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Immucor Announces Record Fiscal Third Quarter Results

NORCROSS, Ga., April 1, 2008 /PRNewswire-FirstCall/ -- Immucor, Inc. (Nasdaq: BLUD), a global leader in providing automated instrument-reagent systems to the blood transfusion industry, today reported financial results for the fiscal third quarter ended February 29, 2008.

Revenue for the fiscal third quarter was $67.0 million, up 17% from $57.1 million in the same period last year. Of the $9.9 million total increase in revenues, approximately $4.6 million came from price increases in the United States, approximately $1.6 million came from sales increases including instrument revenues outside the United States, and approximately $2.1 million of the increase is due to the effect of the change in the Euro, Japanese Yen and Canadian dollar exchange rates. Volume increases in the United States totaled $1.6 million as instruments contributed $1.8 million and reagents $0.8 million, partially offset by a $1.0 million reduction in collagen sales resulting from our previously announced decision to cease collagen production. Gross margin improved to 72.1% in the quarter compared to 70.7% in the prior year quarter.

Net income for the third quarter was $19.3 million, up 28% from $15.0 million for the same quarter last year. Diluted earnings per share totaled $0.27 on 71.1 million weighted average shares outstanding, up from $0.21 on 71.0 million weighted average shares outstanding for the same period last year.

Sales of instruments were $7.1 million in the third quarter of fiscal 2008, an increase from $4.4 million in the fiscal 2007 third quarter. Most instrument sales are recognized over the life of the underlying reagent contract, which is usually 5 years. In the quarter ended February 29, 2008 approximately $4.1 million of instrument sales for 39 Galileo(R) and ECHO(TM) instruments were deferred in this manner while the associated cost of sales of approximately $2.4 million was expensed. As of February 29, 2008, deferred instrument revenues, including deferred service revenues, totaled $24.8 million. Reagent gross margin grew to 81.0% during the third quarter of fiscal 2008 compared to 77.6% in the same period last year.

"We are very pleased with our outstanding quarterly financial results and the number of Echo orders received in the United States, which exceeded our expectations" said Dr. Gioacchino De Chirico, President and Chief Executive Officer. "In the third quarter we received 54 Echo orders in North America and another 16 Echo orders in the rest of the world for a total of 70 in the quarter. We also received orders for 11 Galileo in North America in the third quarter, and another 11 Galileo orders in the rest of the world for a total of 22 in the quarter." Commenting further, Dr. De Chirico stated, "Based on the very positive results of the Galileo Echo launch and continued Galileo placements we believe we can achieve market share gains and revenue growth through an increasing number of instrument placements. Third quarter results were positively impacted as 19 of the 20 Galileo instruments previously sold to the American Red Cross went live in the quarter. As of February 29, 2008, the Company had received orders for a total of 562 Galileo instruments worldwide, including 245 in North America and 317 in the rest of the world, and 516 of these instruments were generating reagent revenues, an increase of 38 in the quarter. As of February 29, 2008, the Company had received orders for a total of 155 Echo instruments worldwide." Dr. De Chirico also noted, "Our recently announced proposed acquisition of BioArray Solutions Ltd. means the Company is positioning itself at the leading edge of technology in blood banking. Our excellent current results, good growth prospects for our current products, and now an expected leadership position in molecular diagnostics for our markets make this a very exciting time for Immucor."

Selected Highlights

-- Sales of traditional reagent products, i.e., products not using the

Company's patented Capture(R) technology, increased $4.3 million, or

10%, from $41.4 million in the third quarter of 2007 to $45.7 million

in the third quarter of 2008. Sales of Capture products increased

approximately $3.9 million to $14.2 million, a 38% increase over the

prior year quarter. Human collagen sales decreased approximately

$1.0 million to zero. As previously announced we discontinued the

production of collagen as our present commitment to a third party has


-- The gross margin on traditional reagents was 79.5% for the current

quarter, compared with 75.5% in the prior year quarter. The gross

margin on Capture(R) products was 85.6% for the current quarter,

compared to 86.4% in the prior year quarter.

-- Sales of instruments were $7.1 million in the third quarter of 2008

compared to $4.4 million in the third quarter of 2007. The gross

margin on instruments, including the impact of the cost of providing

service, was a negative 2.0% for the current quarter, compared to 0.5%

for the same quarter last year.

-- The effect on revenues of the change in the Euro, Japanese Yen and

Canadian dollar exchange rates was an increase of approximately $2.1

million for the third quarter of fiscal 2008 as compared to the prior

year quarter. The effect on net income of the change in the Euro,

Japanese Yen and Canadian dollar exchange rates was an increase of

approximately $0.3 million in the quarter ended February 29, 2008 as

compared to the prior year quarter.

-- Distribution expenses increased by $0.5 million in the third quarter

and selling and marketing expenses increased by $0.8 million as

compared to the prior year quarter. Distribution costs were impacted

in the United States by $0.2 million in higher shipping costs partly

due to higher sales volumes and higher fuel costs, and a $0.1 million

increase in personnel costs. Selling and marketing expenses were

impacted by an increase in personnel costs of $0.5 million in the

United States and $0.2 million in Japan. General and administrative

expenses increased by $1.0 million for the third quarter of fiscal

2008 as compared to the prior year quarter. General and administrative

expenses in the United States were impacted by a $0.6 million increase

in personnel costs, and a $0.3 million increase in consulting costs.

Our recent decision to set up a new French subsidiary increased

general and administrative expenses by approximately $0.2 million and

the change in the Euro exchange rate resulted in a $0.2 million

increase. Partially offsetting these increases was a reduction in

audit fees of $0.3 million and a reduction in legal fees of

approximately $0.2 million. Research and development expenses

decreased by $0.1 million to $1.5 million in the third quarter of

fiscal 2008 as compared to the prior year quarter. Overall, operating

expenses increased by $0.8 million as a result of the effect of the

change in the Euro, Japanese Yen and Canadian dollar exchange rates.

-- Operations continue to generate strong cash flow. Cash and cash

equivalents totaled $163.9 million at the end of the current quarter

compared to $137.8 million at the end of the prior quarter and

$113.6 million at May 31, 2007.

We now believe that our revenue, gross margin and earnings per diluted share for the fiscal year ending May 31, 2008 will all be at, or modestly above, the high end of the guidance ranges disclosed in our press release dated May 31, 2007.

Immucor, Inc. will host a conference call April 2, 2008 at 8:30 a.m. (EDT) to review these results. Investors are invited to participate in this conference call with Dr. Gioacchino De Chirico, President and Chief Executive Officer; Richard Flynt, Chief Financial Officer; and Edward L. Gallup, consultant. The call will focus on the results for the third quarter and general business trends. This earnings release will be posted on Immucor's website, as well as any material financial information that may be discussed by Messrs. De Chirico, Flynt, or Gallup during this call that is not contained in the earnings release. Both this earnings release and the additional financial information, if any, will be posted as soon as practicable after the call on the investor news section of Immucor's website. To access this information once posted, go to Immucor's website at and click on "About Us - Press Releases." To participate in the telephone conference call, dial 1-888-950-8044, pass code BLUD. Replays of the conference call will be available for one week beginning at 12:00 PM on April 2, 2008 by calling 1-888-568-0013. Beginning April 9, 2008, audio of the conference call or a transcript of the audio will be available on the "About Us - Press Releases" page of the Immucor website.

Founded in 1982, Immucor manufactures and sells a complete line of reagents and systems used by hospitals, reference laboratories and donor centers to detect and identify certain properties of the cell and serum components of blood prior to transfusion. Immucor markets a complete family of automated instrumentation for all of its market segments.

For more information on Immucor, please visit our website at

Statements contained in this press release that are not statements of historical fact are "forward-looking statements" as that term is defined under federal securities laws, including, without limitation, all statements concerning Immucor's expectations, beliefs, intentions or strategies for the future. Forward-looking statements may be identified by words such as "plans," "expects," "believes," "anticipates," "estimates," "projects," "will," "should" and other words of similar meaning used in conjunction with, among other things, discussions of future operations, financial performance, product development and new product launches, FDA and other regulatory applications and approvals, market position and expenditures. Factors that could cause actual results to differ materially from those expressed in any forward-looking statement include the following: lower than expected market acceptance of the Company's new Galileo Echo instrument; the decision of customers to defer capital spending; the inability of customers to efficiently integrate our instruments into their blood banking operations; increased competition in the sale of instruments and reagents, particularly in North America; product development or regulatory obstacles; the ability to hire and retain key managers; changes in interest rates; fluctuations in foreign currency conversion rates; the ability of the Company's Japanese subsidiary to attain expected revenue, gross margin and net income levels; the outcome of any legal claims or regulatory investigations known or unknown; delays in regulatory approvals required to manufacture products previously produced in Houston; higher than expected manufacturing consolidation costs; the unexpected application of different accounting rules; and general economic conditions. Further risks are detailed in the Company's filings with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on any forward-looking statements. Immucor assumes no obligation to update any forward-looking statements.



(Amounts in thousands, except per share data)


Three Months Nine Months

Ended Ended

Feb. 29, Feb. 28, Feb. 29, Feb. 28,

2008 2007 2008 2007

NET SALES $67,029 $57,091 $192,585 $162,557

COST OF SALES 18,688 16,738 56,489 49,825

GROSS PROFIT 48,341 40,353 136,096 112,732


Research and development 1,522 1,624 5,011 4,658

Selling and marketing 7,605 6,850 23,019 19,164

Distribution 2,881 2,393 8,212 7,061

General and administrative 7,228 6,271 19,385 16,784

Restructuring expense (gain) (77) 72 646 641

Amortization expense and other 88 86 261 259

Total operating expenses 19,247 17,296 56,534 48,567

INCOME FROM OPERATIONS 29,094 23,057 79,562 64,165


Interest income 1,260 682 3,504 1,845

Interest expense (111) (106) (292) (334)

Other, net (14) 135 73 231

Total non-operating income 1,135 711 3,285 1,742

INCOME BEFORE INCOME TAXES 30,229 23,768 82,847 65,907

PROVISION FOR INCOME TAXES 10,963 8,749 29,667 24,050

NET INCOME $19,266 $15,019 $53,180 $41,857

Earnings per share:

Per common share - basic $0.28 $0.22 $0.76 $0.61

Per common share - assuming

dilution $0.27 $0.21 $0.75 $0.59


Selected Condensed Consolidated Balance Sheet Items

(Amounts in thousands)

February 29, 2008 May 31, 2007


Cash $163,851 $113,551

Accounts receivable - trade 54,444 47,768

Inventory 33,648 29,320

Total current assets 261,529 199,820

Property and equipment - net 34,684 30,245

Total assets 348,038 275,478

Accounts payable 6,172 8,056

Total current liabilities 44,370 36,955

Other liabilities 16,833 19,075

Shareholders' equity 286,835 219,448

SOURCE Immucor, Inc.
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