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MDS Posts 24 Percent Q2 Revenues Growth

NEW YORK (GenomeWeb News) – MDS today reported that its second-quarter 2008 revenues rose 24 percent, though only 5 percent excluding the impact of currency exchange and acquisitions.
 
The Toronto-based firm brought in revenues of $326 million for the three-month period ended April 30, compared to $263 million in the comparable period of 2007.
 
Among its three divisions, MDS Pharma Services had 11 percent revenue growth to $128 million for the quarter, or 1 percent growth excluding currency effects. MDS Nordion had revenue growth of 13 percent, including 9 percent growth from currency exchange, to $80 million.
 
MDS Analytical Technologies, which includes the firm’s mass spectrometry products and the Molecular Devices business, had 53 percent revenue growth to $118 million. Excluding foreign currency effects and the contribution of Molecular Devices, revenues for the segment grew 15 percent.
 
Molecular Devices, which MDS purchased during last year’s second quarter for $615 million, contributed $55 million of revenue for the second quarter of 2008.
 
MDS posted a profit of $11 million, or $.09 per share, for the quarter, compared to a profit of $737 million, or $5.35 per share, for the second quarter of 2007. Last year’s results included $792 million in income from discontinued operations, which was related to the sale of its diagnostics services business to Borealis Infrastructure Management.
 
The firm’s R&D spending increased 37.5 percent to $22 million for the quarter, while its SG&A costs rose 23 percent to $75 million.
 
MDS finished the quarter with $139 million in cash and cash equivalents.
 
The company expects to report revenues of between $1.35 billion and $1.4 billion for full-year 2008, up from its 2007 revenues of $1.21 billion.
 
One issue that could affect MDS’ financial results going forward was a recent decision by Atomic Energy of Canada and the Canadian government to discontinue development of nuclear reactors, which were to supply the MDS Nordion business with medical isotopes under a 40-year deal.
 
“MDS will continue to evaluate the intangible asset for possible impairment and the relevant financial reporting implications based upon the progress of any dialogue, negotiations or legal proceedings between AECL, the Government of Canada and the company,” MDS said in a statement.
 
In afternoon trade on the New York Stock Exchange, shares of MDS were down 9 percent at $16.70.

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