Exhibit 99.1
[LOGO] PerkinElmer(R) PerkinElmer, Inc.
precisely. 45 William Street
Wellesley, MA 02481-4078 USA
Phone: 781-431-4306
Fax: 781-431-4255
www.perkinelmer.com
FOR IMMEDIATE RELEASE
- ---------------------
28 January 2004
PERKINELMER ANNOUNCES Q4 2003 RESULTS
o STRONG Q4 03 EPS GROWTH; INCREASE OF $.20 FROM Q4 02
o SIGNIFICANT OPERATING MARGIN EXPANSION TO 12.5%
o OPERATING CASH FLOW OF $78M; UP $29M FROM Q4 02
o ISSUES 2004 GUIDANCE; GAAP EPS FORECAST UP 40%+
BOSTON - PerkinElmer, Inc. (NYSE: PKI), a global leader in health sciences and
other advanced technology markets, today announced GAAP earnings per share of
$.21 from continuing operations on revenue of $432.6 million for the fourth
quarter ended December 28, 2003. The Company reported earnings per share from
continuing operations excluding intangibles amortization of $.24, which exceeds
by $.02 the Thomson First Call(TM) consensus earnings per share estimate of $.22
for the fourth quarter of 2003, which also excludes intangibles amortization.
Amortization of intangibles for the fourth quarter of 2003 was $7.1 million, or
$.03 per share.
Revenue from continuing operations in the fourth quarter of 2003 was $432.6
million, an increase of 6.0% from the fourth quarter of 2002, driven by revenue
growth in all segments. Foreign exchange rate fluctuations increased revenue by
6.0% in the fourth quarter of 2003.
GAAP operating margin during the fourth quarter of 2003 increased significantly
in all segments, resulting in an overall operating margin of 12.5% compared to
1.2% for the fourth quarter of 2002. Fourth quarter 2003 operating margin
excluding intangibles amortization was 14.1% compared to 3.0% for the fourth
quarter of 2002. The fourth quarter of 2002 operating profit included a
restructuring charge of $26.5 million, approximately 6.5% of sales for the
period, related to the integration of Life and Analytical Sciences. Improved
gross margin and lower selling, general and administrative expenses (SG&A) drove
the operating margin expansion in the fourth quarter of 2003 compared to the
same period of 2002. SG&A expenses were down, reflecting the benefits from the
Life and Analytical Sciences integration, and productivity initiatives across
all businesses.
The Company generated operating cash flow of $77.9 million in the fourth quarter
of 2003 and $167.5 million for the full year 2003, an increase of $28.9 million
and $59.8 million, respectively, compared to the fourth quarter and full year
2002. The Company paid down $20 million of its long-term debt during the fourth
quarter of 2003, and reduced long-term debt by $70 million during 2003. Free
cash flow, defined as operating cash flow of $167.5 million less capital
expenditures of $16.6 million, was $150.9 million for the full year 2003. Free
cash flow for 2003 was more than double the free cash flow for 2002 on higher
income and improved working capital efficiency. The 2003 operating cash flow of
$167.5 million included a $16.0 million benefit due to increased sales of
receivables under our accounts receivable securitization program.
"We were pleased to deliver fourth quarter financial results that are
significantly improved from a year ago," said Gregory L. Summe, chairman and CEO
of the Company. "Our priorities for 2003 were to improve our cost structure,
launch a broad array of new products, and deliver strong cash flow. We feel
terrific about our progress in all of these areas, especially the strong cash
flow performance. Our 2003 operating cash flow was more than three times our
GAAP net income," added Summe.
The fourth quarter 2002 GAAP earnings per share from continuing operations were
$.01 on revenue of $409.6 million. The fourth quarter 2002 results included a
restructuring charge of $26.5 million mentioned above, related to the
integration of Life and Analytical Sciences.
Total net income for the fourth quarter of 2003 was $27.9 million, or $.22 per
share, and was comprised of $.21 earnings per share from continuing operations
and $.01 earnings per share from disposition of discontinued operations. The
fourth quarter of 2002 resulted in a net loss of ($2.6) million, or ($.02) per
share, comprised of $.01 earnings per share from continuing operations, a loss
of ($.01) per share from discontinued operations, and a loss of ($.02) per share
on disposition of discontinued operations.
Financial overview by reporting segment:
LIFE AND ANALYTICAL SCIENCES reported revenue of $290.4 million for the fourth
quarter of 2003, up 6% from $273.6 million in the fourth quarter of 2002. Growth
during the quarter was driven by Genetic Screening and Environmental and
Chemical end markets. In addition, our OneSource (TM) service offering
continued to gain momentum and experienced strong market penetration and
customer acceptance. By product category, instruments revenue was up slightly,
with stronger growth in reagents, consumables and service.
The segment's GAAP operating profit for the fourth quarter of 2003 was $41.1
million versus a loss of ($2.8) million for the same period of 2002. As a
percentage of sales, operating profit for the fourth quarter was 14.2% compared
to negative (1.0%) for the fourth quarter of 2002. Included in the segment's
operating profit for the fourth quarter of 2002 was a restructuring charge of
$26.5 million, related to the integration of Life and Analytical Sciences. This
significant increase was achieved through cost reductions driven by the
integration of Life and Analytical Sciences. The operating profit for the fourth
quarter of 2003 and 2002 included intangibles amortization of $6.6 million and
$5.9 million, respectively.
OPTOELECTRONICS reported revenue of $91.0 million for the fourth quarter of
2003, an increase of 4% from revenue of $87.3 million in the fourth quarter of
2002. Growth in digital imaging revenue during the quarter was partially offset
by revenue declines in sensors and lighting compared to the fourth quarter of
2002.
The segment's GAAP operating profit was $11.6 million for the fourth quarter of
2003 versus an operating profit of $7.7 million for the comparable period of
2002. As a percentage of sales, operating profit for the fourth quarters of both
2003 and 2002 was 12.7% and 8.8%, respectively. The operating profit for the
fourth quarter of 2003 and 2002 included intangibles amortization of $.3
million. Higher revenue and lower SG&A expenses year over year were the primary
drivers of the increase in operating profit during the fourth quarter of 2003
compared to the same period of 2002.
FLUID SCIENCES reported revenue of $51.1 million for the fourth quarter of 2003,
up 5% from the same period of 2002. Revenue growth in aerospace was offset by
lower revenue in power generation, with sales to semiconductor end markets
roughly flat compared to the fourth quarter of 2002, as orders during the fourth
quarter suggest that demand in semiconductor end markets appears to be
improving.
The segment's GAAP operating profit for the fourth quarter of 2003 was $6.8
million, versus $4.8 million in the fourth quarter of 2002. As a percentage of
sales, operating profit for the fourth quarter of 2003 and 2002 was 13.3% and
9.8%, respectively. The operating profit for the fourth quarter of 2003 and 2002
included intangibles amortization of $.2 million and $.9 million, respectively.
2004 GUIDANCE
The Company projects 2004 GAAP EPS from continuing operations to be in the range
of $.62 to $.67, including the negative impact of intangibles amortization of
$.15 per share. This would represent an increase of 44% to 56% from the
Company's 2003 GAAP EPS. The Company's 2004 EPS excluding intangibles
amortization is forecasted to be in the range of $.77 to $.82 per share, which
exceeds Thomson First Call (TM) consensus earnings estimate of $.76 per share,
which also excludes intangibles amortization. For the first quarter of 2004, the
Company projects EPS from continuing operations of between $.06 and $.10 per
share on a GAAP basis, including the negative impact of intangibles amortization
of $.04 per share. In Q1 2003, the Company's GAAP earnings per share from
continuing operations were $.03 per share, including the negative impact of
intangibles amortization of $.04 per share.
"Our revenue growth outlook for 2004 continues to be tempered. We expect the
economy to continue in a slow expansion, with slightly higher growth in the
cyclical recoveries of industrial and semiconductor," continued Summe. "However,
we enter 2004 with a better cost position, a stronger balance sheet and improved
operating processes. We believe this positions us to deliver significant
earnings per share growth in 2004, while at the same time funding more growth
initiatives. Our priorities for this year will be focused on improving our
customers' experience, as well as driving productivity, cash flow and new
product innovations."
The Company will discuss its fourth quarter results in a conference call on
Thursday January 29, 2004 at 10:00 a.m. Eastern Time (ET). To listen to the call
live, please tune into the webcast at the "Investor Corner" section of our
website, www.perkinelmer.com. A playback of this conference call will be
available beginning 1:00 p.m. ET, Thursday, January 29, 2004. The playback phone
number is (719) 457-0820 and the code number is 602615.
USE OF NON-GAAP FINANCIAL MEASURES
In addition to financial measures prepared in accordance with generally accepted
accounting principles (GAAP), this press release also contains non-GAAP
financial measures of earnings per share and operating margin, in each case
excluding amortization of acquisition-related intangible assets. We exclude the
amortization of acquisition-related intangibles in calculating these non-GAAP
measures because such amortization is outside of our normal operations. We
believe that the inclusion of these non-GAAP financial measures in this press
release helps investors to gain a meaningful understanding of our core operating
results and future prospects, consistent with how management measures and
forecasts the company's performance, especially when comparing such results to
previous periods or forecasts. PerkinElmer's management uses these non-GAAP
measures, in addition to GAAP financial measures, as the basis for measuring the
company's core operating performance and comparing such performance to that of
prior periods and to the performance of our competitors. Such measures are also
used by management in their financial and operating decision-making.
This press release also contains a non-GAAP measure of free cash flow. We
define free cash flow as our net cash provided by operating activities minus
our capital expenditures. We use free cash flow, and ratios based on this
measure, to conduct and evaluate our business and, specifically, to determine
incentive compensation, to allocate resources to debt repayment and for cash
investing and financing activities. Therefore, we believe that these measures
may be similarly useful and informative to investors.
The non-GAAP financial measures included in this press release are not meant to
be considered superior to or a substitute for results of operations prepared in
accordance with GAAP. In addition, the non-GAAP financial measures included in
this press release may be different from, and therefore may not be comparable
to, similar measures used by other companies. Reconciliations of the non-GAAP
financial measures used in this press release to the most directly comparable
GAAP financial measures are set forth in the text of, and the accompanying
exhibits to this press release.
FACTORS AFFECTING FUTURE PERFORMANCE
This press release contains "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Any statements contained
in this press release that relate to prospective events or developments are
deemed to be forward-looking statements. Words such as "believes,"
"anticipates," "plans," "expects," "projects," "forecasts," "will" and similar
expressions are intended to identify forward-looking statements. There are a
number of important risk factors that could cause actual results or events to
differ materially from those indicated by these forward-looking statements,
including risks related to cyclical downturns affecting several of the
industries into which we sell our products, our failure to introduce new
products in a timely manner, the impact of our debt on our cash flow and
investment opportunities, our ability to comply with financial covenants
contained in our credit agreements and debt instruments, risks related to our
international operations, our ability to adjust our operations to address
unexpected changes, our ability to execute acquisitions and license technologies
and successfully integrate acquired businesses and licensed technologies into
our existing business, the loss of any of our licenses that may require us to
stop selling products or lose competitive advantage, competition, regulatory
changes, our failure to obtain and enforce intellectual property protection, our
defense of third party claims of patent infringement and our ability to realize
the full value of our intangible assets, as well as other factors which we
describe under the caption "Forward-Looking Information and Factors Affecting
Future Performance" in our most recently filed annual report on Form 10-K and in
our most recently filed quarterly report on Form 10-Q. 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.
PerkinElmer, Inc. is a global technology leader focused in the following
businesses - Life and Analytical Sciences, Optoelectronics and Fluid Sciences.
Combining operational excellence and technology expertise with an intimate
understanding of our customers' needs, PerkinElmer provides products and
services in health sciences and other advanced technology markets that require
innovation, precision and reliability. The Company serves customers in more than
125 countries, and is a component of the S&P 500 Index. Additional information
is available through www.perkinelmer.com or 1-877-PKI-NYSE.
# # #
For further information:
Investor Contact:
Dan Sutherby
PerkinElmer, Inc.
(781) 431-4306
PERKINELMER, INC. AND SUBSIDIARIES
INCOME STATEMENTS
THREE MONTHS ENDED YEAR ENDED
----------------------------- --------------------------------
(In thousands except share and per share data) 28-Dec-03 29-Dec-02 28-Dec-03 29-Dec-02
--------- --------- --------- ---------
SALES $ 432,564 $ 409,581 $ 1,535,222 $ 1,504,981
Cost of Sales 247,904 241,083 906,269 904,100
Research and Development Expenses 20,308 21,536 83,145 86,451
Selling, General and Administrative Expenses 104,362 108,320 386,404 431,304
Restructuring (Reversals) Charges, net (545) 26,474 (3,539) 35,698
Gains on Dispositions, net (617) -- (2,674) (5,216)
Amortization of Intangible Assets 7,089 7,057 28,346 28,326
--------- --------- ----------- -----------
OPERATING INCOME FROM CONTINUING OPERATIONS 54,063 5,111 137,271 24,318
Extinguishment of Debt 951 1,598 1,953 353
Loss on Investments, Net 1,141 -- 2,391 1,987
Interest Income (298) (1,026) (2,488) (3,161)
Interest Expense 11,823 9,185 52,586 32,096
Other Expense (Income), Net 976 (3,671) 1,945 1,593
--------- --------- ----------- -----------
Income (Loss) From Continuing Operations
Before Income Taxes 39,470 (975) 80,884 (8,550)
Provision (Benefit) for Income Taxes 12,618 (1,673) 25,871 (4,415)
--------- --------- ----------- -----------
NET INCOME (LOSS) FROM CONTINUING OPERATIONS 26,852 698 55,013 (4,135)
Loss From Discontinued Operations, Net of
Income Tax -- (832) (1,597) (16,543)
Gain (Loss) on Disposition of Discontinued
Operations, Net of Income Tax 1,078 (2,494) (457) (13,460)
--------- --------- ----------- -----------
NET INCOME (LOSS) BEFORE EFFECT OF ACCOUNTING
CHANGE 27,930 (2,628) 52,959 (34,138)
Effect of Accounting Change, Net of Income Tax -- -- -- (117,800)
--------- --------- ----------- -----------
NET INCOME (LOSS) $ 27,930 $ (2,628) $ 52,959 $ (151,938)
========= ========= =========== ===========
Diluted Earnings (Loss) Per Share:
CONTINUING OPERATIONS $ 0.21 $ 0.01 $ 0.43 $ (0.03)
Loss From Discontinued Operations, Net of
Income Tax -- (0.01) (0.01) (0.13)
Gain (Loss) on Disposition of Discontinued
Operations, Net of Income Tax 0.01 (0.02) -- (0.11)
--------- --------- ----------- -----------
NET INCOME (LOSS) BEFORE EFFECT OF ACCOUNTING
CHANGE 0.22 (0.02) 0.41 (0.27)
Effect of Accounting Change, Net of Income Tax -- -- -- (0.94)
--------- --------- ----------- -----------
NET INCOME (LOSS) $ 0.22 $ (0.02) $ 0.41 $ (1.21)
========= ========= =========== ===========
Weighted Average Diluted Shares of Common Stock
Outstanding 128,261 126,269 127,741 125,439
PREPARED IN ACCORDANCE WITH GAAP
ADDITIONAL SUPPLEMENTAL INFORMATION AND RECONCILIATION OF GAAP TO NON-GAAP
MEASURES
(per share, continuing operations)
GAAP Diluted EPS from Continuing Operations $0.21 $0.01 $0.43 $(0.03)
Amortization of Intangible Assets, Net of
Income Tax 0.03 0.03 0.15 0.15
----- ----- ----- -----
EPS excluding Amortization of Intangible Assets $0.24 $0.03 $0.58 $0.12
===== ===== ===== =====
Thomson First Call(TM) EPS $0.22 $0.55
===== =====
PerkinElmer, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
THREE MONTHS ENDED YEAR ENDED
---------------------------- ----------------------------
DECEMBER 28, DECEMBER 29, DECEMBER 28, DECEMBER 29,
2003 2002 2003 2002
---------- ---------- ---------- ----------
(IN THOUSANDS)
OPERATING ACTIVITIES:
Net income (loss) $ 27,930 $ (2,628) $ 52,959 $ (151,938)
Add loss from discontinued operations, net of income taxes -- 832 1,597 16,543
Add net (gain) loss on disposition of discontinued operations (1,078) 2,494 457 13,460
Less effect of accounting change, net of income taxes -- -- -- 117,800
---------- ---------- ---------- ----------
Net income (loss) from continuing operations 26,852 698 55,013 (4,135)
---------- ---------- ---------- ----------
Adjustments to reconcile net income (loss) from continuing
operations to net cash provided by continuing operations:
Restructuring (reversals) charges, net of expense (545) 26,474 (3,539) 35,698
Stock based compensation 2,939 2,182 8,880 8,813
Amortization of debt discount and issuance costs 1,386 2,367 9,631 19,531
Depreciation and amortization 22,136 20,731 80,150 76,580
Losses (Gains) on dispositions and sales of investments, net 524 2,106 (283) (3,229)
Changes in operating assets and liabilities:
Accounts receivable (13,293) (3,544) 43,359 35,278
Inventories 13,783 17,905 28,163 48,231
Accounts payable 9,522 3,286 725 13,846
Accrued restructuring costs (5,383) (1,250) (21,675) (30,106)
Accrued expenses and other 16,757 (21,710) (40,011) (86,058)
---------- ---------- ---------- ----------
NET CASH PROVIDED BY CONTINUING OPERATIONS 74,678 49,245 160,413 114,449
---------- ---------- ---------- ----------
Net Cash Provided by (Used in) Discontinued Operations 3,225 (250) 7,062 (6,745)
---------- ---------- ---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 77,903 48,995 167,475 107,704
---------- ---------- ---------- ----------
INVESTING ACTIVITIES:
Cash held in escrow -- (186,483) 187,477 (186,483)
Settlement of Freemont lease obligation -- (30,000) -- (30,000)
Capital expenditures (5,394) (6,068) (16,588) (37,819)
Proceeds from disposition of businesses, PP&E, net 2,068 1,440 5,363 29,782
Settlement of the disposition of business, net (113) (1,300) (959) 96,194
Proceeds (cost) related to acquisitions, net of cash acquired -- 16,697 534 (22,511)
---------- ---------- ---------- ----------
NET CASH (USED IN) PROVIDED BY CONTINUING OPERATIONS (3,439) (205,714) 175,827 (150,837)
---------- ---------- ---------- ----------
Net Cash Provided by (Used in) Discontinued Operations -- -- 1,400 (5,200)
---------- ---------- ---------- ----------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (3,439) (205,714) 177,227 (156,037)
---------- ---------- ---------- ----------
FINANCING ACTIVITIES:
Payment of debt issuance costs (2,660) (15,841) (4,385) (15,841)
Prepayment of short-term debt -- -- -- (123,683)
Prepayment of 2005 Notes -- (110,288) -- (110,288)
Prepayment of Zero Coupon Convertible Notes -- (219,882) (189,901) (304,322)
Proceeds from sale of Senior Subordinated Notes -- 297,500 -- 297,500
Prepayment of term loan debt (20,000) -- (70,000) --
Term Loan Proceeds -- 315,000 -- 315,000
Decrease in other credit facilities (536) (70,742) (2,273) (5,540)
Purchases of common stock -- (4,289) -- (5,925)
Proceeds from issuance of common stock for employee benefit plans 1,262 2,797 3,617 12,851
Cash Dividends (8,878) (8,843) (35,409) (35,279)
---------- ---------- ---------- ----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (30,812) 185,412 (298,351) 24,473
---------- ---------- ---------- ----------
Effect of Exchange Rate Changes on Cash and Cash Equivalents 6,531 4,373 14,533 16,225
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 50,183 33,066 60,884 (7,635)
Cash and Cash Equivalents at Beginning of Period 141,316 97,549 130,615 138,250
---------- ---------- ---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 191,499 $ 130,615 $ 191,499 $ 130,615
========== ========== ========== ==========
PREPARED IN ACCORDANCE WITH GAAP
PERKINELMER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 28, 2003 DECEMBER 29, 2002
----------------- -----------------
(In thousands)
Current assets:
Cash and cash equivalents $ 191,499 $ 130,615
Restricted cash (note 1) -- 186,483
Accounts receivable 288,556 304,647
Inventories 190,946 205,455
Other current assets 138,791 152,137
Current assets of discontinued operations -- 8,677
----------- -----------
Total current assets 809,792 988,014
Property, plant and equipment:
At cost 623,164 590,696
Accumulated depreciation (355,008) (294,026)
----------- -----------
Net property, plant and equipment 268,156 296,670
Investments 10,874 14,298
Intangible assets 424,811 453,091
Goodwill, net 1,034,911 989,527
Other assets 99,264 80,122
Long-term assets of discontinued operations -- 3,760
----------- -----------
Total assets $ 2,647,808 $ 2,825,482
=========== ===========
Current liabilities:
Short-term debt $ 5,167 $ 5,008
Convertible debt (note 1) -- 186,483
Accounts payable 154,661 146,290
Accrued restructuring costs 8,055 33,397
Accrued expenses 279,281 312,894
----------- -----------
Total current liabilities 447,739 683,949
Long-term debt 544,307 614,053
Long-term liabilities 307,287 275,013
----------- -----------
Total liabilities 1,298,758 1,573,138
Commitments and contingencies
Total stockholders' equity 1,349,050 1,252,344
----------- -----------
Total liabilities and stockholders' equity $ 2,647,808 $ 2,825,482
=========== ===========
Note 1: Convertible debt was called and was repaid with restricted cash on
August 7, 2003.
PREPARED IN ACCORDANCE WITH GAAP
PERKINELMER, INC. AND SUBSIDIARIES
SALES AND OPERATING PROFIT (LOSS)
THREE MONTHS ENDED YEAR ENDED
---------------------------- ----------------------------
(In thousands) DECEMBER DECEMBER DECEMBER DECEMBER
28, 2003 29, 2002 28, 2003 29, 2002
----------- ----------- ----------- -----------
LIFE AND ANALYTICAL SCIENCES Sales $ 290,394 $ 273,638 $ 1,003,711 991,712
OP$ reported 41,134 (2,833) 94,745 27,431
OP% reported 14.2% -1.0% 9.4% 2.8%
Amortization expense 6,557 5,850 26,018 25,489
OP$ excl. amortization 47,691 3,017 120,763 52,920
OP% excl. amortization 16.4% 1.1% 12.0% 5.3%
OPTOELECTRONICS Sales 91,034 87,312 351,841 323,784
OP$ reported 11,554 7,656 42,208 (3,998)
OP% reported 12.7% 8.8% 12.0% -1.2%
Amortization expense 312 312 1,248 1,342
OP$ excl. amortization 11,866 7,968 43,456 (2,656)
OP% excl. amortization 13.0% 9.1% 12.4% -0.8%
FLUID SCIENCES Sales 51,136 48,631 179,670 189,485
OP$ reported 6,796 4,761 17,922 17,476
OP% reported 13.3% 9.8% 10.0% 9.2%
Amortization expense 220 895 1,080 1,495
OP$ excl. amortization 7,016 5,656 19,002 18,971
OP% excl. amortization 13.7% 11.6% 10.6% 10.0%
OTHER OP$ reported (5,421) (4,473) (17,604) (16,591)
CONTINUING OPERATIONS Sales $ 432,564 $ 409,581 $ 1,535,222 $ 1,504,981
=========== =========== =========== ===========
OP$ reported $ 54,063 $ 5,111 $ 137,271 $ 24,318
=========== =========== =========== ===========
OP% reported 12.5% 1.2% 8.9% 1.6%
Amortization expense $ 7,089 $ 7,057 $ 28,346 $ 28,326
=========== =========== =========== ===========
OP$ excl. amortization $ 61,152 $ 12,168 $ 165,617 $ 52,644
=========== =========== =========== ===========
OP% excl. amortization 14.1% 3.0% 10.8% 3.5%
SALES AND REPORTING OPERATING PROFIT PREPARED IN ACCORDANCE WITH GAAP