- Fourth quarter 2015 GAAP revenue of
$608.1 million; Constant currency adjusted revenue growth of 5%;
Organic revenue growth of 3%
- Fourth quarter 2015 GAAP earnings
per share from continuing operations of $0.61; Adjusted earnings
per share of $0.86 representing 11% constant currency adjusted
earnings per share growth
- Strong fourth quarter 2015 operating
cash flow from continuing operations of $125.7 million, up
30%
- Full year 2015 GAAP revenues of
$2.26 billion; Constant currency adjusted revenue growth of 7%;
Organic revenue growth of 4%
- Full year GAAP earnings per share
from continuing operations of $1.88; Adjusted earnings per share of
$2.55 representing full year constant currency adjusted earnings
per share growth of 13%
PerkinElmer, Inc. (NYSE: PKI), a global leader focused on
improving the health and safety of people and the environment,
today reported financial results for the fourth quarter and full
year ended January 3, 2016.
Fourth Quarter 2015
The Company reported GAAP earnings per share from continuing
operations of $0.61 versus $0.28 in the comparable prior period of
2014. Revenue was $608.1 million versus $608.4 million in the
comparable prior period of 2014. GAAP operating income from
continuing operations was $84.7 million versus $30.6 million in the
comparable prior period of 2014.
Adjusted earnings per share of $0.86, representing constant
currency adjusted earnings per share growth of 11%, as compared to
$0.85 in the comparable prior period in 2014. Adjusted earnings per
share was negatively impacted by $0.08 of foreign currency
headwinds versus the comparable prior period representing an
incremental $0.02 per share versus prior guidance. Adjusted revenue
was $608.3 million versus $608.6 million in the comparable prior
period of 2014 negatively impacted by foreign currency headwinds of
$32 million, $5 million more than expected in our prior guidance.
Adjusted operating income was $126.0 million negatively impacted by
approximately $11 million of foreign currency headwinds versus
$130.6 million in the comparable prior period of 2014.
Full Year 2015
The Company reported GAAP earnings per share from continuing
operations of $1.88, compared to $1.42 in 2014. GAAP operating
income from continuing operations was $286.1 million as compared to
$210.7 million in 2014.
Adjusted earnings per share of $2.55, representing 13% constant
currency adjusted earnings per share growth, as compared to $2.47
in 2014. Negative foreign exchange rates impacted full year
adjusted earnings per share by approximately $0.25 as compared to
2014. Adjusted revenue was $2.26 billion, representing 7% constant
currency adjusted revenue growth as compared to $2.24 billion in
2014, negatively impacted by approximately $142 million of foreign
currency headwinds. Adjusted operating income was $400.4 million,
as compared to $394.6 million in 2014.
Adjustments for the Company's non-GAAP financial measures have
been noted in the attached reconciliations. Certain of these
non-GAAP financial measures are presented on a ‘constant currency’
basis, so that financial results can be viewed without the effects
of fluctuations in foreign currency exchange rates, allowing for a
period-to-period comparison of underlying business performance.
“I am very pleased with our financial results for the year, as
we delivered strong performance for our shareholders while
supporting our customers with award winning innovations and
differentiated solutions for their unique needs,” said Robert
Friel, chairman and chief executive officer of PerkinElmer. “We are
well positioned heading into 2016 and will look to build on our
core strengths while offering world class products and services for
our customers.”
Cash Flow
For the fourth quarter of 2015, operating cash flow from
continuing operations was $125.7 million, a strong 30% increase as
compared to $96.6 million in the comparable prior period of 2014.
For the full year, operating cash flow from continuing operations
was $287.6 million which includes $20.0 million in voluntary
pension payments as compared to $282.3 million in 2014.
Financial Overview by Reporting Segment for the Fourth
Quarter and Full Year of 2015
Human Health
- Fourth quarter 2015 revenue of $365.5
million, as compared to $374.7 million for the fourth quarter of
2014. Fourth quarter 2015 revenue declined 2% and organic revenue
increased 2%. Full year 2015 revenue of $1,376.6 million, as
compared to $1,384.2 million in 2014. Full year 2015 revenue
declined 1% and organic revenue increased 4%.
- Fourth quarter 2015 operating income of
$72.2 million, as compared to $83.7 million for the fourth quarter
of 2014. Full year 2015 operating income of $251.7 million, as
compared to operating income of $233.7 million for 2014.
- Fourth quarter 2015 adjusted operating
income of $91.3 million, as compared to $101.4 million in the
fourth quarter of 2014. Fourth quarter 2015 adjusted operating
profit margin was 25.0% as a percentage of adjusted revenue, as
compared to 27.0% in the fourth quarter of 2014. Full year 2015
adjusted operating income of $319.9 million, as compared to
adjusted operating income of $315.3 million for 2014. Full year
2015 adjusted operating profit margin was 23.2% as a percentage of
adjusted revenue, as compared to 22.7% in 2014.
Environmental Health
- Fourth quarter 2015 revenue of $242.6
million, as compared to $233.7 million for the fourth quarter of
2014. Fourth quarter 2015 revenue increased 4% and organic revenue
increased 5%. Full year 2015 revenue of $885.7 million, as compared
to $853.0 million in 2014.
- Fourth quarter 2015 operating income of
$35.9 million, as compared to operating income of $29.9 million for
the fourth quarter of 2014. Full year 2015 operating income of
$89.5 million, as compared to operating income of $95.6 million for
2014.
- Fourth quarter 2015 adjusted operating
income of $46.8 million, as compared to $37.5 million in the fourth
quarter of 2014. Fourth quarter 2015 adjusted operating profit
margin was 19.3% as a percentage of revenue, as compared to 16.0%
in the fourth quarter of 2014. Full year 2015 adjusted operating
income of $123.2 million, as compared to adjusted operating income
of $116.5 million for 2014. Full year 2015 adjusted operating
profit margin was 13.9% as a percentage of revenue, as compared to
13.7% in 2014.
Financial Guidance – Full Year 2016
For the full year 2016, the Company forecasts GAAP earnings per
share from continuing operations in the range of $2.21 to $2.31 and
on a non-GAAP basis, which is expected to include the adjustments
noted in the attached reconciliation, adjusted earnings per share
of $2.65 to $2.75.
Conference Call Information
The Company will discuss its fourth quarter and full year 2015
results and its outlook for business trends in a conference call on
February 4, 2016 at 5:00 p.m. Eastern Time. To access the call,
please dial (541) 797-2422 prior to the scheduled conference call
time and provide the access code 12028033.
A live audio webcast of the call will be available on the
Investors section of the Company’s Web site, www.perkinelmer.com.
Please go to the site at least 15 minutes prior to the call in
order to register, download, and install any necessary software. An
archived version of the webcast will be posted on the Company’s Web
site for a two week period beginning approximately two hours after
the call.
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with
generally accepted accounting principles (GAAP), this earnings
announcement also contains non-GAAP financial measures. The reasons
that we use these measures, a reconciliation of these measures to
the most directly comparable GAAP measures, and other information
relating to these measures are included below following our GAAP
financial statements.
Factors Affecting Future Performance
This press release contains "forward-looking" statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including, but not limited to, statements relating to
estimates and projections of future earnings per share, cash flow
and revenue growth and other financial results, developments
relating to our customers and end-markets, and plans concerning
business development opportunities and divestitures. Words such as
"believes," "intends," "anticipates," "plans," "expects,"
"projects," "forecasts," "will" and similar expressions, and
references to guidance, are intended to identify forward-looking
statements. Such statements are based on management's current
assumptions and expectations and no assurances can be given that
our assumptions or expectations will prove to be correct. A number
of important risk factors could cause actual results to differ
materially from the results described, implied or projected in any
forward-looking statements. These factors include, without
limitation: (1) markets into which we sell our products declining
or not growing as anticipated; (2) fluctuations in the global
economic and political environments; (3) our failure to introduce
new products in a timely manner; (4) our ability to execute
acquisitions and license technologies, or to successfully integrate
acquired businesses and licensed technologies into our existing
business or to make them profitable, or successfully divest
businesses; (5) our failure to adequately protect our intellectual
property; (6) the loss of any of our licenses or licensed rights;
(7) our ability to compete effectively; (8) fluctuation in our
quarterly operating results and our ability to adjust our
operations to address unexpected changes; (9) significant
disruption in third-party package delivery and import/export
services or significant increases in prices for those services;
(10) disruptions in the supply of raw materials and supplies; (11)
the manufacture and sale of products exposing us to product
liability claims; (12) our failure to maintain compliance with
applicable government regulations; (13) regulatory changes; (14)
our failure to comply with healthcare industry regulations; (15)
economic, political and other risks associated with foreign
operations; (16) our ability to retain key personnel; (17)
significant disruption in our information technology systems; (18)
our ability to obtain future financing; (19) restrictions in our
credit agreements; (20) our ability to realize the full value of
our intangible assets; (21) significant fluctuations in our stock
price; (22) reduction or elimination of dividends on our common
stock; and (23) other factors which we describe under the caption
"Risk Factors" in our most recent quarterly report on Form 10-Q and
in our other filings with the Securities and Exchange Commission.
We disclaim any intention or obligation to update any
forward-looking statements as a result of developments occurring
after the date of this press release.
About PerkinElmer
PerkinElmer, Inc. is a global leader focused on improving the
health and safety of people and the environment. The Company
reported revenue of approximately $2.3 billion in 2015, has about
8,000 employees serving customers in more than 150 countries, and
is a component of the S&P 500 Index. Additional information is
available through 1-877-PKI-NYSE, or at www.perkinelmer.com.
PerkinElmer, Inc. and Subsidiaries CONDENSED
CONSOLIDATED INCOME STATEMENTS
Three Months
Ended
Twelve Months
Ended
(In thousands, except per share data)
January 3,
2016
December
28,2014
January 3,
2016
December
28,2014
Revenue $ 608,116 $ 608,390 $ 2,262,359 $
2,237,219 Cost of revenue 326,105 330,788 1,237,859
1,232,611 Selling, general and administrative expenses 158,505
216,648 598,848 659,335 Research and development expenses 30,030
30,966 125,928 121,141 Restructuring and contract termination
charges, net
8,752
(579 ) 13,590
13,390 Operating income from
continuing operations 84,724 30,567 286,134 210,742
Interest income (185 ) (292 ) (673 ) (667 ) Interest expense 9,433
9,063 37,997 36,270 Other expense, net
663
1,149 4,795
5,536 Income from
continuing operations, before income taxes 74,813 20,647 244,015
169,603 Provision for (benefit from) income taxes
6,329 (10,667
) 31,327
8,437 Income from continuing
operations 68,484 31,314 212,688 161,166 Loss from
discontinued operations, before income taxes (9 ) (754 ) (3 )
(4,959 ) (Loss) gain on disposition of discontinued operations,
before income taxes (2 ) 121 (28 ) (260 ) Provision for (benefit
from) income taxes on discontinued operations and dispositions
219 (106
) 232
(1,831 ) Loss from discontinued
operations and dispositions (230
) (527 )
(263 ) (3,388
) Net income $
68,254 $ 30,787
$ 212,425 $
157,778 Diluted earnings per
share: Income from continuing operations $ 0.61 $ 0.28 $ 1.88 $
1.42 Loss from discontinued operations and dispositions
(0.00 ) (0.00
) (0.00 )
(0.03 ) Net income
$
0.61 $ 0.27
$ 1.87 $
1.39 Weighted average diluted
shares of common stock outstanding 112,563 113,448 113,315 113,739
ABOVE PREPARED IN ACCORDANCE WITH GAAP
Additional
Supplemental Information (1): (per share,
continuing operations) GAAP EPS from continuing operations $
0.61 $ 0.28 $ 1.88 $ 1.42 Amortization of intangible assets, net of
income taxes 0.12 0.11 0.46 0.47 Purchase accounting adjustments,
net of income taxes 0.00 0.01 0.05 0.01 Significant litigation
matters, net of income taxes 0.00 (0.00 ) 0.00 0.03
Acquisition-related costs, net of income taxes 0.00 0.03 0.00 0.03
Significant environmental charges, net of income taxes - (0.01 ) -
(0.01 ) Mark to market on postretirement benefits, net of income
taxes 0.07 0.43 0.07 0.43 Restructuring and contract termination
charges, net of income taxes
0.05
0.01 0.08
0.09 Adjusted EPS $
0.86 $
0.85 $
2.55 $
2.47 (1) amounts may not sum
due to rounding PerkinElmer, Inc. and
Subsidiaries REVENUE AND OPERATING INCOME (LOSS)
Three Months
Ended
Twelve Months
Ended
(In thousands, except percentages)
January 3,
2016
December28, 2014
January 3,
2016
December
28,2014
Human Health Reported revenue $ 365,467 $
374,698 $ 1,376,644 $ 1,384,223 Purchase accounting adjustments 169
227 797 2,916 Adjusted revenue 365,636
374,925 1,377,441 1,387,139
Reported operating income from continued operations 72,183 83,710
251,743 233,689 OP% 19.8 % 22.3 % 18.3 % 16.9 % Amortization of
intangible assets 15,827 18,508 61,868 73,218 Purchase accounting
adjustments 199 (929 ) 919 1,108 Acquisition-related costs 120 7
403 94 Significant litigation matters 812 - 812 - Restructuring and
contract termination charges, net 2,156 84 4,160
7,224 Adjusted operating income 91,297 101,380
319,905 315,333 Adjusted OP% 25.0 % 27.0 %
23.2 % 22.7 %
Environmental Health
Reported revenue
242,649
233,692
885,715
852,996
Reported operating income from continued operations 35,938
29,880 89,544 95,605 OP% 14.8 % 12.8 % 10.1 % 11.2 % Amortization
of intangible assets 4,190 3,014 16,689 10,154 Purchase accounting
adjustments - 2,425 7,275 1,595 Acquisition-related costs 72 2,836
307 2,965 Restructuring and contract termination charges, net 6,596
(663 ) 9,430 6,166 Adjusted operating income
46,796 37,492 123,245 116,485 Adjusted
OP% 19.3 % 16.0 % 13.9 % 13.7 %
Corporate Reported
operating loss (23,397 ) (83,023 ) (55,153 ) (118,552 ) Significant
litigation matters - - - 6,645 Significant environmental charges -
(1,191 ) - (1,191 ) Mark to market on postretirement benefits
11,342 75,973 12,408 75,919 Adjusted
operating loss (12,055 ) (8,241 ) (42,745 ) (37,179 )
Continuing Operations Reported revenue $ 608,116 $ 608,390 $
2,262,359 $ 2,237,219 Purchase accounting adjustments 169
227 797 2,916 Adjusted revenue 608,285
608,617 2,263,156 2,240,135 Reported
operating income from continued operations 84,724 30,567 286,134
210,742 OP% 13.9 % 5.0 % 12.6 % 9.4 % Amortization of intangible
assets 20,017 21,522 78,557 83,372 Purchase accounting adjustments
199 1,496 8,194 2,703 Acquisition-related costs 192 2,843 710 3,059
Significant litigation matters 812 - 812 6,645 Significant
environmental charges - (1,191 ) - (1,191 ) Mark to market on
postretirement benefits 11,342 75,973 12,408 75,919 Restructuring
and contract termination charges, net 8,752 (579 ) 13,590
13,390 Adjusted operating income $ 126,038 $
130,631 $ 400,405 $ 394,639 Adjusted OP% 20.7
% 21.5 % 17.7 % 17.6 % REPORTED REVENUE AND REPORTED
OPERATING INCOME (LOSS) PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and Subsidiaries CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands)
January 3,
2016
December 28,
2014
Current assets: Cash and cash equivalents $ 237,932 $
174,821 Accounts receivable, net 439,015 470,563 Inventories
288,028 285,457 Other current assets 68,186
137,710 Total current assets 1,033,161
1,068,551 Property, plant and equipment: At cost
494,956 492,814 Accumulated depreciation (327,927 )
(316,620 ) Property, plant and equipment, net 167,029 176,194
Marketable securities and investments 1,586 1,568 Intangible
assets, net 490,811 490,265 Goodwill 2,279,189 2,284,077 Other
assets, net 167,397 106,921 Total
assets $ 4,139,173 $ 4,127,576 Current
liabilities: Current portion of long-term debt $ 1,123 $ 1,075
Accounts payable 152,726 173,953 Short-term accrued restructuring
and contract termination charges 17,090 17,124 Accrued expenses and
other current liabilities 388,446 403,021 Current liabilities of
discontinued operations 2,100 2,137
Total current liabilities 561,485 597,310
Long-term debt 1,011,762 1,045,393 Long-term
liabilities 455,485 442,771 Total
liabilities 2,028,732 2,085,474
Total stockholders' equity 2,110,441 2,042,102
Total liabilities and stockholders' equity $ 4,139,173
$ 4,127,576 PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and Subsidiaries CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three Months
Ended
Twelve Months
Ended
January 3,
2016
December
28,2014
January 3,
2016
December
28,2014
(In thousands) Operating activities: Net
income $ 68,254 $ 30,787 $ 212,425 $ 157,778 Loss from discontinued
operations and dispositions, net of income taxes 230
527 263 3,388 Income from
continuing operations 68,484 31,314
212,688 161,166 Adjustments to
reconcile income from continuing operations to net cash provided by
continuing operations: Stock-based compensation 5,236 2,695 17,719
14,464 Restructuring and contract termination charges, net 8,752
(579 ) 13,590 13,390 Amortization of deferred debt issuance costs
and accretion of discounts 384 363 1,496 1,434 Depreciation and
amortization 28,250 29,903 112,007 116,736 Losses on disposition -
108 - 108 Amortization of acquired inventory revaluation - 2,425
7,275 2,425 Pension and other postretirement expenses 9,420 77,669
9,420 77,669 Excess tax benefit from exercise of common stock
options (2,435 ) - (2,435 ) - Changes in operating assets and
liabilities which provided (used) cash, excluding effects from
companies purchased and divested: Accounts receivable, net (29,601
) (43,830 ) 6,760 (16,989 ) Inventories 22,124 3,894 (28,700 )
(24,642 ) Accounts payable 3,834 12,112 (16,082 ) 8,103 Accrued
expenses and other 11,204 (19,463 )
(46,157 ) (71,596 )
Net cash provided by operating
activities of continuing operations 125,652
96,611 287,581 282,268 Net cash used in
operating activities of discontinued operations (413 )
(47 ) (483 ) (671 )
Net cash provided by
operating activities 125,239
96,564 287,098
281,597 Investing activities: Capital
expenditures (11,818 ) (6,858 ) (29,632 ) (29,072 ) Proceeds from
dispositions of property, plant and equipment, net - 2,531 - 2,531
Proceeds from surrender of life insurance policies - - 757 490
Changes in restricted cash balances - - 59 - Activity related to
acquisitions and investments, net of cash and cash equivalents
acquired (53,305 ) (269,598 ) (72,040 )
(271,477 )
Net cash used in investing activities of continuing
operations (65,123 ) (273,925 )
(100,856 ) (297,528 ) Net cash provided
by investing activities of discontinued operations -
1,844 - 1,631
Net cash
used in investing activities (65,123 )
(272,081 ) (100,856 )
(295,897 ) Financing Activities:
Payments on revolving credit facility (114,000 ) (51,000 ) (485,000
) (356,000 ) Proceeds from revolving credit facility 104,000
248,000 451,000 475,000 Payments of debt issuance costs - - -
(1,845 ) Settlement of hedges (504 ) - 18,706 - Net payments on
other credit facilities (272 ) (11,450 ) (1,072 ) (12,675 )
Payments for acquisition-related contingent consideration (77 ) -
(103 ) (855 ) Excess tax benefit from exercise of common stock
options 2,435 - 2,435 - Proceeds from issuance of common stock
under stock plans 1,824 3,508 14,905 24,455 Purchases of common
stock (281 ) (26,525 ) (76,439 ) (65,529 ) Dividends paid
(7,834 ) (7,907 ) (31,571 ) (31,620 )
Net
cash (used in) provided by financing activities
(14,709 ) 154,626
(107,139 ) 30,931 Effect
of exchange rate changes on cash and cash equivalents (2,541
) (7,971 ) (15,992 ) (15,052 )
Net
increase (decrease) in cash and cash equivalents 42,866
(28,862 ) 63,111 1,579 Cash and cash
equivalents at beginning of period 195,066
203,683 174,821 173,242
Cash
and cash equivalents at end of period $ 237,932
$ 174,821 $ 237,932
$ 174,821 PREPARED IN ACCORDANCE
WITH GAAP
PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(1) (In millions,
except per share data and percentages) PKI Three
Months Ended January 3, 2016
December 28, 2014 Adjusted
revenue: Revenue $ 608.1 $ 608.4 Purchase accounting
adjustments 0.2 0.2
Adjusted revenue $ 608.3 $ 608.6
Adjusted gross margin: Gross margin $ 282.0 46.4 % $ 277.6
45.6 % Amortization of intangible assets 11.2 1.8 % 12.3 2.0 %
Purchase accounting adjustments 0.2 0.0 % 2.7 0.4 % Mark to market
on postretirement benefits 1.0 0.2 % 8.5
1.4 % Adjusted gross margin $ 294.4 48.4 % $ 301.0
49.5 %
Adjusted SG&A: SG&A $ 158.5
26.1 % $ 216.6 35.6 % Amortization of intangible assets (8.7 ) -1.4
% (9.1 ) -1.5 % Purchase accounting adjustments (0.0 ) 0.0 % 1.2
0.2 % Acquisition-related costs (0.2 ) 0.0 % (2.8 ) -0.5 %
Significant litigation matters (0.8 ) -0.1 % - 0.0 % Significant
environmental charges - 0.0 % 1.2 0.2 % Mark to market on
postretirement benefits (10.2 ) -1.7 % (67.1 ) -11.0
% Adjusted SG&A $ 138.6 22.8 % $ 140.0 23.0 %
Adjusted R&D: R&D $ 30.0 4.9 % $ 31.0 5.1 %
Amortization of intangible assets (0.1 ) 0.0 % (0.1 ) 0.0 % Mark to
market on post-retirement benefits (0.1 ) 0.0 % (0.4
) -0.1 % Adjusted R&D $ 29.8 4.9 % $ 30.4 5.0 %
Adjusted operating income: Operating income $ 84.7
13.9 % $ 30.6 5.0 % Amortization of intangible assets 20.0 3.3 %
21.5 3.5 % Purchase accounting adjustments 0.2 0.0 % 1.5 0.2 %
Acquisition-related costs 0.2 0.0 % 2.8 0.5 % Significant
litigation matters 0.8 0.1 % - 0.0 % Significant environmental
charges - 0.0 % (1.2 ) -0.2 % Mark to market on postretirement
benefits 11.3 1.9 % 76.0 12.5 % Restructuring and contract
termination charges, net 8.8 1.4 % (0.6 ) -0.1
% Adjusted operating income $ 126.0 20.7 % $ 130.6
21.5 %
PKI Three Months
Ended January 3, 2016 December 28,
2014 Adjusted EPS: GAAP EPS $ 0.61 $ 0.27
Discontinued operations, net of income taxes (0.00 )
(0.00 ) GAAP EPS from continuing operations 0.61 0.28
Amortization of intangible assets, net of income taxes 0.12 0.11
Purchase accounting adjustments, net of income taxes 0.00 0.01
Significant litigation matters, net of income taxes 0.00 (0.00 )
Acquisition-related costs, net of income taxes 0.00 0.03
Significant environmental charges, net of income taxes - (0.01 )
Mark to market on postretirement benefits, net of income taxes 0.07
0.43 Restructuring and contract termination charges, net of income
taxes 0.05 0.01 Adjusted
EPS $ 0.86 $ 0.85
PKI Three Months Ended January 3,
2016 December 28, 2014
Impact of tax expense related to
non-GAAP adjustments on adjusted EPS:
Amortization of intangible assets (0.05 ) (0.08 ) Purchase
accounting adjustments (0.00 ) 0.00 Significant litigation matters
(0.00 ) (0.00 ) Acquisition-related costs (0.00 ) (0.01 )
Significant environmental charges - 0.00 Mark to market on
postretirement benefits (0.03 ) (0.24 ) Restructuring and contract
termination charges (0.03 ) 0.01
Impact of tax (expense) benefit related to
non-GAAP adjustments on adjusted EPS
$ (0.12 )
$ (0.31 )
PKI Three Months Ended
January 3, 2016 December 28,
2014 Constant currency adjusted EPS: GAAP
EPS $ 0.61 $ 0.27 Discontinued operations, net of income taxes
(0.00 ) (0.00 ) GAAP EPS from
continuing operations 0.61 0.28 Amortization of intangible assets,
net of income taxes 0.12 0.11 Purchase accounting adjustments, net
of income taxes 0.00 0.01 Significant litigation matters, net of
income taxes 0.00 (0.00 ) Acquisition-related costs, net of income
taxes 0.00 0.03 Significant environmental charges, net of income
taxes - (0.01 ) Mark to market on postretirement benefits, net of
income taxes 0.07 0.43 Restructuring and contract termination
charges, net of income taxes 0.05 0.01 Effect of currency changes
from prior year period 0.08 -
Constant currency adjusted EPS $ 0.94 $ 0.85
PKI Three
Months Ended January 3, 2016
December 28, 2014
Tax Expense related to non-GAAP
adjustments on constant currency adjusted EPS:
Amortization of intangible assets (0.05 ) (0.08 ) Purchase
accounting adjustments (0.00 ) 0.00 Significant litigation matters
(0.00 ) (0.00 ) Acquisition-related costs (0.00 ) (0.01 )
Significant environmental charges - 0.00 Mark to market on
postretirement benefits (0.03 ) (0.24 ) Restructuring and contract
termination charges (0.03 ) 0.01 Effect of currency changes from
prior year period (0.02 ) -
Impact of tax (expense) benefit related to
non-GAAP adjustments on constant currency adjusted EPS
$ (0.14 ) $ (0.31 )
Human Health Three Months Ended January 3,
2016 December 28, 2014
Adjusted revenue: Revenue $ 365.5 $ 374.7 Purchase
accounting adjustments 0.2 0.2
Adjusted revenue $ 365.6 $ 374.9
Adjusted operating income: Operating income $ 72.2
19.8 % $ 83.7 22.3 % Amortization of intangible assets 15.8 4.3 %
18.5 4.9 % Purchase accounting adjustments 0.2 0.1 % (0.9 ) -0.2 %
Acquisition-related costs 0.1 0.0 % 0.0 0.0 % Significant
litigation matters 0.8 0.2 % - 0.0 % Restructuring and contract
termination charges, net 2.2 0.6 % 0.1
0.0 % Adjusted operating income $ 91.3 25.0 % $ 101.4
27.0 %
Environmental Health
Three Months Ended January 3, 2016
December 28, 2014 Revenue:
Revenue $ 242.6 $ 233.7
Adjusted operating income:
Operating income $ 35.9 14.8 % $ 29.9 12.8 % Amortization of
intangible assets 4.2 1.7 % 3.0 1.3 % Purchase accounting
adjustments - 0.0 % 2.4 1.0 % Acquisition-related costs 0.1 0.0 %
2.8 1.2 % Restructuring and contract termination charges, net
6.6 2.7 % (0.7 ) -0.3 % Adjusted operating
income $ 46.8 19.3 % $ 37.5 16.0 %
(1)
amounts may not sum due to rounding PerkinElmer, Inc.
and Subsidiaries RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (1)
(In millions, except per share data and
percentages) PKI Twelve Months Ended
January 3, 2016 December 28,
2014 Adjusted revenue: Revenue $ 2,262.4 $
2,237.2 Purchase accounting adjustments 0.8
2.9 Adjusted revenue $ 2,263.2 $
2,240.1
Adjusted gross margin: Gross
margin $ 1,024.5 45.3 % $ 1,004.6 44.9 % Amortization of intangible
assets 43.5 1.9 % 49.7 2.2 % Purchase accounting adjustments 8.1
0.4 % 5.4 0.2 % Mark to market on postretirement benefits
1.2 0.1 % 8.4 0.4 % Adjusted gross margin $
1,077.3 47.6 % $ 1,068.1 47.7 %
Adjusted
SG&A: SG&A $ 598.8 26.5 % $ 659.3 29.5 % Amortization
of intangible assets (34.6 ) -1.5 % (33.1 ) -1.5 % Purchase
accounting adjustments (0.1 ) 0.0 % 2.7 0.1 % Acquisition-related
costs (0.7 ) 0.0 % (3.1 ) -0.1 % Significant litigation matters
(0.8 ) 0.0 % (6.6 ) -0.3 % Significant environmental charges - 0.0
% 1.2 0.1 % Mark to market on postretirement benefits (11.1
) -0.5 % (67.1 ) -3.0 % Adjusted SG&A $ 551.6
24.4 % $ 553.4 24.7 %
Adjusted R&D:
R&D $ 125.9 5.6 % $ 121.1 5.4 % Amortization of intangible
assets (0.5 ) 0.0 % (0.6 ) 0.0 % Mark to market on postretirement
benefits (0.1 ) 0.0 % (0.4 ) 0.0 % Adjusted R&D $
125.3 5.5 % $ 120.1 5.4 %
Adjusted
operating income: Operating income $ 286.1 12.6 % $ 210.7 9.4 %
Amortization of intangible assets 78.6 3.5 % 83.4 3.7 % Purchase
accounting adjustments 8.2 0.4 % 2.7 0.1 % Acquisition-related
costs 0.7 0.0 % 3.1 0.1 % Significant litigation matters 0.8 0.0 %
6.6 0.3 % Significant environmental charges - 0.0 % (1.2 ) -0.1 %
Mark to market on postretirement benefits 12.4 0.5 % 75.9 3.4 %
Restructuring and contract termination charges, net 13.6
0.6 % 13.4 0.6 % Adjusted operating income $
400.4 17.7 % $ 394.6 17.6 %
PKI Twelve Months Ended
January 3, 2016 December 28,
2014 Adjusted EPS: GAAP EPS $ 1.87 $ 1.39
Discontinued operations, net of income taxes (0.00 )
(0.03 ) GAAP EPS from continuing operations 1.88 1.42
Amortization of intangible assets, net of income taxes 0.46 0.47
Purchase accounting adjustments, net of income taxes 0.05 0.01
Significant litigation matters, net of income taxes 0.00 0.03
Acquisition-related costs, net of income taxes 0.00 0.03
Significant environmental charges, net of income taxes - (0.01 )
Mark to market on postretirement benefits, net of income taxes 0.07
0.43 Restructuring and contract termination charges, net of income
taxes 0.08 0.09 Adjusted
EPS $ 2.55 $ 2.47
PKI Twelve Months Ended
January 3, 2016 December 28,
2014
Impact of tax Expense related to
non-GAAP adjustments on adjusted EPS:
Amortization of intangible assets (0.23 ) (0.27 ) Purchase
accounting adjustments (0.00 ) - Significant litigation matters
(0.00 ) (0.02 ) Acquisition-related costs (0.02 ) (0.01 )
Significant environmental charges - 0.00 Mark to market on
postretirement benefits (0.04 ) (0.24 ) Restructuring and contract
termination charges (0.04 ) (0.02 )
Impact of tax (expense) benefit related to
non-GAAP adjustments on adjusted EPS
$ (0.33 ) $ (0.56 )
PKI Twelve Months Ended January 3,
2016 December 28, 2014
Constant currency adjusted EPS: GAAP EPS $ 1.87 $ 1.39
Discontinued operations, net of income taxes (0.00 )
(0.03 ) GAAP EPS from continuing operations 1.88 1.42
Amortization of intangible assets, net of income taxes 0.46 0.47
Purchase accounting adjustments, net of income taxes 0.05 0.01
Significant litigation matters, net of income taxes 0.00 0.03
Acquisition-related costs, net of income taxes 0.00 0.03
Significant environmental charges, net of income taxes - (0.01 )
Mark to market on postretirement benefits, net of income taxes 0.07
0.43 Restructuring and contract termination charges, net of income
taxes 0.08 0.09 Effect of currency changes from prior year period
0.25
-
Constant currency adjusted EPS $ 2.80 $
2.47
PKI
Twelve Months Ended January 3, 2016
December 28, 2014
Tax Expense related to non-GAAP
adjustments on constant currency adjusted EPS:
Amortization of intangible assets (0.23 ) (0.27 ) Purchase
accounting adjustments (0.00 )
-
Significant litigation matters (0.00 ) (0.02 ) Acquisition-related
costs (0.02 ) (0.01 ) Significant environmental charges - 0.00 Mark
to market on postretirement benefits (0.04 ) (0.24 ) Restructuring
and contract termination charges (0.04 ) (0.02 ) Effect of currency
changes from prior year period (0.06 )
-
Impact of tax (expense) benefit related to
non-GAAP adjustments on constant currency adjusted EPS
$ (0.33 ) $ (0.56 )
PKI
Twelve Months Ended
January 1,
2017
Projected
Adjusted EPS:
EPS from continuing operations
$
2.21 - 2.31
Amortization of intangible assets, net of
income taxes
0.43
Purchase accounting adjustments, net of
income taxes
0.01
Adjusted EPS
$
2.65 - 2.75
Human
Health Twelve Months Ended January 3,
2016 December 28, 2014
Adjusted revenue: Revenue $ 1,376.6 $ 1,384.2 Purchase
accounting adjustments 0.8 2.9
Adjusted revenue $ 1,377.4 $ 1,387.1
Adjusted operating income: Operating income $
251.7 18.3 % $ 233.7 16.9 % Amortization of intangible assets 61.9
4.5 % 73.2 5.3 % Purchase accounting adjustments 0.9 0.1 % 1.1 0.1
% Acquisition-related costs 0.4 0.0 % 0.1 0.0 % Restructuring and
contract termination charges, net 4.2 0.3 %
7.2 0.5 % Adjusted operating income $ 319.9 23.2 % $
315.3 22.7 %
Environmental Health Twelve Months Ended
January 3, 2016 December 28,
2014 Revenue: Revenue $ 885.7 $ 853.0
Adjusted operating income: Operating income $ 89.5
10.1 % $ 95.6 11.2 % Amortization of intangible assets 16.7 1.9 %
10.2 1.2 % Purchase accounting adjustments 7.3 0.8 % 1.6 0.2 %
Acquisition-related costs 0.3 0.0 % 3.0 0.3 % Restructuring and
contract termination charges, net 9.4 1.1 %
6.2 0.7 % Adjusted operating income $ 123.2 13.9 % $
116.5 13.7 %
(1) amounts may not sum due to
rounding PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(1) PKI Three
Months Ended
January 3,
2016
Organic revenue growth: Reported revenue growth 0 % Less:
effect of foreign exchange rates -5 % Less: effect of acquisitions
including purchase accounting adjustments 2 % Organic
revenue growth 3 %
Human Health
Three Months Ended
January 3,
2016
Organic revenue growth: Reported revenue growth -2 % Less:
effect of foreign exchange rates -4 % Less: effect of acquisitions
including purchase accounting adjustments 0 % Organic
revenue growth 2 %
Environmental
Health Three Months Ended
January 3,
2016
Organic revenue growth: Reported revenue growth 4 % Less:
effect of foreign exchange rates -7 % Less: effect of acquisitions
including purchase accounting adjustments 5 % Organic
revenue growth 5 %
PKI Three
Months Ended
January 3,
2016
Constant currency revenue growth: Reported revenue growth 0
% Less: effect of foreign exchange rates -5 % Constant
currency revenue growth 5 %
(1) amounts may not
sum due to rounding PerkinElmer,
Inc. and Subsidiaries RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (1) PKI
Twelve Months Ended
January 3,
2016
Organic revenue growth: Reported revenue growth 1% Less:
effect of foreign exchange rates -6% Less: effect of acquisitions
including purchase accounting adjustments 3% Organic revenue
growth 4%
Human Health Twelve
Months Ended
January 3,
2016
Organic revenue growth: Reported revenue growth -1% Less:
effect of foreign exchange rates -5% Less: effect of acquisitions
including purchase accounting adjustments 0% Organic revenue
growth 4%
Environmental Health
Twelve Months Ended
January 3,
2016
Organic revenue growth: Reported revenue growth 4% Less:
effect of foreign exchange rates -8% Less: effect of acquisitions
including purchase accounting adjustments 8% Organic revenue
growth 4%
PKI Twelve Months
Ended
January 3,
2016
Constant currency growth: Reported revenue growth 1% Less:
effect of foreign exchange rates -6% Constant currency
revenue growth 7%
(1) Amounts may not sum due to
rounding.
Explanation of Non-GAAP Financial Measures
We report our financial results in accordance with GAAP.
However, management believes that, in order to properly understand
our short-term and long-term financial and operational trends,
investors may wish to consider the impact of certain non-cash or
non-recurring items, which result from facts and circumstances that
vary in frequency and impact on continuing operations. Accordingly,
we present non-GAAP financial measures as a supplement to the
financial measures we present in accordance with GAAP. These
non-GAAP financial measures provide management with additional
means to understand and evaluate the operating results and trends
in our ongoing business by adjusting for certain non-cash expenses
and other items that management believes might otherwise make
comparisons of our ongoing business with prior periods more
difficult, obscure trends in ongoing operations, or reduce
management's ability to make useful forecasts. Management believes
these non-GAAP financial measures provide additional means of
evaluating period-over-period operating performance. In addition,
management understands that some investors and financial analysts
find this information helpful in analyzing our financial and
operational performance and comparing this performance to our peers
and competitors.
We use the term “adjusted revenue” to refer to GAAP revenue,
including purchase accounting adjustments for revenue from
contracts acquired in acquisitions that will not be fully
recognized due to accounting rules. We use the related term
“adjusted revenue growth” to refer to the measure of comparing
current period adjusted revenue with the corresponding period of
the prior year.
We use the term “constant currency adjusted revenue” to refer to
GAAP revenue recalculated using the currency exchange rates for the
corresponding period in the prior year, and including purchase
accounting adjustments for revenue from contracts acquired in
acquisitions that will not be fully recognized due to accounting
rules. We use the related term “constant currency adjusted revenue
growth” to refer to the measure of comparing current period
constant currency adjusted revenue with the corresponding period of
the prior year.
We use the term “organic revenue” to refer to GAAP revenue,
excluding the effect of foreign currency translation and
acquisitions, and including purchase accounting adjustments for
revenue from contracts acquired in acquisitions that will not be
fully recognized due to accounting rules. We use the related term
“organic revenue growth” to refer to the measure of comparing
current period organic revenue with the corresponding period of the
prior year.
We use the term “adjusted gross margin” to refer to GAAP gross
margin, excluding amortization of intangible assets, inventory fair
value adjustments related to business acquisitions, and including
purchase accounting adjustments for revenue from contracts acquired
in acquisitions that will not be fully recognized due to business
combination accounting rules. We also exclude adjustments for
mark-to-market accounting on post-retirement benefits, therefore
only our projected costs have been used to calculate our non-GAAP
measure. We use the related term “adjusted gross margin percentage”
to refer to adjusted gross margin as a percentage of adjusted
revenue.
We use the term “adjusted SG&A expense” to refer to GAAP
SG&A expense, excluding amortization of intangible assets,
purchase accounting adjustments, acquisition-related expenses,
significant litigation matters and significant environmental
charges. We also exclude adjustments for mark-to-market accounting
on post-retirement benefits, therefore only our projected costs
have been used to calculate our non-GAAP measure. We use the
related term “adjusted SG&A percentage” to refer to adjusted
SG&A expense as a percentage of adjusted revenue.
We use the term “adjusted R&D expense” to refer to GAAP
R&D expense, excluding amortization of intangible assets. We
use the related term “adjusted R&D percentage” to refer to
adjusted R&D expense as a percentage of adjusted revenue.
We use the term “adjusted operating income,” to refer to GAAP
operating income, including revenue from contracts acquired in
acquisitions that will not be fully recognized due to accounting
rules, and excluding amortization of intangible assets, other
purchase accounting adjustments, acquisition-related costs,
significant litigation matters, significant environmental charges,
and restructuring and contract termination charges. We also exclude
adjustments for mark-to-market accounting on post-retirement
benefits, therefore only our projected costs have been used to
calculate our non-GAAP measure. We use the related terms “adjusted
operating profit percentage,” “adjusted operating profit margin,”
or “adjusted operating margin” to refer to adjusted operating
income as a percentage of adjusted revenue.
We use the term “adjusted earnings per share,” or “adjusted
EPS,” to refer to GAAP earnings per share, including revenue from
contracts acquired in acquisitions that will not be fully
recognized due to accounting rules, and excluding discontinued
operations, amortization of intangible assets, other purchase
accounting adjustments, acquisition-related costs, significant
litigation matters, significant environmental charges, and
restructuring and contract termination charges. We also exclude
adjustments for mark-to-market accounting on post-retirement
benefits, therefore only our projected costs have been used to
calculate our non-GAAP measure. We also adjust for any tax impact
related to the above items.
We use the term “constant currency adjusted earnings per share,”
or “constant currency adjusted EPS,” to refer to GAAP earnings per
share recalculated using the currency exchange rates for the
corresponding period in the prior year, including revenue from
contracts acquired in acquisitions that will not be fully
recognized due to accounting rules, and excluding discontinued
operations, amortization of intangible assets, other purchase
accounting adjustments, acquisition-related costs, significant
litigation matters, significant environmental charges, and
restructuring and contract termination charges. We also exclude
adjustments for mark-to-market accounting on post-retirement
benefits, therefore only our projected costs have been used to
calculate our non-GAAP measure. We also adjust for any tax impact
related to the above items.
Management includes or excludes the effect of each of the items
identified below in the applicable non-GAAP financial measure
referenced above for the reasons set forth below with respect to
that item:
- Amortization of
intangible assets— purchased intangible assets are amortized
over their estimated useful lives and generally cannot be changed
or influenced by management after the acquisition. Accordingly,
this item is not considered by management in making operating
decisions. Management does not believe such charges accurately
reflect the performance of our ongoing operations for the period in
which such charges are incurred.
- Revenue from
contracts acquired in acquisitions that will not be fully
recognized due to accounting rules—accounting rules require
us to account for the fair values of revenue from contracts assumed
in connection with our acquisitions. As a result, our GAAP results
reflect the fair value of those revenues, which is not the same as
the revenue that otherwise would have been recorded by the acquired
entity. We include such revenue in our non-GAAP measures because we
believe the fair value of such revenue does not accurately reflect
the performance of our ongoing operations for the period in which
such revenue is recorded.
- Other purchase
accounting adjustments—accounting rules require us to adjust
various balance sheet accounts, including inventory and deferred
rent balances to fair value at the time of the acquisition. As a
result, the expenses for these items in our GAAP results are not
the same as what would have been recorded by the acquired entity.
Accounting rules also require us to estimate the fair value of
contingent consideration at the time of the acquisition, and any
subsequent changes to the estimate or payment of the contingent
consideration and purchase accounting adjustments are charged to
expense or income. We exclude the impact of any changes to
contingent consideration from our non-GAAP measures because we
believe these expenses or benefits do not accurately reflect the
performance of our ongoing operations for the period in which such
expenses or benefits are recorded.
- Acquisition-related expenses—we incur legal, due
diligence, and other costs related to acquisitions. We exclude
these expenses from our non-GAAP measures because we believe they
do not reflect the performance of our ongoing operations.
- Restructuring and
contract termination charges—restructuring and contract
termination expenses consist of employee severance and other exit
costs as well as the cost of terminating certain lease agreements
or contracts. Management does not believe such costs accurately
reflect the performance of our ongoing operations for the period in
which such costs are reported.
- Adjustments for
mark-to-market accounting on post-retirement benefits—we
exclude adjustments for mark-to-market accounting on
post-retirement benefits, therefore only our projected costs have
been used to calculate our non-GAAP measures. We exclude these
adjustments because they do not represent what we believe our
investors consider to be costs of producing our products,
investments in technology and production, and costs to support our
internal operating structure.
- Significant
litigation matters—we incurred expenses related to
significant litigation matters. Management does not believe such
charges accurately reflect the performance of our ongoing
operations for the periods in which such charges were
incurred.
- Significant
environmental charges—we incurred expenses related to
significant environmental charges. Management does not believe such
charges accurately reflect the performance of our ongoing
operations for the periods in which such charges were
incurred.
- Impact of foreign
currency changes on the current period—we exclude the impact
of foreign currency from these measures by using the prior period’s
foreign currency exchange rates for the current period because
foreign currency exchange rates are subject to volatility and can
obscure underlying trends.
The tax effect for discontinued operations is calculated based
on the authoritative guidance in the Financial Accounting Standards
Board’s Accounting Standards Codification 740, Income Taxes. The
tax effect for amortization of intangible assets, inventory fair
value adjustments related to business acquisitions, changes to the
fair values assigned to contingent consideration, other costs
related to business acquisitions, significant litigation matters,
significant environmental charges, adjustments for mark-to-market
accounting on post-retirement benefits, restructuring and contract
termination charges, and the revenue from contracts acquired with
various acquisitions is calculated based on operational results and
applicable jurisdictional law, which contemplates tax rates
currently in effect to determine our tax provision. The tax effect
for the impact from foreign currency exchange rates on the current
period is calculated based on the average rate currently in effect
to determine our tax provision.
The non-GAAP financial measures described above are not meant to
be considered superior to, or a substitute for, our financial
statements prepared in accordance with GAAP. There are material
limitations associated with non-GAAP financial measures because
they exclude charges that have an effect on our reported results
and, therefore, should not be relied upon as the sole financial
measures to evaluate our financial results. Management compensates
and believes that investors should compensate for these limitations
by viewing the non-GAAP financial measures in conjunction with the
GAAP financial measures. In addition, the non-GAAP financial
measures included in this earnings announcement may be different
from, and therefore may not be comparable to, similar measures used
by other companies.
Each of the non-GAAP financial measures listed above are also
used by our management to evaluate our operating performance,
communicate our financial results to our Board of Directors,
benchmark our results against our historical performance and the
performance of our peers, evaluate investment opportunities
including acquisitions and discontinued operations, and determine
the bonus payments for senior management and employees.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160204006571/en/
Investor Relations:PerkinElmer, Inc.Tommy J. Thomas, CPA,
781-663-5889tommy.thomas@perkinelmer.comorMedia
Contact:PerkinElmer, Inc.Fara Goldberg,
781-663-5699fara.goldberg@perkinelmer.com
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