Life Technologies Announces First Quarter 2011 Results
"Our ability to drive performance is a direct result of our commitment to innovation and operational excellence," said
Analysis of First Quarter 2011 Results
First quarter non-GAAP 2011 revenue increased 1 percent over the previous year. Revenue growth without the impact from currency, completed acquisitions and divestitures was flat.
- Foreign currency exchange had a negative 1 point impact and prior acquisitions and divestitures contributed approximately 2 points to reported revenue growth.
- Non-GAAP gross margin in the first quarter was 66.3 percent, 200 basis points lower than the same period prior year due to the negative impact from currency and mix partially offset by the positive impact of price.
- Non-GAAP operating margin was 28.2 percent in the first quarter, 130 basis points lower than the same period prior year due to lower gross margins, partially offset by lower operating expenses.
- First quarter non-GAAP tax rate was 27.6 percent.
- Diluted weighted shares outstanding were 186 million in the first quarter. During the quarter we repurchased approximately 4.4 million shares at an average price of
- Cash flow from operating activities for the first quarter was
$115 million. First quarter capital expenditures were $17 millionand resulting free cash flow was $98 million. The company ended the quarter with $735 millionin cash and short-term investments.
- The following analysis of diluted earnings per share identifies specific items that affect the comparability of results between periods. Reconciliations between the company's GAAP and non-GAAP results for the periods reported are presented in the attached tables and on the company's Investor Relations page at www.lifetechnologies.com.
Three Months Ending Mar 31
GAAP earnings per share
Gain on sale of Mass Spectrometry Division
Non-cash interest expense (FSP APB14-1)
Business integration and other charges
Accelerated amortization of debt issuance costs
Amortization of acquisition related expenses
Non-GAAP earnings per share
- Cell Systems division non-GAAP revenue was
$238 millionin the first quarter, an increase of 11 percent over the same period last year. Excluding the impact from currency, organic revenue growth was 11 percent year over year. This growth was a result of strong demand across the portfolio, including double-digit growth in the Beads Based Separation and BioProduction businesses.
- Molecular Biology Systems division non-GAAP revenue was
$426 million, a decrease of 1 percent over the same period last year. Excluding the impact from currency and acquisitions, organic revenue for the division declined 3 percent. Strong demand for TaqMan® assay products was offset by the PCR and Molecular Biology Reagents businesses, which both faced difficult year-over-year comparisons.
- Genetic Systems division non-GAAP revenue was
$228 millionin the first quarter, a decrease of 4 percent over the same period last year. Excluding the impact from currency, organic revenue declined 8 percent. The decline in revenue growth primarily resulted from the delayed shipment of the new 5500 sequencer due to events in Japan, and the impact of year over year comparables on the CE sequencing business.
- Regional organic growth rates for the quarter compared to the same quarter of the prior year were as follows: the
Americasincreased 1 percent, Europe2 percent, and Asia Pacific7 percent. Japan declined 16 percent.
- Revenue from orders transacted through
Life Technologies' eCommerce channels grew 25 percent during the quarter. Over 50 percent of all transactions are processed using eCommerce platforms.
Company and Technology Highlights:
- The company launched a number of new consumable products in the quarter, including a new addition to the gold standard TaqMan® product line. The TaqMan® Mutation Detection Assay was developed for clinical researchers to validate and screen for low levels of mutations in cancer-related genes. This new assay is the first of its kind on the market, showing at least 10-fold greater sensitivity than currently available products.
FDAgranted 510(k) clearance for StemPro® MSC SFM, a liquid medium designed to efficiently grow human mesenchymal stem cells. StemPro® is the first and only product of its kind to receive clearance from the FDAand has the potential to accelerate the regulatory review process for regenerative medicine studies.
- The company announced that it has initiated clinical trials leading to a 510(k) submission of a Class I and Class II HLA Sequence-Based Typing solution on the company's Applied Biosystems™ 3500 Dx Genetic Analyzer. HLA typing is one of the main determinants used in patient-donor compatibility selection for individuals diagnosed with leukemia and other blood cancers.
- Furthering our efforts to make genetic sequencing affordable and simple enough for use in all molecular biology labs, the company introduced the Ion OneTouch™ system, a simple, bench-top sample preparation device for use with the Personal Genome Machine. This automated system reduces the time required to prepare samples to three hours, from 8 to 10 hours using current manual methods.
- The company announced the opening of a new distribution center in
Singapore. This new distribution hub was built to address strong demand for Life Technologies' products in Asia Pacificmarkets. Since its inception, the volume of items shipped per day in the region has increased fourfold, dramatically improving order fulfillment time by up to 50 percent. The new Singaporehub puts the company one step closer to its goal of delivering in stock products to customers within 3 to 5 days anywhere in the world.
Fiscal Year 2011 Outlook
Subject to the risk factors detailed in the Safe Harbor Statement section of this release, the company reiterated its expectations for fiscal year 2011 financial performance. Organic revenues are expected to increase in the mid-single digits. This level of organic revenue growth is expected to result in approximately
The company will discuss its financial and business results as well as its business outlook on its webcast at 4:30 PM ET today. This webcast will contain forward-looking information. The webcast 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 webcast will be posted at the company's Investor Relations Web site at www.lifetechnologies.com. The webcast can be accessed through the investor relations page of the
Safe Harbor Statement
Certain statements contained in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and
This press release includes certain financial information which constitutes "non-GAAP financial measures" as defined by the SEC. The GAAP measures which are most directly comparable to these measures, as well as a reconciliation of these measures with the most directly comparable GAAP measures, can be found at on the Investor Relations portion of the company's website at www.lifetechnologies.com.
LIFE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RECONCILIATION OF NON-GAAP ADJUSTMENTS(1)
For the three months
For the three months
(in thousands, except per share data)
ended March 31, 2011
ended March 31, 2010
Cost of revenues
Purchased intangibles amortization
Selling, general and administrative
Research and development
Business consolidation costs
Total operating expenses
Loss on early retirement of debt
Gain on divestiture of equity investments
Other income (expense), net
Total other income (expense), net
Income from operations before provision for income taxes
Income tax provision
Net loss attributable to non-controlling interests
Net income attributable to controlling interest
Effective tax rate
Add back interest expense for subordinated
debt, net of tax
Numerator for diluted earnings per share
Earnings per common share:
Basic earnings per share attributable to controlling interest
Diluted earnings per share attributable to controlling interest
Weighted average shares used in per share calculation:
(1) The Company reports Non-GAAP results which excludes business consolidation costs, amortization of purchase accounting adjustments to deferred revenue, charges for inventory revaluation, amortization of acquired intangibles, depreciation of acquired property, plant, and equipment to provide a supplemental comparison of the results of operations. In addition, charges related to non-cash interest expense incurred as a result of the retrospective application of the bifurcation requirement between equity and debt prescribed by the Financial Accounting Standards Board Accounting Standards Codification, or ASC, Topic of Debt with Conversion and Other Options, costs associated with the early termination of outstanding indebtedness and the impact from the divestiture of our joint venture have been excluded from Non-GAAP results.
(2) Add back fair value amortization of purchased deferred revenue of $0.9 million and $2.1 million for the three months ended March 31, 2011 and 2010, respectively.
(3) Adjust for contingent consideration revaluation of $1.9 million, offset with $0.5 million of purchase accounting related cost of revenues revaluation for the three months ended March 31, 2011. Add back noncash charges for purchase accounting inventory revaluation cost of $0.2 million for the three months ended March 31, 2010.
(4) Add back amortization of purchased intangibles.
(5) Add back depreciation of purchase accounting property, plant, and equipment revaluations of $2.1 million and $2.6 million for the three months ended March 31, 2011 and 2010, respectively, and accelerated compensation expense related to business acquisitions of $1.5 million for the three months ended March 31, 2011.
(6) Add back business consolidation costs.
(7) Add back charges related to non-cash interest expense as a result of the provision adopted in accordance with the ASC Topic of Debt with Conversion and Other Options of $7.2 million and $11.2 million for the three months ended March 31, 2011 and 2010, respectively. Adjust for imputed finance charge of $1.5 million associated with contingent consideration on business acquisitions for the three months ended March 31, 2011.
(8) Add back loss on early retirement of debt.
(9) Adjust for gain on divestiture of equity investments.
(10) Adjust for gain on impaired security recovery of $6.7 million and gain on foreign currency related to joint venture divestiture of $1.0 million offset by loss on discontinuance of cash flow hedge of $12.9 million and joint venture purchase accounting adjustment of $1.2 million for the three months ended March 31, 2010.
(11) Non-GAAP tax differs from GAAP tax expense primarily because certain acquisition related costs such as: restructuring; amortization of acquired intangibles; depreciation of acquired property, plant, and equipment and; fair market value adjustments to contingent consideration liabilities associated with certain acquisitions. In addition, GAAP net income includes interest expense with related income tax benefits as a result of the provision adopted in accordance with the ASC Topic of Debt with Conversion and Other Options but excluded for Non-GAAP purposes. These deductions produce a GAAP only tax benefit which is added back for Non-GAAP presentation.
(12) Add back noncash charges for purchase accounting inventory revaluations and depreciation of purchase accounting property, plant and equipment revaluations attributable to non-controlling interest, net of tax benefit.
LIFE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months
ended March 31,
Add back amortization and
Add back depreciation
Balance sheet changes
Other noncash adjustments
Net cash provided by operating activities
Free cash flow
Net cash provided by (used in) investing activities
Net cash used in financing activities
Effect of exchange rate changes on cash
Net increase (decrease) in cash and cash equivalents
LIFE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
Cash and short-term investments
Trade accounts receivable, net of allowance for doubtful accounts
Prepaid expenses and other current assets
Total current assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt
Accounts payable, accrued expenses and other current liabilities
Total current liabilities
Other long-term liabilities
Total liabilities and stockholders' equity
Investor and Financial Contacts:
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