- Revenue of $1.228 billion; 51% reported growth; 41% organic
growth
- GAAP EPS from continuing operations of $2.19; Adjusted EPS
of $2.83
- Initiates Third Quarter and Raises Full-Year Revenue and
Earnings Guidance
- Announces Agreement to Acquire BioLegend – Leading Antibody
& Research Reagent Provider
Earnings Call Moved to Today at
8:00 a.m. Eastern Time; Dial-in Information Below
PerkinElmer, Inc. (NYSE: PKI), a global leader committed to
innovating for a healthier world, today reported financial results
for the second quarter ended July 4, 2021.
The Company reported GAAP earnings per share from continuing
operations of $2.19, as compared to GAAP earnings per share from
continuing operations of $1.23 in the second quarter of 2020. GAAP
revenue for the quarter was $1.228 billion, as compared to $812
million in the second quarter of 2020. GAAP operating income from
continuing operations for the quarter was $332 million, as compared
to $176 million for the same period a year ago. GAAP operating
profit margin was 27.1% as a percentage of revenue, as compared to
21.6% in the second quarter of 2020.
Adjusted earnings per share from continuing operations for the
quarter was $2.83, as compared to $1.57 in the second quarter of
2020. Adjusted revenue for the quarter was $1.229 billion, as
compared to $812 million in the second quarter of 2020. Adjusted
operating income from continuing operations for the quarter was
$411 million, as compared to $228 million for the same period a
year ago. Adjusted operating profit margin was 33.5% as a
percentage of adjusted revenue, as compared to 28.1% in the second
quarter of 2020.
Adjustments for the Company's non-GAAP financial measures have
been noted in the attached reconciliations.
“The organization continues to perform extremely well through
the first half of 2021. Underpinned by the strategic pillars we
highlighted at our recent Analyst Day and now the exciting addition
of BioLegend, PerkinElmer is well positioned to execute on both our
near- and long-term goals,” said Prahlad Singh, president and chief
executive officer of PerkinElmer. “The tremendous efforts by the
more than 14,000 PerkinElmer employees across the globe have been
instrumental in transforming the company into what it is today. I
could not be more excited for what is to come in the years
ahead.”
Financial Overview by Reporting Segment for the Second
Quarter
Discovery & Analytical Solutions
- Second quarter 2021 revenue was $513 million, as compared to
$391 million for the second quarter of 2020. Reported revenue
increased 31% and organic revenue increased 22% as compared to the
second quarter of 2020.
- Second quarter 2021 operating income from continuing operations
was $64 million, as compared to $39 million for the comparable
prior period.
- Second quarter 2021 adjusted operating income was $101 million,
as compared to $57 million for the second quarter of 2020.
Diagnostics
- Second quarter 2021 revenue was $716 million, as compared to
$421 million for the second quarter of 2020. Reported revenue
increased 70% and organic revenue increased 59% as compared to the
second quarter of 2020.
- Second quarter 2021 operating income from continuing operations
was $286 million, as compared to $160 million for the comparable
prior period.
- Second quarter 2021 adjusted operating income was $328 million,
as compared to $190 million for the second quarter of 2020.
Initiates Third Quarter Guidance and Raises Full Year 2021
Guidance
For the third quarter of 2021, the Company forecasts adjusted
revenue of approximately $1.00 billion and adjusted earnings per
share of $1.62.
For the full year of 2021, the Company now forecasts adjusted
revenue of $4.57 billion and adjusted earnings per share of
$9.88.
Guidance for the third quarter and full year is provided on a
non-GAAP basis and cannot be reconciled to the closest GAAP
measures without unreasonable effort due to the unpredictability of
the amounts and timing of events affecting the items the Company
excludes from these non-GAAP measures. The timing and amounts of
such events and items could be material to the Company’s results
prepared in accordance with GAAP.
Announces Acquisition of BioLegend
The Company has also announced today that it has reached an
agreement to acquire BioLegend, a leading manufacturer of
innovative antibodies and research reagents for $5.25 billion.
Please see today’s separate release for additional details on this
transaction.
Conference Call Information
The Company will discuss its second quarter 2021 results, its
outlook for business trends, and its acquisition of BioLegend in a
conference call on July 26, 2021 at 8:00 a.m. Eastern Time. To
access the call, please dial 720-405-2250 prior to the scheduled
conference call time and provide the access code 9275741.
A live audio webcast of the call will be available on the
Investors section of the Company’s website, www.perkinelmer.com.
Please go to the site at least 15 minutes prior to the call in
order to register, download, and install any necessary software. An
archived version of the webcast will be posted on the Company’s
website for a two-week period beginning approximately two hours
after the call.
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with
generally accepted accounting principles (GAAP), this earnings
announcement also contains non-GAAP financial measures. The reasons
that we use these measures, a reconciliation of these measures to
the most directly comparable GAAP measures, and other information
relating to these measures are included below following our GAAP
financial statements.
Factors Affecting Future Performance
This press release contains "forward-looking" statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including, but not limited to, statements relating to
estimates and projections of future earnings per share, cash flow
and revenue growth and other financial results, developments
relating to our customers and end-markets, and plans concerning
business development opportunities, acquisitions and divestitures.
Words such as "believes," "intends," "anticipates," "plans,"
"expects," "projects," "forecasts," "will" and similar expressions,
and references to guidance, are intended to identify
forward-looking statements. Such statements are based on
management's current assumptions and expectations and no assurances
can be given that our assumptions or expectations will prove to be
correct. A number of important risk factors could cause actual
results to differ materially from the results described, implied or
projected in any forward-looking statements. These factors include,
without limitation: (1) markets into which we sell our products
declining or not growing as anticipated; (2) the effect of the
COVID-19 pandemic on our sales and operations; (3) fluctuations in
the global economic and political environments; (4) our failure to
introduce new products in a timely manner; (5) our ability to
execute acquisitions, such as BioLegend, and license technologies,
or to successfully integrate acquired businesses and licensed
technologies into our existing business or to make them profitable,
or successfully divest businesses; (6) our ability to compete
effectively; (7) fluctuation in our quarterly operating results and
our ability to adjust our operations to address unexpected changes;
(8) significant disruption in third-party package delivery and
import/export services or significant increases in prices for those
services; (9) disruptions in the supply of raw materials and
supplies; (10) our ability to retain key personnel; (11)
significant disruption in our information technology systems, or
cybercrime; (12) our ability to realize the full value of our
intangible assets; (13) our failure to adequately protect our
intellectual property; (14) the loss of any of our licenses or
licensed rights; (15) the manufacture and sale of products exposing
us to product liability claims; (16) our failure to maintain
compliance with applicable government regulations; (17) regulatory
changes; (18) our failure to comply with healthcare industry
regulations; (19) economic, political and other risks associated
with foreign operations; (20) the United Kingdom’s withdrawal from
the European Union; (21) our ability to obtain future financing;
(22) restrictions in our credit agreements; (23) discontinuation or
replacement of LIBOR; (24) significant fluctuations in our stock
price; (25) reduction or elimination of dividends on our common
stock; and (26) other factors which we describe under the caption
"Risk Factors" in our most recent quarterly report on Form 10-Q and
in our other filings with the Securities and Exchange Commission.
We disclaim any intention or obligation to update any
forward-looking statements as a result of developments occurring
after the date of this press release.
About PerkinElmer
PerkinElmer, Inc. is a global leader focused on innovating for a
healthier world. The Company reported revenue of approximately $3.8
billion in 2020, has about 14,000 employees serving customers in
more than 190 countries, and is a component of the S&P 500
Index. Additional information is available through 1-877-PKI-NYSE,
or at www.perkinelmer.com.
PerkinElmer, Inc. and Subsidiaries CONDENSED CONSOLIDATED
INCOME STATEMENTS
Three
Months Ended
Six
Months Ended
(In thousands, except per share data) July 4, 2021 July 5,
2020 July 4, 2021
July 5, 2020
Revenue
$1,228,471
$811,718
$2,536,160
$1,464,114
Cost of revenue
543,277
364,374
1,065,820
708,747
Selling, general and administrative expenses
281,819
221,026
533,229
429,595
Research and development expenses
65,824
49,521
126,040
98,435
Restructuring and other, net
5,063
1,158
10,807
7,016
Operating income from continuing operations
332,488
175,639
800,264
220,321
Interest income
(367
)
(192
)
(778
)
(457
)
Interest expense
16,750
11,586
30,876
25,251
Change in fair value of financial securities
(8,633
)
-
(27,931
)
-
Other income, net
(1,319
)
(582
)
(8,442
)
(3,989
)
Income from continuing operations, before income taxes
326,057
164,827
806,539
199,516
Provision for income taxes
80,089
27,614
181,228
28,588
Income from continuing operations
245,968
137,213
625,311
170,928
Loss on disposition of discontinued operations, before
income taxes
-
-
-
-
Provision for income taxes on discontinued operations and
dispositions
38
51
76
101
Loss from discontinued operations and dispositions
(38
)
(51
)
(76
)
(101
)
Net income
$245,930
$137,162
$625,235
$170,827
Diluted earnings per share: Income from
continuing operations
$2.19
$1.23
$5.56
$1.53
Loss from discontinued operations and dispositions
(0.00
)
(0.00
)
(0.00
)
(0.00
)
Net income
$2.19
$1.23
$5.56
$1.53
Weighted average diluted shares of common stock
outstanding
112,417
111,869
112,456
111,756
ABOVE PREPARED IN ACCORDANCE WITH GAAP
Additional
Supplemental Information (1): (per share, continuing
operations) GAAP EPS from continuing operations
$2.19
$1.23
$5.56
$1.53
Amortization of intangible assets
0.53
0.42
1.01
0.84
Purchase accounting adjustments
0.03
0.01
0.07
(0.09
)
Acquisition and divestiture-related costs
0.09
(0.05
)
0.13
0.06
Change in fair value of financial securities
(0.08
)
-
(0.25
)
-
Significant litigation matters and settlements
-
0.03
-
0.03
Significant environmental matters
-
0.05
-
0.05
Restructuring and other, net
0.05
0.01
0.10
0.06
Tax on above items
(0.11
)
(0.13
)
(0.21
)
(0.25
)
Significant tax items
0.13
-
0.13
-
Adjusted EPS
$2.83
$1.57
$6.55
$2.24
(1) amounts may not sum due to rounding
PerkinElmer, Inc. and Subsidiaries REVENUE AND OPERATING
INCOME (LOSS) Three
Months Ended Six Months
Ended (In thousands, except percentages)
July 4, 2021 July 5, 2020 July 4,
2021 July 5, 2020
DAS Reported revenue
$512,829
$391,002
$967,438
$789,397
Purchase accounting adjustments
822
-
1,849
-
Adjusted revenue
513,651
391,002
969,287
789,397
Reported operating income from continued operations
64,155
39,430
107,102
67,943
OP%
12.5
%
10.1
%
11.1
%
8.6
%
Amortization of intangible assets
23,072
20,506
43,492
41,216
Purchase accounting adjustments
1,473
136
3,649
(11,334
)
Acquisition and divestiture-related costs
8,597
(5,486
)
14,505
6,833
Significant litigation matters and settlements
-
2,001
-
2,399
Restructuring and other, net
3,615
845
7,744
4,754
Adjusted operating income
100,912
57,432
176,492
111,811
Adjusted OP%
19.6
%
14.7
%
18.2
%
14.2
%
Diagnostics Reported revenue
715,642
420,716
1,568,722
674,717
Purchase accounting adjustments
199
196
398
392
Adjusted revenue
715,841
420,912
1,569,120
675,109
Reported operating income from continued operations
286,280
160,300
727,747
189,891
OP%
40.0
%
38.1
%
46.4
%
28.1
%
Amortization of intangible assets
36,489
26,211
70,226
52,751
Purchase accounting adjustments
2,107
1,336
4,378
1,765
Acquisition and divestiture-related costs
2,051
263
5,810
305
Significant litigation matters and settlements
-
1,200
-
1,245
Restructuring and other, net
1,448
313
3,063
2,262
Adjusted operating income
328,375
189,623
811,224
248,219
Adjusted OP%
45.9
%
45.1
%
51.7
%
36.8
%
Corporate Reported operating loss
(17,947
)
(24,091
)
(34,585
)
(37,513
)
Significant environmental matters
-
5,242
-
5,242
Adjusted operating loss
(17,947
)
(18,849
)
(34,585
)
(32,271
)
Continuing Operations Reported revenue
$1,228,471
$811,718
$2,536,160
$1,464,114
Purchase accounting adjustments
1,021
196
2,247
392
Adjusted revenue
1,229,492
811,914
2,538,407
1,464,506
Reported operating income from continued operations
332,488
175,639
800,264
220,321
OP%
27.1
%
21.6
%
31.6
%
15.0
%
Amortization of intangible assets
59,561
46,717
113,718
93,967
Purchase accounting adjustments
3,580
1,472
8,027
(9,569
)
Acquisition and divestiture-related costs
10,648
(5,223
)
20,315
7,138
Significant litigation matters and settlements
-
3,201
-
3,644
Significant environmental matters
-
5,242
-
5,242
Restructuring and other, net
5,063
1,158
10,807
7,016
Adjusted operating income
$411,340
$228,206
$953,131
$327,759
Adjusted OP%
33.5
%
28.1
%
37.5
%
22.4
%
REPORTED REVENUE AND REPORTED OPERATING INCOME (LOSS)
PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and
Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) July 4, 2021 January
3, 2021 Current assets: Cash and
cash equivalents
$572,810
$402,036
Accounts receivable, net
992,602
1,155,109
Inventories, net
513,429
514,567
Other current assets
181,151
167,208
Total current assets
2,259,992
2,238,920
Property, plant and equipment, net
379,065
368,304
Operating lease right-of-use assets
208,494
207,236
Intangible assets, net
1,561,534
1,365,693
Goodwill
3,844,070
3,447,114
Other assets, net
486,306
333,048
Total assets
$8,739,461
$7,960,315
Current liabilities: Current portion of
long-term debt
$4,669
$380,948
Accounts payable
324,711
327,325
Accrued expenses and other current liabilities
793,443
943,916
Total current liabilities
1,122,823
1,652,189
Long-term debt
2,348,523
1,609,701
Long-term liabilities
838,974
774,531
Operating lease liabilities
189,334
188,402
Total liabilities
4,499,654
4,224,823
Total stockholders' equity
4,239,807
3,735,492
Total liabilities and stockholders' equity
$8,739,461
$7,960,315
PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc.
and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months
Ended Six Months
Ended July 4,
2021 July 5, 2020
July 4, 2021 July 5, 2020 (In thousands) (In
thousands)
Operating activities: Net
income
$245,930
$137,162
$625,235
$170,827
Loss from discontinued operations and dispositions, net of income
taxes
38
51
76
101
Income from continuing operations
245,968
137,213
625,311
170,928
Adjustments to reconcile income from continuing operations
to net cash provided by continuing operations: Stock-based
compensation
7,204
9,604
12,361
12,654
Restructuring and other, net
5,063
1,158
10,807
7,016
Depreciation and amortization
75,636
59,289
145,822
120,047
Change in fair value of contingent consideration
237
879
477
(11,446
)
Amortization of deferred debt financing costs and accretion of
discounts
828
935
1,724
1,642
Change in fair value of financial securities
(8,633
)
-
(27,931
)
-
Amortization of acquired inventory revaluation
2,322
397
5,303
1,485
Loss on disposition of businesses and assets, net
-
485
-
485
Changes in assets and liabilities which provided (used) cash,
excluding effects from companies acquired: Accounts
receivable, net
(9,920
)
(76,288
)
155,270
4,312
Inventories
22,246
(71,949
)
7,239
(126,707
)
Accounts payable
(21,747
)
17,744
(26,795
)
20,907
Accrued expenses and other
(31,342
)
59,130
(148,226
)
(2,677
)
Net cash provided by operating activities of continuing
operations
287,862
138,597
761,362
198,646
Investing activities: Capital
expenditures
(20,364
)
(16,650
)
(34,675
)
(37,138
)
Purchases of investments
(10,507
)
(5,755
)
(14,507
)
(7,393
)
Proceeds from surrender of life insurance policies
-
79
-
131
Proceeds from disposition of businesses and assets
-
1,755
-
1,815
Cash paid for acquisitions, net of cash, cash equivalents and
restricted cash acquired
(259,154
)
(2,990
)
(702,697
)
(2,990
)
Net cash used in investing activities of continuing
operations
(290,025
)
(23,561
)
(751,879
)
(45,575
)
Financing Activities: Payments on
borrowings
(20,000
)
(149,000
)
(763,545
)
(290,000
)
Proceeds from borrowings
145,000
63,000
729,000
188,000
Payments of senior debt
(339,605
)
-
(339,605
)
Proceeds from sale of senior debt
-
-
799,856
-
Payments of debt financing costs
(360
)
-
(8,242
)
-
Settlement of cash flow hedges
(11,940
)
(3,671
)
(5,935
)
5,037
Net payments on other credit facilities
(2,027
)
(1,753
)
(11,826
)
(6,036
)
Payments for acquisition-related contingent consideration
-
(5,200
)
-
(5,200
)
Proceeds from issuance of common stock under stock plans
9,198
8,968
14,185
10,074
Purchases of common stock
(30,145
)
(327
)
(72,924
)
(6,669
)
Dividends paid
(7,845
)
(7,791
)
(15,697
)
(15,572
)
Net cash (used in) provided by financing activities of
continuing operations
(257,724
)
(95,774
)
325,267
(120,366
)
Effect of exchange rate changes on cash, cash
equivalents, and restricted cash
(3,810
)
5,510
(10,659
)
(4,658
)
Net (decrease) increase in cash, cash equivalents,
and restricted cash
(263,697
)
24,772
324,091
28,047
Cash, cash equivalents, and restricted cash at beginning of period
990,401
195,169
402,613
191,894
Cash, cash equivalents, and restricted cash at end of period
$726,704
$219,941
$726,704
$219,941
Supplemental disclosure of cash flow
information:
Reconciliation of cash, cash equivalents
and restricted cash reported within the consolidated balance sheets
that sum to the total shown in the consolidated statements of cash
flows:
Cash and cash equivalents
$572,810
$218,536
$572,810
$218,536
Restricted cash included in other current assets
1,750
1,405
1,750
1,405
Restricted cash included in other assets
152,144
-
152,144
-
Total cash, cash equivalents and restricted cash
$726,704
$219,941
$726,704
$219,941
PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc.
and Subsidiaries RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (1) (In
millions, except per share data and percentages) PKI
Three Months Ended
July 4, 2021
July 5, 2020
Adjusted revenue:
Revenue
$1,228.5
$811.7
Purchase accounting adjustments
1.0
0.2
Adjusted revenue
$1,229.5
$811.9
Adjusted gross margin:
Gross margin
$685.2
55.8
%
$447.3
55.1
%
Amortization of intangible assets
22.7
1.8
%
16.0
2.0
%
Purchase accounting adjustments
3.3
0.3
%
0.6
0.1
%
Adjusted gross margin
$711.2
57.8
%
$463.9
57.1
%
Adjusted SG&A:
SG&A
$281.8
22.9
%
$221.0
27.2
%
Amortization of intangible assets
(36.9
)
-3.0
%
(30.7
)
-3.8
%
Purchase accounting adjustments
(0.2
)
0.0
%
(0.9
)
-0.1
%
Acquisition and divestiture-related expenses
(10.6
)
-0.9
%
5.2
0.6
%
Significant litigation matters and settlements
-
0.0
%
(3.2
)
-0.4
%
Significant environmental matters
-
0.0
%
(5.2
)
-0.6
%
Adjusted SG&A
$234.0
19.0
%
$186.2
22.9
%
R&D
$65.8
5.4
%
$49.5
6.1
%
Adjusted operating income:
Operating income
$332.5
27.1
%
$175.6
21.6
%
Amortization of intangible assets
59.6
4.8
%
46.7
5.8
%
Purchase accounting adjustments
3.6
0.3
%
1.5
0.2
%
Acquisition and divestiture-related costs
10.6
0.9
%
(5.2
)
-0.6
%
Significant litigation matters and settlements
-
0.0
%
3.2
0.4
%
Significant environmental matters
-
0.0
%
5.2
0.6
%
Restructuring and other, net
5.1
0.4
%
1.2
0.1
%
Adjusted operating income
$411.3
33.5
%
$228.2
28.1
%
PKI
Three Months Ended
July 4, 2021
July 5, 2020
Adjusted EPS: GAAP
EPS
$2.19
$1.23
Discontinued operations, net of income taxes
(0.00
)
(0.00
)
GAAP EPS from continuing operations
2.19
1.23
Amortization of intangible assets
0.53
0.42
Purchase accounting adjustments
0.03
0.01
Acquisition and divestiture-related costs
0.09
(0.05
)
Change in fair value of financial securities
(0.08
)
-
Significant litigation matters and settlements
-
0.03
Significant environmental matters
-
0.05
Restructuring and other, net
0.05
0.01
Tax on above items
(0.11
)
(0.13
)
Significant tax items
0.13
-
Adjusted EPS
$2.83
$1.57
DAS
Three Months Ended
July 4, 2021
July 5, 2020
Adjusted revenue:
Revenue
$512.8
$391.0
Purchase accounting adjustments
0.8
-
Adjusted revenue
$513.7
$391.0
Adjusted operating
income: Operating income
$64.2
12.5
%
$39.4
10.1
%
Amortization of intangible assets
23.1
4.5
%
20.5
5.2
%
Purchase accounting adjustments
1.5
0.3
%
0.1
0.0
%
Acquisition and divestiture-related costs
8.6
1.7
%
(5.5
)
-1.4
%
Significant litigation matters and settlements
-
0.0
%
2.0
0.5
%
Restructuring and other, net
3.6
0.7
%
0.8
0.2
%
Adjusted operating income
$100.9
19.6
%
$57.4
14.7
%
Diagnostics
Three Months Ended
July 4, 2021
July 5, 2020
Adjusted revenue:
Revenue
$715.6
$420.7
Purchase accounting adjustments
0.2
0.2
Adjusted revenue
$715.8
$420.9
Adjusted operating
income: Operating income
$286.3
40.0
%
$160.3
38.1
%
Amortization of intangible assets
36.5
5.1
%
26.2
6.2
%
Purchase accounting adjustments
2.1
0.3
%
1.3
0.3
%
Acquisition and divestiture-related costs
2.1
0.3
%
0.3
0.1
%
Significant litigation matters and settlements
-
0.0
%
1.2
0.3
%
Restructuring and other, net
1.4
0.2
%
0.3
0.1
%
Adjusted operating income
$328.4
45.9
%
$189.6
45.1
%
(1) amounts may not sum due to
rounding PerkinElmer, Inc. and
Subsidiaries RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (1) (In millions,
except per share data and percentages) PKI
Six Months Ended
July 4, 2021
July 5, 2020
Adjusted revenue:
Revenue
$2,536.2
$1,464.1
Purchase accounting adjustments
2.2
0.4
Adjusted revenue
$2,538.4
$1,464.5
Adjusted gross margin:
Gross margin
$1,470.3
58.0
%
$755.4
51.6
%
Amortization of intangible assets
43.0
1.7
%
32.1
2.2
%
Purchase accounting adjustments
7.6
0.3
%
1.9
0.1
%
Adjusted gross margin
$1,520.9
59.9
%
$789.3
53.9
%
Adjusted SG&A:
SG&A
$533.2
21.0
%
$429.6
29.3
%
Amortization of intangible assets
(70.7
)
-2.8
%
(61.9
)
-4.2
%
Purchase accounting adjustments
(0.5
)
0.0
%
11.4
0.8
%
Acquisition and divestiture-related expenses
(20.3
)
-0.8
%
(7.1
)
-0.5
%
Significant litigation matters and settlements
-
0.0
%
(3.6
)
-0.2
%
Significant environmental matters
-
0.0
%
(5.2
)
-0.4
%
Adjusted SG&A
$441.7
17.4
%
$363.1
24.8
%
R&D
$126.0
5.0
%
$98.4
6.7
%
Adjusted operating income:
Operating income
$800.3
31.6
%
$220.3
15.0
%
Amortization of intangible assets
113.7
4.5
%
94.0
6.4
%
Purchase accounting adjustments
8.0
0.3
%
(9.6
)
-0.7
%
Acquisition and divestiture-related costs
20.3
0.8
%
7.1
0.5
%
Significant litigation matters and settlements
-
0.0
%
3.6
0.2
%
Significant environmental matters
-
0.0
%
5.2
0.4
%
Restructuring and other, net
10.8
0.4
%
7.0
0.5
%
Adjusted operating income
$953.1
37.5
%
$327.8
22.4
%
PKI
Six Months Ended
July 4, 2021
July 5, 2020
Adjusted EPS: GAAP
EPS
$5.56
$1.53
Discontinued operations
(0.00
)
(0.00
)
GAAP EPS from continuing operations
5.56
1.53
Amortization of intangible assets
1.01
0.84
Purchase accounting adjustments
0.07
(0.09
)
Significant litigation matters and settlements
-
0.03
Significant environmental matters
-
0.05
Acquisition and divestiture-related costs
0.13
0.06
Change in fair value of financial securities
(0.25
)
-
Restructuring and other, net
0.10
0.06
Tax on above items
(0.21
)
(0.25
)
Significant tax items
0.13
-
Adjusted EPS
$6.55
$2.24
DAS
Six Months Ended
July 4, 2021
July 5, 2020
Adjusted revenue:
Revenue
$967.4
$789.4
Purchase accounting adjustments
1.8
-
Adjusted revenue
$969.3
$789.4
Adjusted operating
income: Operating income
$107.1
11.1
%
$67.9
8.6
%
Amortization of intangible assets
43.5
4.5
%
41.2
5.2
%
Purchase accounting adjustments
3.6
0.4
%
(11.3
)
-1.4
%
Acquisition and divestiture-related costs
14.5
1.5
%
6.8
0.9
%
Significant litigation matters and settlements
-
0.0
%
2.4
0.3
%
Restructuring and other, net
7.7
0.8
%
4.8
0.6
%
Adjusted operating income
$176.5
18.2
%
$111.8
14.2
%
Diagnostics
Six Months Ended
July 4, 2021
July 5, 2020
Adjusted revenue:
Revenue
$1,568.7
$674.7
Purchase accounting adjustments
0.4
0.4
Adjusted revenue
$1,569.1
$675.1
Adjusted operating
income: Operating income
$727.7
46.4
%
$189.9
28.1
%
Amortization of intangible assets
70.2
4.5
%
52.8
7.8
%
Purchase accounting adjustments
4.4
0.3
%
1.8
0.3
%
Acquisition and divestiture-related costs
5.8
0.4
%
0.3
0.0
%
Significant litigation matters and settlements
-
0.0
%
1.2
0.2
%
Restructuring and other, net
3.1
0.2
%
2.3
0.3
%
Adjusted operating income
$811.2
51.7
%
$248.2
36.8
%
(1) amounts may not sum due to
rounding PerkinElmer, Inc. and
Subsidiaries RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (1) PKI Three Months Ended
July 4, 2021 Organic revenue
growth: Reported revenue growth
51%
Less: effect of foreign exchange rates
5%
Less: effect of acquisitions including purchase accounting
adjustments and impact of divested businesses
6%
Organic revenue growth
41%
DAS Three Months Ended July 4, 2021 Organic revenue growth:
Reported revenue growth
31%
Less: effect of foreign exchange rates
4%
Less: effect of acquisitions including purchase accounting
adjustments and impact of divested businesses
6%
Organic revenue growth
22%
Diagnostics Three Months Ended July 4, 2021 Organic revenue growth:
Reported revenue growth
70%
Less: effect of foreign exchange rates
5%
Less: effect of acquisitions including purchase accounting
adjustments and impact of divested businesses
6%
Organic revenue growth
59%
(1) amounts may not sum due to rounding
Explanation of Non-GAAP Financial Measures
We report our financial results in accordance with GAAP.
However, management believes that, in order to more fully
understand our short-term and long-term financial and operational
trends, investors may wish to consider the impact of certain
non-cash, non-recurring or other items, which result from facts and
circumstances that vary in frequency and impact on continuing
operations. Accordingly, we present non-GAAP financial measures as
a supplement to the financial measures we present in accordance
with GAAP. These non-GAAP financial measures provide management
with additional means to understand and evaluate the operating
results and trends in our ongoing business by adjusting for certain
non-cash expenses and other items that management believes might
otherwise make comparisons of our ongoing business with prior
periods more difficult, obscure trends in ongoing operations, or
reduce management's ability to make useful forecasts. Management
believes these non-GAAP financial measures provide additional means
of evaluating period-over-period operating performance. In
addition, management understands that some investors and financial
analysts find this information helpful in analyzing our financial
and operational performance and comparing this performance to our
peers and competitors.
We use the term “adjusted revenue” to refer to GAAP revenue,
including purchase accounting adjustments for revenue from
contracts acquired in acquisitions that will not be fully
recognized due to accounting rules. We use the related term
“adjusted revenue growth” to refer to the measure of comparing
current period adjusted revenue with the corresponding period of
the prior year.
We use the term “organic revenue” to refer to GAAP revenue,
excluding the effect of foreign currency changes and revenue from
recent acquisitions and divestitures and including purchase
accounting adjustments for revenue from contracts acquired in
acquisitions that will not be fully recognized due to accounting
rules. We use the related term “organic revenue growth” to refer to
the measure of comparing current period organic revenue with the
corresponding period of the prior year.
We use the term “adjusted gross margin” to refer to GAAP gross
margin, excluding amortization of intangible assets and inventory
fair value adjustments related to business acquisitions, asset
impairments, and including purchase accounting adjustments for
revenue from contracts acquired in acquisitions that will not be
fully recognized due to business combination accounting rules. We
use the related term “adjusted gross margin percentage” to refer to
adjusted gross margin as a percentage of adjusted revenue.
We use the term “adjusted SG&A expense” to refer to GAAP
SG&A expense, excluding amortization of intangible assets,
purchase accounting adjustments, acquisition and
divestiture-related expenses, acceleration of executive
compensation, significant litigation matters and settlements, asset
impairments, and significant environmental charges. We use the
related term “adjusted SG&A percentage” to refer to adjusted
SG&A expense as a percentage of adjusted revenue.
We use the term “adjusted R&D expense” to refer to GAAP
R&D expense, excluding amortization of intangible assets and
purchase accounting adjustments. We use the related term “adjusted
R&D percentage” to refer to adjusted R&D expense as a
percentage of adjusted revenue.
We use the term “adjusted net interest and other expense” to
refer to GAAP net interest and other expense, excluding adjustments
for mark-to-market accounting on post-retirement benefits, changes
in the value of financial securities and debt extinguishment
costs.
We use the term “adjusted operating income,” to refer to GAAP
operating income, including revenue from contracts acquired in
acquisitions that will not be fully recognized due to accounting
rules, and excluding amortization of intangible assets, other
purchase accounting adjustments, acquisition and
divestiture-related expenses, acceleration of executive
compensation, significant litigation matters and settlements,
significant environmental charges, asset impairments, and
restructuring and other charges. We use the related terms “adjusted
operating profit percentage,” “adjusted operating profit margin,”
or “adjusted operating margin” to refer to adjusted operating
income as a percentage of adjusted revenue.
We use the term “adjusted earnings per share,” or “adjusted
EPS,” to refer to GAAP earnings per share, including revenue from
contracts acquired in acquisitions that will not be fully
recognized due to accounting rules, and excluding discontinued
operations, amortization of intangible assets, debt extinguishment
costs, other purchase accounting adjustments, acquisition and
divestiture-related expenses, acceleration of executive
compensation, significant litigation matters and settlements,
significant environmental charges, changes in the value of
financial securities, disposition of businesses and assets, net,
asset impairments and restructuring and other charges. We also
exclude adjustments for mark-to-market accounting on
post-retirement benefits, therefore only our projected costs have
been used to calculate this non-GAAP measure. We also adjust for
any tax impact related to the above items and exclude the impact of
significant tax events.
Management includes or excludes the effect of each of the items
identified below in the applicable non-GAAP financial measure
referenced above for the reasons set forth below with respect to
that item:
- Amortization of intangible assets—
purchased intangible assets are amortized over their estimated
useful lives and generally cannot be changed or influenced by
management after the acquisition. Accordingly, this item is not
considered by management in making operating decisions. Management
does not believe such charges accurately reflect the performance of
our ongoing operations for the period in which such charges are
incurred.
- Debt extinguishment costs—we incur
costs and income related to the extinguishment of debt; including
make-whole payments to debt holders, accelerated amortization of
debt fees and discounts, and expense or income from hedges to lock
in make whole payments. We exclude the impact of these items from
our non-GAAP measures because we believe they do not reflect the
performance of our ongoing operations.
- Revenue from contracts acquired in
acquisitions that will not be fully recognized due to accounting
rules— accounting rules require us to account for the fair
value of revenue from contracts assumed in connection with our
acquisitions. As a result, our GAAP results reflect the fair value
of those revenues, which is not the same as the revenue that
otherwise would have been recorded by the acquired entity. We
include such revenue in our non-GAAP measures because we believe
the fair value of such revenue does not accurately reflect the
performance of our ongoing operations for the period in which such
revenue is recorded.
- Other purchase accounting
adjustments—accounting rules require us to adjust various
balance sheet accounts, including inventory and deferred rent
balances to fair value at the time of the acquisition. As a result,
the expenses for these items in our GAAP results are not the same
as what would have been recorded by the acquired entity. Accounting
rules also require us to estimate the fair value of contingent
consideration at the time of the acquisition, and any subsequent
changes to the estimate or payment of the contingent consideration
and purchase accounting adjustments are charged to expense or
income. We exclude the impact of any changes to contingent
consideration from our non-GAAP measures because we believe these
expenses or benefits do not accurately reflect the performance of
our ongoing operations for the period in which such expenses or
benefits are recorded.
- Acquisition and divestiture-related
expenses—we incur legal, due diligence, stay bonuses,
incentive awards, interest expense, foreign exchange gains and
losses, integration expenses and other costs related to
acquisitions and divestitures. We exclude these expenses from our
non-GAAP measures because we believe they do not reflect the
performance of our ongoing operations.
- Asset impairments—we incur expense
related to asset impairments. Management does not believe such
charges accurately reflect the performance of our ongoing
operations for the periods in which such charges were
incurred.
- Acceleration of executive
compensation—the announced retirement of a senior executive
resulted in an acceleration of compensation expense. We exclude
these expenses from our non-GAAP measures because we believe they
do not reflect the performance of our ongoing operations.
- Restructuring and other
charges—restructuring and other charges consist of employee
severance, other exit costs as well as the cost of terminating
certain lease agreements or contracts as well as costs associated
with relocating facilities. Management does not believe such costs
accurately reflect the performance of our ongoing operations for
the period in which such costs are reported.
- Adjustments for mark-to-market accounting
on post-retirement benefits—we exclude adjustments for
mark-to-market accounting on post-retirement benefits, and
therefore only our projected costs are used to calculate our
non-GAAP measures. We exclude these adjustments because they do not
represent what we believe our investors consider to be costs of
producing our products, investments in technology and production,
and costs to support our internal operating structure.
- Significant litigation matters and
settlements—we incur expenses related to significant
litigation matters, including the costs to settle or resolve
various claims and legal proceedings. Management does not believe
such charges accurately reflect the performance of our ongoing
operations for the periods in which such charges were
incurred.
- Significant environmental
charges—we incur expenses related to significant
environmental charges. Management does not believe such charges
accurately reflect the performance of our ongoing operations for
the periods in which such charges were incurred.
- Disposition of businesses and assets,
net—we exclude the impact of gains or losses from the
disposition of businesses and assets from our adjusted earnings per
share. Management does not believe such gains or losses accurately
reflect the performance of our ongoing operations for the period in
which such gains or losses are reported.
- Impact of foreign currency changes on the
current period— we exclude the impact of foreign currency
from these measures by using the prior period’s foreign currency
exchange rates for the current period because foreign currency
exchange rates are subject to volatility and can obscure underlying
trends.
- Impact of significant tax events –
we exclude the impact of significant tax events, such as the Tax
Cuts and Jobs Act of 2017. Management does not believe the impact
of significant tax events accurately reflects the performance of
our ongoing operations for the periods in which the impact of such
events was recorded.
- Changes in value of financial
securities—we exclude the impact of changes in the value of
financial securities. Management does not believe such gains or
losses accurately reflect the performance of our ongoing operations
for the period in which such gains or losses are reported.
The tax effect for discontinued operations is calculated based
on the authoritative guidance in the Financial Accounting Standards
Board’s Accounting Standards Codification 740, Income Taxes. The
tax effect for amortization of intangible assets, inventory fair
value adjustments related to business acquisitions, changes to the
fair values assigned to contingent consideration, debt
extinguishment costs, other costs related to business acquisitions
and divestitures, acceleration of executive compensation,
significant litigation matters and settlements, significant
environmental charges, changes in the fair value of financial
securities, adjustments for mark-to-market accounting on
post-retirement benefits, disposition of businesses and assets,
net, restructuring and other charges, and the revenue from
contracts acquired with various acquisitions is calculated based on
operational results and applicable jurisdictional law, which
contemplates tax rates currently in effect to determine our tax
provision. The tax effect for the impact from foreign currency
exchange rates on the current period is calculated based on the
average rate currently in effect to determine our tax
provision.
The non-GAAP financial measures described above are not meant to
be considered superior to, or a substitute for, our financial
statements prepared in accordance with GAAP. There are material
limitations associated with non-GAAP financial measures because
they exclude charges that have an effect on our reported results
and, therefore, should not be relied upon as the sole financial
measures by which to evaluate our financial results. Management
compensates and believes that investors should compensate for these
limitations by viewing the non-GAAP financial measures in
conjunction with the GAAP financial measures. In addition, the
non-GAAP financial measures included in this earnings announcement
may be different from, and therefore may not be comparable to,
similar measures used by other companies.
Each of the non-GAAP financial measures listed above is also
used by our management to evaluate our operating performance,
communicate our financial results to our Board of Directors,
benchmark our results against our historical performance and the
performance of our peers, evaluate investment opportunities
including acquisitions and discontinued operations, and determine
the bonus payments for senior management and employees.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210726005239/en/
Investor Relations: PerkinElmer, Inc. Steve Willoughby (781)
663-5677 steve.willoughby@perkinelmer.com
Media Contact: PerkinElmer, Inc. Fara Goldberg (781) 663-5699
fara.goldberg@perkinelmer.com
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