Invitrogen Announces Second Quarter 2008 Financial Results

"We continue to see consistent, solid growth in our business, leading to yet another quarter of strong financial results," said Greg Lucier, Chairman and Chief Executive Officer of Invitrogen. "Once the transaction with Applied Biosystems is complete, we look forward to combining our strong portfolios, world-class systems and talented people to create a truly remarkable life sciences company."

Second quarter diluted earnings per share were $0.55, which includes $0.05 per share of stock option expensing and $0.13 per share of amortization, business integration and other expenses. On a non-GAAP basis, which excludes these items, diluted earnings per share were $0.73, an increase of 28 percent over the same period last year.

Analysis of Second Quarter 2008 Results

-- Second quarter 2008 revenues increased 14.3 percent over the previous year, driven by solid growth in all businesses and regions, as well as positive currency benefits. Organic revenue growth, without the impact from currency and acquisitions, was 6.2 percent. Revenue from foreign exchange contributed $22 million or seven points of growth. -- Gross margin, on a non-GAAP basis, was 66.3 percent in the second quarter. This represents an increase of 260 basis points from the same period in the prior year, due to positive price realization, productivity and currency exchange benefits. -- Non-GAAP operating margin was 27.7 percent in the second quarter, representing an increase of 370 basis points over the same period in 2007. Operating expenses as a percent of revenue declined year over year due to lower general and administrative costs. G&A costs were lower primarily as the result of the elimination of one-time legal expenses present in 2007. -- Non-GAAP tax rate was 28.7 percent, a decrease of approximately 2 percentage points from the previous year. The decrease was related primarily to a projected higher percentage of income being earned in lower tax jurisdictions, as well as $1 million of tax benefits resulting from the completion of prior period audits. -- Weighted shares outstanding were 97.1 million in the second quarter. -- Cash flow from operating activities for the second quarter was $82 million. Second quarter capital expenditures were $17 million and free cash flow was $65 million. The company ended the second quarter with $646 million in cash & short-term investments. -- The following analysis of diluted earnings per share identifies specific items that affect the comparability of results between periods. Reconciliations between Invitrogen's results and non-GAAP results for the periods reported are presented in the attached tables and on the company's Investor Relations page at www.invitrogen.com.

Three Months Ending June 30, ------------------------------------- 2008 2007 % Change ---------- ------------- ---------- GAAP earnings per share $0.55 $0.31 78% Amortization of acquisition related expenses $0.12 $0.18 (33%) Stock option expense (FAS123R) $0.05 $0.07 (29%) Business integration and other expense $0.01 $0.01 n/a ---------- ------------- ---------- Non-GAAP earnings per share $0.73 $0.57 28% ---------- ------------- ----------

Segment and Geographic Highlights

-- BioDiscovery revenue was $253 million in the second quarter, an increase of 13.6 percent over the same period the previous year. Organic revenue growth, which excludes the impact from currency, was 6.5 percent. Revenue growth was a result of positive price realization and volume in almost all product areas, most notably in drug discovery sciences, molecular biology and cellular analysis products. -- BioDiscovery non-GAAP gross margins increased 250 basis points year over year due to positive price realization and operational productivity. -- Cell Systems revenue was $115 million in the second quarter 2008, an increase of 16 percent over the same period the previous year. Organic revenue growth, which excludes the impact from currency and acquisitions, was 5.6 percent. Solid growth in cell culture research continued, driven by accelerating sales of stem cell and other specialty cell culture media. Production media and sera grew in the mid single digits, as expected. -- Cell Systems non-GAAP gross margins increased by 310 basis points year over year due to improved productivity and currency benefits. -- Revenue growth, including impact from currency, by region for the second quarter was 5 percent in the Americas, 24 percent in Europe and 22 percent in Asia Pacific. The emerging markets of India, China and Korea had strong double-digit growth. -- Orders transacted through e-commerce channels reached another record high of 63 percent in the Americas during the second quarter, and over 50 percent globally. -- New product highlights included: -- Food and Drug Administration premarket approval for the HER2 CISH Kit, indicated as an aid in the assessment of breast cancer patients for whom trastuzumab (Herceptin(R)) treatment is being considered. The approval marks the first PMA that Invitrogen has received from the FDA; -- The SequalPrep(TM) System; a complete sample enrichment and normalization solution for next generation sequencing technologies; and -- CELLstart(TM), the first fully defined, completely animal origin free substrate in the marketplace for the attachment and expansion of embryonic, mesenchymal and neural stem cells. -- The company won six Life Science Industry Awards, the most of any company. The awards are given to top life science suppliers, with the winners being determined by the industry's customers -- scientists in biotechnology and pharmaceutical companies, in government and academia. This was the fourth year in a row that Invitrogen was recognized through these awards.

Applied Biosystems Transaction

As previously announced on June 12, 2008, the Boards of Directors of Invitrogen and Applera Corporation approved a definitive merger agreement under which Invitrogen will acquire all of the outstanding stock of Applied Biosystems, Inc. for $38.00 per share in a cash and stock transaction valued at $6.7 billion.

The company expects the transaction to close in late October to early November. The company has filed under Hart Scott Rodino for U.S. antitrust review and will soon be engaging with the European Commission for a similar review process. The company expects to file the preliminary proxy by the end of July or early August.

Fiscal Year 2008 Outlook

Subject to the risk factors detailed in the Safe Harbor Statement section of this release, the company expects full year 2008 organic revenue, excluding the impact from currency and acquisitions, to increase in the mid single digits. Non-GAAP earnings per share are expected to increase at a rate of one and a half to two times that of revenue. The company will provide further detail on its business outlook during the conference call today.

Conference Call and Webcast Details

The company will discuss its financial and business results as well as its business outlook on its conference call at 9:00 a.m. Eastern Time today. This conference call will contain forward-looking information. The conference call will include a discussion of "non-GAAP financial measures" as that term is defined in Regulation G. For actual results, the most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the company's financial results determined in accordance with GAAP, as well as other material financial and statistical information to be discussed on the conference call will be posted at the company's Investor Relations website at www.invitrogen.com.

The webcast can be accessed on Invitrogen's website at www.invitrogen.com on the Investor Relations home page. Alternatively, callers may listen to the live conference call by dialing 866.831.5605 (domestic) or 617.213.8851 (international) and use passcode 21567755. A replay of the webcast will be available on the Company's website through Thursday, August 14, 2008.

About Invitrogen

Invitrogen Corporation (Nasdaq:IVGN) provides products and services that support academic and government research institutions and pharmaceutical and biotech companies worldwide in their efforts to improve the human condition. The company provides essential life science technologies for disease research, drug discovery, and commercial bioproduction. Invitrogen's own research and development efforts are focused on breakthrough innovation in all major areas of biological discovery including functional genomics, proteomics, stem cells, cell therapy, and cell biology -- placing Invitrogen's products in nearly every major laboratory in the world. Founded in 1987, Invitrogen is headquartered in Carlsbad, California, and conducts business in more than 70 countries around the world. The company employs approximately 4,700 scientists and other professionals and had revenues of approximately $1.3 billion in 2007. For more information, visit www.invitrogen.com.

Statement Regarding Use of Non-GAAP Measures

We regularly have reported non-GAAP measures for net income and earnings per share as non-GAAP results. These measures are provided as supplementary information and are not a substitute for, or superior to, financial measures calculated in accordance with GAAP. These non-GAAP measures are limited because they do not reflect the entirety of our business results.

We define our non-GAAP results as our GAAP results excluding the after tax impact of the following:

-- Acquisition related amortization; -- In process research and development expenses; -- Acquisition related gains and losses; -- Asset impairment charges related to a portfolio review; -- Business consolidation costs required to realize cost synergies from combining our acquired entities with our existing operations; -- Certain significant one time events that are unlikely to recur; and -- Share based payment expenses as a result of adoption of FAS123R.

Management views these excluded items as not indicative of the operating results or cash flows of its operations and excludes these items as a supplemental disclosure to assist investors in evaluating and assessing our past and future operational performance. This presentation of our non-GAAP results is consistent with how management internally evaluates the performance of its operations.

We encourage investors to carefully consider our results under GAAP, as well as our non-GAAP disclosures and the reconciliation between these presentations to more fully understand our business. Reconciliations between GAAP results and non-GAAP results are presented on the following pages.

Safe Harbor Statement

Certain statements contained in this press release and in today's conference call are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and it is Invitrogen's intent that such statements be protected by the safe harbor created thereby. Such statements include, but are not limited to statements regarding Invitrogen's: 1) financial projections, including revenue and non-GAAP earnings per share; 2) plans regarding our share repurchase program; 3) momentum in 2008; 4) plans to sustain and expand organic growth and increase operating margins; and 5) plans to acquire Applied Biosystems, Inc. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to a) the Company's ability to identify promising technology and new product development opportunities; b) the Company's repurchase shares of its common stock at prices that are acceptable to its Board of Directors and management; c) the Company's ability to identify acquisitions and organic growth opportunities that will position it to serve growing markets; and d) the closing conditions in the Agreement & Plan of Merger to acquire Applied Biosystems, as well as other risks and uncertainties detailed from time to time in Invitrogen's Securities and Exchange Commission filings.

Herceptin(R) is a registered trademark of Genentech. No sponsorship or endorsement by Genentech is implied herein.

INVITROGEN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RECONCILIATION OF NON-GAAP ADJUSTMENTS(1) For the three months (in thousands, except per ended June 30, 2008 share data) ----------------------------------------- (unaudited) GAAP Adjustments Non-GAAP ---------- ----------- --------- Revenues $ 367,791 $ - $367,791 Cost of revenues 125,268 (1,405) (2)(3) 123,863 Purchased intangibles amortization 17,416 (17,416) (4) - ---------- ----------- --------- Gross profit 225,107 18,821 243,928 ---------- ----------- --------- Gross margin 61.2% 66.3% Operating expenses: Sales and marketing 73,338 (2,127) (3) 71,211 General and administrative 42,188 (3,781) (3) 38,407 Research and development 33,173 (868) (3) 32,305 Business consolidation costs 1,413 (1,413) (5) - ---------- ----------- --------- Total operating expenses 150,112 (8,189) 141,923 ---------- ----------- --------- Operating income 74,995 27,010 102,005 Operating margin 20.4% 27.7% Interest income 5,348 - 5,348 Interest expense (6,895) - (6,895) Other income (expense), net (357) - (357) ---------- ----------- --------- Total other income (expense), net (1,904) - (1,904) ---------- ----------- --------- Income from continuing operations before income taxes 73,091 27,010 100,101 Income tax provision (19,866) (8,913) (6) (28,779) ---------- ----------- --------- Income from continuing operations $ 53,225 $ 18,097 $ 71,322 Income from discontinued operations, net of tax$ - $ - $ - ---------- ----------- --------- Net income $ 53,225 $ 18,097 $ 71,322 Effective tax rate for continuing operations 27.2% 28.7% Add back interest expense for subordinated debt, net of tax 34 - 34 ---------- ----------- --------- Numerator for diluted continuing earnings per share $ 53,259 $ 18,097 $ 71,356 ========== =========== ========= Earnings per common share: Basic earnings per share from continuing operations $ 0.58 $ 0.78 ========== ========= Basic earnings per share from discontinued operations $ - $ - ========== ========= Diluted earnings per share from continuing operations $ 0.55 $ 0.73 ========== ========= Diluted earnings per share from discontinued operations $ - $ - ========== ========= Weighted average shares used in per share calculation: Basic 91,907 91,907 Diluted 97,129 97,129 For the three months (in thousands, except per ended June 30, 2007 share data) ------------------------------------------ (unaudited) GAAP Adjustments Non-GAAP ---------- ----------- --------- Revenues $ 321,690 $ - $321,690 Cost of revenues 118,191 (1,546) (2)(3) 116,645 Purchased intangibles amortization 27,957 (27,957) (4) - ---------- ----------- --------- Gross profit 175,542 29,503 205,045 ---------- ----------- --------- Gross margin 54.6% 63.7% Operating expenses: Sales and marketing 62,436 (1,649) (3) 60,787 General and administrative 44,791 (5,360) (3) 39,431 Research and development 28,604 (1,113) (3) 27,491 Business consolidation costs 724 (724) (5) - ---------- ----------- --------- Total operating expenses 136,555 (8,846) 127,709 ---------- ----------- --------- Operating income 38,987 38,349 77,336 Operating margin 12.1% 24.0% Interest income 7,931 - 7,931 Interest expense (6,944) - (6,944) Other income (expense), net 350 - 350 ---------- ----------- --------- Total other income (expense), net 1,337 - 1,337 ---------- ----------- --------- Income from continuing operations before income taxes 40,324 38,349 78,673 Income tax provision (10,927) (13,065) (6) (23,992) ---------- ----------- --------- Income from continuing operations $ 29,397 $ 25,284 $ 54,681 Income from discontinued operations, net of tax $ 11,481 $(11,481) $ - ---------- ----------- --------- Net income $ 40,878 $ 13,803 $ 54,681 Effective tax rate for continuing operations 27.1% 30.5% Add back interest expense for subordinated debt, net of tax 40 - 40 ---------- ----------- --------- Numerator for diluted continuing earnings per share $ 29,437 $ 25,284 $ 54,721 ========== =========== ========= Earnings per common share: Basic earnings per share from continuing operations $ 0.32 $ 0.59 ========== ========= Basic earnings per share from discontinued operations $ 0.12 $ - ========== ========= Diluted earnings per share from continuing operations $ 0.31 $ 0.57 ========== ========= Diluted earnings per share from discontinued operations $ 0.12 $ - ========== ========= Weighted average shares used in per share calculation: Basic 92,940 92,940 Diluted 95,448 95,448 (1)The Company has regularly reported Non-GAAP results which exclude the amortization of purchased intangibles, charges for inventory revaluation on products sold that were previously written-up under purchase accounting rules, in-process research and development and acquisition related deferred compensation to provide a supplemental comparison of results of operations. In addition, expenses related to share-based payments as a result of the adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payments," have been excluded from Non-GAAP results. (2)Add back noncash charges for purchase accounting inventory revaluations of $0.6 million and zero for the three months ended June 30, 2008 and 2007, respectively. (3)Add back stock option expense related to Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payments," of $7.6 million and $9.7 million for the three months ended June 30, 2008 and 2007, respectively. (4)Add back amortization of purchased intangibles. (5)Add back business consolidation costs. (6)Non-GAAP tax expense is higher than GAAP tax expense primarily because certain acquisition related costs such as charges for inventory revaluation, amortization of acquired intangibles, in- process research and development and deferred compensation are deducted for GAAP purposes but excluded for Non-GAAP purposes. In addition, 2008 GAAP net income includes expenses related to share- based payments as a result of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payments," which are deducted for GAAP purposes but excluded for Non-GAAP purposes. These deductions produce a GAAP only tax benefit which is added back for Non-GAAP presentation.

INVITROGEN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RECONCILIATION OF NON-GAAP ADJUSTMENTS(1) For the six months (in thousands, except per ended June 30, 2008 share data) --------------------------------------- (unaudited) GAAP Adjustments Non-GAAP --------- ----------- --------- Revenues $718,009 $ - $718,009 Cost of revenues 239,823 (3,092) (2)(3) 236,731 Purchased intangibles amortization 34,319 (34,319) (4) - --------- ----------- --------- Gross profit 443,867 37,411 481,278 --------- ----------- --------- Gross margin 61.8% 67.0% Operating expenses: Sales and marketing 143,636 (3,636) (3) 140,000 General and administrative 85,623 (8,681) (3) 76,942 Research and development 63,806 (1,884) (3) 61,922 Business consolidation costs 1,914 (1,914) (5) - --------- ----------- --------- Total operating expenses 294,979 (16,115) 278,864 --------- ----------- --------- Operating income 148,888 53,526 202,414 Operating margin 20.7% 28.2% Interest income 14,272 - 14,272 Interest expense (13,762) - (13,762) Other income 1,437 - 1,437 --------- ----------- --------- Total other income (expense), net 1,947 - 1,947 --------- ----------- --------- Income from continuing operations before provision for income taxes 150,835 53,526 204,361 Income tax provision (39,240) (17,854) (6) (57,094) --------- ----------- --------- Income from continuing operations $111,595 $ 35,672 $147,267 Income from discontinued operations, net of tax $ 1,358 $ (1,358) $ - --------- ----------- --------- Net income $112,953 $ 34,314 $147,267 Effective tax rate for continuing operations 26.0% 27.9% Add back interest expense for subordinated debt, net of tax 68 - 68 --------- ----------- --------- Numerator for diluted continuing earnings per share $111,663 $ 35,672 $147,335 ========= =========== ========= Earnings per common share: Basic earnings per share from continuing operations $ 1.21 $ 1.59 ========= ========= Basic earnings per share from discontinued operations $ 0.01 $ - ========= ========= Diluted earnings per share from continuing operations $ 1.15 $ 1.51 ========= ========= Diluted earnings per share from discontinued operations $ 0.01 $ - ========= ========= Weighted average shares used in per share calculation: Basic 92,387 92,387 Diluted 97,497 97,497 For the six months (in thousands, except per ended June 30, 2007 share data) ----------------------------------------- (unaudited) GAAP Adjustments Non-GAAP --------- ----------- --------- Revenues $630,343 $630,343 Cost of revenues 227,924 (2,979) (2)(3) 224,945 Purchased intangibles amortization 55,543 (55,543) (4) - --------- ----------- --------- Gross profit 346,876 58,522 405,398 --------- ----------- --------- Gross margin 55.0% 64.3% Operating expenses: Sales and marketing 119,651 (3,176) (3) 116,475 General and administrative 85,312 (10,320) (3) 74,992 Research and development 56,049 (2,144) (3) 53,905 Business consolidation costs 2,522 (2,522) (5) - --------- ----------- --------- Total operating expenses 263,534 (18,162) 245,372 --------- ----------- --------- Operating income 83,342 76,684 160,026 Operating margin 13.2% 25.4% Interest income 11,900 - 11,900 Interest expense (14,128) - (14,128) Other income 96 - 96 --------- ----------- --------- Total other income (expense), net (2,132) - (2,132) --------- ----------- --------- Income from continuing operations before provision for income taxes 81,210 76,684 157,894 Income tax provision (21,921) (26,230) (6) (48,151) --------- ----------- --------- Income from continuing operations $ 59,289 $ 50,454 $109,743 Income from discontinued operations, net of tax $ 11,855 $(11,855) $ - --------- ----------- --------- Net income $ 71,144 $ 38,599 $109,743 Effective tax rate for continuing operations 27.0% 30.5% Add back interest expense for subordinated debt, net of tax 80 - 80 --------- ----------- --------- Numerator for diluted continuing earnings per share $ 59,369 $ 50,454 $109,823 ========= =========== ========= Earnings per common share: Basic earnings per share from continuing operations $ 0.63 $ - $ 1.17 ========= =========== ========= Basic earnings per share from discontinued operations $ 0.13 $ - $ - ========= =========== ========= Diluted earnings per share from continuing operations $ 0.62 $ - $ 1.14 ========= =========== ========= Diluted earnings per share from discontinued operations $ 0.12 $ - $ - ========= =========== ========= Weighted average shares used in per share calculation: Basic 93,814 - 93,814 Diluted 96,030 - 96,030 (1)The Company has regularly reported Non-GAAP results which exclude the amortization of purchased intangibles, charges for inventory revaluation on products sold that were previously written-up under purchase accounting rules, in-process research and development and acquisition related deferred compensation to provide a supplemental comparison of results of operations. In addition, expenses related to share-based payments as a result of the adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payments," have been excluded from Non-GAAP results. (2)Add back noncash charges for purchase accounting inventory revaluations of $0.9 million and zero for the six months ended June 30, 2008 and 2007, respectively. (3)Add back stock option expense related to Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payments," of $16.4 million and $18.6 million for the six months ended June 30, 2008 and 2007, respectively. (4)Add back amortization of purchased intangibles. (5)Add back business consolidation costs. (6)Non-GAAP tax expense is higher than GAAP tax expense primarily because certain acquisition related costs such as charges for inventory revaluation, amortization of acquired intangibles, in- process research and development and deferred compensation are deducted for GAAP purposes but excluded for Non-GAAP purposes. In addition, 2008 GAAP net income includes expenses related to share- based payments as a result of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payments," which are deducted for GAAP purposes but excluded for Non-GAAP purposes. These deductions produce a GAAP only tax benefit which is added back for Non-GAAP presentation.

INVITROGEN CORPORATION BUSINESS SEGMENT HIGHLIGHTS FOR THE THREE MONTHS ENDED JUNE 30, 2008 AND 2007 Bio- Cell (in thousands) Discovery Systems Unallocated(1) Total (unaudited) --------- --------- -------------- --------- Segment results for the three months ended June 30, 2008 -------------------------------- Revenues $253,056 $114,735 $ - $367,791 ========= ========= ============== ========= Gross profit 183,408 60,520 (18,821) 225,107 --------- --------- -------------- --------- Gross margin 72.5% 52.7% 61.2% Selling and administrative 78,910 30,708 5,908 115,526 Research and development 28,129 4,176 868 33,173 Business consolidation costs - - 1,413 1,413 --------- --------- -------------- --------- Operating income (loss)$ 76,369 $ 25,636 $(27,010) $ 74,995 ========= ========= ============== ========= Operating margin 30.2% 22.3% 20.4% Segment results for the three months ended June 30, 2007 -------------------------------- Revenues $222,760 $ 98,930 $ - $321,690 ========= ========= ============== ========= Gross profit 155,941 49,104 (29,503) 175,542 --------- --------- -------------- --------- Gross margin 70.0% 49.6% 54.6% Selling and administrative 74,723 25,495 7,009 107,227 Research and development 23,830 3,661 1,113 28,604 Business consolidation costs - - 724 724 --------- --------- -------------- --------- Operating income (loss)$ 57,388 $ 19,948 $(38,349) $ 38,987 ========= ========= ============== ========= Operating margin 25.8% 20.2% 12.1% (1)Unallocated items for the three months ended June 30, 2008 and 2007 include noncash charges for purchase accounting inventory revaluations of $0.6 million and zero, amortization of purchased intangibles of $17.4 million and $28.0 million, business consolidation costs of $1.4 million and $0.7 million, and expenses related to share-based payments as a result of the adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payments," of $7.6 million and $9.7 million, respectively. These items are not allocated by management for purposes of analyzing the operations since they are principally noncash or other costs resulting primarily from business restructuring or purchase accounting that are separate from ongoing operations.

INVITROGEN CORPORATION BUSINESS SEGMENT HIGHLIGHTS FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007 Bio- Cell (in thousands) (unaudited)Discovery Systems Unallocated(1) Total --------- --------- -------------- --------- Segment results for the six months ended June 30, 2008 ----------------------------------- Revenues $500,352 $217,657 $ - $718,009 ========= ========= ============== ========= Gross profit 363,583 117,695 (37,411) 443,867 --------- --------- -------------- --------- Gross margin 72.7% 54.1% 61.8% Selling and administrative 156,964 59,978 12,317 229,259 Research and development 53,983 7,939 1,884 63,806 Business consolidation costs - - 1,914 1,914 --------- --------- -------------- --------- Operating income (loss) $152,636 $ 49,778 $(53,526) $148,888 ========= ========= ============== ========= Operating margin 30.5% 22.9% 20.7% Segment results for the six months ended June 30, 2007 ----------------------------------- Revenues $442,827 $187,516 $ - $630,343 ========= ========= ============== ========= Gross profit 313,482 91,916 (58,522) 346,876 --------- --------- -------------- --------- Gross margin 70.8% 49.0% 55.0% Selling and administrative 142,995 48,472 13,496 204,963 Research and development 47,221 6,684 2,144 56,049 Business consolidation costs - - 2,522 2,522 --------- --------- -------------- --------- Operating income (loss) $123,266 $ 36,760 $(76,684) $ 83,342 ========= ========= ============== ========= Operating margin 27.8% 19.6% 13.2% (1)Unallocated items for the six months ended June 30, 2008 and 2007 include noncash charges for purchase accounting inventory revaluations of $0.9 million and zero, amortization of purchased intangibles of $34.3 million and $55.5 million, business consolidation costs of $1.9 million and $2.5 million, and expenses related to share-based payments as a result of the adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payments," of $16.4 million and $18.6 million, respectively. These items are not allocated by management for purposes of analyzing the operations since they are principally noncash or other costs resulting primarily from business restructuring or purchase accounting that are separate from ongoing operations.

INVITROGEN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended June 30, ------------------------- (in thousands)(unaudited) 2008 2007 ------------ ----------- Net income $ 112,953 $ 71,144 Add back amortization and share-based compensation 56,054 80,585 Add back depreciation 19,559 18,305 Balance sheet changes (36,774) (35,137) Other noncash adjustments (2,363) 2,192 ------------ ----------- Net cash provided by operating activities 149,429 137,089 Capital expenditures (28,264) (25,697) ------------ ----------- Free cash flow 121,165 111,392 Net cash (used in) provided by investing activities (37,019) 206,297 Net cash used in financing activities (50,877) (120,053) Effect of exchange rate changes on cash 3,765 1,927 ------------ ----------- Net increase in cash and cash equivalents $ 37,034 $ 199,563 ============ ===========

INVITROGEN CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS June 30 December 31, (in thousands) 2008 2007 ------------- ------------- ASSETS (unaudited) Current assets: Cash and short-term investments $ 646,080 $ 671,293 Trade accounts receivable, net of allowance for doubtful accounts 207,035 192,137 Inventories 212,445 172,692 Deferred income taxes 27,760 20,699 Prepaid expenses and other current assets 36,565 33,663 ------------- ------------- Total current assets 1,129,885 1,090,484 Property and equipment, net 337,902 319,653 Goodwill 1,581,770 1,528,779 Intangible assets, net 286,244 286,521 Long-term investments 37,332 753 Other assets 53,726 103,557 ------------- ------------- Total assets $ 3,426,859 $ 3,329,747 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 6 $ 124 Accounts payable, accrued expenses and other current liabilities 231,603 225,218 Income taxes - 9,071 ------------- ------------- Total current liabilities 231,609 234,413 Liabilities of discontinued operations 2,104 2,506 Long-term debt 1,150,962 1,150,700 Pension liabilities 28,434 28,428 Income taxes 114,016 129,466 Other long-term liabilities 19,201 18,787 Stockholders' equity 1,880,533 1,765,447 ------------- ------------- Total liabilities and stockholders' equity $ 3,426,859 $ 3,329,747 ============= =============

SOURCE: Invitrogen Corporation

Invitrogen Corporation Investor and Financial Contacts: Amanda Clardy, 760-603-7200 Vice President, Investor Relations