(Source: Business Wire)
Life Technologies Corporation (NASDAQ:LIFE) today announced results for
its third quarter ended September 30, 2009. Non-GAAP revenue for the
third quarter was $805 million, an increase of 3 percent over third
quarter revenue of $784 million in 2008, as if Invitrogen and Applied
Biosystems had been combined. Excluding the impact of currency and the
divested LIMS business unit, organic revenue grew 5 percent over the
same period in the previous year.
"I am very pleased that we've again delivered such strong results," said
Greg Lucier, Chairman and Chief Executive Officer of Life Technologies.
"We saw good demand for our products and services around the globe, and
began to receive the initial purchases emanating from the American
Recovery and Reinvestment Act. The company also achieved its integration
goals for the quarter, the most notable accomplishment being the
completion of the portfolio review which resulted in the sale of our
mass spectrometry joint venture to Danaher Corporation."
Third quarter GAAP diluted earnings per share was $0.22, which includes
$0.29 per share of acquisition related intangible amortization expense,
$0.04 per share of non-cash interest expense associated with the
adoption of FSP APB14-1, and $0.15 per share of business integration
costs and other items. In addition, GAAP earnings per share includes
$0.03 per share of accelerated amortization of debt issuance cost
resulting from the early payment of debt incurred as a result of the
Applied Biosystems merger. On a non-GAAP basis, which excludes these
items, diluted earning per share was $0.73.
Analysis of Third Quarter 2009 Results
Third quarternon-GAAP 2009 revenue increased3percent over the
previous year. Revenue growth without the impact from currency and the
divested LIMS business was 5 percent, which was a result of strong
growth in Europe, Asia Pacific, Japan and the majority of product
areas. Revenue from foreign currency exchange had a negative 2 point
effect on reported revenue growth.
Gross margin in the third quarter on a non-GAAP basiswas 67.0
percent, an improvement of 20 basis points over the prior year
quarter. Positive price realization across the portfolio, lower
royalty expense and reduced costs as a result of merger synergies all
contributed to the gross margin improvements offset partially by the
negative impact of currency and lower royalty revenues.
Non-GAAP operating margin was 27.3 percent in the third quarter,
representing an increase of approximately 290 basis points over the
same period in 2008. The increase in operating margin was a result of
improved gross margins, as well as lower operating expenses due to
synergy realization and other targeted cost reductions.
Third quarter non-GAAP tax rate was29.1 percent.
Diluted weighted shares outstandingwere183.4 million in the third
quarter.
Cash flow from operating activities for the third quarter was $200
million. Third quarter capital expenditures were $36 million and
resulting free cash flow was $164 million. The company ended the
quarter with $580 million in cash & short-term investments, including
$52 million held as restricted cash.
Business Highlights:
Molecular Biology Systems division revenue was $394 million in the
third quarter, an increase of approximately 5 percent over the same
period last year. Excluding the impact from currency, organic revenue
growth was 8 percent. This growth was a result of broad demand across
the portfolio, including continued strong orders for the company's
Influenza A (H1N1) related products.
Genetic Systems division revenue was $216 million in the third
quarter, an increase of 5 percent over the same period last year.
Excluding the impact from currency and the divested LIMS business,
organic revenue growth was 7 percent. This increase was a result of
double-digit growth for consumable kits and capillary electrophoresis
instruments sold into applied markets like forensics, continued growth
of next generation sequencing systems, as well as low single-digit
growth in capillary electrophoresis sold into the life science
research market.
Cell Systems division revenue was $189 million in the third quarter, a
decrease of 3 percent over the same period last year. Excluding the
impact from currency, organic revenue was flat year over year.
Expected declines in media sold to pharmaceutical and biotechnology
customers were offset by significant growth in other product areas
such as stem cell related products and cellular analysis solutions.
The Mass Spectrometry division, the company's joint venture with MDS
Analytical Technologies, contributed $6 million in other income. This
income was a result of $111 million in revenue, an increase of 2
percent over prior year. Excluding the impact from currency, organic
growth was 3 percent. As announced on September 2nd, a
definitive agreement has been signed to sell the company's ownership
stake in the division to Danaher Corporation. The transaction is
expected to close in the fourth quarter and is subject to customary
closing conditions
Regional organic growth rates, excluding the impact from the company's
mass spectrometry joint venture, were as follows compared to the same
quarter of the prior year: the America's increased 1 percent, Europe
increased 8 percent, Asia Pacific increased 21 percent, and Japan
increased 7 percent.
Third quarter company and technology highlights include:
Continued expansion of the leading line of TaqMan® assays with the
introduction of a new line of real-time PCR assays that enable
researchers to rapidly detect and quantify proteins in human cell
samples.
The launch of a new genomic analysis tool, the MeltDoctorTM
High-Resolution Melt (HRM) Reagents, which will help researchers
in studies that associate genetic variation with specific
diseases, and adds another industry leading technology to Life
Technologies' advanced genomics portfolio of products.
Launch of a new biomarker tool for use in pre-clinical research,
which is indicative of the company's increasing focus on
advancements in the diagnostics market. The PlexMark 3 Renal
Biomarker Panel Assay is a non-invasive and cost-effective
research tool for performing kidney function post-transplantation
studies rapidly and easily.
Furthering the company's goal to advance education in science, the
Life Technologies Foundation awarded $1.7 million in new grants
for projects that include the creation of an online biology
textbook, and building a museum exhibit about the human cell.
Fiscal Year 2009 Outlook
Subject to the risk factors detailed in the Safe Harbor Statement
section of this release, the company increased its expectations for
fiscal year 2009 financial performance. Organic revenue in the fourth
quarter of 2009 is expected to increase in the high single digits,
including a modest impact from ARRA stimulus funds. The revised full
year non-GAAP earnings per share are now expected to be in the range of
$2.90 to $2.95. The company will provide further detail on its business
outlook during the conference call today.
Use of Pro-forma statements for comparison purposes
Posted on the Company's investor relations Web site is a quarterly
pro-forma 2008 Income Statement, down to operating income, for the
combined companies of Invitrogen and Applied Biosystems. Also provided
is quarterly revenue detail for each of Life Technologies' technology
divisions. These pro-forma income statements are meant for reference
only and represent what the company profitability would have been if
Invitrogen and Applied Biosystems had been combined during those years.
Interested parties may access this document at www.lifetechnologies.com
/ corporate/investor relations/financial reports/GAAP Reconciliations.
In addition, incorporated in this press release is a table comparing the
current quarter results to the same quarter from the previous year using
the pro-forma data provided in the table titled Life Technologies
Corporate Condensed Non-GAAP and Reconciliation of Non-GAAP Adjustments.
All comparisons of financial results from revenue to operating income
will use the provided pro-forma statements.
Conference Call and Webcast Details
The company will discuss its financial and business results as well as
its business outlook on its conference call at8:30 a.m. EDT today. This
conference call will contain forward-looking information. The conference
call will include a discussion of "non-GAAP financial measures" as that
term is defined in Regulation G. For actual results, the most directly
comparable GAAP financial measures and information reconciling these
non-GAAP financial measures to the company's financial results
determined in accordance with GAAP, as well as other material financial
and statistical information to be discussed on the conference call will
be posted at the company's Investor Relations Web site at www.lifetechnologies.com.
The Webcast can be accessed through the investor relations page of the
Life Technologies' Web site at www.lifetechnologies.com.
Alternatively, callers may listen to the live conference call by dialing
866.543.6408 (domestic) or 617.213.8899 (international) and use passcode
86799224. A replay of the Webcast will be available on the Company's Web
site through Tuesday, November 17, 2009.
The company will also hold a post-earnings Q&A call for analysts and
investors on the same day at 11:00 a.m. EDT. The Webcast can be accessed
through the investor relations page of the Life Technologies' Web site
at www.lifetechnologies.com.
Alternatively, callers may listen to the live conference call by dialing
866.825.1709(domestic) or 617.213.8060(international) and use passcode
10585706. A replay of the Webcast will be available on the Company's Web
site through Tuesday, November 17, 2009.
About Life Technologies
Life Technologies Corporation (NASDAQ:LIFE) is a global biotechnology
tools company dedicated to improving the human condition. Our systems,
consumables and services enable researchers to accelerate scientific
exploration, driving to discoveries and developments that make life even
better. Life Technologies customers do their work across the biological
spectrum, working to advance personalized medicine, regenerative
science, molecular diagnostics, agricultural and environmental research,
and 21st century forensics. Life Technologies had sales of more than $3
billion in 2008, employs approximately 9,500 people, has a presence in
more than 100 countries, and possesses a rapidly growing intellectual
property estate of approximately 3,600 patents and exclusive licenses.
Life Technologies was created by the combination of Invitrogen
Corporation and Applied Biosystems Inc. For more information on how we
are making a difference please visit our Website: www.lifetechnologies.com.
Safe Harbor Statement
This press release includes forward-looking statements about our
anticipated results that involve risks and uncertainties. Some of the
information contained in this press release, including, but not limited
to, statements as to, financial projections, including revenue and
non-GAAP earnings per share, momentum in 2009, plans to sustain and
expand organic growth and increase operating margins, industry trends
and Life Technologies' plans, objectives, expectations and strategy for
its business, contains forward-looking statements that are subject to
risks and uncertainties that could cause actual results or events to
differ materially from those expressed or implied by such
forward-looking statements. Any statements that are not statements of
historical fact are forward-looking statements. When used, the words
"believe," "plan," "intend," "anticipate," "target," "estimate,"
"expect" and the like, and/or future tense or conditional constructions
("will," "may," "could," "should," etc.), or similar expressions,
identify certain of these forward-looking statements. Important factors
which could cause actual results to differ materially from those in the
forward-looking statements are detailed in filings made byLife
Technologies with the Securities and Exchange Commission.Life
Technologies undertakes no obligation to update or revise any such
forward-looking statements to reflect subsequent events or circumstances.
LIFE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RECONCILIATION OF NON-GAAP ADJUSTMENTS(1)
For the three months For the three months
(in thousands, except per share data) ended September 30, 2009 ended September 30, 2008((11))
(unaudited)
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
Revenues $ 800,729 $ 4,357 ((2)) $ 805,086 $ 361,696 $ - $ 361,696
Cost of revenues 266,499 (610 ) ((3)) 265,889 125,865 (539 ) ((3)) 125,326
Purchased intangibles amortization 71,445 (71,445 ) ((4)) - 17,677 (17,677 ) ((4)) -
Gross profit 462,785 76,412 539,197 218,154 18,216 236,370
Gross margin 57.8 % 67.0 % 60.3 % 65.4 %
Operating expenses:
Selling, general and administrative 240,016 (2,419 ) ((5)) 237,597 118,301 - 118,301
Research and development 82,724 (834 ) ((5)) 81,890 31,430 - 31,430
Purchased in-process research and development - - - 18,901 (18,901 ) ((4))
Business consolidation costs 23,345 (23,345 ) ((6)) - 14,176 (14,176 ) ((6)) -
Total operating expenses 346,085 (26,598 ) 319,487 182,808 (33,077 ) 149,731
Operating income 116,700 103,010 219,710 35,346 51,293 86,639
Operating margin 14.6 % 27.3 % 9.8 % 24.0 %
Interest income 1,009 - 1,009 6,263 - 6,263
Interest expense (47,792 ) 10,798 ((7)) (36,994 ) (17,448 ) 10,119 ((7)) (7,329 )
Loss on early retirement of debt (6,814 ) 6,814 ((8)) - - - -
Other income (expense), net 2,627 3,500 ((9)) 6,127 (629 ) - (629 )
Total other income (expense), net (50,970 ) 21,112 (29,858 ) (11,814 ) 10,119 (1,695 )
Income from operations before provision for income taxes 65,730 124,122 189,852 23,532 61,412 84,944
Income tax provision (24,594 ) (30,643 ) ((10)) (55,237 ) (4,756 ) (18,765 ) ((10)) (23,521 )
Net income $ 41,136 $ 93,479 $ 134,615 $ 18,776 $ 42,647 $ 61,423
Effective tax rate 37.4 % 29.1 % 20.2 % 27.7 %
Add back interest expense for subordinated debt, net of tax 22 22 34 34
Numerator for diluted earnings per share $ 41,158 $ 93,479 $ 134,637 $ 18,810 $ 42,647 $ 61,457
Earnings per common share:
Basic earnings per share $ 0.23 $ 0.76 $ 0.20 ((12)) $ 0.67 ((12))
Diluted earnings per share $ 0.22 $ 0.73 $ 0.19 ((12)) $ 0.63 ((12))
Weighted average shares used in per share calculation:
Basic 176,387 176,387 92,298 92,298
Diluted 183,428 183,428 96,995 96,995
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((1)) The Company reports Non-GAAP results which include write offs of purchased deferred revenue and exclude charges for inventory revaluation, amortization of acquired intangibles, depreciation of acquired property, plant, and equipment, and in-process research and development to provide a supplemental comparison of the results of operations.
