Improves Full Year Earnings Outlook ORANGE COUNTY, Calif., July 30
/PRNewswire-FirstCall/ -- Beckman Coulter, Inc. (NYSE:BEC), a
leading developer, manufacturer and marketer of products that
simplify, automate and innovate complex biomedical testing,
announced today second quarter and first half ended June 30, 2009
results. Total second quarter revenue was $756.7 million, down
5.2%, or flat in constant currency terms. On a constant currency
basis, recurring revenue increased 7.7%, offset by the anticipated
decline in cash instrument sales. Reported net earnings were $60.8
million, or $0.94 per fully diluted share. Adjusting for special
items, net earnings were $63.9 million, or $0.99 per fully diluted
share, an increase of 15.1% over prior year quarter (see "Non-GAAP
Financial Measures" and "Reconciling Items to Non-GAAP Financial
Measures"). (Logo:
http://www.newscom.com/cgi-bin/prnh/20031202/BECLOGO) Scott
Garrett, chairman, president and chief executive officer, said,
"The excellent first half results demonstrate the resilience of our
recurring revenue business model and enable us to improve full year
earnings outlook to between $3.76 and $3.91 per share." Three
Months Ended Six Months Ended June 30 June 30 2009 2008 % Chg 2009
2008 % Chg Reported Results (in millions, except amounts per share)
Revenue $756.7 $798.3 (5.2%) $1,448.2 $1,528.8 (5.3%) Recurring
Revenue $629.0 $618.7 1.7% $1,202.7 $1,198.0 0.4% Operating Income
$75.9 $71.8 5.7% $115.5 $133.6 (13.5%) Tax Rate 22.4% 26.1% 15.7%
24.8% Diluted Earnings per Share(1) $0.94 $0.71 32.4% $1.26 $1.35
(6.7%) Adjusted Results Revenue- constant currency 0.2% 0.0%
Recurring Revenue- constant currency 7.7% 6.3% Operating Income
$97.5 $88.5 10.2% $163.5 $152.0 7.6% Diluted Earnings per Share(1)
$0.99 $0.86 15.1% $1.70 $1.51 12.6% See "Non-GAAP Financial
Measures," where the impact of certain items on reported results
are discussed. (1) Earnings, in both 2008 and 2009, include the
incremental interest expense associated with FSP No. APB 14-1
"Accounting for Convertible Debt Instruments That May Be Settled in
Cash upon Conversion (Including Partial Cash Settlement)". The
effect is a $0.03 and $0.07 non-cash charge to interest expense for
the second quarter and first half 2009, respectively. Garrett
continued, "Recurring revenue, which accounts for approximately 80%
of total revenue and contributes more than 90% of our gross profit,
grew 7% on a constant currency basis excluding revenue from our
Cogenics acquisition. Within the quarter, an increase in pension
expense and a stronger dollar were offset by effective currency
hedging, a favorable product mix and diligent expense management.
While a difficult economic climate constrained cash instrument
sales, adjusted net earnings per fully diluted share grew over 15%,
adjusted operating margin reached 13% and operating cash flow was
$120 million, up nearly $50 million." Recurring revenue gains were
driven by Clinical Diagnostics which grew 8.3% in constant currency
versus prior year quarter with strong growth in Flow Cytometry and
Access Immunoassay. Access Immunoassay recurring revenue grew 13.7%
on a constant currency basis. Declining cash instrument sales
offset recurring revenue gains. Cellular Analysis and Chemistry
& Clinical Automation cash instrument sales declined more than
30%, led by weakness in the U.S. market. Declines in cash
instrument sales in Cellular were magnified by an unusually strong
second quarter 2008 when a backlog drove 30% growth in cash
instrument sales. Revenue from life science customers decreased
14.7% compared to prior year, or 9.3% in constant currency. A weak
capital expenditure environment and difficult comparables
contributed to this outcome. On a geographic basis, second quarter
revenue in the U.S. decreased 3.3%. In constant currency,
International revenue grew 3.6%, driven by continued strength in
China and recurring revenue growth in other emerging markets.
Growth in higher margin recurring revenue more than offset an
unfavorable geographic mix; as a result, gross profit margin grew
120 basis points to 47.2% versus prior year adjusted quarterly
results. Second quarter operating income was $75.9 million. On an
adjusted basis, operating income for the quarter was $97.5 million,
or 12.9% of sales. Cost containment initiatives, which began in
2008, contributed to reducing adjusted operating expense by 6.8%
versus prior year quarter. Non-operating income of $2.5 million
includes a gain of $20.5 million related to the hedge for the
purchase price and a $3.2 million incremental interest expense
incurred on the debt offering associated with the pending Olympus
diagnostics acquisition. Non-operating expense excluding these
items was $14.8 million compared to $9.7 million in the prior year
quarter. The adjusted tax rate in the quarter was 22.7% compared to
28.5% in the prior year quarter. The favorable adjusted tax rate
was due to anticipated discrete items in the quarter related
primarily to tax settlements. Net earnings were $60.8 million or
$0.94 per fully diluted share. Adjusting for restructuring and
acquisition-related items, but including interest expense
associated with the accounting change, net earnings were $63.9
million or $0.99 per fully diluted share. Garrett stated, "Cash
instrument sales declined in all major regions as customers remain
cautious in their capital spending within a difficult economic
environment. Extremely strong cash instrument sales in 2008 will
continue to make for a difficult comparison through the first three
quarters of 2009. However, a product mix favoring higher margin
recurring revenue and continued focus on operating expense
management should allow us to deliver on our earnings goals."
Recent Developments -- Associated activities for the expected close
of the acquisition of Olympus Corporation's lab-based diagnostics
business on August 3, 2009: -- Announced that the Federal Trade
Commission granted early termination of its review under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976. -- Raised
approximately $495 million from debt issuance to partially finance
the acquisition. The issuance came in two $250 million senior note
offerings of 6- and 10- year maturities with 6% and 7% coupons,
respectively. -- Raised approximately $240 million in a common
stock offering to partially finance the acquisition. Approximately
4.7 million shares were issued to the public at $53.00 per share,
or $50.75 net proceeds per share. In connection with the offering,
Beckman Coulter entered into forward sale agreements, which settled
on July 27, 2009 adding the newly issued shares of Common Stock to
Beckman Coulter's outstanding shares. -- Declared a $0.17 per share
quarterly cash dividend payable on August 24, 2009 to all
stockholders of record on August 10, 2009, representing the
company's 81st consecutive, quarterly dividend payout. First Half
Summary For the first six months of 2009, revenue decreased 5.3%,
or flat in constant currency, versus first half 2008. Year-to-date
recurring revenue was up 0.4%, or 6.3% in constant currency, with
the Cogenics acquisition contributing approximately 50 basis points
to this growth. Year-to-date gross profit, including gains and
losses on hedging contracts, decreased $19.7 million to $676
million. Gross margin expanded 120 basis points to 46.7% compared
to the first six months of 2008. Adjusting for special items,
operating income increased by 7.6% to $163.5 million. The primary
driver of operating income growth was a 5.9% decrease in operating
expense. Adjusted operating margin increased 140 basis points to
11.3%. On an adjusted basis, net earnings increased 12.3% and
adjusted net earnings per fully diluted share increased 12.6%. Full
Year 2009 Outlook Outlook is based on adjusted results and excludes
any impact of the pending Olympus diagnostics acquisition. "We are
updating our full year outlook raising the lower end of our
earnings range. For the full year 2009, we still anticipate 6% to
7% constant currency recurring revenue growth offsetting weakness
in cash instrument sales, yielding 4% to 6% constant currency
growth in total revenue, or roughly flat on a reported basis. Solid
growth in recurring revenue and its gross profit contribution
increase our confidence that we can overcome the impact of a
stronger dollar and a substantial increase in pension expense to
generate earnings per fully diluted share within a narrowed range
relative to our previously stated earnings outlook," Garrett
continued. "We remain committed to providing quality service to
customers, aggressively managing expenses and delivering on our
earnings goals. Operating margin, now including normal hedging
activities, is anticipated to be around 13%. Adjusted non-operating
expense, now excluding normal hedging activities, should be around
$62 million. Based on a full year tax rate of 26% to 27%, our
outlook for adjusted earnings per fully diluted share is improved
to $3.76 to $3.91. We are revising our expectations for capital
expenditures to between $325 and $350 million, but continue to
expect depreciation and amortization to be between $270 and $290
million. Despite a challenging operating environment, we expect to
continue solid recurring revenue growth and determined expense
management. We believe this reflects the stability of our sector
and our ability to manage risk and is consistent with our long-term
goal to deliver annual earnings growth of 9% to 12%," concluded
Garrett. Investor Conference Call As previously announced, there
will be a conference call today, Thursday, July 30, 2009 at 5:00 pm
ET to discuss the second quarter and first half 2009 results. The
call also will be webcast live and is accessible to all investors
through Beckman Coulter's website at http://www.beckmancoulter.com/
or at http://www.streetevents.com/. When accessing the webcast
through the Beckman Coulter site, select "go to IR" under Investor
Relations and find the call listed under "What's Ahead." The
webcast will be archived on both websites for future on-demand
replay through Friday, August 14, 2009. About Beckman Coulter
Beckman Coulter, Inc., based in Fullerton, California, develops,
manufactures and markets products that simplify, automate and
innovate complex biomedical tests. More than 200,000 Beckman
Coulter systems operate in laboratories around the world, supplying
critical information for improving patient health and reducing the
cost of care. Recurring revenue, consisting of consumable supplies
(including reagent test kits), service and operating-type lease
payments, represent about 78% of the company's 2008 revenue of $3.1
billion. For more information, visit
http://www.beckmancoulter.com/. Forward-Looking Statements This
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Such statements contain words such as "may," "will," "might,"
"expect," "believe," "anticipate," "could," "would," "should,"
"estimate," "continue," "pursue," or the negative thereof or
comparable terminology, and may include without limitation
information regarding the company's expectations, goals or
intentions regarding the future, including without limitation
statements regarding expectations of full-year earnings outlook,
anticipated recurring revenue growth, expectations of risk
management, anticipated product mix, expense management, the
anticipated closing and impact of the company's expected
acquisition of the lab-based diagnostics business of Olympus
Corporation and statements under the heading "Full Year Outlook,"
including expectations for earnings, constant currency, recurring
revenue growth, reported revenue growth, earnings growth, operating
margin, currency exchange rates, pension expense, adjusted
non-operating expense, expense management, providing service,
hedging activities, tax rate, earnings per diluted share, capital
expenditures, and depreciation and amortization. The outlook
provided is based on fiscal year ended 2008 and the quarter and six
months ended June 30, 2009 adjusted results and does not include
special items that have occurred or may occur in 2009. This press
release contains the company's unaudited financial results for the
quarter and six months ended June 30, 2009. These results may
change as a result of further review by the company's independent
accountants and management. The completion of the review of our
financial statements could result in additional changes to our
financial results and could result in the identification of issues
relating to the effectiveness of our internal control over
financial reporting. Final second quarter results will be provided
in the company's quarterly report to the SEC on Form 10-Q.
Forward-looking statements included in this press release involve
certain risks and uncertainties and are based on management's
current expectations, estimates, forecasts and projections about
the company and are subject to risks and uncertainties, some of
which may be beyond the company's control, that could cause actual
results and events to differ materially from those stated in the
forward-looking statements. These risks and uncertainties include,
but are not limited to our ability to obtain consents and other
approvals required to consummate our pending acquisition of Olympus
Corporation's lab-based diagnostics business; our ability to
compete effectively; changes in laws and regulations; market demand
for the company's new and existing products; intellectual property
infringement claims by others and our ability to protect the
company's intellectual property; difficulty in obtaining materials
and components for our products; consolidation of our customer
base, formation of group purchasing organizations and changes in
customer inventory levels and inventory management practices;
reductions in government funding to our customers; foreign currency
exchange fluctuations; global market, economic and political
conditions and natural disasters; costs associated with our supply
chain initiatives; tax risks and regulations; changes in the value
of our investment in marketable securities; and our ability to
successfully acquire and integrate acquired businesses and realize
the anticipated benefits from such acquisitions. Additional factors
that could cause actual results to differ are discussed in Part I,
Item 1A (Risk Factors) of the company's Form 10-K filed with the
SEC on February 23, 2009 as well as in the company's form 10-Q
filed since then and reports on Form 8-K. Forward-looking
statements contained in this press release are made only as of the
date hereof, and we undertake no obligation to update these
disclosures except as required by law. Change in Accounting for
Convertible Debt Securities In May 2008, the FASB issued FSP No.
APB 14-1 "Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash
Settlement)" ("FSP APB 14-1")." Under this standard, convertible
debt securities that may be settled in cash (or other assets),
including partial cash settlement, would be separated into a debt
and equity component. This change in principle, which is effective
for us as of January 1, 2009, was applied retrospectively to
previously issued convertible debt instruments. The adoption of
this new accounting standard increased our 2008 and 2007 non-cash
interest expense by approximately $13 million per year, resulting
in a reduction of our diluted earnings per share by approximately
$0.12 in 2008 and 2007. Interest expense increased by $3.6 million
and $3.3 million for the three months ended June 30, 2009 and 2008,
respectively, and by $7.1 million and $6.6 million for the six
months ended June 30, 2009 and 2008, respectively. Our diluted
earnings per share decreased by $0.03 for the three months ended
June 30, 2009 and 2008 and by $0.07 and $0.06 for the six months
ended June 30, 2009 and 2008, respectively, as a result of the
adoption. Change in Presentation We have a hedging program to
reduce the risk of foreign currency changes on cash flows generated
from intercompany receivables. To reflect this net currency impact
on our operating results, during the first quarter of 2009, we
reclassified our gains and losses related to cash flow hedging
activities and foreign currency transactions to cost of sales from
non-operating income or expense for all periods presented. The
following quarterly table reflects reclassified cost of sales and
non-operating income or expense for the periods 2008 and 2007. (in
millions) 2008 First Second Third Fourth Quarter Quarter Quarter
Quarter Total Cost of sales $401.7 $431.4 $409.8 $428.0 $1,670.9
Non-operating expense (income) $8.4 $9.7 $12.3 $15.5 $45.9 2007
First Second Third Fourth Quarter Quarter Quarter Quarter Total
Cost of sales $318.7 $373.6 $355.2 $422.0 $1,469.5 Non-operating
expense (income) $10.5 $(27.0) $(5.7) $11.0 $(11.2) Non-GAAP
Financial Measures "GAAP" refers to financial information presented
in accordance with generally accepted accounting principles in the
United States. To supplement the condensed consolidated financial
statements and discussion presented on a GAAP basis, this press
release includes non-GAAP financial measures with respect to the
quarter and six months ended June 30, 2009 and 2008 and with
respect to Outlook for 2009. Management uses non-GAAP financial
measures because it believes the appropriate analysis of our
profitability cannot be effectively considered while incorporating
the effect of unusual items and charges that have not been
experienced consistently in prior periods. Also, management
believes these non-GAAP measures facilitate our comparison of our
historical results to our competitors. The Company reported the
following non-GAAP financial measures: "adjusted operating
expense," "adjusted operating income," "adjusted operating margin,"
"adjusted net earnings," "adjusted diluted earnings per share,"
"adjusted tax rate," "free cash flow," "constant currency growth,"
"adjusted earnings before interest, taxes, depreciation and
amortization" ("adjusted EBITDA") and "adjusted pretax profit
growth." The Company also provided its outlook for 2009 for
"adjusted operating margin," "adjusted non-operating expense,"
"adjusted tax rate," and "adjusted earnings per diluted share."
These non-GAAP financial measures are not in accordance with or an
alternative to GAAP. Adjusted operating expense excludes the impact
of charges associated with restructuring or relocations in
connection with our supply chain improvement initiatives,
acquisition related expenses, environmental remediation, charges
associated with acquisitions and non-recurring license fees, and
other operating expense items that we do not expect to be
recurring. Some of the items excluded may be beyond the control of
management and are less predictable than our core performance.
Although management expects to continue to incur costs for its
supply chain initiatives and planned acquisitions through 2009,
management has not developed plans for those initiatives in
sufficient detail to estimate the costs to be incurred in each
period and believes those costs do not reflect the ongoing
performance of the core business. Management uses adjusted
operating expense to prepare operating budgets and forecasts and to
measure our performance against those budgets and forecasts. A
reconciliation of operating expense, the GAAP measure most directly
comparable to adjusted operating expense, is provided on the
attached schedule. Adjusted operating income excludes the impact of
charges associated with restructuring or relocations in connection
with our supply chain improvement initiatives, acquisition related
expenses, environmental remediation, charges associated with
acquisitions, and other operating income and expense items that we
do not expect to be recurring. Some of the items excluded may be
beyond the control of management and are less predictable than our
core performance. Although management expects to continue to incur
costs for its supply chain initiatives and planned acquisitions
through 2009, management has not developed plans for those
initiatives in sufficient detail to estimate the costs to be
incurred in each period and believes those costs do not reflect the
ongoing performance of the core business. Management uses adjusted
operating income to prepare operating budgets and forecasts and to
measure our performance against those budgets and forecasts.
Additionally, the Company uses adjusted operating income to
evaluate management performance for compensation purposes. A
reconciliation of operating income, the GAAP measure most directly
comparable to adjusted operating income, is provided on the
attached schedule. Adjusted operating margin is calculated using
adjusted operating income, as described above, divided by revenue.
Management uses adjusted operating margin in its analysis of
operating budgets and forecasts and to measure our performance
against those budgets and forecasts, since this measure is
reflective of our operating costs on an ongoing basis and excludes
transactions or events that may be beyond the control of management
or which are unpredictable. Management uses adjusted operating
margin when evaluating the performance trends of our Company
compared to others. A reconciliation of operating margin, the GAAP
measure most directly comparable to adjusted operating margin, is
provided on the attached schedule. Adjusted net earnings excludes
the impact of income and expense items excluded from adjusted
operating income, as described above, and non-operating income and
expense items that we do not expect to be recurring, including
hedging gains or losses in connection with forward contracts to
hedge the Yen purchase price of the acquisition of Olympus
Corporation's lab based diagnostics business. Adjusted net earnings
also excludes the incremental net interest expense related to the
debt issued to finance the acquisition, since the funds have not
yet been deployed to finance the acquisition and only earn a
nominal return while invested in conservative investments. Adjusted
net earnings also exclude the related incremental tax effect of
these items. Adjusted diluted earnings per share exclude the effect
of those same items from diluted earnings per share.
Reconciliations of net earnings, the GAAP measure most directly
comparable to adjusted net earnings, and earnings per share, the
GAAP measure most directly comparable to adjusted earnings per
share, are provided on the attached schedule. Adjusted EBITDA is a
non-GAAP measure that management believes provides useful
supplemental information for management and investors. Adjusted
EBITDA is a tool that provides a measure of the adjusted net
earnings, as described above, of the business before considering
the impact of interest, taxes, depreciation and amortization. We
believe adjusted EBITDA provides management with a means to analyze
and evaluate the profitability of our business and its ability to
generate cash flow before the effect of interest, taxes,
depreciation and amortization. A reconciliation of net earnings,
the GAAP measure most directly comparable to adjusted EBITDA, is
provided on the attached schedule. Adjusted tax rate excludes the
incremental tax effect of income and expense items excluded from
adjusted operating income, as described above, and non-operating
income and expense items that we do not expect to be recurring. A
reconciliation of the tax rate, the GAAP measure most directly
comparable to adjusted tax rate, is provided on the attached
schedule. Free cash flow is a non-GAAP measure that management
believes provides useful supplemental information for management
and investors, because it reports the cash provided by operating
activities after cash invested in property, plant and equipment. We
believe this measure provides management and investors with a
measure to determine the health of the business and cash flow
generated by the business in excess of the cash needed to be
reinvested in the business. A reconciliation of cash provided by
operating activities, the GAAP measure most directly comparable to
free cash flow, is provided on the attached schedule. Our
discussion of international revenue includes comparisons on a
constant currency basis, which we have previously defined in our
annual report on Form 10-K. We believe use of this measure aids in
the understanding of our operations without the impact of foreign
currency. This presentation is consistent with our internal use of
the measure, which we use to measure the profitability of ongoing
operating results against prior periods and against our internally
developed targets. We believe our investors also use this measure
to analyze the underlying trends in our international operations.
Our Outlook for 2009 adjusted operating income, adjusted operating
margin, adjusted pretax profit growth, adjusted non-operating
expense, adjusted tax rate, adjusted earnings per diluted share and
adjusted EBITDA excludes the impact of charges or write-offs
associated with acquisitions, environmental remediation,
restructuring, including relocations in connection with our supply
chain improvement initiatives, acquisition related costs, gains or
losses upon sale of assets or businesses and other items that we do
not expect to be recurring, because we are unable to forecast such
items with reasonable predictability and do not include those items
in our operating budgets. Although management expects to continue
to incur costs for its supply chain initiatives and planned
acquisitions through 2009, management has not developed plans for
those initiatives in sufficient detail to estimate the costs to be
incurred in each period and believes those costs do not reflect the
ongoing performance of the core business. The Company is not able
to provide a reconciliation of projected non-GAAP financial
measures to expected reported results due to the unknown effect,
timing and potential significance of special charges and our
inability to forecast charges associated with future transactions
and initiatives. However, management believes our Outlook for 2009,
using the non-GAAP measures indicated, reflects management's
expectation of the performance of the core operations of the
Company and believes this information is useful to investors to
view our operations through the eyes of management. The
presentation of historical non-GAAP financial measures is not meant
to be considered in isolation from or as a substitute for results
prepared in accordance with GAAP. We use these non-GAAP measures to
supplement net earnings and other corresponding measures on a basis
prepared in conformance with GAAP. These non-GAAP financial
measures reflect additional ways of viewing aspects of our
operations that when viewed with our GAAP results provide a more
complete understanding of factors and trends affecting our
business. However, investors should understand that the excluded
items are actual income and expenses that may impact the cash
available to us for other uses. We strongly encourage investors to
consider both net earnings and cash flows determined under GAAP as
compared to the non-GAAP measures presented and to perform their
own analysis, as appropriate. Reconciling Items to Non-GAAP
Financial Measures The non-GAAP measures described above exclude
the following items: a) Restructuring and acquisition related costs
- For the quarter and six months ended June 30, 2009 and 2008, we
recorded restructuring charges of $21.6 million and $4.7 million
(including a net gain of $0.9 million gain on sale of building and
land in Hialeah, Florida) and $48.0 million and $5.4 million
(including a net gain of $3.5 million gain on sale of building and
land in Hialeah, Florida), respectively. These restructuring
charges were primarily associated with our supply chain improvement
initiative and Orange County consolidation project, and included
charges related to severance, relocation, asset impairment and
other duplicative exit costs. Furthermore, on February 27, 2009, we
announced that we had signed a definitive agreement to buy the
lab-based diagnostic business of Olympus Corporation. In connection
with this acquisition, we incurred acquisition related expenses of
$10.9 million and $20.7 for the quarter and six months ended June
30, 2009, respectively, primarily pertaining to legal and
consulting services. b) Forward contract gain - acquisition -
Consideration for the acquisition of the lab-based diagnostics
business of Olympus Corporation is to be paid in Japanese Yen. To
mitigate unfavorable fluctuation in the movement of the Yen in
relation to the U.S. dollar, we entered into forward contracts to
purchase Japanese Yen at the spot rate to effectively fix the U.S.
dollar cost of the closing payment to approximately $780 million.
These business acquisition related forward contracts cannot be
designated as hedged instruments under accounting rules. Gains or
losses on derivative contracts not designated as a hedged
instrument are recognized in earnings. As a result, we recognized a
gain of approximately $20.5 and $8.7 million for the quarter and
six months ended June 30, 2009, respectively, which is reflected
within non-operating income in our consolidated statements of
earnings. c) Fair market value inventory adjustment - During the
first quarter of 2008, in connection with our acquisition of the
flow cytometry business of Dako A/S, we recorded a $1.0 million
charge related to the fair value of acquired inventory sold in the
first quarter. d) Interest expense on debt offering - On May 26,
2009, we issued $250 million principal amount of the Company's 6%
Senior Notes due 2015 and $250 million principal amount of the
Company's 7% Senior Notes due 2019 (the "Notes"). The proceeds from
the Notes will be used to partially fund the acquisition of the
lab-based diagnostics business of Olympus Corporation. During the
second quarter of 2009, we incurred approximately $3.2 million in
net interest expense associated with these Notes. e) HCV sublicense
-- During the second quarter of 2008, we entered into an agreement
with Siemens Healthcare Diagnostics and recorded an R&D charge
of $12.0 million, for sublicense rights relating to testing for the
hepatitis C virus (HCV). Under the agreement, we can develop,
manufacture and sell a quantitative viral load HCV blood test for
use on our molecular diagnostic instrument, which is in
development. f) Miami vacant land sale -- During the second quarter
2008, we received the remaining $1.2 million held in escrow related
to our 2007 sale of vacant land adjacent to our Miami, Florida
facility and recorded a gain on sale in other non-operating income.
BECKMAN COULTER, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except amounts per share and share data) (unaudited)
Quarter Ended Six Months Ended June 30, June 30, 2009 2008 2009
2008 Recurring revenue - supplies, service and lease payments
$629.0 $618.7 $1,202.7 $1,198.0 Cash instrument sales 127.7 179.6
245.5 330.8 Total revenue 756.7 798.3 1,448.2 1,528.8 Cost of
recurring revenue 285.0 278.1 553.3 548.6 Cost of cash instrument
sales 114.8 153.3 218.9 284.5 Total cost of sales 399.8 431.4 772.2
833.1 Gross profit 356.9 366.9 676.0 695.7 Operating costs and
expenses Selling, general and administrative 198.7 212.7 391.9
416.3 Research and development 60.7 77.7 120.6 140.4 Restructuring
and acquisition related costs 21.6 4.7 48.0 5.4 Total operating
costs and expenses 281.0 295.1 560.5 562.1 Operating income 75.9
71.8 115.5 133.6 Non-operating (income) expense Interest income
(1.3) (3.6) (2.6) (6.2) Interest expense 17.5 15.5 28.4 27.8 Other,
net (18.7) (2.2) (6.9) (3.5) Total non-operating (income) expense
(2.5) 9.7 18.9 18.1 Earnings before income taxes 78.4 62.1 96.6
115.5 Income tax provision 17.6 16.2 15.2 28.7 Net earnings $60.8
$45.9 $81.4 $86.8 Basic earnings per share $0.95 $0.73 $1.28 $1.38
Diluted earnings per share $0.94 $0.71 $1.26 $1.35 Weighted average
number of shares outstanding (in thousands) Basic 63,841 62,969
63,693 63,005 Diluted 64,828 64,397 64,428 64,435 BECKMAN COULTER,
INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions)
(unaudited) June 30, December 31, 2009 2008 Assets Current assets
Cash and cash equivalents $665.5 $120.0 Trade and other
receivables, net 688.2 706.7 Inventories 535.7 496.2 Deferred
income taxes 67.5 62.5 Prepaids and other current assets 106.0 76.3
Total current assets 2,062.9 1,461.7 Property, plant and equipment,
net 497.9 465.5 Customer leased instruments, net 462.2 448.7
Goodwill 700.9 696.3 Other intangible assets, net 391.3 396.8
Deferred income taxes - 1.3 Other assets 62.1 71.5 Total assets
$4,177.3 $3,541.8 Liabilities and Stockholders' Equity Current
liabilities Accounts payable $200.4 $172.2 Accrued expenses 446.6
416.9 Income taxes payable - 29.7 Short-term borrowings 4.7 21.4
Current maturities of long-term debt 4.1 4.4 Total current
liabilities 655.8 644.6 Long-term debt, less current maturities
1,311.6 819.0 Deferred income taxes 64.4 - Other liabilities 529.5
595.9 Total liabilities 2,561.3 2,059.5 Commitments and
contingencies Stockholders' equity Preferred stock - - Common stock
6.9 6.9 Additional paid-in capital 628.5 621.5 Retained earnings
1,441.3 1,381.6 Accumulated other comprehensive loss (167.3)
(199.8) Treasury stock, at cost (293.4) (327.9) Common stock held
in grantor trust, at cost (20.9) (19.3) Grantor trust liability
20.9 19.3 Total stockholders' equity 1,616.0 1,482.3 Total
liabilities and stockholders' equity $4,177.3 $3,541.8 BECKMAN
COULTER, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in
millions) (unaudited) Six Months Ended June 30, 2009 2008 Cash
flows from operating activities Net earnings $81.4 $86.8
Adjustments to reconcile net earnings to net cash provided by
operating activities Depreciation and amortization 138.8 122.4
Provision for doubtful accounts receivable 0.2 4.4 Share-based
compensation expense 18.7 18.1 Gain on sales of building and land -
(5.9) Accreted interest on convertible debt 7.1 6.6 U.S. pension
trust contributions (24.0) (8.2) Deferred income taxes (10.0) 3.1
Changes in assets and liabilities, net of acquisitions Trade and
other receivables 24.5 (6.0) Prepaid and other current assets
(12.9) 1.3 Inventories (50.4) (38.5) Accounts payable and accrued
expenses 40.8 (30.5) Income taxes payable 14.4 (32.2) Long-term
lease receivables 7.6 7.3 Other (10.7) 3.6 Net cash provided by
operating activities 225.5 132.3 Cash flows from investing
activities Additions to property, plant and equipment (66.0) (39.4)
Additions to customer leased instruments (72.7) (95.8) Proceeds
from sales of building and land - 7.4 Payments for business
acquisitions and technology license assets, net of cash acquired
(18.8) (15.3) Net cash used in investing activities (157.5) (143.1)
Cash flows from financing activities Dividends to stockholders
(21.7) (21.2) Proceeds from issuance of stock 28.9 38.4 Repurchase
of common stock as treasury stock - (70.9) Repurchase of common
stock held in grantor trust (1.7) (1.1) Excess tax benefits from
share-based payment transactions 1.3 6.3 Proceeds from issuance of
long-term debt 497.8 - Debt issuance costs (9.0) - Debt repayments
- (16.7) Net (repayments) borrowings on lines of credit (18.9) 58.5
Net cash provided by (used in) financing activities 476.7 (6.7)
Effect of exchange rates on cash and cash equivalents 0.8 4.0
Change in cash and cash equivalents 545.5 (13.5) Cash and cash
equivalents-beginning of period 120.0 83.0 Cash and cash
equivalents-end of period $665.5 $69.5 BECKMAN COULTER, INC SEGMENT
REVENUES(1) (in millions) (unaudited) Quarter Ended June 30,
Constant Reported Currency 2009 2008 Growth % Growth %(2) Clinical
Diagnostics Chemistry and Clinical Automation $218.7 $233.1 (6.2)%
(0.6)% Cellular Analysis 226.4 244.4 (7.4)% (2.8)% Immunoassay and
Molecular Diagnostics 202.7 193.3 4.9% 11.2% Total Clinical
Diagnostics 647.8 670.8 (3.4)% 2.0% Life Sciences 108.8 127.5
(14.7)% (9.3)% Total revenues $756.7 $798.3 (5.2)% 0.2% Six Months
Ended June 30, Constant Reported Currency 2009 2008 Growth % Growth
%(2) Clinical Diagnostics Chemistry and Clinical Automation $425.7
$448.8 (5.2)% 0.2% Cellular Analysis 439.9 475.8 (7.6)% (2.9)%
Immunoassay and Molecular Diagnostics 379.6 366.2 3.7% 9.8% Total
Clinical Diagnostics 1,245.1 1,290.8 (3.5)% 1.8% Life Sciences
203.0 238.0 (14.7)% (9.6)% Total revenues $1,448.2 $1,528.8 (5.3)%
0.0% (1) Amounts may not foot due to rounding. (2) Constant
currency growth as presented herein represents - Current period
constant currency revenue less prior year reported revenue / Prior
year reported revenue BECKMAN COULTER, INC SEGMENT REVENUES (1) (in
millions) (unaudited) 2008 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Clinical
Diagnostics: Chemistry and Clinical Automation $215.6 $233.0 $220.4
$229.7 $898.6 Cellular Analysis 231.5 244.5 233.1 245.1 954.2
Immunoassay and Molecular Diagnostics 172.9 193.3 182.4 190.5 739.1
Total Clinical Diagnostics 620.0 670.8 635.9 665.3 2,591.9 Life
Sciences 110.5 127.5 122.9 146.0 507.0 Total revenues $730.5 $798.3
$758.8 $811.3 $3,098.9 2007 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Clinical
Diagnostics Chemistry and Clinical Automation $183.9 $205.0 $196.5
$229.9 $815.3 Cellular Analysis 194.4 208.3 203.0 235.2 840.9
Immunoassay and Molecular Diagnostics 141.9 159.7 159.6 166.0 627.2
Total Clinical Diagnostics 520.2 573.0 559.1 631.0 2,283.4 Life
Sciences 93.4 116.7 109.9 158.0 477.9 Total revenues $613.6 $689.7
$669.0 $789.0 $2,761.3 (1) Amounts may not foot due to rounding.
Clinical Diagnostics Chemistry and Clinical Automation includes:
> Autochemistry > Protein and rapid test products >
Clinical Automation Cellular includes: > Hematology >
Coagulation > Flow cytometry and related products Immunoassay
and Molecular Diagnostics includes: > All immunoassay products
> Molecular diagnostics products Life Sciences Life Sciences
includes: > Life science tools: (All robotic automation, genetic
analysis products, centrifuge and analytical systems) >
Industrial particle characterization BECKMAN COULTER, INC REVENUE
BY GEOGRAPHY (1) (in millions) (unaudited) Quarter Ended June 30,
Constant Reported Currency 2009 2008 Growth % Growth % Revenue by
geography: United States $376.7 $389.7 (3.3)% (3.3)% Europe 166.1
183.4 (9.5)% 4.6% Emerging Markets (2) 62.2 70.0 (11.2)% (1.3)%
Asia Pacific 102.9 100.9 2.1% 4.4% Other (3) 48.7 54.2 (10.2)% 4.7%
Total revenues $756.7 $798.3 (5.2)% 0.2% Six Months Ended June 30,
Constant Reported Currency 2009 2008 Growth % Growth % Revenue by
geography: United States $732.8 $756.9 (3.2)% (3.2)% Europe 310.9
346.4 (10.2)% 3.2% Emerging Markets (2) 113.1 136.3 (17.0)% (6.0)%
Asia Pacific 199.6 184.6 8.1% 9.4% Other (3) 91.7 104.5 (12.3)%
3.9% Total revenues $1,448.2 $1,528.8 (5.3)% 0.0% (1) Amounts may
not foot due to rounding (2) Includes Eastern Europe, Russia,
Middle East, Africa and India (3) Includes Canada and Latin America
BECKMAN COULTER, INC. SALES MIX (1) (in millions) (unaudited) 2009
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Recurring revenue $573.7 $629.0 Cash
instrument sales 117.8 127.7 Total revenues $691.5 $756.7 2008 Qtr
1 Qtr 2 Qtr 3 Qtr 4 Year Recurring revenue $579.3 $618.7 $594.6
$610.0 $2,402.6 Cash instrument sales 151.2 179.6 164.2 201.3 696.3
Total revenues $730.5 $798.3 $758.8 $811.3 $3,098.9 2007 Qtr 1 Qtr
2 Qtr 3 Qtr 4 Year Recurring revenue $513.3 $546.0 $538.6 $580.5
$2,178.4 Cash instrument sales 100.3 143.7 130.4 208.5 582.9 Total
revenues $613.6 $689.7 $669.0 $789.0 $2,761.3 (1) Amounts may not
foot due to rounding. BECKMAN COULTER, INC. RECONCILIATION OF GAAP
OPERATING EXPENSE TO ADJUSTED OPERATING EXPENSE (1) (2) (in
millions) (unaudited) Quarter Ended June 30, 2009 2008 GAAP
operating expense $281.0 $295.1 Reconciling items: Restructuring
and acquisition related expenses (a) (21.6) (4.7) HCV sublicense
(e) - (12.0) Adjusted operating expense $259.4 $278.4 Six Months
Ended June 30, 2009 2008 GAAP operating expense $560.5 $562.1
Reconciling items: Restructuring and acquisition related costs (a)
(48.0) (5.4) HCV sublicense (e) - (12.0) Adjusted operating expense
$512.5 $544.7 (1) Amounts may not foot due to rounding. (2) See
accompanying Non-GAAP Financial Measures section for description of
Non-GAAP adjustments. BECKMAN COULTER, INC. RECONCILIATION OF GAAP
OPERATING INCOME AND MARGIN TO ADJUSTED OPERATING INCOME AND MARGIN
(1) (2) (in millions) (unaudited) Quarter Ended June 30, 2009 2008
GAAP operating income $75.9 $71.8 Reconciling items: Restructuring
and acquisition related expenses (a) 21.6 4.7 HCV sublicense (e) -
12.0 Adjusted operating income $97.5 $88.5 GAAP operating margin
10.0% 9.0% Impact of adjustments 2.9% 2.1% Adjusted operating
margin 12.9% 11.1% Six Months Ended June 30, 2009 2008 GAAP
operating income $115.5 $133.6 Reconciling items: Restructuring and
acquisition related costs (a) 48.0 5.4 Fair market value inventory
adjustment (c) - 1.0 HCV sublicense (e) - 12.0 Adjusted operating
income $163.5 $152.0 GAAP operating margin 8.0% 8.7% Impact of
adjustments 3.3% 1.2% Adjusted operating margin 11.3% 9.9% (1)
Amounts may not foot due to rounding. (2) See accompanying Non-GAAP
Financial Measures section for description of Non-GAAP adjustments.
BECKMAN COULTER, INC. RECONCILIATION OF GAAP NET EARNINGS TO
ADJUSTED NET EARNINGS (1) (2) (in millions, except amounts per
share) (unaudited) Quarter Ended June 30, 2009 2008 Amount Per
Diluted Amount Per Diluted Share Share GAAP net earnings $60.8
$0.94 $45.9 $0.71 Reconciling items: Restructuring and acquisition
related costs (a) 21.6 0.35 4.7 0.07 Forward contract gain -
acquisition (b) (20.5) (0.33) - - Interest expense on debt offering
(d) 3.2 0.05 - - HCV sublicense (e) - - 12.0 0.19 Miami vacant land
sale (f) - - (1.2) (0.02) Adjustment for income taxes (1.2) (0.02)
(6.0) (0.09) Adjusted net earnings $63.9 $0.99 $55.4 $0.86 Six
Months Ended June 30, 2009 2008 Amount Per Diluted Amount Per
Diluted Share Share GAAP net earnings $81.4 $1.26 $86.8 $1.35
Reconciling items: Restructuring and acquisition related costs (a)
48.0 0.75 5.4 0.08 Forward contract gain - acquisition (b) (8.7)
(0.13) - - Fair market value inventory adjustment (c) - - 1.0 0.02
Interest expense on debt offering (d) 3.2 0.05 - - HCV sublicense
(e) - - 12.0 0.18 Miami vacant land sale (f) - - (1.2) (0.02)
Adjustment for income taxes (14.5) (0.23) (6.6) (0.10) Adjusted net
earnings $109.4 $1.70 $97.4 $1.51 (1) Amounts may not foot due to
rounding. (2) See accompanying Non-GAAP Financial Measures section
for description of Non-GAAP adjustments. BECKMAN COULTER, INC.
RECONCILIATION OF GAAP NET EARNINGS TO ADJUSTED EBITDA (1) (2) (in
millions) (unaudited) Quarter Ended June 30, 2009 2008 GAAP net
earnings $60.8 $45.9 Income taxes 17.6 16.2 Interest expense 17.5
15.5 Depreciation and amortization 71.3 63.1 EBITDA 167.2 140.7
Reconciling items: Restructuring and acquisition related costs (a)
21.6 4.7 Forward contract gain - acquisition (b) (20.5) - HCV
sublicense (e) - 12.0 Miami vacant land sale (f) - (1.2) Adjusted
EBITDA $168.3 $156.2 Six Months Ended June 30, 2009 2008 GAAP net
earnings $81.4 $86.8 Income taxes 15.2 28.7 Interest expense 28.4
27.8 Depreciation and amortization 138.8 122.4 EBITDA 263.8 265.7
Reconciling items: Restructuring and acquisition related costs (a)
48.0 5.4 Forward contract gain - acquisition (b) (8.7) - Fair
market value inventory adjustment (c) - 1.0 HCV sublicense (e) -
12.0 Miami vacant land sale (f) - (1.2) Adjusted EBITDA $303.1
$282.9 (1) Amounts may not foot due to rounding. (2) See
accompanying Non-GAAP Financial Measures section for description of
Non-GAAP adjustments. BECKMAN COULTER, INC. RECONCILIATION OF GAAP
TAX RATE TO ADJUSTED TAX RATE (1) (2) (in millions) (unaudited)
Quarter Ended June 30, 2009 2008 GAAP tax rate 22.4% 26.1%
Reconciling items: Restructuring and acquisition related costs (a)
1.8% 0.7% Forward contract gain - acquisition (b) (1.8)% - Interest
expense on debt offering (d) 0.3% - HCV sublicense (e) - 1.9% Miami
vacant land sale (f) - (0.2)% Adjusted tax rate 22.7% 28.5% Six
Months Ended June 30, 2009 2008 GAAP tax rate 15.7% 24.8%
Reconciling items: Restructuring and acquisition related costs (a)
6.5% 0.5% Forward contract gain - acquisition (b) (1.3)% - Fair
market value inventory adjustments (c) - 0.1% Interest expense on
debt offering (d) 0.5% - HCV sublicense (e) - 1.2% Miami vacant
land sale (f) - (0.1%) Adjusted tax rate 21.4% 26.5% (1) Amounts
may not foot due to rounding. (2) See accompanying Non-GAAP
Financial Measures section for description of Non-GAAP adjustments.
BECKMAN COULTER, INC. RECONCILIATION OF FREE CASH FLOW (in
millions) (unaudited) Six Months Ended June 30, 2009 2008 Net cash
provided by operating activities $225.5 $132.3 Additions to
property, plant and equipment (66.0) (39.4) Additions to customer
leased instruments (72.7) (95.8) Free cash flow $86.8 $(2.9)
Contact: Cynthia Skoglund (714) 773-7620 Manager, Investor
Relations http://www.newscom.com/cgi-bin/prnh/20031202/BECLOGO
http://photoarchive.ap.org/ DATASOURCE: Beckman Coulter, Inc.
CONTACT: Cynthia Skoglund, Manager, Investor Relations of Beckman
Coulter, Inc., +1-714-773-7620 Web Site:
http://www.beckmancoulter.com/
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