One-off costs slice Millipore profits in Q1
and a continuing manufacturing consolidation strategy were largely
responsible for sharp falls in Millipore's pre-tax and net profits
for the first quarter ended 31 March 2007.
The US company, which supplies products and services to the biopharmaceutical industry, saw its pre-tax profit slump by 47.9 per cent year on year to $23.3m (€17.1m) in the first quarter, while net income was 22.8 per cent lower at $26.7m. Millipore fared better at the operating level, where profit dipped 5.7 per cent to $39.6m. These figures included a number of one-off charges totalling $15.8m for the quarter. They comprised $3.8m related to manufacturing consolidation, $9.2m for business acquisition inventory fair-value adjustments, $586,000 for acquisition integration and restructuring expenses, and $2.4m for purchased intangibles amortisation. There were no comparable costs in the first quarter of 2006, other than $4.2m for the ongoing manufacturing consolidation programme. Without the charges, pre-tax income for the first quarter of 2007 would have been 24.9 per cent higher at US$55.8m, while net income would have improved by 17.4 per cent to $40.5m and operating income by 71.7 per cent to $72.0m. As Millipore pointed out, the $1.4bn acquisition of antibody-based products supplier Serologicals in July 2006 was the largest in recent Millipore history, while the manufacturing consolidation programme is a major undertaking that involves the closure of six plants in total. First-quarter revenues were $372.0m, up by 38.6 per cent on the same period last year, with foreign currency fluctuations contributing around 5 percentage points of that increase. The acquisition of Serologicals was also a prime factor, although Millipore reported organic revenue growth of 8 per cent, including a 10 per cent gain from its Bioprocess Division and 6 per cent from its Bioscience Division. Organic revenue growth in the Bioprocess Division was led by strong sales of consumable products used in biopharmaceutical manufacturing. Taking the acquisition and foreign currency effects into account, the Bioprocess Division generated quarterly revenues of $214.3m, 31.0 per cent higher than in the first quarter of 2006, and Bioscience revenues jumped 50.5 per cent to $157.7m. On a geographical basis, the Americas led the first-quarter growth with a sales increase of 43.8 per cent to $162.7m. European revenues rose by 34.4 per cent to $146.5m and the Asia Pacific region contributed $62.8m (+35.6 per cent). In addition to its solid organic growth in the quarter, the Bioprocess Division has markedly stepped up the pace of new product launches, with seven of these featured at last week's Interphex 2007 Conference in New York. Among the new crop were: A NovAseptic High Shear Mixer (HS T10), which Millipore is positioning as ideal for downsizing particles and manufacturing emulsions in small production-scale processes and pilot plants. The HS T10 will "enable customers to quantify the mixing process more quickly and move their processes into manufacturing faster and more cost-effectively", the company claims. The NovaSeal crimping solution for secure separation of the company's Mobius disposable assemblies. The patented design of the NovaSeal tool first crimps the metallic pinch pipe, ensuring a proper seal, then cuts the tubing into two sterile fluid paths, Millipore notes. The tool is ideally suited for sampling, transporting or transferring fluid, while ensuring sterility is maintained and the fluid is securely protected from the outside environment at all times, the company says. A new, smaller version of Millipore's Pod range of disposable filters, capable of processing small bioreactor batches of 5-20L. Because it uses the same media as the pilot- and process-scale Pods, the new size with Millistak media offers linear scale-up from 270cm2 to 540cm2. The Bioscience Division was also busy with new product during the first quarter, introducing media and cell lines for stem-cell research as well as a new service for kinase profiling. In addition, the division expanded on Millipore's leading portfolio of research reagents with the launch of some 300 antibodies. The main focus in the Bioscience Division is on completing the integration of Serologicals acquisition and improving the productivity of the sales organisation, Millipore said, adding that it expects to generate "significant value" from wider sales coverage in the second half of 2007.