FINANCIAL STATEMENT BULLETIN
BIOHIT PLC. STOCK EXCHANGE RELEASE 17.2.2000 at 12:00 1 (14)
FINANCIAL STATEMENT BULLETIN OF BIOHIT PLC. FOR 1.1. - 31.12.1999
The net sales of the Biohit Group (FIM 122.2 million) increased by 22%
compared with the previous year. The profit before extraordinary items
for the period (FIM 4.9) increased by 81%.
Net Sales
Foreign sales accounted for 96% of Group net sales, i.e. the same
share as in 1998. 72% of sales was generated from the European
countries, 13% from the United States and the remaining 15% primarily
from Asia.
The growth in sales met the targets set and was generated primarily
due to an increased demand of electronic liquid handling equipment.
Profit
The operating profit for the period totalled to FIM 7.9 million in
the financial year, and to FIM 8.2 million in the preceding year.
However, the operating profits of 1998 and 1999 are not fully
comparable as the operating profit of 1999 is burdened with the
amortization of FIM 5.3 million on the goodwill associated with Locus
genex Oy and Biohit Systems, Inc, which have been part of the Biohit
Group since December 30, 1998, and with the operating loss of Locus
genex Oy totalling to FIM 2.8 million. On the otherhand, the 1998
operating profit is negatively impacted by FIM 3.5 million higher
amortization of capitalized development costs due to a change in
amortization policy. Without the amortization of the goodwill the
profit for the period would have been FIM 13.2 million, i.e. FIM 5.0
million (61%) higher than in 1998.
The so-called taxation hearing concerning the costs of the copyright
trial having been pending in the U.K. ended on October 21, 1999. After
this the parties continued the settlement negotations, on the basis of
which a final decision was reached on January 14, 2000. On the basis
of the settlement Biohit will be obliged to pay in total FIM 3.4
million. The amount paid exceeds by FIM 0.8 million the amount (FIM
2.6 million) which, based on the estimate presented by local experts,
was recorded under provisions in prior years' financial statements.
However, the final amount is FIM 0.3 million lower than what the
Company disclosed in its interim report for 1.1. - 30.9.1999 and the
amount which was known to the Company before commencing the settlement
negotiations.
The net financial expenses totalled to FIM 3.0 million. The decrease
of FIM 2.5 compared with the previous financial year resulted
primarily from the improved financial structure. On the otherhand,
1999 interest expenses include interests accrued on the capital loans
of Biohit Plc. during both the current and prior financial years
amounting to FIM 0.2 million and FIM 1.4 million, respectively.
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The profit before extraordinary items of the financial year was FIM
4.9 million which was FIM 2.2 million (81%) higher than in the
preceding year.
1999 extraordinary income of FIM 2.0 million consists of damages to be
paid by the City of Kajaani. In 1998 extraordinary income included the
impacts of the change in the valuation principle of inventories and
cancellation of certain liabilities.
Profit before taxes totalled to FIM 6.9 million, which is at the same
level as in 1998. However, profit for the financial year, FIM 4.1
million, is FIM 2.4 million lower than in the previous year due income
taxes paid by the Group.
Investments
The investments of the financial year totalled to FIM 7.6 million,
which consisted primarily of investment in the information systems and
the production machinery and equipment.
Liquidity
The liquidity of Biohit continues to be strong. The directed share
issue, which was carried out in June 1999, has essentially
strengthened the financial position of the Biohit Group and made it
possible to start the planned investments and to repay long-term
liabilities. In the financial year repayments of interest-bearing
liabilities were FIM 16.7 million out of which FIM 9.4 million have
been paid before the scheduled payment dates.
The gearing ratio increased from 38.8% at the end of the previous year
to 66.0%.
Personnel Options and Other Option Arrangements
During the financial year the personnel and Board members of the
Biohit Group subscribed in full the personnel options offered to them.
The personnel options entitle to subscribe between 1.1. - 1.4.2000
altogether 400,000 B-shares of Biohit for a subscription price of FIM
12.50, and between 1.1. - 1.4.2002 in total 400,000 B-shares for a
subscription price of FIM 20.00. On the basis of the subscription of
the shares the share capital of the Company may increase at maximum
with EUR 136,000 and the number of shares with 800,000.
The annual general meeting decided on April 21, 1999 to offer for
subscription to Martin John Anthony Williams and Robert Erwin
Williams, the owners of Jencons Scientific Ltd., a distributor for
Biohit's products, altogether 625,000 rights of option, which entitle
to subscribe between April 26, 1999 - September 30, 2002 altogether
625,000 B-shares for a subscription price of FIM 10. The parties in
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question subscribed all the rights of option offered to them. On the
basis of the subscription of the shares the share capital of the
Company may increase at maximum with EUR 106,250 and the number of
shares with 625,000. No subscriptions of shares has been made during
the financial year.
The Board of Directors will propose to the annual general meeting that
no dividend will be paid for the financial year since the Group does
not have distributable earnings.
Main Events of the Financial Year
Research and Development
In the area of liquid handling Biohit finished and entered into
production six new Biohit Proline® - products, which are presented
under the section on Liquid Handling. In 1999 the Company also
continued the development of several new OEM -liquid handling
products, which complement the instrument and diagnostic systems of
Biohit and other companies.
In the area of diagnostics the development work of, e.g. the test
panel for screening the risk of gastric cancer and peptic ulcer
proceeded in accordance with the targets set (see the section on
Diagnostics).
Production
The liquid handling products and the disposable pipettor tips are
manufactured in the Kajaani and Helsinki plants. As to liquid handling
the main task of the production facility in Helsinki is to act as a
pilot plant. Also, the diagnostic tests are produced in Helsinki. At
present, the injection molding department of Biohit in Kajaani,
producing precision molded plastic components, pipettor parts and
disposable pipettor tips, operates in three shifts, 7 days a week. The
assembly departments for the mechanical and electronic pipettors and
other supporting functions operate in one shift, 5 days a week.
In 1999 Biohit made the decision to commence construction of new
production premises in Kajaani. The construction work will begin in
spring 2000, and the Company estimates that the new premises can be
taken into use during 2000. As a result of the construction of the new
plant Biohit will enjoy the benefits of locating activities in one
site and will be able to increase the efficiency of the production of
pipettors, disposable tips as well as other plastic products for
diagnostics and instruments. According to the estimate of the Company
the new premises should, at least, enable to triple the volume of
current production.
Biohit's new production technology, additional capacity and new
premises ensure that the Company is equipped for future growth. Biohit
is an ISO 9001 -certified company, and the comprehensive and
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continuous development of quality plays a major role in the
organization.
Immaterial Assets
Collaboration between industry and the scientific community, reliable
research work, active R & D, the related innovations and awarded
patents form the solid and safe basis for the international
competitiveness and successful growth of a high technology company.
The basic and applied research of Biohit together with its
collaboration with Finnish and foreign scientific communities, and its
R & D work result in the generation of intellectual property, which is
protected, e.g. by patents and various agreements. Through the careful
monitoring of the patents and products of competitors it is possible
to follow their action and especially minimize the risk that the
rights of Biohit or those of other companies would be violated.
Currently Biohit does not have any disputes or law suits related with
immaterial rights.
During 1999 and in the early 2000 Biohit has increasingly concentrated
solely on those business areas in which it possesses reliable
scientific and technical know how, innovations and immaterial assets.
Compared with the over 20 companies having listed during the past year
in Finland Biohit possesses 16 patents (please refer to the following
table).
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Patenting in Finland by Finnish Companies Recently Listed and Market
Value per Estimated Net Sales 1999
Company Patents Patent Utility Market value
Applications Models 11.2.2000/
Estimated
Net Sales 1999
Biohit 16 31 - 4.4
Perlos 6 13 3 8.5
Teleste 3 4 - 5.0
Eimo 1 2 - 5.3
Sanitec 1 1 - 1.2
Stonesoft - 3 - 39.3
Keskisuomalai- - 1 - 1.1
nen
Aldata - - - 16.3
Comptel - - - 52.2
F-Secure - - - 86.1
Janton - - - 2.9
Liinos - - - 13.9
Marimekko - - - 0.7
Nedecon - - - 18.9
Proha - - - 10.2
Sponda - - - 3.8
Sysopen - - - 15.4
Technopolis - - - 2.3
Oulu
TH - - - 2.8
tiedonhallinta
Tieto-X - - - 6.7
TJ Group - - - 92.4
Sources concerning patent information: National Board of Patents and
Registration of Finland 27.1.2000. Sources concerning estimated net
sales 1999 and market value: Taloussanomat 26.1.2000 and 12.2.2000
The comprehensive patent protection in Finland and abroad, as well as
different agreements have formed a solid and reliable basis for
Biohit's growth and co-operation with other companies on the global
level. Biohit's patents, the high quality of products and secure
deliveries have resulted in the continuation of long term co-operation
with multinational companies such as Becton Dickinson, bioMérieux,
Johnson & Johnson and 3M. Also for this reason the six sales and
marketing subsidiaries of Biohit abroad have continued their growth
and favorable development. Likewise, the distributor network worldwide
has increasingly invested in the sales and marketing of Biohit's
products. The Company will continue to pay special attention to the
development of its immaterial assets also in the future.
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International Sales and Marketing
The international sales and marketing network of Biohit covers approx.
50 independent distributors each of which have a broad local network
of subdistributors. This network, comprising altogether over 200
distributors, covers about 50 countries. In addition, Biohit's
subsidiaries in France, Germany, Italy, Japan, the U.K. and the U.S.
focus on the sales and marketing of Biohit-labelled products and offer
maintenance and training services locally. In this way it is possible
to create a global Biohit brand and enhance further customer
satisfaction. In addition to Biohit-labelled products, the
subsidiaries sell OEM- and private label -products. Biohit's important
OEM- and private label -customers possess extensive global sales
networks, which form an essential part in Biohit's product and
marketing strategy for liquid handling products, diagnostics and
instruments as well as synergistic analyzing systems formed from
these. The Biohit subsidiary, Locus genex Oy, operating in Finland is
responsible for the R & D and production of diagnostics.
In 1999 the subsidiaries accounted for 62 % (FIM 74 million) of the
Group's net sales. During the financial year Biohit began to offer
more extensive maintenance services in its foreign subsidiaries for
Biohit-labelled pipettors and also for those manufactured by other
companies. In connection with this, Biohit continued to develop and
harmonize the international maintenance network for its liquid
handling products. In 1999 the Company continued to invest in the
marketing of the Biohit product ranges and OEM-products. In the future
Biohit aims to strengthen the operations of subsidiaries located in
the most important market areas. In addition, Biohit has identified
leading corporate partners to develop the market for diagnostics, and
has begun discussions.
Business Areas
Liquid Handling
During the financial year Biohit introduced the following new liquid
handling products on the markets.
The Biohit Proline® range of electronic pipettors was complemented by
the new single- and 12-channel pipettor for the volume range 50 - 1200
ul (1 ul= one million part of a liter). The 1200 ul range has been
developed to assist in high-throughput screening and as a tool for
scientists who need flexibility and performance in their work. The
maximum volume of 1200 ul and small volume increments make these
pipettors ideal for reagent addition across microplates at speed. The
single-channel unit is an ideal aid for dispensing into tubes, vials,
flasks, petri dishes, cell culture plates and many other vessels.
The light weight, cordless pipetting aid, Midi Plus, was developed and
introduced for applications of cell biology and chemical industry.
With the use of a unique accessory the Midi Plus can be pulled down
to ideal working height and held in position with tension, which is
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ideal for reducing the strain associated with long operating periods.
Another invention, the attached support allows the unit to be rested
on a table with pipet attached, which is not possible with most of the
other units in the market.
During 1999 Biohit finished the development work of a new range of
electronic pipettors. The main difference compared with the basic
range of Biohit Proline -electronic devices is that the battery
charger is located at the upper part of the pipettors and, thus, a
separate charging stand is not needed. This factor renders the price
of the new device also lower than that of the basic range of
electronic pipettors. The new electronic pipettor is a product
targeted to new market segments, such as for educational purposes and
as a replacement for the high-priced models of mechanical pipettors.
This product range was registered under the name ePET in the U.S. in
1999.
During the financial year Biohit complemented its range of mechanical
pipettors with the adjustable pipettor for the volume range 0.1-2.5
ul.This product has been developed especially for the dispensing needs
of small amounts of liquid in molecular biology and biotechnology.
In order to improve further the safety aspects of pipetting, Biohit
introduced in 1999 protective filters for its pipettors, so as to
prevent the contamination of the internal components of the pipettors
and, as a result, the sample from carryover, e.g. in genetic studies.
Moreover, the filters prevent damage of the internal mechanism of
pipettors. Previously Biohit has offered filters for most of its
single-channel models, but in 1999 the filter option was extended to
cover all multichannel pipettors over 50 ul.
Biohit broadened its selection of disposables by launching tips for
electronic and mechanical pipettors for the volume range of 5 - 350 ul
as well as expanded its speciality tip range from its supplier network
with, e.g., filter tips and gel loading tips.
In April, 1999 Biohit was awarded the U.S. -patent 5,895,838 for its
liquid handling device which automatically corrects the errors
produced by temperature variation of the pipetted liquid. Two Finnish
patents (FI 98604, FI 101864) have also previously been awarded for
the invention, and the Company has filed patent applications in
numerous other countries. At the turn of 1999-2000 a research project
related with this innovation which was supported by TEKES, the
National Technology Agency of Finland, was finished. Biohit believes
that this invention will strengthen its position on the liquid
handling and instrument markets in the future.
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Diagnostics
In the area of diagnostics Biohit develops, manufactures and markets
enzyme immunoassay (EIA) -based test kits and monoclonal antibodies
(MAbs) for the screening and detection of infections, and cancer.
Cancer diagnostics, and particularly screening and detecting the risk
of gastric cancer and peptic ulcer, represent key focal areas for
Biohit in the future.
In 1999 the development work of the unique test panel for screening
the risk of gastric cancer of the entire stomach area and peptic ulcer
proceeded according to plans. Through the blood sample analyses of the
test panel the pepsinogen I and II concentrations, the gastrin-17
concentration, the Helicobacter pylori -antibodies and the
concentration of vitamin B-12 can be determined. The biopsy sample
analyses cover the determination of the cyclooxygenase-2 protein (Cox-
2) and the detection of lactose intolerance. The celiac disease can be
determined on the basis of the blood sample and biopsy analyses.
If the mucous membrane of the stomach has been damaged due to atrophic
gastritis and this has caused the pepsinogen I and gastrin-17 blood
concentrations to fall, and if the person has also a Helicobacter
pylori infection, the risk of gastric cancer may be even 90 times
higher than normal. The lower the concentration of gastrin-17 in
blood, the higher is the risk for peptic ulcer in patients with normal
concentration of pepsinogen I. An estimated 20 million persons in the
U.S. either have or are expected to develop a peptic ulcer, which is
primarily caused by Helicobacter pylori. In addition atrophic patients
are less able to absorb vitamin B-12 from nutrition and this, prior to
the diagnosis of anemia, may quickly lead to incurable neurological
damage such as numbness in limbs, muscular weakness and dementia.
In case and internal examination is needed on the basis of blood
analyses, a biopsy will also be performed in order to detect possible
lactose intolerance and celiac disease. The cyclooxygenase-2 protein
determined form tissue samples is found only when cells become
neoplastic and malignant.
The different test kits of the test panel for screening the risk of
gastric cancer and peptic ulcer will be based on immunodiagnostics and
there on the use of Biohit's monoclonal antibodies (MAbs) and
microplates. Biohit currently manufactures and markets 24 different
MAbs for use in basic research as well as for classifying different
types of cancer from tissue samples.
In 1999 Biohit acquired, on a private label -basis, two anti-gliadin
tests (IgG and IgA) and an anti-transglutaminase test (IgA) for the
diagnosis of celiac disease to complement its product range for the
diagnosis of cancer. Untreated celiac disease may lead to the
development of anemias and intestinal malignancies, e.g. lymphomas
and, therefore, it is important to find the atypical or even
symptomless celiac patients.
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The phytoestrogen tests, which should be finished in 2001, can be used
to guide people to healthier eating habits and the prevention of
diseases. For example, the enterolactone levels of phytoestrogens
reflect the amount of fibre in nutrition. Enterolactone is a biomarker
of ordinary nutrition. The scarcity of phytoestrogens in nutrition and
their reduction in the body make people more exposed to cancer, heart
and blood vessel diseases.
In addition, Biohit is developing a method for diagnosing systemic
lupus erythematosus (SLE), a connective tissue disease with numerous
symptoms, which resembles rheumatic diseases, by using a specific anti-
dsDNA, anti-telomere assay. This simple and reliable method based on
blood sample analysis has been awarded the U.S. patent 5,700,641 and
the Finnish patent 100 556.
In 1999 Biohit filed the following patent applications related with
the gastric cancer and peptic ulcer test panel, the detection of
lactose intolerance and the deficiency of vitamin B-12: Method for the
determination of disaccharidases and kit therefor, method to assess
the risk for irreversible neurodamages, method for assessing the risk
of peptic ulcer, and method for identifying an individual at risk for
vascular and cancer disease.
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Status of the Diagnostics Product Range
Product Stage Clinical Performance Estimated
Evaluations Data Launch *)
Pepsinogen I Ready Jorvi Hos- Final stage 2Q/2000
pital,
United Clin.
Lab
Gastrin 17 Ready 1Q/2000 Under 2Q/2000
preparation
Helicobacter Ready Lund Under 2Q/2000
pylori University preparation
Pepsinogen II Development 1-2Q/2000 2Q/2000
COX-2 Development 3-4Q/2000 1Q/2001
B-12 vitamin Development 3-4Q/2000 4Q/2000
Lactose Ready Jorvi Hos Under 2Q/2000
Intolerance pital, HUCH, preparation
TUCH, Japan
Anti-dsDNA Ready Haartman Under 2Q/2000
Institute preparation
Anti-Gliadin Ready Ready Under 1Q/2000
IgG preparation
Anti-Gliadin Ready Ready Under 1Q/2000
IgA preparation
Anti-Trans- Ready Ready Under 1Q/2000
glutaminase preparation
Phytoestrogens
- Enterolactone Development MAbs 4Q/2000
- Genistein Development MAbs 4Q/2000
- Daidzein Development MAbs 4Q/2000
Monoclonal Ready Ready Ready Launched
antibodies (24
MAbs)
*) Before clinical use in the USA: FDA approval takes ca. 6 months; in
Japan approval takes ca. 6-12 months. No corresponding approvals are
needed in most other countries for clinical use. Approvals for
research use are not needed worldwide.
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Listing on Helsinki Exchanges
Biohit became a public limited company in April 1999 and listed on the
New Market -list of Helsinki Exchanges in June 1999. The trading of
Biohit's B-shares commenced on June 18, 1999.
In connection with the listing process Biohit carried out a directed
share issue in which 2,000,000 new shares with a nominal value of EUR
0.17 were offered for subscription to Finnish and international
institutional investors and the Finnish public for a subscription
price of EUR 4.5. The subscription period was June 2 - 15, 1999. The
share issue was discontinued on June 14, 1999 due to oversubscription.
The shares subscribed were allocated so that the institutional
investors received 750,000 shares and the Finnish public 1,250,000
shares. As a result of the share issue the number of B-shares
increased to 8,389,037 and the total number of A- and B-shares to
12,264,537 pieces. The share capital increased by EUR 340.000 (FIM 2
million). The new shares entitled to full dividends as of the fiscal
year beginning January 1, 1999. The shares yielded other rights from
the date of registration of the increase in share capital. The number
of shareholders increased to nearly 3,000. The funds received will be
used to reinforce international marketing and service efforts and
continuously develop further R & D and production.
Development of the Price of Biohit's B-Share
The turnover of the B-share in Helsinki Exchanges totalled to EUR
5,624,693 and 1,240,212 pieces in 1999. The highest price was EUR 6.00
and the lowest EUR 3.75.
During 2000 the development of the share price has been favorable, and
on 15.2.2000 the average price of the B-share was EUR 10.13.
Group Income Statement
1-12 1999 Change 1-12 1998
MFIM MEUR % MFIM
Net sales 122.2 20.6 22 100.4
Operating expenses 114.3 19.2 24 92.2
Operating profit 7.9 1.3 -4 8.2
Financial expenses
(net) 3.0 0.5 -45 5.5
Profit before
extraordinary items 4.9 0.8 81 2.7
Extraordinary income 2.0 0.3 -51 4.1
Profit before taxes 6.9 1.2 1 6.8
Profit for the period 4.1 0.7 -37 6.5
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Group Balance Sheet
31.12.1999 31.12.1998
Assets MFIM MEUR % MFIM %
Non-current assets 52.5 8.8 36 57.5 53
Current assets
Inventories 14.1 2.4 10 14.6 13
Receivables 37.3 6.3 25 30.8 28
Cash and cash
equivalents 42.9 7.2 29 6.7 6
Total assets 146.8 24.7 100 109.6 100
Liabilities and
shareholders' equity
Shareholders' equity
Share capital 12.4 2.0 8 10.3 9
Share premium fund 84.2 14.2 58 61.2 57
Accumulated
profits/ losses 0.0 0.0 0 -29.3 -27
Capital loans 8.6 1.5 6 8.3 7
Minority interest 0.3 0.1 0 0.3 0
Provisions 0.1 0.0 0 2.7 3
Long-term
liabilities 17.0 2.8 12 28.8 26
Short-term
liabilities 24.2 4.1 16 27.3 25
Total liabilities
and shareholders'
equity 146.8 24.7 100 109.6 100
1-12/99 Change Change-% 1-12/98
Investments,
gross
Fixed assets MFIM 7.6 -0.7 -8.4 8.3
Employees, average 184 20 12 164
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31.12.1999 31.12.1998
Mortgages and shares pledged
for liabilities, MFIM
Loans from financial
institutions 20.9 28.1
Corporate mortgages 20.1 20.1
Pledged shares, book value 0.4 0.3
Total 20.5 20.4
Other commitments, MFIM
Pledged shares, book value 0.8 0.8
Pledged securities 0.4 0.4
Total 1.2 1.2
Leasing commitments, MFIM 21.8 20.3
Ratios per share
Earnings per share, FIM 0.24 0.38
Shareholders' equity
per share, FIM 7.88 4.11
Derivative Contracts
The Group has no off balance sheet financial instruments.
Interest on Capital Loans
The unrecorded interest accrued on capital loans was FIM 1.7 million
on December 31, 1999 and FIM 2.8 million on December 31, 1998.
The figures of the Financial Statement Bulletin are unaudited.
Helsinki, February 17, 2000
Board of Directors of Biohit Plc.
Biohit Plc.
Helena Hentola
Information Management
Additional information: Osmo Suovaniemi, President & CEO, Tel: +358-9-
773 861, direct: +358-9-773 86 250
Terttu Ollikainen, Accounting & Finance, Tel:
+358-9-773 861, direct: +358-9-773 86 226
http://www.biohit.com
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Distribution: Helsinki Exchanges
The Financial Supervision Authority
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