Biosite Incorporated Announces 2006 Fourth Quarter and Annual Results

SAN DIEGO, Jan. 30  /PRNewswire-FirstCall/ -- Biosite Incorporated (NASDAQ:BSTE) today reported financial results for the fourth quarter and full year 2006 and discussed its revenue and earnings per share guidance for 2007.  The Company also provided an update on clinical trials for several potential new products.

  Key Financial Results

  *  Revenues for the fourth quarter of 2006 totaled $76.9 million, a
     6 percent increase from $72.4 million in the comparable period of 2005.
     Year-over-year sales of Triage(R) BNP Test products, which represented
     63 percent of total product sales, increased 2 percent in the quarter.
     Sales of Biosite's other cardiovascular products increased 31 percent.
     Combined sales from physician office and international markets
     increased 29 percent over the fourth quarter of 2005.

  *  For the fourth quarter of 2006, GAAP diluted earnings per share was
     $0.60 and Non-GAAP diluted earnings per share was $0.85. By comparison,
     in the fourth quarter of 2005 the Company's diluted earnings per share
     was $0.73.

     Non-GAAP results exclude the impact of FAS 123R, Share-Based Payment,
     which relates to the expensing of non-cash stock-based compensation,
     such as stock options and the Company's Employee Stock Purchase Program
     awards. The Company adopted FAS 123R as of January 1, 2006 on a
     modified prospective basis. See the tables included at the end of this
     release for a reconciliation of Non-GAAP financial results to GAAP
     financial results. See also, "About Non-GAAP Financial Measures" below.

     The Company also noted that 2006 fourth quarter earnings were favorably
     affected by the resolution of certain tax contingencies amounting to
     $0.06 per diluted share following the recent completion of a California
     Franchise Tax Board audit of certain of the Company's prior years'
     returns.

  *  GAAP operating income for the fourth quarter of 2006 was $15.0 million
     and Non-GAAP operating income was $21.1 million. In the comparable
     period of 2005, operating income was $20.3 million.

  *  Cash generated from operations was $8.3 million in the fourth quarter
     of 2006 and $75.1 million for the year.

  *  For the year ended December 31, 2006, total revenues were
     $308.6 million, a 7 percent increase from $287.7 million in 2005. GAAP
     diluted earnings per share was $2.20 for the year and Non-GAAP diluted
     earnings per share was $3.21, compared with diluted earnings per share
     of $2.92 in 2005.

  *  As a result of the Company's previously announced $100 million
     accelerated stock buyback program, the Company repurchased and retired
     1.9 million of its outstanding shares of common stock in the fourth
     quarter. For the year ended December 31, 2006, Biosite repurchased and
     retired approximately 2.5 million shares of common stock at a cost of
     $130 million. As of December 31, 2006, the Company's cash balance was
     approximately $64.2 million.





Following are financial highlights pertaining to revenues and cash flow for the three and 12 months ended December 31, 2006 and 2005:

     ($ in 000's)
                          Three months ended         Twelve months ended
                      12/31/06  12/31/05  Change  12/31/06  12/31/05  Change
  Triage BNP Test
   sales               $47,620   $46,893     2%   $196,393  $189,614     4%
  Other cardiovascular
   product sales        15,226    11,598    31%     54,877    39,559    39%
  Other product sales   12,775    12,999    (2%)    51,991    53,599    (3%)
  Total product sales   75,621    71,490     6%    303,261   282,772     7%
  Total revenues        76,851    72,421     6%    308,592   287,699     7%

  Cash flow from
   operations           $8,280   $12,202   (32%)   $75,089   $91,543   (18%)
  Cash used for stock
   repurchases        $100,000        --          $130,000        --

                      12/31/06  12/31/05  Change
  Cash and marketable
   securities balance  $64,229  $132,412   (51%)





"We exited 2006 with a strong cardiovascular franchise and healthy margins that we will work to maintain in 2007," said Kim Blickenstaff, Biosite's chairman and chief executive officer.  "Additionally, our investments in the physician office and international markets are producing results and we will continue to expand with the aim of increasing our presence in both of these areas in 2007."

Financial Guidance Update

Commenting on expectations for 2007, Biosite management maintained its 2007 total revenue target of $326 million, a 6 percent increase over 2006. The Company also said its 2007 GAAP diluted earnings per share target is $2.33, a 6 percent increase over 2006.  The 2007 diluted earnings per share target includes an estimated $20.0 million of stock-based compensation expense and $6.0 million of tax benefits associated with the compensation expense, compared to $24.9 million and $7.2 million, respectively in 2006.

See the Biosite Incorporated Guidance Data table included at the end of this release for additional details regarding the Company's financial guidance data.

Research and Development

In the area of research and development, Biosite announced that it has received clearance from the U.S. Food and Drug Administration (FDA) for its Protein C test.  As reported last year, the Company expects this test to be used in a clinical trial undertaken by Eli Lilly and Company that will employ a tailored therapy strategy for Lilly's sepsis drug Xigris(R).

Biosite also reported that it will allow its pending Premarket Notification 510(k) FDA submission for its myeloperoxidase (MPO) test to expire.  The Company filed the submission in December of 2005 and has been attempting to resolve questions concerning data poolability among four clinical sample banks previously collected that were used in support of the submission.

"At this time, we believe that continuing to pursue the current 510(k) submission using data from past studies is not in the best interest of the Company," said Ken Buechler, Ph.D., Biosite's president and chief scientific officer.  "We are already well underway with studies aimed at providing data intended to support a submission and expect to file a new Premarket Notification 510(k) submission for the prognostic use of MPO within the next several months."

The Company also reported commencement of the MIDAS (Myeloperoxidase and Multimarkers in the Diagnosis of ACS) trial in the fourth quarter of 2006. The MIDAS trial is, in part, intended to generate data to support regulatory submissions for an MPO test and for the Triage CardioProfilER(R) Panel with MPO featuring the MultiMarker Index(TM) Value.

During the fourth quarter of 2006, Biosite completed product design and optimization of the Triage Sepsis Panel.  The product combines three biomarkers, which Biosite's discovery program has shown to be potentially useful in the prognosis of sepsis, and will be evaluated in a validation clinical study, called MINDSET (MultiMarker Index for the Risk Assessment of Sepsis in the Emergency Department), which is aimed at generating data in support of an FDA submission.  This multi-center study is expected to commence in the spring of 2007.

Commenting on its kidney injury program, Biosite reported that it intends to perform additional investigational studies, beginning in the first quarter of 2007, prior to starting the KINGPIN (Kidney Injury Assessment Using NGAL in Cardiopulmonary Bypass Patients) validation trial.  The KINGPIN trial, which is expected to commence once these investigational studies have been completed, is intended to generate data to support the use of the biomarker neutrophil gelatinase-associated lipocalin (NGAL) as a predictor of kidney injury following cardiovascular surgery in adults.  Early data on NGAL from children suggest that the biomarker may be useful in evaluating the risk of kidney injury and the resulting loss of kidney function.

About Biosite Incorporated

Biosite Incorporated is a leading bio-medical company commercializing proteomics discoveries for the advancement of medical diagnosis.  The Company's products contribute to improvements in medical care by aiding physicians in the diagnosis of critical diseases and health conditions.  The Biosite(R) Triage(R) rapid diagnostic tests are used in more than 50 percent of U.S. hospitals and in more than 60 international markets.  Information on Biosite can be found at http://www.biosite.com/.

Investor Conference Call

Biosite will host an investor conference call to discuss financial results and research and development progress.  The call will take place today, January 30, 2007, at 1:30 p.m. Pacific.  A live webcast of the call can be accessed via the Internet at http://www.biosite.com/.  The phone number for U.S. callers is [phone] and international callers is [phone].  The conference call code for the live call is 20195944.  The call will be archived on the Biosite website for at least 21 days.  The phone replay number is [phone].  International callers, please dial [phone].  Please reference the conference call code 88652592.

About Non-GAAP Financial Measures

This press release contains financial results that exclude the effects of FAS 123R, Share-Based Payment, which relates to stock-based compensation, and is not in accordance with U.S. generally accepted accounting principles (GAAP).  The Company believes that this Non-GAAP financial measure provides meaningful supplemental information to both management and investors that is indicative of the Company's core operating results and facilitates comparison of operating results across reporting periods.  The Company has used this Non- GAAP measure for evaluating its financial results as well as for internal resource management, planning and forecasting purposes.  This Non-GAAP measure should not be viewed in isolation from or as a substitute for the Company's financial results in accordance with GAAP.  Assumptions regarding the valuation of stock-based compensation and the timing of events, such as the issuance of new stock-based compensation awards and the realization of tax benefits, may differ from actual results.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements.  Examples of forward-looking statements are financial targets and growth objectives and also include but are not limited to statements that are preceded by, followed by, or that include the words "will"; "believes"; "should"; "intend"; "anticipates"; "plans"; "expects"; "estimates"; or similar statements.  Forward-looking statements in this press release include statements regarding the Company's expected financial performance for the 2007 fiscal year, such as anticipated revenues, operating margins and earnings per share, the Company's ability to achieve growth targets in the international and physician office markets, the Company's ability to maintain market share for cardiovascular testing, the Company's plans to initiate the proposed MINDSET and KINGPIN validation studies when expected, the Company's plans to complete new studies intended to support regulatory filings relating to MPO and Triage CardioProfilER with MPO, as well as  the Company's plan to file a new Premarket Notification 510(k) for those potential new products when expected.  Risks and uncertainties include risks associated with Biosite's ability to commence and complete clinical trials as currently planned, Biosite's ability to obtain regulatory approvals and complete other pre-market activities needed to launch new products as currently planned, Biosite's ability to manufacture new products on a commercial scale and in accordance with acceptable quality standards, Biosite's ability to effectively promote and market acceptance of any new products, the continued growth of the BNP market generally, including the physician office market, the Company's ability to effectively expand sales activities outside the United States, and other risks associated with changing market conditions and the effect of competition from companies with greater capital and resources, including the impact on market pricing for BNP testing generally.  Other risks that should be considered are detailed in the Company's most recent Annual Report on Form 10-K and subsequent SEC filings.  The Company disclaims, however, any intent or obligation to update these forward-looking statements.  Copies of the Company's SEC filings are available from the Investor Relations department or from the Company's website.

Biosite(R), Cardio Profiler(R), Triage(R) and New Dimensions in Diagnosis(R) are registered trademarks of Biosite Incorporated.  MultiMarker Index(TM) is a trademark of Biosite Incorporated.

  Xigris(R) is a registered trademark of Eli Lilly and Company.



                           Biosite Incorporated
                Unaudited Statements of Income Data - GAAP
            (in thousands, except per share data and margins)

                              Three months ended           Year ended
                                 December 31,             December 31,
                           2006     2005   %Change   2006      2005  %Change

  Total revenues:
     Product sales        $75,621  $71,490     6%  $303,261  $282,772    7%
     Contract revenue       1,230      931    32%     5,331     4,927    8%
          Total revenues   76,851   72,421     6%   308,592   287,699    7%

  Gross margin on product
   sales                      68%      71%              69%       70%

  Operating expenses:
     Cost of product
      sales                23,992   20,953    15%    94,228    85,108   11%
     Selling, general
      and administrative   24,189   19,828    22%    97,098    74,758   30%
     Research and
      development          13,689   10,706    28%    53,043    42,215   26%
     License and patent
      disputes                 --      637  (100%)    3,142     1,977   59%
         Total operating
          expenses         61,870   52,124    19%   247,511   204,058   21%

  Operating income         14,981   20,297   (26%)   61,081    83,641  (27%)

  Operating income as
   % of total revenue         19%      28%              20%       29%

  Interest and other
   income, net                690    1,053   (34%)    4,244     2,722   56%

  Income before provision
   for income taxes        15,671   21,350   (27%)   65,325    86,363  (24%)

  Provision for income
   taxes                   (5,197)  (7,654)  (32%)  (25,331)  (32,334) (22%)

  Net income              $10,474  $13,696   (24%)  $39,994   $54,029  (26%)

  Diluted earnings per
   share                    $0.60    $0.73   (18%)    $2.20     $2.92  (25%)

  Diluted shares used
   in calculating per
   share amounts           17,571   18,773           18,186    18,505

  Share-based
   compensation expense
   for stock options and
   the employee stock
   purchase plan recorded
   in accordance with
   FAS 123R for
   continuing operations:

     Cost of product
      sales                  $858      $--           $2,728       $--
     Selling, general
      and administrative    3,577       --           15,100        --
     Research and
      development           1,732       --            7,031        --
        Subtotal           $6,167      $--          $24,859       $--
     Tax benefit           (1,934)      --           (7,217)       --
        Total              $4,233      $--          $17,642       $--



                           Biosite Incorporated
              Unaudited Statement of Income Data - Non-GAAP
            (in thousands, except per share data and margins)

  NOTE: Non-GAAP results exclude the impact of FAS 123R, which relates to
  the expensing of non-cash stock-based compensation

                              Three months ended            Year ended
                                 December 31,              December 31,
                           2006     2005   %Change    2006     2005  %Change

  Total revenues:
     Product sales        $75,621  $71,490     6%   $303,261  $282,772    7%
     Contract revenue       1,230      931    32%      5,331     4,927    8%
        Total revenues     76,851   72,421     6%    308,592   287,699    7%

  Gross margin on product
   sales                      69%      71%               70%       70%

  Operating expenses:
     Cost of product
      sales                23,134   20,953    10%     91,500    85,108    8%
     Selling, general
      and administrative   20,612   19,828     4%     81,998    74,758   10%
     Research and
      development          11,957   10,706    12%     46,012    42,215    9%
     License and patent
      disputes                 --      637  (100%)     3,142     1,977   59%
         Total operating
          expenses         55,703   52,124     7%    222,652   204,058    9%

  Operating income         21,148   20,297     4%     85,940    83,641    3%

  Operating income as
   % of total revenue         28%      28%               28%       29%

  Interest and other
   income, net                690    1,053   (34%)     4,244     2,722   56%

  Income before provision
   for income taxes        21,838   21,350     2%     90,184    86,363    4%

  Provision for income
   taxes                   (7,131)  (7,654)   (7%)   (32,548)  (32,334)   1%

  Net income              $14,707  $13,696     7%    $57,636   $54,029    7%

  Diluted earnings per
   share                    $0.85    $0.73    16%      $3.21     $2.92   10%

  Diluted shares used in
   calculating per share
   amounts                 17,271   18,773            17,936    18,505





Biosite Incorporated Unaudited Reconciliation of Consolidated Statements of Income Data - Non-GAAP

             to Consolidated Statements of Income Data - GAAP
            (in thousands, except per share data and margins)

                          Three months ended           Three months ended
                          December 31, 2006            December 31, 2005
                      Non-GAAP    Adjmts    GAAP     Non-GAAP  Adjmts  GAAP

  Total revenues:
     Product sales     $75,621      $--    $75,621    $71,490  $--  $71,490
     Contract revenue    1,230       --      1,230        931   --      931
         Total
          revenues      76,851       --     76,851     72,421   --   72,421

  Gross margin on
   product sales           69%      (1%)       68%        71%   0%      71%

  Operating expenses:
     Cost of product
      sales             23,134      858[a]  23,992     20,953   --   20,953
     Selling, general
      and
      administrative    20,612    3,577[a]  24,189     19,828   --   19,828
     Research and
      development       11,957    1,732[a]  13,689     10,706   --   10,706
     License and
      patent disputes       --       --         --        637   --      637
         Total
          operating
          expenses      55,703    6,167     61,870     52,124   --   52,124

  Operating income      21,148   (6,167)    14,981     20,297   --   20,297

  Operating income as
   % of total revenue      28%      (9%)       19%        28%   0%      28%

  Interest and other
   income, net             690       --        690      1,053   --    1,053

  Income before
   provision for
   income taxes         21,838   (6,167)    15,671     21,350   --   21,350

  Provision for
   income taxes         (7,131)   1,934[a]  (5,197)    (7,654)  --   (7,654)

  Net income           $14,707  $(4,233)   $10,474    $13,696  $--  $13,696

  Diluted earnings
   per share             $0.85   $(0.25)     $0.60      $0.73  $--    $0.73

  Diluted shares used
   in calculating per
   share amounts        17,271      300     17,571     18,773   --   18,773

  [a] - Adjustments to exclude from Non-GAAP financial measures the impact
        of FAS 123R, which relates to the expensing of non-cash stock-based
        compensation, beginning the first quarter of 2006





Biosite Incorporated Unaudited Reconciliation of Consolidated Statements of Income Data - Non-GAAP

             to Consolidated Statements of Income Data - GAAP
             (in thousands except per share data and margins)

                            Year ended                   Year ended
                         December 31, 2006            December 31, 2005
                    Non-GAAP     Adjmts    GAAP    Non-GAAP  Adjmts   GAAP

  Total revenues:
    Product sales   $303,261       $--   $303,261  $282,772   $--  $282,772
    Contract
     revenue           5,331        --      5,331     4,927    --     4,927
        Total
         revenues    308,592        --    308,592   287,699    --   287,699

  Gross margin on
   product sales         70%       (1%)       69%       70%    0%       70%

  Operating
   expenses:
    Cost of product
     sales            91,500     2,728[a]  94,228    85,108    --    85,108
    Selling,
     general and
     administrative   81,998    15,100[a]  97,098    74,758    --    74,758
    Research and
     development      46,012     7,031[a]  53,043    42,215    --    42,215
    License and
     patent
     disputes          3,142        --      3,142     1,977    --     1,977
        Total
         operating
         expenses    222,652    24,859    247,511   204,058    --   204,058

  Operating income    85,940   (24,859)    61,081    83,641    --    83,641

  Operating income
   as % of total
   revenue               28%       (8%)       20%       229    0%       29%

  Interest and other
   income, net         4,244        --      4,244      2,722   --     2,722

  Income before
   provision for
   income taxes       90,184   (24,859)    65,325     86,363   --    86,363

  Provision for
   income taxes      (32,548)    7,217[a] (25,331)   (32,334)  --   (32,334)

  Net income         $57,636  $(17,642)   $39,994    $54,029  $--   $54,029

  Diluted earnings
   per share           $3.21    $(1.01)     $2.20      $2.92  $--     $2.92

  Diluted shares
   used in
   calculating per
   share amounts      17,936       250     18,186     18,505   --    18,505

  [a] - Adjustments to exclude from Non-GAAP financial measures the impact
        of FAS 123R, which relates to the expensing  of non-cash stock-based
        compensation, beginning the first quarter of 2006



                           Biosite Incorporated
                          Selected Product Data
                  (in thousands, except margins and %'s)

  Sales by Product:
                                      Q1 2005   Q2 2005   Q3 2005   Q4 2005
  Triage(R) Drugs of Abuse Products   $10,283   $11,341   $12,408   $11,018
  Triage Cardiac Panel                  5,985     6,439     7,142     6,629
  Triage BNP Tests                     49,771    49,058    43,892    46,893
  Triage Profiler Products              1,946     2,226     2,852     3,465
  Triage D-Dimer Test                     131       481       757     1,489
  Triage Parasite Panel                   255       283       355       269
  Triage C. difficile Panel             1,349     1,377       942       988
  Triage Meters                           776       693       538       724
  Triage Stroke Panel (EU)                 --        --         2        15
     Total Product Sales              $70,496   $71,898   $68,888   $71,490


  International Sales:
                                      Q1 2005   Q2 2005   Q3 2005   Q4 2005
  International Sales as % of
   Product Sales                          13%       12%       12%       13%
  BNP International Sales as % of
   BNP Total Sales                        10%        9%        9%       10%

  Margin by Product Type (a), (b):
                                      Q1 2005   Q2 2005   Q3 2005   Q4 2005
  Triage Drugs of Abuse Product Line      82%       78%       82%       81%
  Triage Cardiovascular Product Line
   (incl. BNP)                            72%       69%       69%       70%


  Sales by Product:
                                      Q1 2006   Q2 2006   Q3 2006   Q4 2006
  Triage(R) Drugs of Abuse Products   $11,547   $10,464   $11,444   $10,836
  Triage Cardiac Panel                  6,616     7,188     6,902     7,606
  Triage BNP Tests                     52,564    50,678    45,531    47,620
  Triage Profiler Products              4,036     4,598     5,735     5,743
  Triage D-Dimer Test                   1,417     1,450     1,616     1,852
  Triage Parasite Panel                   286       337       377       360
  Triage C. difficile Panel             1,029     1,088     1,022       977
  Triage Meters                           625       539       458       602
  Triage Stroke Panel (EU)                 37        30        26        25
     Total Product Sales              $78,157   $76,372   $73,111   $75,621

  International Sales:
                                      Q1 2006   Q2 2006   Q3 2006   Q4 2006
  International Sales as % of
   Product Sales                          14%       15%       14%       16%
  BNP International Sales as % of
   BNP Total Sales                        11%       11%       10%       13%

  Margin by Product Type (a), (b):
                                      Q1 2006   Q2 2006   Q3 2006   Q4 2006
  Triage Drugs of Abuse Product Line      79%       77%       73%       78%
  Triage Cardiovascular Product Line
   (incl. BNP)                            71%       70%       68%       69%


  (a) These margins do not include all products.  The Triage Meters, Triage
      Micro Product Line and Triage Stroke Panel are not included.
  (b) Includes the impact of FAS 123R, which relates to the expensing of
      non-cash stock-based compensation, beginning the first quarter of 2006



                           Biosite Incorporated
                   Unaudited Balance Sheet Data - GAAP
                              (in thousands)

                                       December 31, 2006   December 31, 2005
                                           Unaudited
  Assets
    Cash, cash equivalents &
     marketable securities                   $64,229            $132,412
    Accounts receivable                       33,613              30,303
    Inventories                               33,154              32,627
    Other current assets                      14,603               9,422
       Total current assets                  145,599             204,764

    Property, equipment and leasehold
     improvements, net                       157,945             151,018
    Patents and license rights, net            9,399               4,764
    Other assets                              13,644               7,380
       Total assets                         $326,587            $367,926

  Liabilities and Stockholders' Equity
    Current liabilities                      $34,669             $39,104
    Long-term liabilities                     11,763              13,457
    Stockholders' equity                     280,155             315,365
      Total liabilities and stockholders'
       equity                               $326,587            $367,926



                           Biosite Incorporated
                          Guidance Data -- GAAP
          (in thousands, except per share data, margins and %'s)



The financial guidance provided below is an estimate based on information available as of January 30, 2007.  The Company's future performance and financial results are subject to risks and uncertainties, and actual results could differ materially from the guidance set forth below.  Some of the factors that could affect the Company's actual financial results are stated above in the section entitled "Forward Looking Statements" and in the Company's filings with the SEC.  The Company assumes no obligation to update the guidance set forth below.

                                                     Year ended
                                                     December 31,
                                       2007 Guidance    2006      %Change

  BNP product sales                       $200,500    $196,393      2.1%
  Total product sales                     $321,000    $303,261      5.8%

  Total revenues                          $326,000    $308,592      5.6%

  International sales % of total
   product sales                             18.0%       14.7%      3.3%(a)

  Gross margin on product sales              68.5%       68.9%     (0.4%)(a)

  Operating expenses (excl. Cost of
   sales) % of revenues                      49.5%       49.7%     (0.2%)(a)

  Operating income as % of total
   revenues                                  19.5%       19.8%     (0.3%)(a)

  Diluted earnings per share                 $2.33       $2.20      5.9%

  Income tax rate                            40.5%       38.8%      1.7%(a)

  Cash flow from operations                $80,000     $75,089      6.5%

  (a) Percentage point change


DATASOURCE: Biosite Incorporated



CONTACT:  Nadine Padilla, VP, Corporate & Investor Relations of Biosite

Incorporated, [phone], 



Web site:  http://www.biosite.com/ 



Company News On-Call:  http://www.prnewswire.com/comp/116737.html 

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