Exhibit 99.1
PerkinElmer Announces Q3 2006 Results
-- Revenue Growth of 7%; Health Sciences up 9%
-- EPS from Continuing Operations of $.23; Cash EPS of $.30, up
25%
-- Cash Flow from Continuing Operations up 42%
BOSTON--(BUSINESS WIRE)--Oct. 26, 2006--PerkinElmer, Inc. (NYSE:
PKI), a global leader in Health Sciences and Photonics markets, today
reported GAAP earnings per share from continuing operations of $.23 on
revenue of $386.9 million for the third quarter ended October 1, 2006.
The third quarter 2006 results include intangibles amortization of
$9.1 million, or approximately $.05 per share, and stock option
expense of $3.1 million, or $.02 per share. The Company announced
earnings per share from continuing operations excluding intangibles
amortization and stock option expense, or Cash EPS, of $.30, which
represents an increase of 25% over the third quarter of 2005 and
exceeded the Company's forecasted range of $.27 to $.29.
Third quarter 2006 revenue of $386.9 million increased 7% over the
third quarter of 2005. Revenue growth was 9% in Life and Analytical
Sciences and 2% in Optoelectronics compared to the same period last
year. From an end market perspective, third quarter 2006 revenue from
Health Sciences, which represented 83% of total revenues for the
quarter, increased 9% over the same period of 2005. This increase was
driven primarily by strong growth in genetic screening, medical
imaging and service. Foreign exchange and acquisitions contributed 3%
to third quarter 2006 revenue.
"We were pleased to deliver a strong quarter of revenue and
earnings growth driven by excellent performance in our key growth
platforms," said Gregory L. Summe, Chairman and CEO of the Company.
"We believe our ongoing investments in these platforms, both through
acquisitions and internal spending, will continue to drive long-term
growth. This quarter, for example, we introduced our new Clarus(R) gas
chromatography line, which offers the world's fastest
injection-to-injection time. We also completed the acquisition of NTD
Laboratories, a market leader in first trimester prenatal risk
assessment."
GAAP operating profit during the third quarter of 2006 was $36.5
million. Third quarter 2006 operating profit excluding intangibles
amortization of $9.1 million and stock option expense of $3.1 million
was $48.7 million, or 12.6% as a percentage of revenue for the
quarter.
The Company generated cash flow from continuing operations of
$26.0 million in the third quarter of 2006, up 42% over the same
period last year.
Financial Overview by Reporting Segment
Life and Analytical Sciences reported revenue of $283.5 million
for the third quarter of 2006, up 9% from revenue of $259.1 million in
the third quarter of 2005, driven primarily by growth in the Company's
genetic screening and service businesses, as well as sales traction
from a range of new products.
The segment's GAAP operating profit for the third quarter of 2006
was $25.3 million. Operating profit excluding intangibles amortization
and stock option expense for the third quarter of 2006 was $34.7
million, or 12.2% as a percentage of revenue.
Optoelectronics reported revenue of $103.4 million for the third
quarter of 2006, up 2% from revenue of $100.9 million in the third
quarter of 2005, driven primarily by revenue growth in imaging
partially offset by a decline in specialty lighting revenue.
The segment's GAAP operating profit was $20.1 million for the
third quarter of 2006. The segment's operating profit excluding
intangibles amortization and stock option expense for the third
quarter of 2006 was $21.2 million, or 20.5% as a percentage of
revenue.
Financial Guidance
For the fourth quarter of 2006, the Company projects GAAP earnings
per share from continuing operations of between $.32 and $.34. The
Company projects Cash EPS of between $.38 and $.40 for the fourth
quarter of 2006.
The Company will discuss its third quarter results in a conference
call on October 26, 2006, at 5:30 p.m. Eastern Time (ET). To listen to
the call live, please tune in to the webcast at the "Investor Corner"
section of our website, www.perkinelmer.com. A playback of this
conference call will be available beginning at 7:30 p.m. ET, Thursday,
October 26, 2006. The playback phone number is 617-801-6888 and the
code number is 12230024.
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 of revenue,
revenue growth, operating profit, operating margin and earnings per
share, in each case excluding, where appropriate, the impact of
foreign exchange, the effects of acquisitions, intangibles
amortization, stock option expense and tax benefits.
-- When we refer in this earnings announcement to "revenue
growth," other than on a GAAP basis, we are excluding the
effects of foreign exchange and acquisitions on GAAP revenue.
-- When we refer in this earnings announcement to "operating
profit," other than on a GAAP basis, we are excluding the
amortization of intangibles, stock option expense and
restructuring charges or reversals from GAAP operating margin.
-- When we refer in this earnings announcement to "operating
margin," other than on a GAAP basis, we are excluding the
amortization of intangibles, stock option expense and
restructuring charges or reversals from GAAP operating margin.
-- When we refer to "Cash EPS" or "earnings per share from
continuing operations," other than on a GAAP basis, we are
excluding the amortization of intangibles and stock option
expense from GAAP earnings per share from continued
operations.
We exclude the impact of foreign exchange, the effects of
acquisitions, intangibles amortization and stock option expense in
calculating these non-GAAP measures because such items are outside of
our ongoing core business operations.
We believe that the inclusion of these non-GAAP financial measures
in this earnings announcement helps investors to gain a meaningful
understanding of our core operating results and future prospects, and
can also help investors who wish to make comparisons between us and
other companies on both a GAAP and a non-GAAP basis, particularly with
respect to stock option expenses. Our management uses both GAAP
financial measures and non-GAAP financial measures to measure and
forecast our core operating performance and to compare that
performance to prior periods and to the performance of our
competitors. Both GAAP and non-GAAP measures are also used by
management in their financial and operating decision making.
The non-GAAP financial measures included in this earnings
announcement 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
earnings announcement may be different from, and therefore may not be
comparable to, similar measures used by other companies. Although
certain non-GAAP financial measures used in this release exclude the
accounting treatment of stock option expense, these non-GAAP measures
should not be relied upon independently, as they ignore the
contribution to our operating results that is generated by the
incentive and compensation effects of the underlying stock option
programs. Reconciliations of the non-GAAP financial measures used in
this earnings announcement to the most directly comparable GAAP
financial measures are set forth in the text of, and the accompanying
exhibits to, this earnings announcement.
Factors Affecting Future Performance
This earnings announcement 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 and revenue growth and
other financial results, developments relating to our customers and
end-markets, and plans concerning business development opportunities.
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) our failure to introduce new products in a timely manner; (2) 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; (3) our failure
to protect adequately our intellectual property; (4) the loss of any
of our licenses or licensed rights; (5) our ability to compete
effectively; (6) fluctuation in our quarterly operating results and
our ability to adjust our operations to address unexpected changes;
(7) our ability to produce an adequate quantity of products to meet
our customers' demands; (8) our failure to maintain compliance with
applicable government regulations; (9) regulatory changes; (10)
economic, political and other risks associated with foreign
operations; (11) our ability to retain key personnel; (12)
restrictions in our credit agreement; (13) our ability to realize the
full value of our intangible assets; and (14) other factors which we
describe under the caption "Risk Factors" in our most recent annual
report on Form 10-K and 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 earnings announcement.
Other Information
Health Sciences end markets include genetic screening,
environmental, service, biopharma, and medical imaging. Photonics
markets include sensors and specialty lighting.
PerkinElmer, Inc. is a global technology leader driving growth and
innovation in Health Sciences and Photonics markets to improve the
quality of life. The Company reported revenues of $1.5 billion in
2005, has 8,000 employees serving 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.
PerkinElmer, Inc. and Subsidiaries
INCOME STATEMENTS
Three Months Ended Nine Months Ended
------------------- -----------------------
(In thousands, except per
share data) 1-Oct-06 2-Oct-05 1-Oct-06 2-Oct-05
- -------------------------- --------- --------- ----------- -----------
Sales $386,917 $359,982 $1,119,372 $1,086,173
Cost of Sales 230,976 209,700 670,155 636,479
Research and Development
Expenses 24,762 21,676 72,640 66,349
In-Process Research and
Development Charge - - - 194
Selling, General and
Administrative Expenses 94,664 87,900 277,172 277,437
Gains on Dispositions - (461) (1,505) (64)
Restructuring and
Integration (Reversals)
Charges, Net - - (290) 14,245
-------- -------- ----------- -----------
Operating Income From
Continuing Operations 36,515 41,167 101,200 91,533
Extinguishment of Debt - - - 6,210
Interest Income (1,919) (489) (7,654) (1,778)
Interest Expense 2,152 6,886 6,689 22,462
Gains on Dispositions of
Investments, Net (980) (400) (1,913) (5,844)
Other Expense, Net 524 51 4,296 502
-------- -------- ----------- -----------
Income From Continuing
Operations Before Income
Taxes 36,738 35,119 99,782 69,981
Provision for (Benefit
from) Income Taxes 7,823 8,650 22,527 (2,652)
-------- -------- ----------- -----------
Net Income From
Continuing Operations 28,915 26,469 77,255 72,633
Income (Loss) From
Discontinued Operations,
Net of Income Taxes - 5,176 (1,025) 12,464
Gain (Loss) on
Disposition of
Discontinued Operations,
Net of Income Taxes 838 188 1,625 (4,537)
-------- -------- ----------- -----------
Net Income $ 29,753 $ 31,833 $ 77,855 $ 80,560
======== ======== =========== ===========
Diluted Earnings (Loss)
Per Share:
Continuing Operations $ 0.23 $ 0.20 $ 0.61 $ 0.55
Income (Loss) From
Discontinued Operations,
Net of Income Taxes - 0.04 (0.01) 0.10
Gain (Loss) on
Disposition of
Discontinued Operations,
Net of Income Taxes 0.01 - 0.01 (0.03)
-------- -------- ----------- -----------
Net Income $ 0.24 $ 0.24 $ 0.61 $ 0.62
======== ======== =========== ===========
Weighted Average Diluted
Shares of Common Stock
Outstanding 125,171 131,291 127,429 131,021
ABOVE PREPARED IN ACCORDANCE WITH GAAP
Additional Supplemental
Information:
(per share, continuing
operations)
GAAP Diluted EPS from
Continuing Operations $ 0.23 0.20
Amortization of Intangible
Assets, Net of Income
Taxes 0.05 0.04
Stock Options, Net of Tax 0.02 -
-------- --------
Continuing Operations EPS
excluding above items $ 0.30 $ 0.24
======== ========
PerkinElmer, Inc. and Subsidiaries
SALES AND OPERATING PROFIT (LOSS)
Three Months Ended Nine Months Ended
--------------------- ---------------------
October 1, October 2, October 1, October 2,
(In thousands) 2006 2005 2006 2005
- -------------------------- ---------- ---------- ---------- ----------
Life and
Analytical
Sciences Sales $ 283,527 $ 259,083 $ 823,918 $ 794,634
OP$ reported 25,334 26,717 74,429 64,342
OP% reported 8.9% 10.3% 9.0% 8.1%
Amortization
expense 8,410 6,529 22,302 19,643
Stock option
expense 968 - 2,325 -
Restructuring
charges - - 1,109 11,035
OP$ adjusted 34,712 33,246 100,165 95,020
OP% adjusted 12.2% 12.8% 12.2% 12.0%
Opto-
electronics Sales 103,390 100,899 295,454 291,539
OP$ reported 20,097 20,782 50,209 47,156
OP% reported 19.4% 20.6% 17.0% 16.2%
Amortization
expense(a) 641 618 1,900 1,967
Stock option
expense 416 - 1,103 -
Restructuring
charges - - (1,399) 3,210
OP$ adjusted 21,154 21,400 51,813 52,333
OP% adjusted 20.5% 21.2% 17.5% 18.0%
Other OP$ reported (8,916) (6,332) (23,438) (19,965)
Stock option
expense 1,701 - 3,400 -
OP$ adjusted (7,215) (6,332) (20,038) (19,965)
Continuing
Operations Sales $ 386,917 $ 359,982 $1,119,372 $1,086,173
OP$ reported 36,515 41,167 101,200 91,533
OP% reported 9.4% 11.4% 9.0% 8.4%
Amortization
expense(a) 9,051 7,147 24,202 21,610
Stock option
expense 3,085 - 6,828 -
Restructuring
charges - - (290) 14,245
---------- ---------- ---------- ----------
OP$ adjusted $ 48,651 $ 48,314 $ 131,940 $ 127,388
========== ========== ========== ==========
OP% adjusted 12.6% 13.4% 11.8% 11.7%
(a) Includes In-Process Research and Development Charge in the amount
of $194 in Q1 2005.
SALES AND REPORTED OPERATING PROFIT PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
October 1, July 2, January 1, October 2,
2006 2006 2006 2005
----------- ----------- ----------- -----------
(In thousands)
Current assets:
Cash and cash
equivalents $207,074 $323,755 $502,264 $166,057
Accounts receivable,
net 253,189 233,449 250,844 245,855
Inventories 182,124 173,658 163,150 166,172
Other current assets 72,745 76,707 71,189 71,773
Current assets of
discontinued
operations 1,090 854 11,442 59,443
----------- ----------- ----------- -----------
Total current assets 716,222 808,423 998,889 709,300
Property, plant and
equipment:
At cost 517,611 507,642 484,453 486,093
Accumulated
depreciation (336,026) (327,931) (307,084) (306,025)
----------- ----------- ----------- -----------
Net property, plant and
equipment 181,585 179,711 177,369 180,068
Marketable securities
and investments 7,531 9,674 9,222 9,268
Intangible assets, net 410,417 383,406 375,419 378,767
Goodwill 1,103,352 1,066,542 1,026,201 1,027,872
Other assets 80,028 86,351 90,156 99,607
Long-term assets of
discontinued
operations 1,654 1,455 16,205 88,819
----------- ----------- ----------- -----------
Total assets $2,500,789 $2,535,562 $2,693,461 $2,493,701
=========== =========== =========== ===========
Current liabilities:
Short-term debt $1,142 $1,090 $1,131 $5,850
Accounts payable 142,644 130,014 146,971 127,158
Accrued restructuring
and integration costs 8,607 9,797 11,242 10,754
Accrued expenses 278,969 276,135 324,954 250,349
Current liabilities of
discontinued
operations 909 998 10,241 49,932
----------- ----------- ----------- -----------
Total current
liabilities 432,271 418,034 494,539 444,043
Long-term debt 201,133 199,187 243,282 268,390
Long-term liabilities 310,738 317,364 303,687 283,043
Long-term liabilities
of discontinued
operations - - 1,440 12,120
----------- ----------- ----------- -----------
Total liabilities 944,142 934,585 1,042,948 1,007,596
Commitments and
contingencies
Total stockholders'
equity 1,556,647 1,600,977 1,650,513 1,486,105
----------- ----------- ----------- -----------
Total liabilities and
stockholders' equity $2,500,789 $2,535,562 $2,693,461 $2,493,701
=========== =========== =========== ===========
PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended Nine Months Ended
--------------------- ---------------------
October 1, October 2, October 1, October 2,
2006 2005 2006 2005
---------- ---------- ---------- ----------
(In thousands)
Operating Activities:
Net income $ 29,753 $ 31,833 $ 77,855 $ 80,560
(Income) loss from
discontinued operations,
net of income taxes - (5,176) 1,025 (12,464)
(Gain) loss on
disposition of
discontinued operations,
net of income taxes (838) (188) (1,625) 4,537
---------- ---------- ---------- ----------
Net income from
continuing operations 28,915 26,469 77,255 72,633
---------- ---------- ---------- ----------
Adjustments to reconcile
net income from continuing
operations to net cash
provided by continuing
operations:
Stock-based
compensation 3,924 570 10,629 5,627
Non-cash restructuring
actions - - (290) 14,245
Amortization of debt
discount and issuance
costs 74 660 218 8,506
Depreciation and
amortization 17,531 16,839 50,937 51,117
In-process research and
development - - - 194
Resolution of prior
year tax contingencies - - - (27,772)
Gains on dispositions,
net - (461) (1,505) (64)
Gains on sales of
investments, net (980) (400) (1,913) (5,844)
Changes in operating assets
and liabilities:
Accounts receivable (14,870) (6,883) 12,972 (2,658)
Inventories (6,745) 109 (13,264) (2,186)
Accounts payable 11,284 2,631 (9,976) 2,810
Taxes paid on
divestitures (846) - (59,996) -
Accrued expenses and
other (12,290) (21,197) (21,852) (6,741)
---------- ---------- ---------- ----------
Net Cash Provided by
Continuing Operations 25,997 18,337 43,215 109,867
---------- ---------- ---------- ----------
Net Cash Provided by (Used
in) Discontinued
Operations 691 4,896 (862) 13,651
---------- ---------- ---------- ----------
Net Cash Provided by
Operating Activities 26,688 23,233 42,353 123,518
---------- ---------- ---------- ----------
Investing Activities:
Capital expenditures (9,551) (6,641) (30,999) (16,199)
Proceeds from disposition
of property, plant and
equipment, net - 3,135 7,085 9,393
Proceeds from settlement
of life insurance
policies 1,426 - 3,753 -
Proceeds from disposition
or settlement of
investments, net 5,324 400 23,243 6,956
Cash used related to
acquisitions, net of
cash acquired (60,946) (1,750) (97,576) (14,888)
---------- ---------- ---------- ----------
Net Cash Used in Continuing
Operations (63,747) (4,856) (94,494) (14,738)
---------- ---------- ---------- ----------
Net Cash Provided by (Used
in) Discontinued
Operations 467 (7,556) 467 (9,547)
---------- ---------- ---------- ----------
Net Cash Used in Investing
Activities (63,280) (12,412) (94,027) (24,285)
---------- ---------- ---------- ----------
Financing Activities:
Principal payments on
debt - - (56,565) -
Prepayment of debt - - - (100,000)
Premium on prepayment of
senior subordinated debt - - - (4,125)
Payment of debt issuance
and tender costs - - (741) -
Tax benefit from exercise
of common stock options 367 - 3,998 -
Decrease in other credit
facilities (22) (27) (812) (875)
Proceeds from issuance of
common stock for
employee benefit plans 240 5,294 17,385 9,270
Purchase of stock (73,727) - (190,121) -
Cash dividends (8,876) (9,100) (26,851) (27,210)
---------- ---------- ---------- ----------
Net Cash Used in Continuing
Operations (82,018) (3,833) (253,707) (122,940)
---------- ---------- ---------- ----------
Net Cash Used in
Discontinued Operations - (78) - (155)
---------- ---------- ---------- ----------
Net Cash Used in Financing
Activities (82,018) (3,911) (253,707) (123,095)
---------- ---------- ---------- ----------
Effect of Exchange Rate
Changes on Cash and Cash
Equivalents 1,929 414 10,191 (7,594)
---------- ---------- ---------- ----------
Net (Decrease) Increase in
Cash and Cash Equivalents (116,681) 7,324 (295,190) (31,456)
Cash and Cash Equivalents
at Beginning of Period 323,755 158,733 502,264 197,513
---------- ---------- ---------- ----------
Cash and Cash Equivalents
at End of Period $ 207,074 $ 166,057 $ 207,074 $ 166,057
========== ========== ========== ==========
PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
PKI LAS Opto
Adjusted Operating Profit: Q306 Q305 Q306 Q305 Q306 Q305
GAAP Operating Profit $36.5 $41.2 $25.3 $26.7 $20.1 $20.8
Intangibles Amortization 9.1 7.1 8.4 6.5 0.6 0.6
Stock Option Expense 3.1 - 1.0 - 0.4 -
------------ ------------- --------------
Adjusted Operating Profit: $48.7 $48.3 $34.7 $33.2 $21.2 $21.4
============ ============= ==============
PKI LAS Opto
Adjusted OP Margin: Q306 Q305 Q306 Q305 Q306 Q305
GAAP Operating Margin 9.4% 11.4% 8.9% 10.3% 19.4% 20.6%
Intangibles Amortization 2.3% 2.0% 3.0% 2.5% 0.6% 0.6%
Stock Option Expense 0.8% 0.0% 0.3% 0.0% 0.4% 0.0%
------------ ------------- --------------
Adjusted Operating Margin 12.6% 13.4% 12.2% 12.8% 20.5% 21.2%
============ ============= ==============
PKI PKI
Cash EPS: Q306 Q305 Q4 06
GAAP EPS $0.24 $0.24 $0.32 - $0.34
Discontinued Operations 0.01 0.04 -
--------------------- --------------
GAAP EPS from Continuing
Operations 0.23 0.20 $0.32 - $0.34
Intangibles Amortization 0.05 0.04 0.05
Stock Option Expense 0.02 - 0.01
--------------------- --------------
Cash EPS $0.30 $0.24 $0.38 - $0.40
===================== ==============
Q3 2006
Adjusted Revenue Growth: LAS Opto PKI
Reported Revenue Growth 9% 2% 7%
Foreign Exchange 2% 1% 2%
Acquisitions 2% 0% 2%
---------------------
Adjusted Revenue Growth 5% 1% 4%
=====================
CONTACT: Investor Relations:
PerkinElmer, Inc.
Steven Delahunt, 781-431-4258
or
Media Contact:
PerkinElmer, Inc.
Kevin Lorenc, 781-431-4231