- GAAP revenue of $563 million;
Constant currency adjusted revenue growth 10%; Organic revenue
growth 6%
- GAAP earnings per share from
continuing operations of $0.48; Adjusted earnings per share of
$0.60 representing 16% constant currency adjusted EPS
growth
- Narrows full year 2015 guidance and
maintains midpoint of range
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 third quarter ended
October 4, 2015.
The Company reported GAAP earnings per share from continuing
operations of $0.48, compared to $0.38 in the third quarter of
2014. Revenue in the third quarter of 2015 was $563.4 million,
compared to $542.0 million in the third quarter of 2014. GAAP
operating income from continuing operations for the third quarter
of 2015 was $75.9 million, compared to $58.8 million in the third
quarter of 2014. GAAP operating profit margin from continuing
operations was 13.5% in the third quarter of 2015, compared to
10.8% in the third quarter of 2014.
Adjusted earnings per share was $0.60, compared to $0.57 in the
third quarter of 2014. Adjusted revenue increased 4% and organic
revenue increased 6%, compared to the third quarter of 2014.
Adjusted revenue was $563.6 million, compared to $542.9 million in
the third quarter of 2014. Adjusted operating income for the third
quarter of 2015 was $95.7 million, compared to $91.3 million for
the same period a year ago. Adjusted operating profit margin was
17.0% as a percentage of adjusted revenue, as compared to 16.8% for
the same period a year ago. 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 pleased to report another solid quarterly performance as
we delivered strong and broad-based revenue growth and
profitability despite a somewhat mixed global macro-environment,”
said Robert Friel, chairman and chief executive officer of
PerkinElmer. “We continue to believe that the strength and
differentiation of PerkinElmer’s products and solutions coupled
with a relentless focus on executing against our strategic
priorities will afford us the ability to deliver on our balance of
year commitments and position us well for 2016 and beyond.”
Financial Overview by Reporting Segment for the Third Quarter
2015
Human Health
- Revenue of $343.6 million, as compared
to $336.9 million for the third quarter of 2014.
- Operating income of $63.1 million, as
compared to $48.1 million for the same period a year ago.
- Adjusted revenue of $343.8 million, as
compared to $337.8 million for the third quarter of 2014. Organic
revenue increased 7%.
- Adjusted operating income of $78.9
million, as compared to $73.6 million for the same period a year
ago.
- Adjusted operating profit margin was
22.9% as a percentage of adjusted revenue, an increase of
approximately 110 basis points as compared to the third quarter of
2014.
Environmental Health
- Revenue of $219.8 million, as compared
to $205.1 million for the third quarter of 2014. Revenue increased
7% and organic revenue increased 5%.
- Operating income of $22.8 million, as
compared to $18.5 million for the same period a year ago.
- Adjusted operating income of $26.9
million, as compared to $25.5 million for the same period a year
ago.
- Adjusted operating profit margin was
12.2% as a percentage of revenue, a decline of approximately 30
basis points as compared to the third quarter of 2014.
Financial Guidance – Full Year 2015 - Updated
For the full year 2015, the Company now forecasts GAAP earnings
per share from continuing operations in the range of $2.02 to $2.05
and on a non-GAAP basis, which is expected to include the
adjustments noted in the attached reconciliation, adjusted earnings
per share in the range of $2.56 to $2.59 representing 13-14%
constant currency adjusted earnings per share growth.
Conference Call Information
The Company will discuss its third quarter results and its
outlook for business trends in a conference call on November 5,
2015 at 5:00 p.m. Eastern Time (ET). To access the call, please
dial (541) 797-2422 prior to the scheduled conference call time and
provide the access code 49211111.
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, plans concerning
business development opportunities and divestitures and effects of
foreign currency exchange rates. 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, including significant fluctuations in foreign currency
exchange rates; (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 $2.2 billion in 2014, has about
7,700 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
SubsidiariesCONDENSED CONSOLIDATED INCOME STATEMENTS
Three Months
Ended
Nine Months
Ended
(In thousands, except per share data)
October 4,
2015
September 28,
2014
October 4,
2015
September 28,
2014
Revenue $ 563,436 $ 542,049 $ 1,654,243 $
1,628,829 Cost of revenue 308,833 298,740 911,754 901,823
Selling, general and administrative expenses 147,728 142,997
440,343 442,687 Research and development expenses 31,095 30,444
95,898 90,175 Restructuring and contract termination charges, net
(118 ) 11,092
4,838 13,969
Operating income from continuing operations
75,898 58,776 201,410 180,175 Interest income (147 ) (130 )
(488 ) (375 ) Interest expense 9,874 8,909 28,564 27,207 Other
expense, net
2,217
2,187 4,132
4,387 Income from continuing operations,
before income taxes 63,954 47,810 169,202 148,956 Provision
for income taxes
9,057
4,912 24,998
19,104 Income from continuing
operations 54,897 42,898 144,204 129,852 Gain (loss)
from discontinued operations, before income taxes 8 (1,091 ) 6
(4,205 ) Loss on disposition of discontinued operations, before
income taxes (3 ) (7 ) (26 ) (381 ) Provision for (benefit from)
income taxes on discontinued operations and dispositions
39 (477 )
13 (1,725
) Loss from discontinued operations and
dispositions (34 )
(621 ) (33
) (2,861 )
Net income $ 54,863
$ 42,277 $
144,171 $ 126,991
Diluted earnings per share: Income from
continuing operations $ 0.48 $ 0.38 $ 1.27 $ 1.14 Loss from
discontinued operations and dispositions
(0.00
) (0.01 )
(0.00 ) (0.03
) Net income
$ 0.48
$ 0.37 $
1.27 $ 1.12
Weighted average diluted shares of common stock
outstanding 113,422 113,759 113,565 113,836 ABOVE
PREPARED IN ACCORDANCE WITH GAAP
Additional Supplemental
Information (1): (per share, continuing
operations) GAAP EPS from continuing operations $ 0.48 $
0.38 $ 1.27 $ 1.14 Amortization of intangible assets, net of income
taxes 0.11 0.11 0.34 0.35 Purchase accounting adjustments, net of
income taxes 0.01 0.00 0.05 0.00 Significant litigation matter, net
of income taxes - - - 0.04 Mark to market on postretirement
benefits, net of income taxes - - 0.01 (0.00 ) Restructuring and
contract termination charges, net of income taxes
(0.00 ) 0.07
0.03 0.09
Adjusted EPS $ 0.60
$ 0.57
$ 1.70
$ 1.62 (1)
amounts may not sum due to rounding
PerkinElmer, Inc. and SubsidiariesREVENUE
AND OPERATING INCOME (LOSS)
Three Months
Ended
Nine Months
Ended
(In thousands, except percentages)
October 4,
2015
September 28,
2014
October 4,
2015
September 28,
2014
Human Health Reported revenue
$
343,636
$
336,949
$
1,011,177
$
1,009,525
Purchase accounting adjustments 164 811
628 2,689
Adjusted revenue
343,800 337,760 1,011,805
1,012,214 Reported operating income from
continued operations 63,147 48,089 179,560 149,979 OP% 18.4 % 14.3
% 17.8 % 14.9 % Amortization of intangible assets 15,298 18,402
46,041 54,710 Purchase accounting adjustments 195 836 720 2,037
Acquisition-related costs 74 18 283 87 Restructuring and contract
termination charges, net 184 6,285
2,004 7,140 Adjusted operating income
78,898 73,630 228,608
213,953 Adjusted OP% 22.9 % 21.8 % 22.6 % 21.1 %
Environmental Health Reported revenue 219,800 205,100
643,066 619,304 Reported operating income from continued
operations 22,838 18,540 53,606 65,725 OP% 10.4 % 9.0 % 8.3 % 10.6
% Amortization of intangible assets 3,551 2,177 12,499 7,140
Purchase accounting adjustments 808 - 7,275 (830 )
Acquisition-related costs 19 17 235 129 Restructuring and contract
termination charges, net (302 ) 4,807
2,834 6,829 Adjusted operating income
26,914 25,541 76,449
78,993 Adjusted OP% 12.2 % 12.5 % 11.9 % 12.8 %
Corporate Reported operating loss (10,087 ) (7,853 ) (31,756
) (35,529 ) Significant litigation matter - - - 6,645 Mark to
market on postretirement benefits - -
1,066 (54 ) Adjusted operating loss
(10,087 ) (7,853 ) (30,690 ) (28,938 )
Continuing Operations Reported revenue
$
563,436
$
542,049
$
1,654,243
$
1,628,829
Purchase accounting adjustments 164 811
628 2,689
Adjusted revenue
563,600 542,860 1,654,871
1,631,518 Reported operating income from
continued operations 75,898 58,776 201,410 180,175 OP% 13.5 % 10.8
% 12.2 % 11.1 % Amortization of intangible assets 18,849 20,579
58,540 61,850 Purchase accounting adjustments 1,003 836 7,995 1,207
Acquisition-related costs 93 35 518 216 Significant litigation
matter - - - 6,645 Mark to market on postretirement benefits - -
1,066 (54 ) Restructuring and contract termination charges, net
(118 ) 11,092 4,838
13,969 Adjusted operating income
$
95,725
$
91,318
$
274,367
$
264,008
Adjusted OP% 17.0 % 16.8 % 16.6 % 16.2 % REPORTED
REVENUE AND REPORTED OPERATING INCOME (LOSS) PREPARED IN ACCORDANCE
WITH GAAP
PerkinElmer, Inc. and SubsidiariesCONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands)
October 4, 2015 December 28,
2014 Current assets: Cash and cash equivalents $
195,066 $ 174,821 Accounts receivable, net 414,193 470,563
Inventories 313,047 285,457 Other current assets 151,531
137,710 Total current assets 1,073,837
1,068,551 Property, plant and
equipment: At cost 494,768 492,814 Accumulated depreciation
(330,591 ) (316,620 ) Property, plant and equipment, net
164,177 176,194 Marketable securities and investments 1,574 1,568
Intangible assets, net 424,239 490,265 Goodwill 2,253,943 2,284,077
Other assets, net 113,897 113,420 Total
assets $ 4,031,667 $ 4,134,075 Current
liabilities: Current portion of long-term debt $ 1,107 $ 1,075
Accounts payable 149,684 173,953 Short-term accrued restructuring
and contract termination charges 12,111 17,124 Accrued expenses and
other current liabilities 389,274 403,021 Current liabilities of
discontinued operations 2,100 2,137
Total current liabilities 554,276 597,310
Long-term debt 1,027,269 1,051,892 Long-term
liabilities 395,798 442,771 Total
liabilities 1,977,343 2,091,973
Total stockholders' equity 2,054,324 2,042,102
Total liabilities and stockholders' equity $ 4,031,667
$ 4,134,075 PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and
SubsidiariesCONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months
Ended
Nine Months
Ended
October
4,2015
September28,
2014
October
4,2015
September
28,2014
(In thousands) Operating activities: Net
income $ 54,863 $ 42,277 $ 144,171 $ 126,991 Loss from discontinued
operations and dispositions, net of income taxes 34
621 33 2,861 Income from
continuing operations 54,897 42,898
144,204 129,852 Adjustments to
reconcile income from continuing operations to net cash provided by
continuing operations: Stock-based compensation 4,290 2,450 12,483
11,769 Restructuring and contract termination charges, net (118 )
11,092 4,838 13,969 Amortization of deferred debt issuance costs
and accretion of discounts 435 409 1,112 1,071 Depreciation and
amortization 27,164 28,926 83,757 86,833 Amortization of acquired
inventory revaluation 808 - 7,275 - Changes in operating assets and
liabilities which provided (used) cash, excluding effects from
companies purchased and divested: Accounts receivable, net 5,518
3,407 36,361 26,841
Inventories
(17,497 ) (12,799 ) (50,824 ) (28,536 ) Accounts payable (18,375 )
7,858 (19,916 ) (4,009 ) Accrued expenses and other 3,646
(21,154 ) (57,361 ) (52,133 )
Net
cash provided by operating activities of continuing operations
60,768 63,087 161,929 185,657 Net cash
used in operating activities of discontinued operations (43
) (160 ) (70 ) (624 )
Net cash provided by
operating activities 60,725
62,927 161,859
185,033 Investing activities: Capital
expenditures (7,715 ) (7,767 ) (17,814 ) (22,214 ) Proceeds from
surrender of life insurance policies 757 65 757 490 Changes in
restricted cash balances - - 59 - Activity related to acquisitions
and investments, net of cash and cash equivalents acquired -
(1,529 ) (18,735 ) (1,879 )
Net cash
used in investing activities of continuing operations
(6,958 ) (9,231 ) (35,733
) (23,603 ) Net cash used in investing
activities of discontinued operations - -
- (213 )
Net cash used in investing
activities (6,958 ) (9,231
) (35,733 ) (23,816
) Financing Activities: Payments on revolving
credit facility (122,000 ) (73,000 ) (371,000 ) (305,000 ) Proceeds
from revolving credit facility 163,000 34,000 347,000 227,000
Payments of debt issuance costs - - - (1,845 ) Settlement of hedges
(4,258 ) - 19,210 - Net payments on other credit facilities (1,144
) (718 ) (800 ) (1,225 ) Payments for acquisition-related
contingent consideration (26 ) (855 ) (26 ) (855 ) Proceeds from
issuance of common stock under stock plans 412 1,493 13,081 20,947
Purchases of common stock (72,063 ) (28 ) (76,158 ) (39,004 )
Dividends paid (7,938 ) (7,904 ) (23,737 )
(23,713 )
Net cash used in financing activities
(44,017 ) (47,012 )
(92,430 ) (123,695 )
Effect of exchange rate changes on cash and cash equivalents
(6,854 ) (8,259 ) (13,451 ) (7,081 )
Net increase (decrease) in cash and cash equivalents
2,896 (1,575 ) 20,245 30,441
Cash and cash equivalents at beginning of period 192,170
205,258 174,821 173,242
Cash and cash equivalents at end of period $
195,066 $ 203,683 $
195,066 $ 203,683
PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and
SubsidiariesRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (1) (In millions, except per share
data and percentages)
PKI
Three Months Ended
October 4, 2015
September 28, 2014
Adjusted revenue: Revenue $ 563.4 $ 542.0 Purchase
accounting adjustments 0.2
0.8 Adjusted
revenue $ 563.6 $ 542.9
Adjusted gross margin:
Gross margin $ 254.6 45.2 % $ 243.3 44.9 % Amortization of
intangible assets 10.7 1.9 % 12.4 2.3 % Purchase accounting
adjustments 1.0 0.2 %
0.8 0.2 % Adjusted gross margin $ 266.3
47.2 % $ 256.5
47.3 %
Adjusted SG&A: SG&A $ 147.7
26.2 % $ 143.0 26.4 % Amortization of intangible assets (8.0 ) -1.4
% (8.0 ) -1.5 % Purchase accounting adjustments (0.0 ) 0.0 % (0.0 )
0.0 % Acquisition-related costs (0.1 ) 0.0 %
(0.0 ) 0.0 % Adjusted SG&A $
139.6 24.8 % $ 134.9
24.9 %
Adjusted R&D: R&D $ 31.1
5.5 % $ 30.4 5.6 % Amortization of intangible assets (0.1 )
0.0 % (0.2 ) 0.0 %
Adjusted R&D $ 31.0 5.5 % $
30.3 5.6 %
Adjusted operating
income: Operating income $ 75.9 13.5 % $ 58.8 10.8 %
Amortization of intangible assets 18.8 3.3 % 20.6 3.8 % Purchase
accounting adjustments 1.0 0.2 % 0.8 0.2 % Acquisition-related
costs 0.1 0.0 % 0.0 0.0 % Restructuring and contract termination
charges, net (0.1 ) 0.0 %
11.1 2.0 % Adjusted operating income $ 95.7
17.0 % $ 91.3
16.8 %
PKI
Three Months Ended October 4, 2015
September 28, 2014 Adjusted EPS:
GAAP EPS $ 0.48 $ 0.37 Discontinued operations, net of income taxes
(0.00 ) (0.01 )
GAAP EPS from continuing operations 0.48 0.38
Amortization of intangible assets, net of income taxes 0.11 0.11
Purchase accounting adjustments, net of income taxes 0.01 0.00
Acquisition-related costs, net of income taxes 0.00 0.00
Restructuring and contract termination charges, net of income taxes
(0.00 ) 0.07
Adjusted EPS $ 0.60
$ 0.57
PKI
Three Months Ended October 4, 2015
September 28, 2014
Impact of tax Expense related to
non-gaap adjustments on adjusted EPS:
Amortization of intangible assets
$
(0.06 )
$
(0.07 )
Purchase accounting adjustments
(0.00 ) (0.00 )
Acquisition-related costs
(0.00 ) (0.00 )
Restructuring and contract termination
charges
0.00 (0.03
) Impact of tax expense related to non-gaap
adjustments on adjusted EPS $ (0.06 )
$ (0.09 )
PKI
Three Months Ended October 4, 2015
September 28, 2014 Constant currency
adjusted EPS: GAAP EPS $ 0.48 $ 0.37 Discontinued operations,
net of income taxes (0.00 )
(0.01 ) GAAP EPS from continuing
operations 0.48 0.38 Amortization of intangible assets, net of
income taxes 0.11 0.11 Purchase accounting adjustments, net of
income taxes 0.01 0.00 Acquisition-related costs, net of income
taxes 0.00 0.00 Restructuring and contract termination charges, net
of income taxes (0.00 ) 0.07 Effect of currency changes from prior
year period 0.06
- Constant currency adjusted EPS
$ 0.66 $ 0.57
PKI
Three Months Ended October 4, 2015
September 28, 2014 Tax Expense related to
non-gaap adjustments on constant currency adjusted EPS:
Amortization of intangible assets
$
(0.06 )
$
(0.07 )
Purchase accounting adjustments
(0.00 ) (0.00 )
Acquisition-related costs
(0.00 ) (0.00 )
Restructuring and contract termination
charges
0.00 (0.03 ) Effect of currency changes from prior year period
(0.01 ) -
Impact of tax expense related to non-gaap
adjustments on constant currency adjusted EPS $ (0.07 )
$ (0.09 )
Human Health
Three Months Ended October 4, 2015
September 28, 2014 Adjusted
revenue: Revenue $ 343.6 $ 336.9 Purchase accounting
adjustments 0.2
0.8 Adjusted revenue $ 343.8
$ 337.8
Adjusted operating income: Operating
income $ 63.1 18.4 % $ 48.1 14.3 % Amortization of intangible
assets 15.3 4.5 % 18.4 5.5 % Purchase accounting adjustments 0.2
0.1 % 0.8 0.2 % Acquisition-related costs 0.1 0.0 % 0.0 0.0 %
Restructuring and contract termination charges, net 0.2
0.1 % 6.3
1.9 % Adjusted operating income $ 78.9
22.9 % $ 73.6 21.8 %
Environmental Health
Three Months Ended October 4, 2015
September 28, 2014 Revenue:
Revenue $ 219.8 $ 205.1
Adjusted operating income:
Operating income $ 22.8 10.4 % $ 18.5 9.0 % Amortization of
intangible assets 3.6 1.6 % 2.2 1.1 % Purchase accounting
adjustments 0.8 0.4 % - 0.0 % Acquisition-related costs 0.0 0.0 %
0.0 0.0 % Restructuring and contract termination charges, net
(0.3 ) -0.1 % 4.8
2.3 % Adjusted operating income $ 26.9
12.2 % $ 25.5 12.5 %
(1) amounts may not sum due to rounding
PerkinElmer, Inc. and SubsidiariesRECONCILIATION OF GAAP
TO NON-GAAP FINANCIAL MEASURES (1) (In
millions, except per share data and percentages) PKI
Nine Months Ended
October 4,
2015
September 28,
2014
Adjusted revenue: Revenue $ 1,654.2 $ 1,628.8
Purchase accounting adjustments 0.6
2.7
Adjusted revenue $ 1,654.9
$ 1,631.5
Adjusted
gross margin: Gross margin $ 742.5 44.9 % $ 727.0 44.6 %
Amortization of intangible assets 32.2 1.9 % 37.4 2.3 % Purchase
accounting adjustments 7.9 0.5 % 2.7 0.2 % Mark to market on
postretirement benefits 0.2 0.0 %
(0.1 ) 0.0 % Adjusted gross
margin $ 782.9 47.3 % $ 767.1
47.0 %
Adjusted SG&A:
SG&A $ 440.3 26.6 % $ 442.7 27.2 % Amortization of intangible
assets (26.0 ) -1.6 % (24.0 ) -1.5 % Purchase accounting
adjustments (0.0 ) 0.0 % 1.5 0.1 % Acquisition-related costs (0.5 )
0.0 % (0.2 ) 0.0 % Significant litigation matter - 0.0 % (6.6 )
-0.4 % Mark to market on postretirement benefits (0.8 )
-0.1 % -
0.0 % Adjusted SG&A $ 413.0 25.0 %
$ 413.4 25.3 %
Adjusted
R&D: R&D $ 95.9 5.8 % $ 90.2 5.5 % Amortization of
intangible assets (0.4 ) 0.0 %
(0.4 ) 0.0 % Adjusted R&D $ 95.5
5.8 % $ 89.7 5.5 %
Adjusted operating income: Operating income $ 201.4
12.2 % $ 180.2 11.1 % Amortization of intangible assets 58.5 3.5 %
61.9 3.8 % Purchase accounting adjustments 8.0 0.5 % 1.2 0.1 %
Acquisition-related costs 0.5 0.0 % 0.2 0.0 % Significant
litigation matter - 0.0 % 6.6 0.4 % Mark to market on
postretirement benefits 1.1 0.1 % (0.1 ) 0.0 % Restructuring and
contract termination charges, net 4.8
0.3 % 14.0 0.9 % Adjusted
operating income $ 274.4 16.6 %
$ 264.0 16.2 %
PKI Nine Months
Ended
October 4,
2015
September 28,
2014
Adjusted EPS: GAAP EPS $ 1.27 $ 1.12 Discontinued
operations, net of income taxes (0.00 )
(0.03 ) GAAP EPS from
continuing operations 1.27 1.14 Amortization of intangible assets,
net of income taxes 0.34 0.35 Purchase accounting adjustments, net
of income taxes 0.05 0.00 Significant litigation matter, net of
income taxes - 0.04 Acquisition-related costs, net of income taxes
0.00 0.00 Mark to market on postretirement benefits, net of income
taxes 0.01 (0.00 ) Restructuring and contract termination charges,
net of income taxes 0.03
0.09 Adjusted EPS $ 1.70
$ 1.62
PKI Nine Months Ended
October 4,
2015
September 28,
2014
Impact of tax Expense related to non-gaap adjustments on
adjusted EPS:
Amortization of intangible assets
$
(0.18 )
$
(0.19 )
Purchase accounting adjustments
(0.00 ) (0.00 )
Significant litigation matter
- (0.02 )
Acquisition-related costs
(0.02 ) (0.01 )
Mark to market on postretirement
benefits
(0.00 ) 0.00
Restructuring and contract termination
charges
(0.01 ) (0.03 )
Impact of tax expense related to non-gaap
adjustments on adjusted EPS $ (0.22 )
$ (0.26 )
PKI Twelve
Months Ended
January 3,
2016
Adjusted EPS:
Projected
GAAP EPS from continuing operations $ 2.02 - $2.05 Amortization of
intangible assets, net of income taxes 0.45 Purchase accounting
adjustments, net of income taxes 0.05 Mark to market on
postretirement benefits, net of income taxes 0.01 Restructuring and
contract termination charges, net of income taxes
0.03
Adjusted EPS $ 2.56 -
$2.59
PKI Twelve
Months Ended
January 3,
2016
Constant Currency Adjusted EPS: Projected GAAP EPS
from continuing operations $ 2.02 - $2.05 Amortization of
intangible assets, net of income taxes 0.45 Purchase accounting
adjustments, net of income taxes 0.05 Mark to market on
postretirement benefits, net of income taxes 0.01 Restructuring and
contract termination charges, net of income taxes 0.03 Effect of
currency changes from prior year period
0.23 Adjusted EPS
$ 2.79 - $2.82
Human Health Nine Months
Ended
October 4,
2015
September 28,
2014
Adjusted revenue: Revenue $ 1,011.2 $ 1,009.5
Purchase accounting adjustments 0.6
2.7
Adjusted revenue $ 1,011.8
$ 1,012.2
Adjusted
operating income: Operating income $ 179.6 17.8 % $ 150.0 14.9
% Amortization of intangible assets 46.0 4.6 % 54.7 5.4 % Purchase
accounting adjustments 0.7 0.1 % 2.0 0.2 % Acquisition-related
costs 0.3 0.0 % 0.1 0.0 % Restructuring and contract termination
charges, net 2.0 0.2 %
7.1 0.7 % Adjusted operating income $
228.6 22.6 % $ 214.0
21.1 %
Environmental Health Nine
Months Ended
October 4,
2015
September 28,
2014
Revenue: Revenue $ 643.1 $ 619.3
Adjusted
operating income: Operating income $ 53.6 8.3 % $ 65.7 10.6 %
Amortization of intangible assets 12.5 1.9 % 7.1 1.2 % Purchase
accounting adjustments 7.3 1.1 % (0.8 ) -0.1 % Acquisition-related
costs 0.2 0.0 % 0.1 0.0 % Restructuring and contract termination
charges, net 2.8 0.4 %
6.8 1.1 % Adjusted operating income $
76.4 11.9 % $ 79.0
12.8 %
(1) amounts may not sum due to rounding
PerkinElmer, Inc. and
SubsidiariesRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (1)
PKI
Three Months Ended
October 4,
2015
Organic revenue growth: Reported revenue growth 4 % Less:
effect of foreign exchange rates -6 % Less: effect of acquisitions
including purchase accounting adjustments 4 % Organic revenue
growth 6 %
Human Health
Three Months Ended
October 4,
2015
Organic revenue growth: Reported revenue growth 2 % Less:
effect of foreign exchange rates -5 % Less: effect of acquisitions
including purchase accounting adjustments 1 % Organic revenue
growth 7 %
Environmental Health
Three Months Ended
October 4,
2015
Organic revenue growth: Reported revenue growth 7 % Less:
effect of foreign exchange rates -9 % Less: effect of acquisitions
including purchase accounting adjustments 11 % Organic revenue
growth 5 %
(1) amounts may not sum due to rounding
PerkinElmer, Inc. and
SubsidiariesQ3 2015 CONSTANT CURRENCY ADJUSTED REVENUE
GROWTH
PKI
Three Months Ended
October 4,
2015
Constant currency adjusted revenue
growth:
Reported revenue growth 4 % Less: effect of foreign exchange rates
-6 %
Constant currency adjusted revenue
growth
10 %
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, and
a significant litigation matter. 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, a
significant litigation matter, 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, a significant
litigation matter, 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, a significant
litigation matter, 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.
- A significant
litigation matter—we incurred expenses related to a
significant litigation matter. 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, a significant litigation matter,
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/20151105006799/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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