WALTHAM, Mass., Feb. 6 /PRNewswire-FirstCall/ -- Thermo Fisher
Scientific Inc. (NYSE: TMO), the world leader in serving science, reported
that revenues increased to a record $2.62 billion in the fourth quarter of
2007 (largely as a result of the November 2006 merger with Fisher
Scientific), compared with $1.67 billion in the 2006 quarter. GAAP diluted
earnings per share (EPS) were $.54 in 2007, versus $0.08 in the year-ago
period. GAAP operating income for the 2007 quarter was $285.0 million,
compared with $26.9 million in 2006, and GAAP operating margin was 10.9%,
compared with 1.6% a year ago. The 2006 results include significant
merger-related charges.
For a better comparison of the company's operating performance from
2006 to 2007, we are also presenting our 2006 revenues and adjusted
operating results (except adjusted EPS) on a pro forma basis, as if Thermo
and Fisher had been combined for the entire year. Fourth quarter 2007
revenues grew 12% to $2.62 billion, over pro forma 2006 revenues of $2.35
billion. Currency translation increased revenues by 4%, and acquisitions,
net of divestitures, increased revenues by 2%. Adjusted EPS grew 33% to
$.76 in the fourth quarter of 2007, versus $.57 in the 2006 quarter.
Adjusted operating income for the 2007 quarter increased 27% over pro forma
2006 results, and adjusted operating margin expanded 200 basis points to
17.2%, compared with pro forma adjusted operating margin of 15.2% in the
2006 period.
For the full year, revenues grew 10% to $9.75 billion in 2007, over pro
forma 2006 revenues of $8.87 billion. Currency translation increased
revenues by 3%, and acquisitions, net of divestitures, increased revenues
by 1%. GAAP diluted EPS was $1.72 in 2007, versus $.84 in 2006. GAAP
operating income in 2007 was $974.4 million, compared with $242.0 million a
year ago, and GAAP operating margin was 10.0% in 2007, compared with 6.4%
in 2006. Full-year adjusted EPS grew 39% to $2.65 in 2007, versus $1.91 in
2006. Adjusted operating income for 2007 increased 25% over pro forma 2006
results, and adjusted operating margin expanded 210 basis points to 16.8%,
compared with pro forma adjusted operating margin of 14.7% in 2006.
Adjusted EPS, adjusted operating income and adjusted operating margin
are non-GAAP measures that exclude certain items detailed later in this
press release under the heading "Use of Non-GAAP Financial Measures."
Full-Year Highlights
-- Revenues grew 10% over pro forma 2006
-- Adjusted EPS rose 39%
-- Adjusted operating income increased 25% over pro forma 2006
-- Adjusted operating margin expanded 210 basis points over pro forma 2006
-- Leveraged $240 million of R&D spending to launch range of innovative
new products
-- Achieved goal of $75 million in synergies related to Fisher merger
-- Generated more than $1.3 billion of operating cash flow from continuing
operations, net of capital expenditures
-- Completed bolt-on acquisitions that added $240 million in annualized
revenues
-- Repurchased approximately $900 million of our common stock
"We are very pleased to report a record fourth quarter, continuing the
momentum we've had all year long and leading to an incredibly successful
2007," said Marijn E. Dekkers, president and chief executive officer of
Thermo Fisher Scientific. "Our adjusted EPS for the year rose 39% on good
top line growth, and we achieved excellent operating margin expansion of
210 basis points. This performance is the result of our ongoing commitment
to product innovation, world-class commercial execution and our relentless
focus on operating excellence.
"Even more exciting, we achieved these strong financial results while
successfully integrating a major acquisition. I want to thank our employees
around the world for working hard to meet aggressive goals across our
businesses. Armed with an unmatched portfolio of offerings, we are well-
equipped to meet the needs of our customers in all our major end markets,
from life sciences and healthcare to industrial, environmental and safety."
Mr. Dekkers added, "Looking ahead to 2008, we expect adjusted EPS to be
in the range of $3.05 to $3.15. This would lead to adjusted EPS growth of
15 to 19% over our strong performance in 2007. We expect to achieve 2008
revenues of $10.5 to $10.6 billion, resulting in 8 to 9% revenue growth
over our 2007 results." (The 2008 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. Results in the following
segment information are reported on a pro forma adjusted basis for 2006, as
if Thermo and Fisher had been combined for the entire year.
Analytical Technologies Segment
Revenues in the Analytical Technologies Segment grew 14% in the fourth
quarter of 2007 to $1.17 billion, compared with pro forma 2006 revenues of
$1.02 billion. Operating income increased 33% in the fourth quarter of
2007, and operating margin rose to 21.0%, versus pro forma 2006 results of
17.9%.
For the full year, pro forma segment revenues grew 14% to $4.26 billion
in 2007, compared with $3.74 billion in 2006. Pro forma adjusted operating
income for the segment grew 31% in 2007, and pro forma adjusted operating
margin increased to 19.8%, versus 17.2% a year ago.
Laboratory Products and Services Segment
In the Laboratory Products and Services Segment, revenues grew 10% in
the fourth quarter of 2007 to $1.55 billion, compared with pro forma 2006
revenues of $1.40 billion. Operating income increased 19% in the fourth
quarter of 2007, and operating margin rose to 13.4%, versus pro forma 2006
results of 12.4%.
For the full year, pro forma segment revenues grew 7% to $5.84 billion
in 2007, compared with $5.44 billion in 2006. Pro forma adjusted operating
income for the segment grew 20% in 2007, and pro forma adjusted operating
margin increased to 13.6%, versus 12.2% 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 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 in
connection with the Fisher merger and our Kendro acquisition. 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 professional
fees related to the merger with Fisher. 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 2008
excludes approximately $.89 of expense for the amortization of
acquisition-related intangible assets for acquisitions completed through
the fourth quarter of 2007. 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, the early retirement of debt and debt facilities and discontinued
operations.
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 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 6, at 9:00 a.m. Eastern time. To listen, dial (866) 804-3546
within the U.S. or (703) 639-1327 outside the U.S., and use conference ID
1177037. 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
"Quarterly Results." An audio archive of the call will be available under
"Webcasts and Presentations" through Friday, March 7, 2008.
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 annual revenues of $10 billion, we have more than
30,000 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 quarter ended
September 29, 2007, under the caption "Risk Factors," which is on file with
the Securities and Exchange Commission (SEC) and available in the
"Investors" section of our Website under the heading "SEC Filings." We also
may make forward-looking statements about the benefits of the merger of
Thermo Electron and Fisher Scientific, including statements about future
financial and operating results, the new company's plans, objectives,
expectations and intentions and other statements that are not historical
facts. Important factors that could cause actual results to differ
materially from those indicated by forward-looking statements include risks
and uncertainties relating to: the risk that the businesses will not be
integrated successfully; the risk that the cost savings and any other
synergies from the transaction may not be fully realized or may take longer
to realize than expected; disruption from the transaction making it more
difficult to maintain relationships with customers, employees or suppliers;
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; use and protection of intellectual property; dependence on
customers' capital spending policies and government funding policies;
realization of potential future savings from new productivity initiatives;
general worldwide economic conditions and related uncertainties; the effect
of changes in governmental regulations; the effect of exchange rate
fluctuations on international operations; 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.
Media Contact Information:
Karen Kirkwood
Phone: 781-622-1306
E-mail: karen.kirkwood@thermofisher.com
Investor Contact Information:
Ken Apicerno
Phone: 781-622-1111
E-mail: ken.apicerno@thermofisher.com
Website: http://www.thermofisher.com
Consolidated Statement of Income (a)
Three Months Ended
December December
31, % of 31, % of
(In millions except per share 2007 Revenues 2006 Revenues
amounts)
Revenues $2,621.1 $1,668.9
Costs and Operating Expenses
(e)(i)(j):
Cost of revenues 1,550.8 59.2% 1,061.5 63.6%
Selling, general and
administrative expenses 558.0 21.3% 403.0 24.1%
Amortization of acquisition-
related intangible assets 148.2 5.6% 93.2 5.6%
Research and development expenses 61.4 2.3% 52.2 3.1%
Restructuring and other costs,
net (d) 17.7 0.7% 32.1 1.9%
2,336.1 89.1% 1,642.0 98.4%
Operating Income 285.0 10.9% 26.9 1.6%
Interest Income 13.4 6.7
Interest Expense (f) (36.9) (26.9)
Other Income (Expense), Net (g) (3.5) 0.5
Income from Continuing Operations
Before Income Taxes 258.0 7.2
Income Tax (Provision) Benefit (23.7) 17.7
Income from Continuing Operations 234.3 24.9
Income from Discontinued Operations
(net of income tax
provision of $0.2 in 2006) - 0.5
Gain (Loss) on Disposal of
Discontinued Operations (net of
income tax provision of $4.5 in
2007; Includes income tax benefit
of $0.2 in 2006) 5.5 (0.1)
Net Income $239.8 9.1% $25.3 1.5%
Earnings per Share from Continuing
Operations:
Basic $.56 $.08
Diluted $.53 $.08
Earnings per Share:
Basic $.57 $.08
Diluted $.54 $.08
Weighted Average Shares:
Basic 417.5 302.2
Diluted 440.7 318.4
Reconciliation of Adjusted Operating
Income and Adjusted Operating Margin
GAAP Operating Income (a) $285.0 10.9% $26.9 1.6%
Cost of Revenues Charges (c) 1.2 0.0% 74.4 4.5%
Restructuring and Other Costs,
Net (d) 17.7 0.7% 32.1 1.9%
Equity Compensation Acceleration
Charges (e) - 0.0% 36.7 2.2%
Amortization of Acquisition-related
Intangible Assets 148.2 5.6% 93.2 5.6%
Adjusted Operating Income (b) $452.1 17.2% $263.3 15.8%
Reconciliation of Adjusted Net Income
GAAP Net Income (a) $239.8 9.1% $25.3 1.5%
Cost of Revenues Charges (c) 1.2 0.0% 74.4 4.5%
Restructuring and Other Costs,
Net (d) 17.7 0.7% 32.1 1.9%
Equity Compensation Acceleration
Charges (e) - 0.0% 36.7 2.2%
Amortization of Acquisition-related
Intangible Assets 148.2 5.6% 93.2 5.6%
Amortization of Acquisition-related
Intangible Assets - Equity
Investments 0.9 0.0% - 0.0%
Loss on Extinguishment of Debt
Facilities (f) - 0.0% 0.9 0.0%
Other Income (Expense), Net (g) 4.5 0.2% - 0.0%
Provision for Income Taxes (h) (73.3) -2.7% (80.6) -4.8%
Discontinued Operations, Net of Tax (5.5) -0.2% (0.4) 0.0%
Adjusted Net Income (b) $333.5 12.7% $181.6 10.9%
Reconciliation of Adjusted Earnings
per Share
GAAP EPS (a) $0.54 $0.08
Cost of Revenues Charges, Net of
Tax (c) - 0.14
Restructuring and Other Costs, Net
of Tax (d) 0.02 0.08
Equity Compensation Acceleration
Charges, Net of Tax (e) - 0.08
Amortization of Acquisition-related
Intangible Assets, Net of Tax 0.21 0.19
Amortization of Acquisition-related
Intangible Assets, Net of Tax -
Equity Investments - -
Loss on Extinguishment of Debt
Facilities, Net of Tax (f) - -
Other Income (Expense), Net of Tax
(g) 0.02 -
Provision for Income Taxes (h) (0.02) -
Discontinued Operations, Net of Tax (0.01) -
Adjusted EPS (b) $0.76 $0.57
Segment Data Three Months Ended
December December
31, % of 31, % of
(In millions except percentage 2007 Revenues 2006 Revenues
amounts)
Revenues
Analytical Technologies $1,167.1 44.5% $849.0 50.9%
Laboratory Products and Services 1,545.5 59.0% 860.8 51.6%
Eliminations (91.5) -3.5% (40.9) -2.5%
Consolidated Revenues $2,621.1 100.0% $1,668.9 100.0%
Operating Income and Operating Margin
Analytical Technologies $245.1 21.0% $153.8 18.1%
Laboratory Products and Services 207.0 13.4% 109.5 12.7%
Subtotal Reportable Segments 452.1 17.2% 263.3 15.8%
Cost of Revenues Charges (c) (1.2) 0.0% (74.4) -4.5%
Restructuring and Other Costs, Net
(d) (17.7) -0.7% (32.1) -1.9%
Equity Compensation Acceleration
Charges (e) - 0.0% (36.7) -2.2%
Amortization of Acquisition-related
Intangible Assets (148.2) -5.6% (93.2) -5.6%
GAAP Operating Income (a) $285.0 10.9% $26.9 1.6%
Pro Forma Data (unaudited) (k) Three Months Ended
(In millions except percentage amounts) December 31, % of
2006 Revenues
Pro Forma Revenues (k)
Analytical Technologies $1,023.6 43.6%
Laboratory Products and Services 1,401.7 59.7%
Eliminations (77.5) -3.3%
Pro Forma Combined Revenues 2,347.8 100.0%
Pre-merger Fisher Scientific
Results, Net of Eliminations (678.9)
GAAP Consolidated Revenues (a) $1,668.9
Pro Forma Operating Income and
Operating Margin (k)
Analytical Technologies $183.6 17.9%
Laboratory Products and Services 173.6 12.4%
Other/Eliminations (0.1)
Pro Forma Adjusted Combined
Operating Income (b) 357.1 15.2%
Pre-merger Fisher Scientific Results
Included Above (93.8)
Adjusted Operating Income (b) 263.3 15.8%
Cost of Revenues Charges (c) (74.4) -4.5%
Restructuring and Other Costs, Net
(d) (32.1) -1.9%
Equity Compensation Acceleration
Charges (e) (36.7) -2.2%
Amortization of Acquisition-related
Intangible Assets (93.2) -5.6%
GAAP Operating Income (a) $26.9 1.6%
(a) "GAAP" (reported) results were determined in accordance with U.S.
generally accepted accounting principles (GAAP).
(b) Adjusted results are non-GAAP measures and exclude certain charges to
cost of revenues (see note (c) for details); amortization of
acquisition-related intangible assets; restructuring and other
costs, net (see note (d) for details); charges for the acceleration of
equity-based compensation expense in 2006 due to a change in control
(see note (e) for details); costs associated with the
early termination of debt/credit facilities (see note (f) for
details); certain other gains or losses that are either isolated or
cannot be expected to occur again with any regularity or
predictability (see note (g) for details); the tax consequences of the
preceding items and other tax events (see note (h) for details); and
results of discontinued operations.
(c) Reported results in 2007 include $1.2 primarily for charges for the
sale of inventories revalued at the date of acquisition. Reported
results in 2006 include $74.1 of charges for the sale of inventories
revalued at the date of acquisition and $0.3 of accelerated
depreciation on manufacturing assets abandoned due to facility
consolidations.
(d) Reported results in 2007 and 2006 include restructuring and other
costs, net, consisting principally of severance, abandoned facility
and other expenses of real estate consolidation, net of
net gains in 2006 on the sale of product lines and abandoned
facilities. Reported results in 2006 also include $15.2 of charges for
in-process research and development associated with the
Fisher merger.
(e) Reported results in 2006 include a charge for the acceleration of
equity-based compensation expense due to a change in control.
(f) Reported results in 2006 include $0.9 of cost associated with the
early termination of debt/credit facilities in interest expense.
(g) Reported results in 2007 included an $8.9 loss from an other than
temporary decline in the fair market value of an available-for-sale
investment and a $4.5 currency transaction gain associated with an
intercompany financing transaction.
(h) Reported provision for income taxes includes i) $62.2 and $80.6 of
incremental tax benefit in 2007 and 2006, respectively, for the pre-
tax reconciling items between GAAP and adjusted net
income; and ii) in 2007, $11.1 of incremental tax benefit from
adjusting the company's deferred tax balances as a result of newly
enacted tax rates, primarily in Canada.
(i) Consolidated depreciation expense in 2007 and 2006 is $48.6 and $31.3,
respectively.
(j) Consolidated equity compensation expense included in both reported and
adjusted results is $11.8 and $12.5 in 2007 and 2006, respectively,
aside from the 2006 charge discussed in note (e).
(k) Pro forma results combine the results of the company with the pre-
merger results of Fisher Scientific International Inc. Equity
compensation expense of $17.5 is included in the pro forma 2006
results.
Note: Consolidated net capital expenditures in Q4 2007 totaled $53.0.
Consolidated Statement of Income (a)
Twelve Months Ended
December December
31, % of 31, % of
(In millions except per share 2007 Revenues 2006 Revenues
amounts)
Revenues $9,746.4 $3,791.6
Costs and Operating Expenses
(e)(i)(j):
Cost of revenues 5,820.3 59.7% 2,210.2 58.3%
Selling, general and
administrative expenses 2,099.7 21.5% 952.7 25.1%
Amortization of acquisition-
related intangible assets 571.1 5.9% 170.8 4.5%
Research and development expenses 238.7 2.4% 170.2 4.5%
Restructuring and other costs, net
(d) 42.2 0.4% 45.7 1.2%
8,772.0 90.0% 3,549.6 93.6%
Operating Income 974.4 10.0% 242.0 6.4%
Interest Income 46.5 16.4
Interest Expense (f) (139.8) (51.9)
Other Income, Net (g) 0.2 2.9
Income from Continuing Operations
Before Income Taxes 881.3 209.4
Provision for Income Taxes (101.7) (43.1)
Income from Continuing Operations 779.6 166.3
Income from Discontinued Operations
(net of income tax
provision of $0.2 in 2006) - 0.5
(Loss) Gain on Disposal of
Discontinued Operations (Includes
income tax provision of $6.4 and
$1.1) (18.5) 2.1
Net Income $761.1 7.8% $168.9 4.5%
Earnings per Share from Continuing
Operations:
Basic $1.85 $.85
Diluted $1.76 $.82
Earnings per Share:
Basic $1.81 $.86
Diluted $1.72 $.84
Weighted Average Shares:
Basic 421.5 196.1
Diluted 443.7 203.7
Reconciliation of Adjusted Operating
Income and Adjusted Operating Margin
GAAP Operating Income (a) $974.4 10.0% $242.0 6.4%
Cost of Revenues Charges (c) 49.2 0.5% 77.7 2.0%
Restructuring and Other Costs,
Net (d) 42.2 0.4% 45.7 1.2%
Equity Compensation Acceleration
Charges (e) - 0.0% 36.7 1.0%
Amortization of Acquisition-related
Intangible Assets 571.1 5.9% 170.8 4.5%
Adjusted Operating Income (b) $1,636.9 16.8% $572.9 15.1%
Reconciliation of Adjusted Net Income
GAAP Net Income (a) $761.1 7.8% $168.9 4.5%
Cost of Revenues Charges (c) 49.2 0.5% 77.7 2.0%
Restructuring and Other Costs, Net
(d) 42.2 0.4% 45.7 1.2%
Equity Compensation Acceleration
Charges (e) - 0.0% 36.7 1.0%
Amortization of Acquisition-related
Intangible Assets 571.1 5.9% 170.8 4.5%
Amortization of Acquisition-related
Intangible Assets - Equity
Investments 1.5 0.0% - 0.0%
Loss on Extinguishment of Debt
Facilities (f) - 0.0% 0.9 0.0%
Other Income, Net (g) 4.5 0.1% - 0.0%
Provision for Income Taxes (h) (270.7) -2.8% (110.5) -2.9%
Discontinued Operations, Net of Tax 18.5 0.2% (2.6) -0.1%
Adjusted Net Income (b) $1,177.4 12.1% $387.6 10.2%
Reconciliation of Adjusted Earnings
per Share
GAAP EPS (a) $1.72 $0.84
Cost of Revenues Charges, Net of
Tax (c) 0.07 0.23
Restructuring and Other Costs, Net
of Tax (d) 0.06 0.18
Equity Compensation Acceleration
Charge, Net of Tax (e) - 0.12
Amortization of Acquisition-related
Intangible Assets, Net of Tax 0.82 0.54
Amortization of Acquisition-related
Intangible Assets, Net of Tax -
Equity Investments - -
Loss on Extinguishment of Debt
Facilities (f) - 0.01
Other Income, Net of Tax (g) 0.01 -
Provision for Income Taxes (h) (0.07) -
Discontinued Operations, Net of Tax 0.04 (0.01)
Adjusted EPS (b) $2.65 $1.91
Segment Data Twelve Months Ended
December December
31, % of 31, % of
(In millions except percentage 2007 Revenues 2006 Revenues
amounts)
Revenues
Analytical Technologies $4,256.0 43.7% $2,425.8 64.0%
Laboratory Products and Services 5,842.2 59.9% 1,406.6 37.1%
Eliminations (351.8) -3.6% (40.8) -1.1%
Consolidated Revenues $9,746.4 100.0% $3,791.6 100.0%
Operating Income and Operating Margin
Analytical Technologies $843.1 19.8% $383.7 15.8%
Laboratory Products and Services 793.8 13.6% 189.2 13.5%
Subtotal Reportable Segments 1,636.9 16.8% 572.9 15.1%
Cost of Revenues Charges (c) (49.2) -0.5% (77.7) -2.0%
Restructuring and Other Costs, Net
(d) (42.2) -0.4% (45.7) -1.2%
Equity Compensation Acceleration
Charge (e) - 0.0% (36.7) -1.0%
Amortization of Acquisition-related
Intangible Assets (571.1) -5.9% (170.8) -4.5%
GAAP Operating Income (a) $974.4 10.0% $242.0 6.4%
Pro Forma Data (unaudited) (k) Twelve Months Ended
December 31, % of
(In millions except percentage amounts) 2006 Revenues
Pro Forma Revenues (k)
Analytical Technologies $3,742.5 42.2%
Laboratory Products and Services 5,437.6 61.3%
Eliminations (309.7) -3.5%
Pro Forma Combined Revenues 8,870.4 100.0%
Pre-merger Fisher Scientific
Results, Net of Eliminations (5,078.8)
GAAP Consolidated Revenues (a) $3,791.6
Pro Forma Operating Income and
Operating Margin (k)
Analytical Technologies $645.0 17.2%
Laboratory Products and Services 662.5 12.2%
Other/Eliminations (1.1)
Pro Forma Adjusted Combined
Operating Income (b) 1,306.4 14.7%
Pre-merger Fisher Scientific Results
Included Above (733.5)
Adjusted Operating Income (b) 572.9 15.1%
Cost of Revenues Charges (c) (77.7) -2.0%
Restructuring and Other Costs, Net
(d) (45.7) -1.2%
Equity Compensation Acceleration
Charge, Net of Tax (e) (36.7) -1.0%
Amortization of Acquisition-related
Intangible Assets (170.8) -4.5%
GAAP Operating Income (a) $242.0 6.4%
(a) "GAAP" (reported) results were determined in accordance with U.S.
generally accepted accounting principles (GAAP).
(b) Adjusted results are non-GAAP measures and exclude certain charges to
cost of revenues (see note (c) for details); amortization of
acquisition-related intangible assets; restructuring and other
costs, net (see note (d) for details); charges for the acceleration of
equity-based compensation expense in 2006 due to a change in control
(see note (e) for details); costs associated with the
early termination of debt/credit facilities (see note (f) for
details); certain other gains or losses that are either isolated or
cannot be expected to occur again with any regularity or
predictability (see note (g) for details); the tax consequences of the
preceding items and other tax events (see note (h) for details); and
results of discontinued operations.
(c) Reported results in 2007 include $49.2 primarily for charges for the
sale of inventories revalued at the date of acquisition. Reported
results in 2006 include $74.8 of charges for the sale of
inventories revalued at the date of acquisition and $2.9 of
accelerated depreciation on manufacturing assets abandoned due to
facility consolidations.
(d) Reported results in 2007 and 2006 include restructuring and other
costs, net, consisting principally of severance, abandoned facility
and other expenses of real estate consolidation and, in 2007,
loss on sale of business, net of net gains in 2006 on the sale of
product lines and abandoned facilities. Reported results in 2006 also
include $15.2 of charges for in-process research and
development associated with the Fisher merger.
(e) Reported results in 2006 include a charge for the acceleration of
equity-based compensation expense due to a change in control.
(f) Reported results in 2006 include $0.9 of cost associated with the
early termination of debt/credit facilities in interest expense.
(g) Reported results in 2007 included an $8.9 loss from an other than
temporary decline in the fair market value of an available-for-sale
investment and a $4.5 currency transaction gain associated with an
intercompany financing transaction.
(h) Reported provision for income taxes includes i) $238.8 and $111.7 of
incremental tax benefit in 2007 and 2006, respectively, for the pre-
tax reconciling items between GAAP and adjusted net income; ii) in
2007, $31.9 of incremental tax benefit from adjusting the company's
deferred tax balances as a result of newly enacted tax rates in the
United Kingdom, Denmark, Germany and Canada; and iii) in
2006, $1.2 of incremental tax provision for the estimated effect of
tax audits of prior years in a non-U.S. country.
(i) Consolidated depreciation expense in 2007 and 2006 is $185.7 and
$69.9, respectively.
(j) Consolidated equity compensation expense included in both reported and
adjusted results is $51.1 and $32.6 in 2007 and 2006, respectively,
aside from the 2006 charge discussed in note (e).
(k) Pro forma results combine the results of the company with the pre-
merger results of Fisher Scientific International Inc. Equity
compensation expense of $74.7 is included in the pro forma 2006
results.
Note: Consolidated net capital expenditures in 2007 totaled $156.3.
Condensed Consolidated Balance Sheet
(In millions) Dec. 31, 2007 Dec. 31, 2006
Assets
Current Assets:
Cash and cash equivalents $636.2 $667.4
Short-term investments 14.1 23.8
Accounts receivable, net 1,450.0 1,392.7
Inventories 1,169.9 1,164.5
Other current assets 408.9 411.1
Total current assets 3,679.1 3,659.5
Property, Plant and Equipment, Net 1,267.4 1,256.7
Acquisition-related Intangible Assets 7,157.8 7,511.6
Other Assets 383.8 309.4
Goodwill 8,713.2 8,525.0
Total Assets $21,201.3 $21,262.2
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term obligations and current
maturities of long-term
obligations $149.3 $483.3
Other current liabilities 1,756.1 1,669.0
Total current liabilities 1,905.4 2,152.3
Other Long-term Liabilities 2,761.7 3,017.4
Long-term Obligations 2,045.9 2,180.7
Total Shareholders' Equity 14,488.3 13,911.8
Total Liabilities and Shareholders'
Equity $21,201.3 $21,262.2
SOURCE Thermo Fisher Scientific Inc.
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Related links:
http://www.thermofisher.com
http://www.prnewswire.com/comp/877850.html /
CONTACT:
Media, Karen Kirkwood, +1-781-622-1306,
karen.kirkwood@thermofisher.com, or Investors, Ken Apicerno,
+1-781-622-1111, ken.apicerno@thermofisher.com, both of Thermo
Fisher Scientific Inc.
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