UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

April 27, 2006
Date of Report (Date of earliest event reported)

APPLERA CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

Delaware   1-4389   06-1534213
(State or Other Jurisdiction
of Incorporation)
  (Commission
File No.)
  (IRS Employer
Identification No.)

301 Merritt 7
Norwalk, Connecticut 06851
(Address of Principal Executive Offices, Including Zip Code)

(203) 840-2000
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 


Item 2.02.  Results of Operations and Financial Condition.

(a)     On April 27, 2006, Applera Corporation (“Applera”) announced financial results for Applera and its business units for the third quarter of its 2006 fiscal year. Attached hereto as Exhibit 99.1 and incorporated by reference herein is the text of a press release issued on April 27, 2006, with respect to financial results for the third quarter of fiscal year 2006 of Applera and Applera’s Applied Biosystems Group, and attached hereto as Exhibit 99.2 and incorporated by reference herein is the text of a press release issued on April 27, 2006, with respect to financial results for the third quarter of fiscal year 2006 of Applera and Applera’s Celera Genomics Group.

Item 2.05. Costs Associated with Exit or Disposal Activities.

As previously reported, in January 2006 we announced plans for Applera’s Celera Genomics Group to partner or sell its small molecule drug discovery and development programs. Programs that are not partnered or sold will be terminated. While we are still evaluating the effect of this action, we anticipate that the Celera Genomics Group will record pre-tax restructuring charges of approximately $30 million in fiscal 2006 associated with this action. This amount consists of the following estimated amounts: $12.8 million for one-time severance and termination benefits relating primarily to staff reductions in small molecule drug discovery and development; $1.9 million for contract termination costs relating primarily to costs associated with a leased facility that will no longer be occupied; $11.0 million for asset impairments primarily relating to a write-down of the carrying amount of an owned facility to its current estimated market value less estimated selling costs, as well as write-offs of some leasehold improvements; and $4.3 million for other associated costs relating primarily to estimated restoration and clean-up costs associated with facilities previously occupied. With the exception of a potential adjustment to the write-down of the facility once a final sales price is negotiated and finalized, all costs are expected to be recorded by June 30, 2006. Of the total expected charges of $30 million, approximately $20 million are expected to be cash charges.

Item 9.01.  Financial Statements and Exhibits.

(c)     Exhibits.

The following exhibits are filed with this Report:

     Exhibit No.   Description
         
     99.1   Press Release issued April 27, 2006, with respect to financial results for Applera and Applera’s Applied Biosystems Group.
         
     99.2   Press Release issued April 27, 2006, with respect to financial results for Applera and Applera’s Celera Genomics Group.

 


SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  APPLERA CORPORATION 
       
       
By:   /s/ Dennis L. Winger
     
      Dennis L. Winger
      Senior Vice President and
      Chief Financial Officer

Dated: April 27, 2006

 


EXHIBIT INDEX

Exhibit No.   Description
     
99.1   Press Release issued April 27, 2006, with respect to financial results for Applera and Applera’s Applied Biosystems Group.
     
99.2   Press Release issued April 27, 2006, with respect to financial results for Applera and Applera’s Celera Genomics Group.

 


Exhibit 99.1

Contacts
Media

Ana Kapor
650.638.6227
kapora1@appliedbiosystems.com

Investors
Peter Fromen
650.638.5828
fromenpj@appliedbiosystems.com

FOR IMMEDIATE RELEASE

APPLIED BIOSYSTEMS REPORTS FISCAL 2006
THIRD QUARTER RESULTS

Net revenues increased 8% to $490.7 million
     
Q3 fully diluted GAAP EPS of $0.65, including legal settlements and certain tax benefits
     
Q3 non-GAAP EPS was $0.34, excluding specified items

FOSTER CITY, CA, April 27, 2006– Applied Biosystems Group (NYSE: ABI), an Applera Corporation business, today reported net revenues of $490.7 million for the third quarter of fiscal 2006, an 8% increase over the prior year quarter. Revenues for the quarter include the favorable impact of 1% related to the acquisition of the Research Products Division of Ambion, Inc., effective March 1st, and an unfavorable currency impact of approximately 2%. Quarterly revenues also included licensing fees and royalty payments of approximately $14 million related to a settlement agreement, announced in February, involving patent infringement claims brought by Applera against Bio-Rad Laboratories, Inc. and MJ Research, Inc. Net income was $124.4 million, compared to $55.5 million for the prior year quarter, and was affected by specified items in both periods. Earnings per share (EPS) for the quarter was $0.65, compared to $0.28 for the prior year quarter. EPS for the quarter on a non-GAAP basis, excluding the specified items described in the reconciliation schedule below, was $0.34, a 21% increase compared to $0.28 for the prior year quarter. The net effect of foreign currency on EPS was an unfavorable impact of approximately $0.01 compared to the prior year quarter. All per share amounts refer to Applera Corporation-Applied Biosystems Group Common Stock.

“This quarter represents another step forward for Applied Biosystems,” said Tony L. White, Chief Executive Officer, Applera Corporation. “We’re executing on the strategies we have outlined over the past year and seeing the benefits in our results.”

“I’m pleased that over the last several quarters Applied Biosystems has been showing consistent organic growth and delivering solid financial results in line with our guidance,” said Catherine M. Burzik, President, Applied Biosystems. “We remain focused on the organic growth potential of our core businesses as well as external opportunities such as the recent acquisition of Ambion.”


As a result of the acquisition of Ambion during the third quarter of fiscal 2006, the Group will now include an adjustment for the amortization of all acquired intangibles in its reconciliation of non-GAAP amounts in the table below. The amortization adjustments for the third quarter of fiscal 2006 and 2005 were $1.3 million and $0.3 million, respectively.

During the third quarters of both fiscal 2006 and 2005, the Group also recorded items that affected the comparability of results. For the third quarter of fiscal 2006, these items decreased income before taxes by $4.1 million, in addition to the $1.3 million of amortization adjustments for a total of $5.4 million. These items included a pre-tax charge of $35 million related to an agreement announced yesterday to settle certain patent infringement claims brought by Beckman Coulter, Inc.; $33.4 million related to the above mentioned favorable settlement with Bio-Rad Laboratories and MJ Research; a pre-tax charge of $3.4 million to write off the value of acquired in-process research and development in connection with the Ambion acquisition; and a favorable pre-tax adjustment of $0.9 million for a previously recorded asset impairment. The third quarter of fiscal 2006 also included tax benefits of $63.3 million related to a completed IRS exam, a state valuation allowance reversal, and research and development credits.

During the third quarter of fiscal 2005, the Group recorded pre-tax items that increased income before taxes by approximately $1 million.

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, 2006   Three months ended March 31, 2005  
    GAAP
amounts
  Adj.   Non-GAAP
amounts
  GAAP
amounts
  Adj.   Non-GAAP
amounts
 
   

 

 

 

 

 

 
Operating income   $ 81.8   $ (5.4 ) $ 87.2   $ 73.7   $ 0.6   $ 73.1  
Income before income taxes     86.7     (5.4 )   92.1     77.9     0.6     77.3  
Provision (benefit) for income taxes     (37.7 )   (64.4 )   26.7     22.4     0.7     21.7  
Net income     124.4     59.0     65.4     55.5     (0.1 )   55.6  
                                       
Earnings per share allocations(1)     (0.6 )   (0.6 )         0.1     0.1        
Adjusted net income for
earnings per share
  $ 123.8   $ 58.4   $ 65.4   $ 55.6   $ -   $ 55.6  
                                       
Total diluted earnings per share   $ 0.65   $ 0.31   $ 0.34   $ 0.28   $ -   $ 0.28  

(1) Represents allocation of interperiod taxes and intercompany sales of assets to adjust net income for purposes of calculating earnings per share.

Quarterly Financial Highlights

Revenues by source and the change relative to the prior year quarter were: $207.1 million for Instruments, a 4% increase; $191.1 million for Consumables, including $5.5 million of Ambion-related revenues, an 8% increase; and $92.5 million for Other Sources, including service and support, royalties, licenses, and consulting, a 17% increase.
     

 


Revenues for major geographic regions and their change relative to the prior year quarter were: $218.1 million in the United States, an 11% increase; $157.1 million in Europe, a 7% increase including unfavorable foreign currency effects of approximately 6%; $61.3 million in Japan, relatively flat but including unfavorable currency effects of approximately 5%; and $35.0 million in Other Asia Pacific countries, a 17% increase including unfavorable foreign currency effects of approximately 2%.
     
Gross margin in the third quarter of fiscal 2006 was 56.0% versus 54.3% in the prior year quarter. The increase in gross margin was primarily attributable to $14 million in licensing fees and royalty payments related to the Bio-Rad Laboratories settlement.
   
Selling, general, and administrative (SG&A) expenditures in the third quarter of fiscal 2006 were $141.1 million, or 28.8% of revenues, compared to $123.4 million, representing 27.1% of revenues, in the prior year quarter. The change in SG&A was driven primarily by employee-related costs and sales force investments, including portal upgrades, as well as $3.1 million in Ambion-related expenses.
   
Research, development, and engineering (R&D) expenditures in the third quarter of fiscal 2006 were $48.0 million, representing 9.8% of revenues, compared to $50.9 million, representing 11.2% of revenues, in the prior year quarter. The decrease in R&D expenditures was due primarily to cost savings realized from the transfer of the MALDI TOF product line into the Applied Biosystems/MDS Sciex Instruments joint venture with MDS Inc. in fiscal 2005.
     
Cash flow from operations was $78.1 million and capital expenditures were $8.4 million for the quarter. Depreciation and amortization was $18.7 million. As of the end of the quarter, cash and short term investments were $358.4 million, down from $502.5 million as of December 31, 2005. This decline was largely a result of the close of the Group’s acquisition of Ambion for $279 million in cash, including closing transaction costs, but was partially offset by a $30 million payment from Applera’s Celera Genomics Group as part of the consideration for Applied Biosystems’ 50 percent interest in Celera Diagnostics. Accounts receivable were $359.5 million, representing 56 days sales outstanding, and inventory was $140.1 million, representing 3.0 months of inventory on hand.

Recent Business Highlights

Yesterday, Applera announced that it and Beckman Coulter, Inc. have established the terms of a settlement to resolve all outstanding legal disputes between the parties regarding claims to certain Beckman Coulter patented capillary electrophoresis technology and PCR instrumentation technology and Applera’s allegations of breach of contract of certain licensed technology.
     

 


In March, the Group announced the commercial availability in Europe, Asia and Africa of its TaqMan® Influenza A/H5 Detection Kit, which is capable of rapidly and reliably detecting multiple strains of avian influenza in laboratory samples.
     
In February, the Group announced that it had entered into a settlement agreement with Bio-Rad Laboratories, Inc. resolving a patent infringement suit by Applera and Roche Molecular Systems against MJ Research, Inc. (acquired by Bio-Rad Laboratories in 2004) relating to PCR methods and thermal cycler instruments, and another patent infringement suit by Applera against Bio-Rad Laboratories and MJ Research relating to Real Time PCR thermal cycler instruments, among other disputes. In conjunction with the settlement, Bio-Rad Laboratories' existing thermal cycler supplier license was amended to include MJ Research thermal cyclers.
     
In January, the Group, together with its joint venture partner MDS Sciex, announced the launch of the QSTAR®Elite LC/MS/MS System, a new quadrupole time-of-flight (QqTOF) mass spectrometer designed for proteomics and metabolomics researchers discovering protein and small molecule biomarkers from complex biological samples.

Applied Biosystems Outlook

The Group believes that its fiscal year 2006 outlook and financial performance will be affected by, among other things: the introduction and adoption of new products; the level of commercial investments in life science R&D; the level of government funding for life science research; the outcome of pending litigation matters; competitive product introductions and pricing; and the success of the Group’s expanded licensing program for real-time PCR technology.

Subject to the inherent uncertainty associated with these factors, Applied Biosystems has the following expectations for fiscal year 2006. This Outlook includes the impact from the acquisition of Ambion.

At current exchange rates, the Group expects mid single digit revenue growth for fiscal 2006.
     
The Group anticipates revenue growth in the Real-Time PCR/Applied Genomics, Mass Spectrometry, and Core PCR and DNA Synthesis product categories and revenue declines in the remaining categories: DNA Sequencing and Other Product Lines. Ambion revenues are recognized in the Real-Time PCR/Applied Genomics category.
     
Excluding specified items that affect the comparability of both fiscal periods, the Group expects double digit non-GAAP EPS growth over the prior year.
     
The Group continues to expect the effective tax rate to be approximately 29%.
     

 


The Group expects capital spending for fiscal 2006 to be in the range of $45-50 million.
     
The Group expects the pre-tax impact of adopting FAS 123R (accounting for stock based compensation) to be approximately $8.5 million, with an EPS impact of approximately $0.03.

In addition, the Group anticipates charges of approximately $3 million in the fourth quarter of fiscal 2006 related to the amortization of acquired intangibles.

Other risks and uncertainties that may affect Applied Biosystems’ 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. Applera 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 Information

This press release contains non-GAAP information, including earnings per share adjusted to exclude certain costs, expenses, gains and losses and other specified items. These measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. Among the items included in GAAP earnings but excluded for purposes of determining adjusted earnings 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; and amortization of acquired intangibles. In addition, for non-GAAP EPS purposes, we have also excluded the allocation of interperiod taxes and intercompany sales from our calculation of non-GAAP EPS. We believe the presentation of non-GAAP information 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 information is viewed in conjunction with non-GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. In addition, this information is among the primary indicators we use as a basis for evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting future periods. This information is not intended to be considered in isolation or as a substitute for GAAP financial information.

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 Applera business separately, approximately at the times indicated below, although the exact timing may be different as the call will proceed without pause between segments:

 


 

Applied Biosystems Group     11:00 a.m. (ET)
Celera Genomics Group      11:45 a.m.

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 706.634.4992 (code "Applera") at any time from 10:45 a.m. 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 or www.celera.com, or the “Investors” section of www.appliedbiosystems.com. A digital recording will be available approximately two hours after the completion of the conference call on April 27 until May 14, 2006. Interested parties should call 706.645.9291 and enter conference ID 8010438.

About Applera Corporation and Applied Biosystems


Applera Corporation consists of two operating groups. The Applied Biosystems Group 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, for example in food and the environment. Applied Biosystems is headquartered in Foster City, CA, and reported sales of nearly $1.8 billion during fiscal 2005. The Celera Genomics Group uses proprietary genomics and proteomics discovery platforms to develop molecular diagnostic products and to identify and validate novel drug targets. Celera maintains a strategic alliance in molecular diagnostics with Abbott. In addition, Celera is developing new molecular diagnostic and pharmacogenomic assays outside of its alliance with Abbott. Therapeutic antibodies against Celera-discovered drug targets are being advanced through strategic partnerships. 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 Applied Biosystems is available at http://www.appliedbiosystems.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 “planned,” 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 Applied Biosystems businesses, including its new activities in the clinical diagnostics instrumentation market, include but are not limited to: (1) rapidly changing technology could adversely affect demand for Applied Biosystems’ products, and its business is dependent on development and customer acceptance of new products; (2) Applied Biosystems’ sales are dependent on customers’ capital spending policies and government-sponsored research; (3) Applied Biosystems’ significant overseas operations, with attendant exposure to fluctuations in the value of foreign currencies; (4) risks associated with Applied Biosystems’ growth strategy, including difficulties in integrating acquired operations or technology; (5) potential liabilities related to the use of hazardous materials; (6) the risk of earthquakes, which could interrupt Applied Biosystems’ operations; (7) risks associated with lawsuits, arbitrations, investigations, and other legal actions with private parties and governmental entities, particularly involving claims for infringement of patents and other intellectual property rights, and the possibility that Applied Biosystems may need to license intellectual property from third parties to avoid or settle such claims; (8) Applied Biosystems’ dependence on the operation of computer hardware, software, and Internet applications and related technology for its businesses, particularly those focused on the development and marketing of information-based products and services; (9) uncertainty that clinical diagnostic instruments to be developed by Applied Biosystems will receive required regulatory clearances and/or will be accepted and adopted by the market, including the risk that these products will not be competitive with products offered by other companies; (10) Applied Biosystems’ reliance on a single supplier or a limited number of suppliers for some key products and key components of some of its products; and (11) 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 2006. Applera Corporation. All Rights Reserved. AB (Design), Applied Biosystems and Celera are registered trademarks, and Applera, and Celera Genomics are trademarks of Applera Corporation or its subsidiaries in the U. S. and/or certain other countries.

 


APPLERA CORPORATION
APPLIED BIOSYSTEMS GROUP
CONDENSED COMBINED STATEMENTS OF OPERATIONS
(Dollar amounts in millions except per share amounts)
(Unaudited)

    Three months ended
March 31,
    Nine months ended
March 31,
 
    2006     2005     2006     2005  
 

 

 

 

 
Net revenues $ 490.7   $ 454.8   $ 1,388.1   $ 1,308.5  
Cost of sales   215.7     207.7     629.0     610.7  
 

 

 

 

 
Gross margin   275.0     247.1     759.1     697.8  
Selling, general and administrative   141.1     123.4     398.9     360.9  
Research, development and engineering   48.0     50.9     134.1     144.0  
Employee-related charges, asset impairments and other   (0.9 )   (0.9 )   0.3     11.6  
Asset dispositions and legal settlements   1.6           27.5     (38.2 )
Acquired research and development   3.4         3.4      
 

 

 

 

 
Operating income   81.8     73.7     194.9     219.5  
Interest income, net   4.1     3.5     11.8     9.4  
Other income (expense), net   0.8     0.7     3.7     2.8  
 

 

 

 

 
Income before income taxes   86.7     77.9     210.4     231.7  
Provision (benefit) for income taxes   (37.7 )   22.4     12.0     66.4  
 

 

 

 

 
Net income $ 124.4   $ 55.5   $ 198.4   $ 165.3  
 

 

 

 

 
                         
Earnings per share analysis                        
                         
Net income $ 124.4   $ 55.5   $ 198.4   $ 165.3  
Allocated intercompany sales of assets               0.1        
Allocated interperiod taxes(1)   (0.6 )   0.1     (1.3 )   1.1  
 

 

 

 

 
Total net income allocated   123.8     55.6     197.2     166.4  
Less dividends declared on common stock   7.9     8.4     24.0     25.0  
 

 

 

 

 
Undistributed earnings $ 115.9   $ 47.2   $ 173.2   $ 141.4  
 

 

 

 

 
                         
Allocation of basic earnings per share                        
Basic distributed earnings per share $ 0.04   $ 0.04   $ 0.13   $ 0.13  
Basic undistributed earnings per share   0.63     0.24     0.92     0.72  
 

 

 

 

 
Total basic earnings per share $ 0.67   $ 0.28   $ 1.05   $ 0.85  
 

 

 

 

 
                         
Allocation of diluted earnings per share                        
Diluted distributed earnings per share $ 0.04   $ 0.04   $ 0.13   $ 0.13  
Diluted undistributed earnings per share   0.61     0.24     0.89     0.71  
 

 

 

 

 
Total diluted earnings per share $ 0.65   $ 0.28   $ 1.02   $ 0.84  
 

 

 

 

 
                         
Weighted average number of common shares                        
Basic   183,512,000     196,415,000     188,320,000     195,949,000  
Diluted   190,546,000     199,092,000     193,018,000     198,579,000  

(1) Represents allocation of interperiod taxes to adjust net income for purposes of calculating earnings per share.

 


APPLERA CORPORATION
APPLIED BIOSYSTEMS GROUP
Revenues By Product Categories
(Dollar amounts in millions)
(Unaudited)

    Three months ended
March 31,
         
    2006     2005     Change    
 

 

 

   
DNA Sequencing $ 136.5   $ 141.6     -4 %  
% of total revenues
  28 %   31 %        
Real-Time PCR/Applied Genomics*   162.2     132.2     23 %  
% of total revenues
  33 %   29 %        
Mass Spectrometry   113.9     104.9     9 %  
% of total revenues
  23 %   23 %        
Core PCR & DNA Synthesis   51.7     49.9     4 %  
% of total revenues
  11 %   11 %        
Other Product Lines   26.4     26.2     1 %  
% of total revenues
  5 %   6 %        
 

 

         
Total $ 490.7   $ 454.8     8 %  
 

 

         
                     
    Nine months ended
March 31,
   
         
    2006     2005     Change    
 

 

 

   
DNA Sequencing $ 402.1   $ 400.7     - %  
% of total revenues
  29 %   31 %        
Real-Time PCR/Applied Genomics*   430.7     376.0     15 %  
% of total revenues
  31 %   29 %        
Mass Spectrometry   330.6     307.6     7 %  
% of total revenues
  24 %   23 %        
Core PCR & DNA Synthesis   146.7     144.8     1 %  
% of total revenues
  10 %   11 %        
Other Product Lines   78.0     79.4     -2 %  
% of total revenues
  6 %   6 %        
 

 

         
Total $ 1,388.1   $ 1,308.5     6 %  
 

 

         

*Fiscal 2006 amounts include revenue related to the acquisition of the Research Division Products of Ambion, Inc.

Certain prior year amounts have been reclassified for comparative purposes.

 


APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2006

(Dollar amounts in millions except per share amounts)
(Unaudited)

    Applied
Biosystems
Group
    Celera
Genomics
Group
     Eliminations      Consolidated  
 

 

 

 

 
Net revenues $ 490.7   $ 8.9   $ (1.8 ) $ 497.8  
Cost of sales   215.7     4.9     (0.8 )   219.8  
 

 

 

 

 
                         
Gross margin   275.0     4.0     (1.0 )   278.0  
Selling, general and administrative   141.1     8.3           149.4  
Research, development and engineering   48.0     20.4     (1.0 )   67.4  
Employee-related charges, asset impairments and other   (0.9 )   20.9         20.0  
Asset dispositions and legal settlements   1.6                 1.6  
Acquired research and development   3.4             3.4  
 

 

 

 

 
Operating income (loss)   81.8     (45.6 )       36.2  
Gain on investments, net         3.1         3.1  
Interest income, net   4.1     5.2           9.3  
Other income (expense), net   0.8         0.1     0.9  
 

 

 

 

 
Income (loss) before income taxes   86.7     (37.3 )   0.1     49.5  
Benefit for income taxes   37.7     14.0     (0.7 )   51.0  
 

 

 

 

 
Net income (loss) $ 124.4   $ (23.3 ) $ (0.6 ) $ 100.5  
 

 

 

 

 
                         
Net income (loss) per share                        
Basic
$ 0.67   $ (0.31 )            
Diluted
$ 0.65   $ (0.31 )            
                         

 


APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2005

(Dollar amounts in millions except per share amounts)
(Unaudited)

    Applied
Biosystems
Group
    Celera
Genomics
Group
     Eliminations      Consolidated  
 

 

 

 

 
Net revenues $ 454.8   $ 17.2   $ (2.6 ) $ 469.4  
Cost of sales   207.7     4.9     (1.7 )   210.9  
 

 

 

 

 
Gross margin   247.1     12.3     (0.9 )   258.5  
Selling, general and administrative   123.4     10.9     0.1     134.4  
Research, development and engineering   50.9     36.9     (1.0 )   86.8  
Amortization of intangible assets         0.7         0.7  
Employee-related charges, asset impairments and other   (0.9 )           (0.9 )
 

 

 

 

 
Operating income (loss)   73.7     (36.2 )       37.5  
Interest income, net   3.5     4.0           7.5  
Other income (expense), net   0.7     (0.1 )   0.1     0.7  
 

 

 

 

 
Income (loss) before income taxes   77.9     (32.3 )   0.1     45.7  
Provision (benefit) for income taxes   22.4     (11.3 )   (0.1 )   11.0  
 

 

 

 

 
Net income (loss) $ 55.5   $ (21.0 ) $ 0.2   $ 34.7  
 

 

 

 

 
                         
Net income (loss) per share                        
Basic and diluted
$ 0.28   $ (0.29 )            

Certain fiscal 2005 amounts have been reclassified for comparative purposes.

 


APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended March 31, 2006

(Dollar amounts in millions except per share amounts)
(Unaudited)

    Applied
Biosystems
Group
    Celera
Genomics
Group
    Eliminations     Consolidated  
 

 

 

 

 
Net revenues $ 1,388.1   $ 28.4   $ (6.8 ) $ 1,409.7  
Cost of sales   629.0     14.5     (4.4 )   639.1  
 

 

 

 

 
Gross margin   759.1     13.9     (2.4 )   770.6  
Selling, general and administrative   398.9     27.0         425.9  
Research, development and engineering   134.1     78.6     (2.5 )   210.2  
Amortization of intangible assets         1.1         1.1  
Employee-related charges, asset impairments and other   0.3     20.9         21.2  
Asset dispositions and legal settlements   27.5     0.7           28.2  
Acquired research and development   3.4             3.4  
 

 

 

 

 
Operating income (loss)   194.9     (114.4 )   0.1     80.6  
Gain on investments, net         7.6         7.6  
Interest income, net   11.8     16.4         28.2  
Other income (expense), net   3.7     (0.2 )   0.1     3.6  
 

 

 

 

 
Income (loss) before income taxes   210.4     (90.6 )   0.2     120.0  
Provision (benefit) for income taxes   12.0     (33.2 )   1.4     (19.8 )
 

 

 

 

 
Net income (loss) $ 198.4   $ (57.4 ) $ (1.2 ) $ 139.8  
 

 

 

 

 
                         
Net income (loss) per share                        
Basic
$ 1.05   $ (0.77 )            
Diluted
$ 1.02   $ (0.77 )            

Certain prior period amounts have beeen reclassified for comparative purposes.

 


APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended March 31, 2005

(Dollar amounts in millions except per share amounts)
(Unaudited)

    Applied
Biosystems
Group
    Celera
Genomics
Group
     Eliminations      Consolidated  
 

 

 

 

 
Net revenues $ 1,308.5   $ 52.1   $ (6.5 ) $ 1,354.1  
Cost of sales   610.7     16.2     (4.4 )   622.5  
 

 

 

 

 
Gross margin   697.8     35.9     (2.1 )   731.6  
Selling, general and administrative   360.9     29.3           390.2  
Research, development and engineering   144.0     106.4     (2.2 )   248.2  
Amortization of intangible assets         2.2           2.2  
Employee-related charges, asset impairments and other   11.6     2.8           14.4  
Asset dispositions and legal settlements   (38.2 )           (38.2 )
 

 

 

 

 
Operating income (loss)   219.5     (104.8 )   0.1     114.8  
Interest income, net   9.4     10.2           19.6  
Other income (expense), net   2.8     1.1         3.9  
 

 

 

 

 
Income (loss) before income taxes   231.7     (93.5 )   0.1     138.3  
Provision (benefit) for income taxes   66.4     (32.7 )   (1.1 )   32.6  
 

 

 

 

 
Net income (loss) $ 165.3   $ (60.8 ) $ 1.2   $ 105.7  
 

 

 

 

 
                         
Net income (loss) per share                        
Basic
$ 0.85   $ (0.83 )            
Diluted
$ 0.84   $ (0.83 )            

Certain fiscal 2005 amounts have been reclassified for comparative purposes.

 


Exhibit 99.2

Contact
David Speechly, Ph.D.
510.749.1853
david.speechly@celera.com

FOR IMMEDIATE RELEASE

CELERA GENOMICS REPORTS THIRD QUARTER FISCAL 2006 RESULTS

ROCKVILLE, MD – April 27, 2006 Celera Genomics Group (NYSE:CRA), an Applera Corporation business, today reported a net loss of $23.3 million, or $0.31 per share, for the third quarter of fiscal 2006 ended March 31, 2006, compared to a net loss of $21.0 million, or $0.29 per share, for the third quarter of fiscal 2005. The third quarter fiscal 2006 results included a $20.9 million pre-tax charge for restructuring costs associated with the previously announced decision to partner or sell the small molecule drug discovery and development programs and the integration of Celera Diagnostics into Celera Genomics. The third quarter fiscal 2006 results also included a $3.1 million pre-tax gain from the sale of an investment. All per share amounts refer to Applera Corporation-Celera Genomics Group Common Stock.

“With the structural changes we made this quarter, Celera is now focused on its molecular diagnostics and proteomics endeavors,” said Tony L. White, Chairman, President and Chief Executive Officer of Applera Corporation. “These efforts provide opportunities for both near- and longer-term value with a lower risk profile to shareholders.”

“This was a strong quarter for us in terms of end-user sales growth and progress in new product introductions,” said Kathy Ordoñez, President of Celera Genomics. “End-user sales of products in our alliance with Abbott increased 27 percent from the prior-year quarter and 31 percent year-to-date. Losses from the alliance were down considerably both for the quarter and so far for the fiscal year. We were pleased with adoption in Europe of the HIV, HCV, and recently-launched Chlamydia and Gonorrhea tests that run on the m2000® . We’re also happy to have launched analyte specific reagents (ASRs) for thrombosis risk and fragile X.

“Outside our alliance with Abbott, we also made substantial progress toward demonstrating the medical utility of a Cirrhosis Risk Score™ for patients with chronic hepatitis C,” added Ms. Ordoñez. “These findings support the value of our genetic discoveries and their utility in the practice of Targeted Medicine.”

Financial Highlights

Effective January 1, 2006, Celera Genomics acquired the 50 percent interest in the Celera Diagnostics joint venture previously owned by the Applied Biosystems group of Applera such that it now owns 100 percent of Celera Diagnostics. Prior to that date, Celera Genomics accounted for its interest in the Celera Diagnostics joint venture under the equity method of accounting and included 100 percent of the losses of Celera Diagnostics in its statement of operations as ‘Loss from joint venture’. Additionally, Celera Genomics recorded 100 percent of net losses at Celera Diagnostics. Celera Genomics’ historical results have been restated for comparative purposes to reflect the transaction. However, the acquisition did not affect Celera Genomics' net loss for the periods presented.


CELERA GENOMICS REPORTS THIRD QUARTER FISCAL 2006 RESULTS
Page 2 of 12

Reported revenues for the third quarter of fiscal 2006 were $8.9 million, compared to $17.2 million for the third quarter of fiscal 2005. Third quarter fiscal 2006 reported revenues of $8.9 million are comprised of diagnostic-related revenues and are essentially consistent with Celera Diagnostics’ revenues in the prior year period. The third quarter fiscal 2005 reported revenues also included revenues from the discontinued Online/Information business and Paracel.
   
  Reported revenues for the Group are comprised of product sales, equalization payments, and license and collaborative revenue. Product sales currently consist primarily of shipments to our partner, Abbott, at a cost recovery price. In the future, product sales that are outside the alliance with Abbott also will be reported in this category. 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 the partners.
   
R&D expenses for the third quarter of fiscal 2006 were $20.4 million, compared to $36.9 million in the prior year quarter, and SG&A expenses for the third quarter of fiscal 2006 decreased to $8.3 million, compared to $10.9 million in the prior year quarter. These reductions were due primarily to the decision to exit small molecule drug discovery and development and the discontinuation of the Online/Information Business.
   
At March 31, 2006, the Group’s cash and short-term investments were approximately $580 million, compared to approximately $620 million at December 31, 2005. This reduction in the Group’s cash and short-term investments position at March 31, 2006 included a $30 million payment to Applied Biosystems as part of the consideration for its 50 percent interest in Celera Diagnostics.

Supplemental Financial Highlights

The following supplemental financial information is provided as a means of increasing the visibility for Celera’s performance in terms of its strategic alliance with Abbott:

(Dollar amounts in millions)     Three months ended March 31,     Nine months ended March 31,  
      2006     2005     2006     2005  
Total Alliance end-user sales     $20.0     $15.7     $57.0     $43.5  
Celera’s 50% pre-tax loss from Alliance activities         (5.4)       (8.6)       (18.3)     (28.2)  
                           
For the third quarter of fiscal 2006, the 27 percent increase over the prior year quarter in end-user sales for all products sold through the alliance with Abbott was due primarily to increased sales of HCV and HIV RealTime™ assays used on the m2000 system and increased sales of high resolution human leukocyte antigen (HLA) products and Celera’s cystic fibrosis ASRs and Viroseq® products. These end-user sales were partially offset by the discontinuation of the low resolution HLA product line that was removed from the alliance in December, 2005.
   
For the first nine months of fiscal 2006, the increase in end-user sales for all products sold through the alliance with Abbott was due primarily to increased sales of: HCV and HIV RealTime™ assays used on the m2000 system, third party high resolution HLA products, and Celera’s ASRs for HCV. These end-user sales were partially offset by lower sales of the low resolution HLA product line that was removed from the alliance in December, 2005.
   


CELERA GENOMICS REPORTS THIRD QUARTER FISCAL 2006 RESULTS
Page 3 of 12

During the recently completed quarter, Celera’s 50 percent portion of the pre-tax loss in the alliance decreased compared to the prior year quarter, primarily due to reduced R&D spending. Gross margin during the quarter remained relatively unchanged and declined modestly as a percentage of end-user sales from the prior year quarter, primarily due to activities associated with launching the m2000 system in Europe.
   
During the first nine months of fiscal 2006, Celera’s 50 percent portion of the pre-tax loss of the alliance decreased compared to the first nine months of fiscal 2005, primarily as a result of increased gross margin resulting from the higher end-user sales coupled with reduced R&D spending. Gross margin as a percentage of end-user sales in the first nine months of fiscal 2006 was relatively unchanged from the same period in the prior year.

Highlights

Celera announced the presentation of data toward development of its Cirrhosis Risk Score™ at the 41st annual meeting of The European Association for the Study of the Liver, in Vienna, Austria, April 26-30, 2006. This study is scheduled for presentation in the general session on Friday, April 28, 2006, when Hongjin Huang, Ph.D., Manager, Liver Diseases at Celera, will describe the study in which Celera and its collaborators have discovered a multi-gene signature that predicts future risk of cirrhosis in patients with chronic hepatitis C. This program is not a part of Celera’s alliance with Abbott.
   
Several new diagnostic products were launched since January 1, 2006, including a group of ASRs for thrombosis risk that were launched in January, 2006, and ASRs to detect fragile X, the leading cause of inherited mental retardation, which were launched in April, 2006. The commercialization of the fragile X ASRs follows the presentation of results from an evaluation study at the 2006 American College of Medical Genetics annual meeting in San Diego, CA, in March.
   
In April, Celera announced the sale to Pharmacyclics, Inc. (Nasdaq:PCYC) of three of its programs around small molecule drug candidates for the treatment of cancer and other diseases, which included programs that target histone deacetylase (HDAC) enzymes, selective HDAC enzymes, Factor VIIa, and B cell tyrosine kinases involved in immune function.
   
In February, Celera announced that four Celera antigen targets have been selected for further investigation by Abbott for therapeutic development under the collaboration between Celera and Abbott to discover, develop, and commercialize therapies for the treatment of cancer. These are in addition to the two targets that were selected for advancement under this collaboration in April, 2005.
   
The proteomics discovery program has now yielded 42 cancer targets through immunohistochemistry and functional studies. An additional 176 potential targets have been selected for functional and expression validation, of which 48 have demonstrated functional activity in tumor cell lines. These targets represent discoveries from pancreatic, colon, breast, lung, renal, gastric, and prostate cancer specimens. New discovery programs have been initiated in hepatocellular cancer and melanoma, and additional discovery efforts are underway in cancer stem cells and tumor endothelial biology. Initial targets have been selected for validation from Celera’s diabetes program.


CELERA GENOMICS REPORTS THIRD QUARTER FISCAL 2006 RESULTS
Page 4 of 12

Celera Genomics Outlook

With the acquisition of Applied Biosystems’ interest in Celera Diagnostics effective January 1, 2006, this outlook for Celera Genomics includes the outlook for Celera Diagnostics. Celera Genomics anticipates that its fiscal 2006 financial performance will be affected by, among other things, continued growth in demand for current and new diagnostic products and potential revenue from technology licenses and collaborations. Additionally, Celera Genomics intends to partner or sell its remaining small molecule pipeline, and programs that are not partnered or sold will be terminated.

Subject to the inherent uncertainty associated with these factors, Celera Genomics has the following expectations regarding its financial performance for fiscal 2006:

Celera Genomics anticipates end-user sales of products sold through the alliance with Abbott of $75 to $85 million.
   
Celera Genomics anticipates R&D expenses to be in the range of $93 to $100 million.
   
Total pre-tax restructuring charges associated with the decision to reduce Celera Genomics’ small molecule program workforce are anticipated to be approximately $30 million. Approximately $20 million of these charges will be cash charges.
   
Celera Genomics anticipates that its net loss for fiscal 2006 will be in the range of $70 to $78 million. This net loss includes the estimated charges and shutdown costs, as well as the estimated expenses, associated with the completion of the partnering or sale of the small molecule programs. This net loss does not include any value that might be received from any partnering or sale of its small molecule programs and associated assets. On an annualized basis for fiscal 2006, variable spending associated with the small molecule programs would have been approximately $75 million, of which approximately 90% would have been cash expenses.
   
At the end of fiscal 2006, Celera Genomics expects to have cash and short–term investments in the range of $550 to $570 million. This outlook excludes any potential proceeds from any partnering or sale of its small molecule programs and associated assets.

Celera Genomics anticipates that its net loss for fiscal 2007 will be less than $40 million.

Other risks and uncertainties that may affect Celera Genomics’ 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.


CELERA GENOMICS REPORTS THIRD QUARTER FISCAL 2006 RESULTS
Page 5 of 12

Conference Call & Webcast

A conference call to discuss financial results will be held today at 11:00 a.m. (ET). During the call, management will focus on each of the Applera businesses separately at the approximate times below:

o Applied Biosystems Group 11:00 a.m. (ET)
o Celera Genomics Group 11:45 a.m.

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 706.634.4992 (code "Applera") at any time from 10:45 a.m. 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 or www.celera.com, or “Investors” section of www.appliedbiosystems.com. A digital recording will be available approximately two hours after the completion of the conference call on April 27 until May 14, 2006. Interested parties should call 706.645.9291 and enter conference ID 8010438.

About Applera Corporation and Celera Genomics

Applera Corporation consists of two operating groups. The Celera Genomics Group uses proprietary genomics and proteomics discovery platforms to develop molecular diagnostic products and to identify and validate novel drug targets. Celera maintains a strategic alliance in molecular diagnostics with Abbott. In addition, Celera is developing new molecular diagnostic and pharmacogenomic assays outside of its alliance with Abbott. Therapeutic antibodies against Celera-discovered drug targets are being advanced through strategic partnerships. The Applied Biosystems Group 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, for example in food and the environment. Applied Biosystems is headquartered in Foster City, CA, and reported sales of nearly $1.8 billion during fiscal 2005. 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 Genomics 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

 


CELERA GENOMICS REPORTS THIRD QUARTER FISCAL 2006 RESULTS
Page 6 of 12

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 Genomics’ businesses, including the Celera Diagnostic business that is now fully owned by Celera Genomics, include but are not limited to: (1) Celera Genomics expects operating losses for the foreseeable future; (2) Celera Genomics’ unproven ability to discover, develop, or commercialize proprietary therapeutic products; (3) Celera Genomics’ unproven ability to discover, develop, or commercialize new proprietary diagnostic products; (4) the risk that clinical trials of therapeutic or diagnostic products that Celera Genomics develops will not proceed as anticipated, may take several years and be very expensive, or may not be successful, (5) the risk that therapeutic or diagnostic products will not receive required regulatory clearances or approvals; (6) the uncertainty that Celera Genomics’ therapeutic or diagnostic products will be accepted and adopted by the market, including the risk that these products will not be competitive with products offered by other companies, or that users will not be entitled to receive adequate reimbursement for these products from third party payors such as private insurance companies and government insurance plans; (7) reliance on existing and future collaborations with other companies, including, in the case of the diagnostics business, the strategic alliance with Abbott, which may not be successful; (8) reliance on access to biological materials and related clinical and other information, which may be in limited supply or access to which may be limited; (9) intense competition in the therapeutic and diagnostic industries in which Celera Genomics operates; (10) potential product liability or other claims against Celera Genomics as a result of the testing or use of its therapeutic or diagnostic products; (11) reliance on scientific and management personnel having the training and technical backgrounds necessary for Celera Genomics’ business, and also on collaborations with scientific and clinical experts at academic and other institutions who may not be available to Celera Genomics or who may compromise the confidentiality of Celera Genomics’ proprietary information; (12) potential liabilities related to the use of hazardous materials; (13) uncertainty of the availability of intellectual property protection, limitations on Celera Genomics’ ability to protect trade secrets, the risk of infringement claims, and the possibility that Celera Genomics may need to license intellectual property from third parties to avoid or settle such claims; (14) Celera Genomics’ dependence on the operation of computer hardware, software, and Internet applications and related technology; (15) legal, ethical, and social issues which could affect demand for Celera Genomics’ therapeutic or diagnostic products; (16) risks associated with future acquisitions by Celera Genomics, including that they may be unsuccessful; (17) uncertainty of the outcome of existing stockholder litigation; (18) Celera Genomics’ limited commercial manufacturing experience and capabilities and its reliance on a single principal manufacturing facility for manufacturing its diagnostic products; (19) Celera Genomics’ reliance on a single supplier or a limited number of suppliers for key components of certain of its products; (20) the risk of earthquakes, which could interrupt operations; (21) the risk that Celera Genomics will not be successful in its efforts to partner or sell its small molecule drug development programs; and (22) 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.


CELERA GENOMICS REPORTS THIRD QUARTER FISCAL 2006 RESULTS
Page 7 of 12

 

###

Copyright 2006. Applera Corporation. All Rights Reserved. Applied Biosystems and Celera are registered trademarks, and AB (Design), Applera, Celera Diagnostics, and Celera Genomics are trademarks of Applera Corporation or its subsidiaries in the U. S. and/or certain other countries.

 


APPLERA CORPORATION
CELERA GENOMICS GROUP
CONDENSED COMBINED STATEMENTS OF OPERATIONS
(Dollar amounts in millions except per share amounts)
(Unaudited)

                         
    Three months ended
March 31,
    Nine months ended
March 31,
 
         
    2006     2005     2006     2005  
 

 

 

 

 
Net revenues $ 8.9   $ 17.2   $ 28.4   $ 52.1  
Costs and expenses                    
Cost of sales
  4.9     4.9     14.5     16.2  
Research and development
  20.4     36.9     78.6     106.4  
Selling, general and administrative
  8.3     10.9     27.0     29.3  
Amortization of intangible assets
        0.7     1.1     2.2  
Employee-related charges, asset impairments and other
  20.9           20.9     2.8  
Asset dispositions and legal settlements
          0.7      
 

 

 

 

 
Operating loss   (45.6 )   (36.2 )   (114.4 )   (104.8 )
Gain on investments, net   3.1           7.6        
Interest income, net   5.2     4.0     16.4     10.2  
Other income (expense), net       (0.1 )   (0.2 )   1.1  
 

 

 

 

 
Loss before income taxes   (37.3 )   (32.3 )   (90.6 )   (93.5 )
Benefit for income taxes   14.0     11.3     33.2     32.7  
 

 

 

 

 
Net loss $ (23.3 ) $ (21.0 ) $ (57.4 ) $ (60.8 )
 

 

 

 

 
                     
Loss per share analysis                        
                         
Net loss per share                        
                         
Basic and diluted $ (0.31 ) $ (0.29 ) $ (0.77 ) $ (0.83 )
                         
Weighted average number of common shares                        
Basic and diluted   75,837,000     73,391,000     75,013,000     73,202,000  

Certain prior period amounts have been reclassified for comparative purposes.

 


APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2006
(Dollar amounts in millions except per share amounts)
(Unaudited)

                         
    Applied
Biosystems
Group
    Celera
Genomics
Group
    Eliminations     Consolidated  
 

 

 

 

 
Net revenues $ 490.7   $ 8.9   $ (1.8 ) $ 497.8  
Cost of sales   215.7     4.9     (0.8 )   219.8  
 

 

 

 

 
Gross margin   275.0     4.0     (1.0 )   278.0  
Selling, general and administrative   141.1     8.3           149.4  
Research, development and engineering   48.0     20.4     (1.0 )   67.4  
Employee-related charges, asset impairments and other   (0.9 )   20.9         20.0  
Asset dispositions and legal settlements   1.6                 1.6  
Acquired research and development   3.4             3.4  
 

 

 

 

 
Operating income (loss)   81.8     (45.6 )       36.2  
Gain on investments, net         3.1         3.1  
Interest income, net   4.1     5.2           9.3  
Other income (expense), net   0.8         0.1     0.9  
 

 

 

 

 
Income (loss) before income taxes   86.7     (37.3 )   0.1     49.5  
Benefit for income taxes   37.7     14.0     (0.7 )   51.0  
 

 

 

 

 
Net income (loss) $ 124.4   $ (23.3 ) $ (0.6 ) $ 100.5  
 

 

 

 

 
                         
Net income (loss) per share                        
Basic
$ 0.67   $ (0.31 )            
Diluted
$ 0.65   $ (0.31 )            

 


APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2005
(Dollar amounts in millions except per share amounts)
(Unaudited)

                         
    Applied
Biosystems
Group
    Celera
Genomics
Group
    Eliminations     Consolidated  
 

 

 

 

 
Net revenues $ 454.8   $ 17.2   $ (2.6 ) $ 469.4  
Cost of sales   207.7     4.9     (1.7 )   210.9  
 

 

 

 

 
Gross margin   247.1     12.3     (0.9 )   258.5  
Selling, general and administrative   123.4     10.9     0.1     134.4  
Research, development and engineering   50.9     36.9     (1.0 )   86.8  
Amortization of intangible assets         0.7         0.7  
Employee-related charges, asset impairments and other   (0.9 )           (0.9 )
 

 

 

 

 
Operating income (loss)   73.7     (36.2 )       37.5  
Interest income, net   3.5     4.0           7.5  
Other income (expense), net   0.7     (0.1 )   0.1     0.7  
 

 

 

 

 
Income (loss) before income taxes   77.9     (32.3 )   0.1     45.7  
Provision (benefit) for income taxes   22.4     (11.3 )   (0.1 )   11.0  
 

 

 

 

 
Net income (loss) $ 55.5   $ (21.0 ) $ 0.2   $ 34.7  
 

 

 

 

 
                         
Net income (loss) per share                        
Basic and diluted
$ 0.28   $ (0.29 )            

Certain fiscal 2005 amounts have been reclassified for comparative purposes.

 


APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended March 31, 2006
(Dollar amounts in millions except per share amounts)
(Unaudited)

                         
    Applied
Biosystems
Group
    Celera
Genomics
Group
    Eliminations     Consolidated  
 

 

 

 

 
Net revenues $ 1,388.1   $ 28.4   $ (6.8 ) $ 1,409.7  
Cost of sales   629.0     14.5     (4.4 )   639.1  
 

 

 

 

 
Gross margin   759.1     13.9     (2.4 )   770.6  
Selling, general and administrative   398.9     27.0         425.9  
Research, development and engineering   134.1     78.6     (2.5 )   210.2  
Amortization of intangible assets         1.1         1.1  
Employee-related charges, asset impairments and other   0.3     20.9         21.2  
Asset dispositions and legal settlements   27.5     0.7           28.2  
Acquired research and development   3.4             3.4  
 

 

 

 

 
Operating income (loss)   194.9     (114.4 )   0.1     80.6  
Gain on investments, net         7.6         7.6  
Interest income, net   11.8     16.4         28.2  
Other income (expense), net   3.7     (0.2 )   0.1     3.6  
 

 

 

 

 
Income (loss) before income taxes   210.4     (90.6 )   0.2     120.0  
Provision (benefit) for income taxes   12.0     (33.2 )   1.4     (19.8 )
 

 

 

 

 
Net income (loss) $ 198.4   $ (57.4 ) $ (1.2 ) $ 139.8  
 

 

 

 

 
                         
Net income (loss) per share                        
Basic
$ 1.05   $ (0.77 )            
Diluted
$ 1.02   $ (0.77 )            
                         
                         
                         
                         
                       

Certain prior period amounts have beeen reclassified for comparative purposes.

 


APPLERA CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended March 31, 2005
(Dollar amounts in millions except per share amounts)
(Unaudited)

                         
    Applied
Biosystems
Group
    Celera
Genomics
Group
    Eliminations     Consolidated  
 

 

 

 

 
Net revenues $ 1,308.5   $ 52.1   $ (6.5 ) $ 1,354.1  
Cost of sales   610.7     16.2     (4.4 )   622.5  
 

 

 

 

 
Gross margin   697.8     35.9     (2.1 )   731.6  
Selling, general and administrative   360.9     29.3           390.2  
Research, development and engineering   144.0     106.4     (2.2 )   248.2  
Amortization of intangible assets         2.2           2.2  
Employee-related charges, asset impairments and other   11.6     2.8           14.4  
Asset dispositions and legal settlements   (38.2 )           (38.2 )
 

 

 

 

 
Operating income (loss)   219.5     (104.8 )   0.1     114.8  
Interest income, net   9.4     10.2           19.6  
Other income (expense), net   2.8     1.1         3.9  
 

 

 

 

 
Income (loss) before income taxes   231.7     (93.5 )   0.1     138.3  
Provision (benefit) for income taxes   66.4     (32.7 )   (1.1 )   32.6  
 

 

 

 

 
Net income (loss) $ 165.3   $ (60.8 ) $ 1.2   $ 105.7  
 

 

 

 

 
                         
Net income (loss) per share                        
Basic
$ 0.85   $ (0.83 )            
Diluted
$ 0.84   $ (0.83 )            

Certain fiscal 2005 amounts have been reclassified for comparative purposes.