Martek Biosciences Corp. (NASDAQ:
MATK) is scheduled to release its Q1 2010 results after the market closes on June 02, 2010. On February 12, 2010, Martek completed its previously announced acquisition of Amerifit, a consumer health and wellness company. To finance the Amerifit acquisition, Martek utilized existing cash of approximately $115 million along with the proceeds from a new term debt facility totaling $75 million and $11 million drawn from a new revolving credit facility. Martek's new revolving credit facility has a total borrowing capacity of $50 million and replaces Martek's former credit facility of $135 million which was due to expire in September 2010.
Martek Biosciences Corp. develops, manufactures and sells products from microalgae. The company''s products include: (1) specialty, nutritional oils for infant formula, nutritional supplements and food ingredients; (2) high value reagents and technologies to visualize molecular interactions for drug discovery and development; and (3) new, powerful fluorescent markers for diagnostics, rapid miniaturized screening, and gene and protein detection.
As for the Q1 of 2010, revenues were $89.8 million, up 3% from $87.4 million in the Q1 of fiscal 2009. GAAP net income was $9.6 million, or $0.29 per diluted share, for the Q1 of fiscal 2010, consistent with the earnings levels in last year's Q1. The Q1 of fiscal 2010 included expenses associated with the acquisition of Amerifit Brands ("Amerifit") of $1.2 million. Excluding these amounts, net of tax, the fiscal Q1 2010 earnings would have been $10.4 million, or $0.31 per diluted share, an increase of 8% over the Q1 of fiscal 2009. Product sales in the first quarter of fiscal 2010 were $84.1 million. While total product sales were essentially unchanged from the first quarter of fiscal 2009, there were changes in the components, most notably an increase of 40% in non-infant formula nutritional revenues along with a 4% decrease in infant formula-related sales. Overall gross margin for the Q1 of fiscal 2010 was 43.0%, a slight increase over the 42.4% gross margin realized in the Q1 of fiscal 2009, but a slight decrease from the 43.8% gross margin in Martek's fiscal Q4 2009.
Analysts' estimates for Q2 2010 range from a low of $0.31 to a high of $0.37, compared to a consensus estimate of $0.33, with number of estimates being 5 and the co-efficient variance 7.42. ]Infant formula revenue is expected to be between $78.0 million and $82.0 million, non-infant formula nutritional revenue to be between $11.0 million and $12.5 million, and contract manufacturing and services revenue to be between $4.0 million and $4.5 million. Consolidated gross margin is expected to be between 46.5% and 47.5%, including the non-recurring cost of goods sold adjustment noted above associated with the estimated effects of a write-up of inventory in connection with purchase accounting of $1.1 million, which reduces gross margin by approximately 1%.
The stock closed at $19.64, May 20, 2010 and most analysts' rate the stock as a relative Overweight with an average price target of $27.00.
