Instruments Business

Ionics Instruments Reports 2002 EBIT Growth of 40%
BOULDER, CO, USA – April 11, 2003 – Ionics Instrument Business Group, a Boulder-based manufacturer of scientific instrumentation and a subsidiary of Ionics, Incorporated (NYSE-ION), reported strong earnings of $3.92 million on revenues of $27.7 million in 2002. This compares to earnings of $942,000 in 2001 on revenues of $26.6 million. Adjusting for one-time charges of $1.7 million in 2001 related to impairment of goodwill for a 1999 acquisition, earnings grew 40 percent in 2002. Total revenue growth over the period was $1.1 million, up 4.3 percent from 2001. Cost of sales as a percentage of revenues decreased to 42.4 percent in 2002 from 48.0 percent in 2001, primarily reflecting the absorption of manufacturing overhead as a result of higher sales volume and improved operating costs.
“Much of our strong 2002 performance is attributable to solid growth in our aftermarket service sector as well as a successful new product launch in the pharmaceutical market,” stated Michael Routh, Ionics Instruments’ Vice President and General Manager. “Sales of our Sievers® 400 ES Total Organic Carbon Analyzer (TOC) and related DataPro + DataGuard™ regulatory compliance software exceeded plan as a result of wide industry adoption. This new product demonstrates our commitment to innovation and industry leadership.”
The Sievers® 400 ES TOC Analyzer, introduced at the end of 2001 and enhanced during 2002, is designed specifically to comply with United States Pharmacopoeia and European Pharmacopoeia requirements for determining water quality in the pharmaceutical industry. Used with the Sievers® DataPro + DataGuard™ software, it enables compliance with FDA electronic record-keeping requirements.
Another significant development in 2002 was the expansion of Ionics Instrument Business Group’s production facility for manufacturing standards for its pharmaceutical customers. Ionics Instrument Business Group is the world’s leading manufacturer of low-level TOC standards, which are used to ensure instrument compliance with pharmaceutical industry regulations. The new standards facility, designed to Class 100,000 cleanroom specifications, includes micro-environments built to Class 100 specifications in areas where stringent contamination control is most critical.
During the year, Ionics Instrument Business Group also introduced the Leakwise® ID-227WL wireless system for remote sensing and satellite/cellular communication of environmental oil spills. The Leakwise? line of instruments detects thin layers of oil on water and is used in a range of industries from oil refining to power generation.
Ionics Instrument Business Group accounted for 8.4 percent of Ionics, Inc.’s total revenues in 2002. The Instrument Business Group is strongly committed to supporting its installed base of more than 8,000 units, and generates more than 40 percent of its revenues from service and support activities.
Background InformationIonics Instrument Business Group was founded in 1996 when Sievers Instruments joined Ionics Instrument Division to create the analytical arm of Ionics’ world-renowned water purification and treatment business. With the addition of Agar Environmental in 1999, and consolidation of operations in Boulder, Colorado, Ionics Instruments is positioned to be the preferred supplier of high value analytical solutions for the analysis of water and other materials of industrial and biological importance. The company’s three brands of instruments-Sievers®, Ionics® and Leakwise®–can be found in a wide range of applications, including pharmaceutical, semiconductor, petrochemical, power generation, medical research and municipal water. Ionics Instrument Business Group is ISO 9001 registered and employs 180 people, of which approximately 140 are based in Boulder, Colorado.