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Thermo Fisher Scientific Inc.. (2/3/10). "Press Release: Thermo Fisher Scientific Reports Record Revenues in Fourth Quarter 2009, Initiates Guidance for 2010". Waltham, MA.

Organisations Organisation Thermo Fisher Scientific Inc. (NYSE: TMO)
  Group Thermo Fisher (Group)
  Organisation 2 Thermo Fisher (Group)
Products Product laboratory equipment and instruments
  Product 2 LTQ Velos™ mass spectrometer
Person Person Casper, Marc N. (Thermo Fisher 200910– CEO before 200805– COO joined Thermo 12/01 before Kendro CEO before Dade Behring)
     


Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, reported that revenues increased 7% to a record $2.84 billion in the fourth quarter of 2009, compared with $2.65 billion in the 2008 quarter. The revenue growth reflects the impact of currency translation, which increased revenues by 3%, and the effect of acquisitions, which also increased revenues by 3%.

Adjusted earnings per share (EPS) grew 5% to $0.91 in the fourth quarter of 2009, versus $0.87 in the 2008 quarter. Adjusted operating income for the 2009 quarter increased 4% versus 2008 results, and adjusted operating margin declined 60 basis points to 18.0%, compared with 18.6% in the 2008 period. GAAP diluted EPS was $0.65 in 2009, versus $0.67 in the year-ago period. GAAP operating income for the 2009 quarter was $324.3 million, compared with $322.5 million in 2008, and GAAP operating margin was 11.4%, compared with 12.2% a year ago.

For the full year, revenues declined 4% to $10.11 billion in 2009, compared with 2008 revenues of $10.50 billion. The revenue decline reflects the impact of currency translation, which decreased revenues by 2%, and the effect of acquisitions, which increased revenues by 1%.

Full-year adjusted EPS declined 3% to $3.05 in 2009, versus $3.13 in 2008. Adjusted operating income for 2009 decreased 8% over 2008 results, and adjusted operating margin declined 80 basis points to 17.0%, compared with 17.8% in 2008. GAAP diluted EPS was $2.01 in 2009, versus $2.25 in 2008. GAAP operating income in 2009 was $1.05 billion, compared with $1.23 billion a year ago, and GAAP operating margin was 10.4% in 2009, compared with 11.7% in 2008.

Adjusted EPS, adjusted operating income, adjusted operating margin and free cash flow are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."

Fourth-Quarter and Full-Year Highlights

" Revenues increased 7% to a record $2.84 billion in the fourth quarter
" Adjusted EPS grew 5% in the fourth quarter
" Generated $0.46 billion of free cash flow in the quarter, and a record $1.47 billion for the year
" Invested nearly $250 million on R&D in 2009; launched innovative new products, including game-changing Thermo Scientific Velos LTQ mass spectrometry platform
" Recorded approximately $50 million in revenue from global government stimulus programs in 2009
" Deployed $650 million of capital on complementary acquisitions in 2009; announced agreements to acquire Ahura Scientific and Finnzymes just after year end

"I'm proud of the way our employees performed this past year in a tough economic environment," said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. "We successfully executed on our strategy - a combination of prudent cost-cutting in the short term and strategic investment that will yield growth over the long term. As a result of these actions, and the gradual recovery we are seeing in our key end markets, in the fourth quarter we grew adjusted EPS for the second quarter in a row and delivered organic revenue growth.

"We are pleased to be back on a growth path. To achieve our goals for 2010, we are focused on four priorities: investing to drive sustainable top-line growth, leveraging our unique value proposition for our customers, expanding our operating margins and effectively deploying our capital - all to generate shareholder value. Our attractive end markets, commitment to technology development and continued expansion in Asia will be catalysts for growth, along with the scale and breadth that comes from our position as the industry leader."

Casper added, "Given the actions we took in 2009, and the improvement we are seeing in our markets, we expect to grow revenues by 5 to 7 percent in 2010 to a range of $10.60 to $10.80 billion. We expect to achieve adjusted EPS growth of 8 to 13 percent, to a range of $3.30 to $3.45." (The 2010 guidance does not include any future acquisitions or divestitures and is based on present currency exchange rates. In addition, the adjusted EPS estimate excludes amortization expense for acquisition-related intangible assets and certain other items detailed later in this press release under the heading "Use of Non-GAAP Financial Measures.")

Management uses adjusted operating results to monitor and evaluate performance of the company's business segments.

Analytical Technologies Segment

Revenues in the Analytical Technologies Segment increased 5% in the fourth quarter of 2009 to $1.19 billion, compared with 2008 revenues of $1.14 billion. Adjusted operating income increased 2% in the fourth quarter of 2009, and adjusted operating margin declined to 21.8%, versus 2008 results of 22.3%.

For the full year, revenues declined 7% in the Analytical Technologies Segment to $4.15 billion in 2009, compared with $4.47 billion in 2008. Adjusted operating income for the segment declined 12% in 2009, and adjusted operating margin decreased to 20.2%, versus 21.4% a year ago.

Laboratory Products and Services Segment

In the Laboratory Products and Services Segment, revenues grew 9% in the fourth quarter of 2009 to $1.77 billion, compared with 2008 revenues of $1.62 billion. Adjusted operating income increased 5% in the fourth quarter of 2009, and adjusted operating margin declined to 14.1%, versus 2008 results of 14.7%.

For the full year, Laboratory Products and Services Segment revenues were $6.43 billion in 2009, compared with $6.46 billion in 2008. Adjusted operating income for the segment declined 4% in 2009, and adjusted operating margin declined to 13.7%, versus 14.2% a year ago.

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including adjusted EPS, adjusted operating income and adjusted operating margin, which exclude restructuring and other costs/income and amortization of acquisition-related intangible assets. Adjusted EPS also excludes certain other gains and losses, tax provisions/benefits related to the previous items, benefits from tax credit carryforwards, the impact of significant tax audits or events and discontinued operations. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. We also use a non-GAAP measure, free cash flow, which excludes operating cash flows from discontinued operations and deducts net capital expenditures. We believe that the use of non-GAAP measures helps investors to gain a better 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.

For example:

We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.

We exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition and significant transaction costs. We exclude these costs because we do not believe they are indicative of our normal operating costs.

We exclude the expense and tax effects associated with the amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of 5 to 20 years. Our adjusted EPS estimate for 2010 excludes approximately $.96 of expense for the amortization of acquisition-related intangible assets for acquisitions completed through the end of 2009. Exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.

We also exclude certain gains/losses and related tax effects, benefits from tax credit carryforwards and the impact of significant tax audits or events (such as the one-time effect on deferred tax balances of enacted changes in tax rates), which are either isolated or cannot be expected to occur again with any regularity or predictability and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business or real estate, gains or losses on significant litigation-related matters, gains on curtailments of pension plans, the early retirement of debt and debt facilities, and discontinued operations.

We also report free cash flow, which is operating cash flow, net of capital expenditures, and also excludes operating cash flows from discontinued operations to provide a view of the continuing operations' ability to generate cash for use in acquisitions and other investing and financing activities.

Thermo Fisher'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 and for compensation purposes.

The non-GAAP financial measures of Thermo Fisher's results of operations and cash flows included in this press release are not meant to be considered superior to or a substitute for Thermo Fisher's results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables. Thermo Fisher's earnings guidance, however, is only provided on an adjusted basis. It is not feasible to provide GAAP EPS guidance because the items excluded, other than the amortization expense, are difficult to predict and estimate and are primarily dependent on future events, such as acquisitions and decisions concerning the location and timing of facility consolidations.

Conference Call

Thermo Fisher Scientific will hold its earnings conference call today, February 3, at 8:30 a.m. Eastern time. To listen, dial (866) 804-6922 within the U.S. or (857) 350-1668 outside the U.S., and use conference ID 27442368. You may also listen to the call live on our Website, http://www.thermofisher.com, by clicking on "Investors." You will find this press release, including the accompanying reconciliation of non-GAAP financial measures and related information, in that section of our Website under "Financial Results." An audio archive of the call will be available under "Webcasts and Presentations" through Friday, February 26, 2010.

About Thermo Fisher Scientific

Thermo Fisher Scientific Inc. (NYSE: TMO) is the world leader in serving science, enabling our customers to make the world healthier, cleaner and safer. With revenues of more than $10 billion, we have approximately 35,000 employees and serve over 350,000 customers within pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental and industrial process control settings. Serving customers through two premier brands, Thermo Scientific and Fisher Scientific, we help solve analytical challenges from routine testing to complex research and discovery. Thermo Scientific offers customers a complete range of high-end analytical instruments as well as laboratory equipment, software, services, consumables and reagents to enable integrated laboratory workflow solutions. Fisher Scientific provides a complete portfolio of laboratory equipment, chemicals, supplies and services used in healthcare, scientific research, safety and education. Together, we offer the most convenient purchasing options to customers and continuously advance our technologies to accelerate the pace of scientific discovery, enhance value for customers and fuel growth for shareholders and employees alike. Visit http://www.thermofisher.com.

The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in the company's Quarterly Report on Form 10-Q for the period ended September 26, 2009, under the caption "Risk Factors," which is on file with the Securities and Exchange Commission and available in the "Investors" section of our Website under the heading "SEC Filings." Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: competition and its effect on pricing, spending, third-party relationships and revenues; the need to develop new products and adapt to significant technological change; implementation of strategies for improving internal growth; general worldwide economic conditions and related uncertainties; dependence on customers' capital spending policies and government funding policies; the effect of exchange rate fluctuations on international operations; use and protection of intellectual property; the effect of changes in governmental regulations; the effect of laws and regulations governing government contracts; the effect of competing with certain of our customers and suppliers; and the effect of rapid changes in the healthcare industry. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our estimates change and, therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

   
Record changed: 2016-03-19

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