
subsidiary of Applera Corporation. RealTime and m2000 are
trademarks of Abbott Laboratories or its subsidiaries in the U.S. and/or
certain other countries.
APPLERA CORPORATION
CELERA GROUP
CONDENSED COMBINED STATEMENTS OF OPERATIONS
(Dollar amounts in millions except per share amounts)
(Unaudited)
Three months ended
Nine months ended
March 31,
March 31,
2008
2007
2008
2007
Net revenues
$
39.5
$
9.8
$
95.9
$
33.2
Cost of sales
13.2
5.4
27.6
13.6
Gross margin
26.3
4.4
68.3
19.6
Selling, general and administrative
21.3
7.1
49.5
21.7
Research and development
10.2
13.0
31.5
38.2
Amortization of purchased intangible assets
2.5
4.6
Employee-related charges, asset impairments and other
3.9
4.3
6.0
Asset dispositions and legal settlements
(1.1
)
(1.1
)
(2.4
)
Operating loss
(10.5
)
(15.7
)
(20.5
)
(43.9
)
Loss on investments, net
(3.1
)
(3.1
)
Interest income (expense), net
3.5
7.4
15.2
20.9
Other income (expense), net
0.1
0.1
0.3
Loss before income taxes
(10.0
)
(8.2
)
(8.4
)
(22.7
)
Benefit for income taxes
2.6
3.7
2.0
10.7
Net loss
$
(7.4
)
$
(4.5
)
$
(6.4
)
$
(12.0
)
Loss per share analysis
Net loss per share
Basic and diluted
$
(0.09
)
$
(0.06
)
$
(0.08
)
$
(0.15
)
Weighted average number of common shares
Basic
79,634,000
78,499,000
79,353,000
78,156,000
Diluted
79,634,000
78,499,000
79,353,000
78,156,000
APPLERA CORPORATION
CELERA GROUP
Revenues By Product Categories
(Dollar amounts in millions)
(Unaudited)
Three months ended
March 31,
2008
2007
Change
Products, including alliance equalization
$
9.1
$
6.3
44
%
% of total revenues
23
%
64
%
Services
22.6
% of total revenues
57
%
Royalty, licenses and milestone
7.8
3.5
123
%
% of total revenues
20
%
36
%
Total
$
39.5
$
9.8
303
%
Nine months ended
March 31,
2008
2007
Change
Products, including alliance equalization
$
23.1
$
19.4
19
%
% of total revenues
24
%
58
%
Services
44.8
% of total revenues
47
%
Royalty, licenses and milestone
28.0
13.8
103
%
% of total revenues
29
%
42
%
Total
$
95.9
$
33.2
189
%
APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2008
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied
Biosystems
Celera
Group
Group
Eliminations
Consolidated
Net revenues
$
552.6
$
39.5
$
(0.7
)
$
591.4
Cost of sales
238.3
13.2
(0.4
)
251.1
Gross margin
314.3
26.3
(0.3
)
340.3
Selling, general and administrative
159.5
21.3
180.8
Research and development
48.6
10.2
(0.2
)
58.6
Amortization of purchased intangible assets
2.6
2.5
5.1
Employee-related charges, asset impairments and other
1.1
3.9
5.0
Asset dispositions and legal settlements
(1.1
)
(1.1
)
Operating income (loss)
102.5
(10.5
)
(0.1
)
91.9
Gain (loss) on investments, net
0.1
(3.1
)
(3.0
)
Interest income (expense), net
2.2
3.5
0.1
5.8
Other income (expense), net
0.3
0.1
0.4
Income (loss) before income taxes
105.1
(10.0
)
95.1
Provision (benefit) for income taxes
22.2
(2.6
)
0.3
19.9
Net income (loss)
$
82.9
$
(7.4
)
$
(0.3
)
$
75.2
Net income (loss) per share
Basic
$
0.49
$
(0.09
)
Diluted
$
0.48
$
(0.09
)
APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2007
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied
Biosystems
Celera
Group
Group
Eliminations
Consolidated
Net revenues
$
529.9
$
9.8
$
(0.7
)
$
539.0
Cost of sales
231.3
5.4
(0.6
)
236.1
Gross margin
298.6
4.4
(0.1
)
302.9
Selling, general and administrative
150.2
7.1
157.3
Research and development
54.4
13.0
(0.2
)
67.2
Amortization of purchased intangible assets
2.8
2.8
Operating income (loss)
91.2
(15.7
)
0.1
75.6
Interest income (expense), net
3.2
7.4
10.6
Other income (expense), net
2.3
0.1
2.4
Income (loss) before income taxes
96.7
(8.2
)
0.1
88.6
Provision (benefit) for income taxes
21.2
(3.7
)
0.2
17.7
Net income (loss)
$
75.5
$
(4.5
)
$
(0.1
)
$
70.9
Net income (loss) per share
Basic
$
0.41
$
(0.06
)
Diluted
$
0.39
$
(0.06
)
APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended March 31, 2008
(Dollar amounts in millions except per share amounts)
(Unaudited)
Applied
Biosystems
Celera
Group
Group
Eliminations
Consolidated
Net revenues
$
1,615.7
$
95.9
$
(2.2
)
$
1,709.4
Cost of sales
694.8
27.6
(0.9
)
721.5
Gross margin
920.9
68.3
(1.3
)
987.9
Selling, general and administrative
462.9
49.5
0.1
512.5
Research and development
143.6
31.5
(1.1
)
174.0
Amortization of purchased intangible assets
7.8
4.6
12.4
Employee-related charges, asset impairments and other
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