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Immucor Announces Fiscal First Quarter Results

NORCROSS, Ga., Oct. 1 /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 its fiscal 2010 first quarter ended August 31, 2009.

Financial Highlights

  • Revenue for the fiscal first quarter of 2010 was $83.1 million, up 14% from $73.2 million in the prior year quarter.
  • Gross margin was 71.9% in the quarter, compared with 73.0% in the prior year quarter. Current quarter gross margin included expenses of approximately $2.3 million related to the Quality Process Improvement Project.
  • Net income in the quarter was $21.3 million, compared with $20.0 million for the same quarter last year.
  • Diluted earnings per share totaled $0.30 in the quarter, compared with $0.28 for the same period last year. The current year quarter included the impact from the Quality Process Improvement Project of approximately $0.02 per diluted share, net of tax.
  • Cash flow from operations for the quarter ended August 31, 2009 was $24.5 million, compared with $21.6 million in the prior year.
  • The current year included a full quarter of results for BioArray Solutions, which was acquired on August 4, 2008.

"Despite the economy, we continue to generate revenue, earnings and cash flow growth due to the needs-based aspect of our business and our focus on automation that improves blood bank operations," stated Dr. Gioacchino De Chirico, Immucor's President and Chief Executive Officer.

    Selected Product Revenue and Gross Margin
                                       ($ amounts in thousands)    Revenue
                       Fiscal Q1 2010      Fiscal Q1 2009          Growth
                       --------------      --------------          ------
                                   Gross               Gross
                        Revenue    Margin  Revenue     Margin     $        %
                        -------   --------  -------   --------    -        -
     reagents           $54,719     76.1%  $49,272      78.7%  $5,447     11%
    Capture reagents     18,303     83.3%   15,174      86.7%   3,129     21%
    Instruments           9,292     32.0%    8,579      17.4%     713      8%

Consolidated revenue was $83.1 million in the current year quarter, an increase of approximately $9.9 million, or 14%, over the first quarter of fiscal 2009. Revenue in the quarter benefited from both price and volume contributions. Revenue in the quarter, as compared with the first quarter of fiscal 2009, was negatively impacted by approximately $1.7 million due to fluctuations in foreign currency exchange rates.

Consolidated gross margin was $59.7 million, or 71.9% of revenue, in the current year quarter compared with $53.4 million, or 73.0% of revenue, in the prior year quarter. During the current year quarter, gross margin was negatively impacted by the costs related to the Company's Quality Process Improvement Project. The Project's goal is to establish a world-class quality system while simultaneously addressing the deficiencies noted by the Food and Drug Administration in its June 2009 administrative action.

"We are making good progress on our Quality Process Improvement Project and continue to believe that our efforts will result in a world-class quality system," stated Dr. De Chirico. "We remain on track for the project to be completed by the end of our third quarter of fiscal 2010."

Operating Expenses

Operating expenses for the first fiscal quarter of 2010 increased by approximately $3.5 million, or 16%, over the prior year quarter primarily attributable to the BioArray acquisition.

    Summary of Instrument Orders

                              Q1 2010 Orders
                              --------------          Cumulative
    Instrument     N.A. (1)     ROW(2)     Total       Orders (3)
    ----------    ---------    --------    ------      ---------
    Echo             23          17         40           643
    Galileo           0          14         14           651

    (1) N.A. - North America (the U.S. and Canada)
    (2) ROW - all parts of the world other than the U.S. and Canada
    (3) Cumulative Orders - total orders received since the launch of the

Of the cumulative orders since the instruments' launch, approximately 430 Echo orders and 614 Galileo orders were generating reagent revenue at their expected annualized run rate as of August 31, 2009, an increase of 70 Echo instruments and 18 Galileo instruments in the fiscal first quarter.

"We have seen a lengthening of sales cycles for the Echo in fiscal 2010 and now believe that we will generate 280 to 320 Echo orders compared with our previous expectations of 320 to 350 orders in fiscal 2010," stated Dr. De Chirico. "We have strong Echo pipelines and continue to believe in the opportunity for Echo, which is targeted at small- to medium-sized hospitals, due to the need for automation in that market segment, particularly in the U.S."

"For Galileo, our high volume instrument, we continue to expect to generate 50 to 70 orders in fiscal 2010, with orders in the U.S. and Canada being lower until the introduction of our next generation automated instrument, the Galileo Neo(TM)," stated Dr. De Chirico. "We continue to expect to launch the Neo in the first calendar quarter of 2010."

Fiscal 2010 Financial Guidance

The Company continues to expect fiscal 2010 consolidated revenue in the range of $322 million to $332 million and consolidated gross margins in the range of 70.0% to 71.5%. The Company's Quality Process Improvement Project is included in cost of goods sold. The Company continues to expect expenses related to the project in fiscal 2010 to be in the range of $4.0 million to $4.5 million.

The Company continues to expect diluted earnings per share to be in the range of $1.10 to $1.17 for fiscal 2010, which includes the approximately $0.04 per share impact, net of tax, related to the Quality Process Improvement Project. The Company's fiscal 2010 guidance also includes a full year of BioArray expenses. BioArray was acquired on August 4, 2008.

Share Repurchase

The Company also announced today that it repurchased approximately 350,000 shares of its stock during the first fiscal quarter of 2010 for a total of approximately $6.0 million. During August 2009, the Company announced an increase of 2 million shares to its stock repurchase program. The total authorization remaining under the stock repurchase program is approximately 2.5 million shares as of August 31, 2009.

Conference Call

Immucor, Inc. will host a conference call Friday, October 2, 2009 at 8:30 AM (Eastern Time) to review these results. To participate in the telephone conference call, dial 1-888-324-9321 (Passcode: BLUD). The Company will also provide a live audio broadcast of the call via webcast. The webcast can be accessed at in the "About Us - Investor Information" section by selecting the webcast link. For those unable to listen to the live broadcast of the call, a replay will be available shortly after completion of the call and will be archived on Immucor's website for approximately 60 days. Additionally, a replay of the call will be available for one week beginning at noon on October 2, 2009 by calling 1-866-403-7112 (Passcode: 2583).

About Immucor

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

Safe Harbor Statement

This press release contains statements that are "forward-looking statements" as that term is defined under federal securities laws. Forward-looking statements contained in this press release include the intent, belief or current expectations of the Company and members of its management team with respect to the Company's future business operations as well as the assumptions upon which such statements are based. Forward-looking statements include specifically, but are not limited to: fiscal 2010 revenue projections, gross margin projections, fully diluted earnings per share projections; Quality Process Improvement Project projections, including projected expenses and completion date; and instrument order projections. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance, and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. In addition, results for one fiscal quarter are not necessarily indicative of results for any future period. Factors that could cause actual results to differ materially from those expressed in any forward-looking statement include, but are not limited to: the outcome and costs associated with the Company's Quality Process Improvement Project; the outcome of the administrative action ("notice of intent to revoke our biological license") received from the Food and Drug Administration ("FDA"); customer reaction to the FDA action and the subsequent impact on the business; lower than expected demand for the Company's instruments; the decision of customers to defer capital spending; the unexpected change in the mix of instruments being purchased instead of acquired through other means, which could significantly change costs recognized in the period; the inability of customers to efficiently integrate the Company's instruments into their blood banking operations; increased competition in the sale of instruments and reagents, particularly in the United States; unanticipated operational problems that result in non-compliance with FDA regulations; the failure to effectively integrate BioArray operations into the Company's overall operations; product development obstacles including obstacles related to the development of the Galileo Neo as well as the next generation automated instrument for the molecular immunohematology products; regulatory obstacles including obstacles in securing regulatory approval of the molecular immunohematology products; the inability to hire and retain, and the unexpected loss of, key managers; changes in interest rates; fluctuations in foreign currency conversion rates; the strengthening of the U.S. Dollar versus any of the functional currencies in which the Company operates and its adverse impact on reported results; the inability of the Company's Japanese, French and United Kingdom subsidiaries to attain expected revenue, gross margin and net income levels; the outcome of any legal claims or regulatory investigations known or unknown, including the ongoing investigations by the Department of Justice and the Federal Trade Commission, and the related customer and shareholder lawsuits; the Company's inability to protect its intellectual property or its infringement of the intellectual property of others; lower than expected market acceptance of the molecular immunohematology products; the unexpected application of different accounting rules; general economic conditions; and adverse developments with respect to the operation or performance of the Company, its products and its affiliates or the market price of its common stock. Additional factors that could cause actual results to differ materially from those contemplated within this Press Release can be found in the Company's Risk Factor disclosures in its Form 10-Q for the quarter ended August 31, 2009 and its Form 10-K for the year ended May 31, 2009. Investors are cautioned not to place undue reliance on any forward-looking statements. Immucor assumes no obligation to update any forward-looking statements.

                                         IMMUCOR, INC.
                        (unaudited, in thousands except per share data)
                                               Three Months Ended
                                            August 31,          August 31,
                                              2009                 2008
                                              ----                 ----
    NET SALES                               $83,071              $73,176
    COST OF SALES                            23,382               19,751
                                             ------               ------
    GROSS PROFIT                             59,689               53,425

       Research and development               3,823                1,880
       Selling and marketing                  9,464                9,469
       Distribution                           3,506                3,468
       General and administrative             8,487                7,458
       Amortization expense and other         1,067                  525
                                              -----                  ---
          Total operating expenses           26,347               22,800
                                             ------               ------

    INCOME FROM OPERATIONS                   33,342               30,625

       Interest income                          190                  794
       Interest expense                          (5)                (127)
       Other, net                                30                 (420)
                                                 --                 ----
          Total non-operating income (expense)  215                  247
                                                ---                  ---

    INCOME BEFORE INCOME TAXES               33,557               30,872
    PROVISION FOR INCOME TAXES               12,224               10,916
                                             ------               ------
    NET INCOME                              $21,333              $19,956
                                            =======              =======

    Earnings per share:
         Per common share - basic             $0.30                $0.28
                                              =====                =====
         Per common share - diluted           $0.30                $0.28
                                              =====                =====
    Weighted average shares
         Basic                               70,397               70,268
                                             ======               ======
         Diluted                             70,883               71,210
                                             ======               ======
                                   IMMUCOR, INC.
                             (Unaudited, in thousands)
                                           August 31,         May 31,
                                             2009              2009
                                             ----              ----

    Cash                                  $152,489          $136,461
    Accounts receivable - trade             56,915            57,017
    Inventory                               41,450            38,256
    Total current assets                   264,600           244,850
    Property and equipment - net            46,587            43,461
    Total assets                           473,332           451,340

    Accounts payable                        11,405             9,344
    Deferred revenue, current portion       11,305            11,222
    Total current liabilities               57,539            52,288
    Deferred revenue, long-term portion      9,714            10,871
    Other liabilities                        3,581             3,603
    Shareholders' equity                   402,498           384,578

                           IMMUCOR, INC. AND SUBSIDIARIES
                             (Unaudited, in thousands)
                                                          Quarters Ended
                                                      August 31,    August 31,
                                                         2009          2008
                                                         ----          ----
       Net income                                  $     21,333   $    19,956
       Adjustments to reconcile net income to
        net cash provided by operating activities:
         Depreciation and amortization                    3,927         2,867
         Share-based compensation expense                 1,351         1,193
         Deferred income taxes                              107             -
         Excess tax benefit from share-based
          compensation                                     (167)       (2,957)
         Other                                               73           362
       Changes in operating assets and liabilities,
        net of effects from acquired companies           (2,097)          139
                                                         ------        ------
    Cash provided by operating activities                24,527        21,560

       Purchases of property and equipment               (3,552)       (1,839)
       Acquisition of businesses, net of cash
        acquired                                              -      (108,230)
                                                         ------        ------
       Cash used in investing activities                 (3,552)     (110,069)

       Repayments of long-term debt and liabilities           -          (249)
       Repurchase of common stock                        (6,185)         (961)
       Proceeds from exercise of stock options                -         2,268
       Excess tax benefit from share-based
        compensation                                        167         2,957
                                                         ------        ------
       Cash (used in) provided by financing
        activities                                       (6,018)        4,015

     EQUIVALENTS                                          1,071        (1,442)
                                                         ------        ------
     CASH EQUIVALENTS                                    16,028       (85,936)
     OF PERIOD                                          136,461       175,056
                                                         ------        ------
    CASH AND CASH EQUIVALENTS AT END OF PERIOD$         152,489    $   89,120
                                                         ======        ======

SOURCE Immucor, Inc.

SOURCE Immucor, Inc.
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