WALTHAM, Mass., Oct. 27, 2021 /PRNewswire/ -- Thermo Fisher
Scientific Inc. (NYSE: TMO), the world leader in serving science,
today reported its financial results for the third quarter ended
October 2, 2021.
Third Quarter 2021 Highlights
- Third quarter revenue increased 9% to $9.33 billion.
- Third quarter GAAP diluted earnings per share (EPS) was
$4.79.
- Third quarter adjusted EPS was $5.76.
- Another quarter of high-impact innovation with a number of
product launches, including the Applied Biosystems QuantStudio
Absolute Q Digital PCR System to enable advancements in oncology,
cell and gene therapy and other research applications, the Thermo
Scientific TSQ Plus Triple Quadrupole mass spectrometer (MS)
portfolio to offer faster throughput and increased sensitivity
across a range of applications including biopharma, food safety and
environmental analysis, the Thermo Scientific Vanquish Neo UHPLC
System and Thermo Scientific PepMap Neo Columns to provide
increased sensitivity in low-flow liquid chromatography and
designed for use in proteomics, precision medicine and
translational research.
- The company continued to expand capacity and capabilities to
better serve customers. Our Pharma Services business brought
additional capacity online to support vaccine and therapy
production. In South Korea, we
opened a Bioprocess Design Center, to advance bioprocessing
innovation and collaboration with biopharma customers, and as part
of the previously announced strategic partnership with CSL Limited,
we assumed operating responsibility of a new state-of-the-art
biologics site in Lengnau, Switzerland. Additionally, in partnership with
the U.S. Department of Defense, we are building a new manufacturing
site in North Carolina to ensure
reliable domestic production of pipette tips which are used for
liquid handling in research and diagnostic laboratories.
- Building on our environmental social and governance initiatives
and to further enable customers to achieve their own sustainability
goals, the company committed to expand use of ACT Label for its
entire cold temperature storage portfolio by the end of 2021.
Additionally, the company extended its support of COVID-19 testing
at historically black colleges and universities (HBCUs) to deliver
accurate COVID-19 testing to all students and staff, helping to
ensure campus safety and the ability to confidently deliver
in-person learning.
Adjusted EPS, adjusted operating income, adjusted operating
margin and free cash flow are non-GAAP measures that exclude
certain items detailed later in this press release under the
heading "Use of Non-GAAP Financial Measures."
"Our incredibly strong performance in the third quarter
demonstrates our proven growth strategy powered by our PPI Business
System," said Marc N. Casper,
chairman, president, and chief executive officer of Thermo Fisher
Scientific. "We continue to deliver exceptional performance in
revenue, earnings and free cash flow. And we are launching
innovative new products and expanding our capabilities and capacity
to enhance our customer value proposition."
Casper added, "Our team executed at a very high level during the
first nine months of the year, and we are on track to deliver
another outstanding year and set the company up for an even
brighter future."
Third Quarter 2021
Revenue for the quarter grew 9% to $9.33
billion in 2021, versus $8.52
billion in 2020. Organic revenue growth was 7%; acquisitions
increased revenue by 1% and currency translation increased revenue
by 1%. Organic revenue growth from the base business was 10%.
COVID-19 response revenue was $2.05
billion.
GAAP Earnings Results
GAAP diluted EPS in the third quarter of 2021 was $4.79, versus $4.84
in the same quarter last year. GAAP operating income for the third
quarter of 2021 was $2.28 billion,
compared with $2.43 billion in the
year-ago quarter. GAAP operating margin was 24.4%, compared with
28.5% in the third quarter of 2020.
Non-GAAP Earnings Results
Adjusted EPS in the third quarter of 2021 increased 2% to
$5.76, versus $5.63 in the third quarter of 2020. Adjusted
operating income for the third quarter of 2021 was $2.78 billion, compared with $2.80 billion in the year-ago quarter. Adjusted
operating margin was 29.8%, compared with 32.9% in the third
quarter of 2020.
2021 Guidance Update
Thermo Fisher is raising its 2021
revenue and earnings guidance. The company is raising its revenue
guidance by $1.2 billion to
$37.1 billion; this would result in
15% revenue growth over 2020. The company is raising its
adjusted EPS guidance by $1.30 to
$23.37, which would represent 20%
growth year over year.
Segment Results
Management uses adjusted operating results to monitor and
evaluate performance of the company's four business segments, as
highlighted below. Since these results are used for this purpose,
they are also considered to be prepared in accordance with
GAAP.
Life Sciences Solutions Segment
Life Sciences Solutions Segment revenue grew 9% to $3.72 billion in the third quarter of 2021,
compared with revenue of $3.42
billion in the third quarter of 2020. Segment adjusted
operating margin was 48.9%, versus 54.9% in the 2020 quarter.
Analytical Instruments Segment
Analytical Instruments Segment revenue grew 11% to $1.48 billion in the third quarter of 2021,
compared with revenue of $1.34
billion in the third quarter of 2020. Segment adjusted
operating margin was 17.8%, versus 12.8% in the 2020 quarter.
Specialty Diagnostics Segment
Specialty Diagnostics Segment revenue was $1.36 billion in the third quarter of 2021,
compared with revenue of $1.43
billion in the third quarter of 2020. Segment adjusted
operating margin was 22.7%, versus 27.9% in the 2020 quarter.
Laboratory Products and Services Segment
Laboratory Products and Services Segment revenue grew 12% to
$3.49 billion in the third quarter of
2021, compared with revenue of $3.11
billion in the third quarter of 2020. Segment adjusted
operating margin was 11.0%, versus 11.4% in the 2020 quarter.
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 certain acquisition-related costs, including charges for
the sale of inventories revalued at the date of acquisition and
significant transaction costs; restructuring and other
costs/income; and amortization of acquisition-related intangible
assets. Adjusted EPS also excludes certain other gains and losses
that are either isolated or cannot be expected to occur again with
any predictability, tax provisions/benefits related to the previous
items, and the impact of significant tax audits or events. We
exclude the above items because they are outside of our normal
operations and/or, in certain cases, are difficult to forecast
accurately for future periods. We also use a non-GAAP measure, free
cash flow, which is operating cash flow, excluding net capital
expenditures to provide a view of the continuing operations'
ability to generate cash for use in acquisitions and other
investing and financing activities. We believe that the use of
non-GAAP measures helps investors to gain a better understanding of
our core operating results and future prospects, consistent with
how management measures and forecasts the company's performance,
especially when comparing such results to previous periods or
forecasts.
For example:
We exclude costs and tax effects associated with restructuring
activities, such as reducing overhead and consolidating facilities.
We believe that the costs related to these restructuring activities
are not indicative of our normal operating costs.
We exclude certain acquisition-related costs, including charges
for the sale of inventories revalued at the date of acquisition and
significant transaction costs. We exclude these costs because we do
not believe they are indicative of our normal operating costs.
We exclude the expense and tax effects associated with the
amortization of acquisition-related intangible assets because a
significant portion of the purchase price for acquisitions may be
allocated to intangible assets that have lives of up to 20 years.
Based on acquisitions closed through the end of the third quarter
of 2021, adjusted EPS will exclude approximately $3.36 of expense for the amortization of
acquisition-related intangible assets. 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,
the impact of significant tax audits or events (such as changes in
deferred taxes from enacted tax rate changes), which are either
isolated or cannot be expected to occur again with any
predictability and that we believe are not indicative of our normal
operating gains and losses. For example, we exclude gains/losses
from items such as the sale of a business or real estate, gains or
losses on significant litigation-related matters, gains on
curtailments of pension plans and the early retirement of debt.
We also report free cash flow, which is operating cash flow,
excluding net capital expenditures to provide a view of the
continuing operations' ability to generate cash for use in
acquisitions and other investing and financing activities.
Thermo Fisher Scientific'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 Scientific's
results of operations and cash flows included in this press release
are not meant to be considered superior to or a substitute for
Thermo Fisher Scientific'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 Scientific
does not provide GAAP financial measures on a forward-looking basis
because we are unable to predict with reasonable certainty and
without unreasonable effort items such as the timing and amount of
future restructuring actions and acquisition-related charges as
well as gains or losses from sales of real estate and businesses,
the early retirement of debt and the outcome of legal proceedings.
The timing and amount of these items are uncertain and could be
material to Thermo Fisher Scientific's results computed in
accordance with GAAP.
Conference Call
Thermo Fisher Scientific will hold its earnings conference call
today, October 27, 2021, at
8:30 a.m. Eastern time. To listen,
dial (833) 714-0931 within the U.S. or (778) 560-2662 outside the
U.S. The conference ID is 6971977. You may also listen to the call
live on our website, www.thermofisher.com, by clicking on
"Investors." You will find this press release, including the
accompanying reconciliation of non-GAAP financial measures and
related information, in that section of our website under
"Financial Results." An audio archive of the call will be available
under "Webcasts and Presentations" through Friday, November 12, 2021.
About Thermo Fisher Scientific
Thermo Fisher Scientific Inc. is the world leader in serving
science, with annual revenue of approximately $35 billion. Our Mission is to enable our
customers to make the world healthier, cleaner and safer. Whether
our customers are accelerating life sciences research, solving
complex analytical challenges, improving patient diagnostics and
therapies or increasing productivity in their laboratories, we are
here to support them. Our global team of more than 90,000
colleagues delivers an unrivaled combination of innovative
technologies, purchasing convenience and pharmaceutical services
through our industry-leading brands, including Thermo Scientific,
Applied Biosystems, Invitrogen, Fisher Scientific, Unity Lab
Services and Patheon. For more information, please
visit www.thermofisher.com.
Safe Harbor Statement
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
forward-looking statements include risks and uncertainties relating
to: the duration and severity of the COVID-19 pandemic; the need to
develop new products and adapt to significant technological change;
implementation of strategies for improving growth; general economic
conditions and related uncertainties; dependence on customers'
capital spending policies and government funding policies; the
effect of economic and political conditions and exchange rate
fluctuations on international operations; use and protection of
intellectual property; the effect of changes in governmental
regulations; any natural disaster, public health crisis or other
catastrophic event; and the effect of laws and regulations
governing government contracts, as well as the possibility that
expected benefits related to recent or pending acquisitions,
including our pending acquisition of PPD, Inc., may not materialize
as expected. Additional important factors that could cause actual
results to differ materially from those indicated by such
forward-looking statements are set forth in our most recent annual
report on Form 10-K and subsequent quarterly reports on Form 10-Q,
which are on file with the SEC and available in the
"Investors" section of our website under the heading "SEC Filings."
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 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:
Sandy Pound
Thermo Fisher Scientific
Phone: 781-622-1223
E-mail: sandy.pound@thermofisher.com
Investor Contact Information:
Rafael Tejada
Thermo Fisher Scientific
Phone: 781-622-1356
E-mail: rafael.tejada@thermofisher.com
Condensed
Consolidated Statement of Income (unaudited) (a)(b)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
October 2,
|
|
% of
|
|
September
26,
|
|
% of
|
(In millions except
per share amounts)
|
|
2021
|
|
Revenues
|
|
2020
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
9,330
|
|
|
|
|
$
|
8,521
|
|
|
|
Costs and Operating
Expenses:
|
|
|
|
|
|
|
|
|
Cost of revenues
(c)
|
|
4,533
|
|
|
48.6
|
%
|
|
4,065
|
|
|
47.7
|
%
|
Selling, general and
administrative expenses (d)
|
|
1,727
|
|
|
18.5
|
%
|
|
1,303
|
|
|
15.3
|
%
|
Amortization of
acquisition-related intangible assets
|
|
423
|
|
|
4.6
|
%
|
|
414
|
|
|
4.9
|
%
|
Research and
development expenses
|
|
351
|
|
|
3.8
|
%
|
|
296
|
|
|
3.5
|
%
|
Restructuring and
other costs (e)
|
|
18
|
|
|
0.2
|
%
|
|
17
|
|
|
0.2
|
%
|
|
|
7,052
|
|
|
75.6
|
%
|
|
6,095
|
|
|
71.5
|
%
|
Operating
Income
|
|
2,278
|
|
|
24.4
|
%
|
|
2,426
|
|
|
28.5
|
%
|
Interest
Income
|
|
9
|
|
|
|
|
9
|
|
|
|
Interest
Expense
|
|
(128)
|
|
|
|
|
(144)
|
|
|
|
Other Income
(Expense) (f)
|
|
14
|
|
|
|
|
(39)
|
|
|
|
Income Before Income
Taxes
|
|
2,173
|
|
|
|
|
2,252
|
|
|
|
Provision for Income
Taxes (g)
|
|
(271)
|
|
|
|
|
(319)
|
|
|
|
Net Income
|
|
$
|
1,902
|
|
|
20.4
|
%
|
|
$
|
1,933
|
|
|
22.7
|
%
|
|
|
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
4.83
|
|
|
|
|
$
|
4.88
|
|
|
|
Diluted
|
|
$
|
4.79
|
|
|
|
|
$
|
4.84
|
|
|
|
Weighted Average
Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
394
|
|
|
|
|
396
|
|
|
|
Diluted
|
|
397
|
|
|
|
|
399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Operating Income and Adjusted Operating
Margin
|
|
|
|
|
|
|
|
|
GAAP Operating Income
(a)
|
|
$
|
2,278
|
|
|
24.4
|
%
|
|
$
|
2,426
|
|
|
28.5
|
%
|
Cost of Revenues
Charges (c)
|
|
—
|
|
|
0.0
|
%
|
|
1
|
|
|
0.0
|
%
|
Selling, General and
Administrative Charges (Credits) (d)
|
|
59
|
|
|
0.6
|
%
|
|
(55)
|
|
|
-0.7
|
%
|
Restructuring and
Other Costs (e)
|
|
18
|
|
|
0.2
|
%
|
|
17
|
|
|
0.2
|
%
|
Amortization of
Acquisition-related Intangible Assets
|
|
423
|
|
|
4.6
|
%
|
|
414
|
|
|
4.9
|
%
|
Adjusted Operating
Income (b)
|
|
$
|
2,778
|
|
|
29.8
|
%
|
|
$
|
2,803
|
|
|
32.9
|
%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net Income
|
|
|
|
|
|
|
|
|
GAAP Net Income
(a)
|
|
$
|
1,902
|
|
|
|
|
$
|
1,933
|
|
|
|
Cost of Revenues
Charges (c)
|
|
—
|
|
|
|
|
1
|
|
|
|
Selling, General and
Administrative Charges (Credits) (d)
|
|
59
|
|
|
|
|
(55)
|
|
|
|
Restructuring and
Other Costs (e)
|
|
18
|
|
|
|
|
17
|
|
|
|
Amortization of
Acquisition-related Intangible Assets
|
|
423
|
|
|
|
|
414
|
|
|
|
Other (Income) Expense
(f)
|
|
(5)
|
|
|
|
|
40
|
|
|
|
Benefit from Income
Taxes (g)
|
|
(108)
|
|
|
|
|
(100)
|
|
|
|
Adjusted Net Income
(b)
|
|
$
|
2,289
|
|
|
|
|
$
|
2,250
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Earnings per Share
|
|
|
|
|
|
|
|
|
GAAP Diluted EPS
(a)
|
|
$
|
4.79
|
|
|
|
|
$
|
4.84
|
|
|
|
Cost of Revenues
Charges, Net of Tax (c)
|
|
0.00
|
|
|
|
|
0.00
|
|
|
|
Selling, General and
Administrative Charges (Credits), Net of Tax (d)
|
|
0.13
|
|
|
|
|
(0.11)
|
|
|
|
Restructuring and
Other Costs, Net of Tax (e)
|
|
0.03
|
|
|
|
|
0.03
|
|
|
|
Amortization of
Acquisition-related Intangible Assets, Net of Tax
|
|
0.84
|
|
|
|
|
0.82
|
|
|
|
Other (Income)
Expense, Net of Tax (f)
|
|
(0.01)
|
|
|
|
|
0.08
|
|
|
|
Benefit from Income
Taxes (g)
|
|
(0.02)
|
|
|
|
|
(0.03)
|
|
|
|
Adjusted EPS
(b)
|
|
$
|
5.76
|
|
|
|
|
$
|
5.63
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Free Cash Flow
|
|
|
|
|
|
|
|
|
GAAP Net Cash Provided
by Operating Activities (a)
|
|
$
|
2,650
|
|
|
|
|
$
|
2,708
|
|
|
|
Purchases of Property,
Plant and Equipment
|
|
(524)
|
|
|
|
|
(366)
|
|
|
|
Proceeds from Sale of
Property, Plant and Equipment
|
|
4
|
|
|
|
|
1
|
|
|
|
Free Cash
Flow
|
|
$
|
2,130
|
|
|
|
|
$
|
2,343
|
|
|
|
Segment
Data
|
|
Three Months
Ended
|
|
|
October 2,
|
|
% of
|
|
September
26,
|
|
% of
|
(In
millions)
|
|
2021
|
|
Revenues
|
|
2020
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Life Sciences
Solutions
|
|
$
|
3,721
|
|
|
39.9
|
%
|
|
$
|
3,424
|
|
|
40.2
|
%
|
Analytical
Instruments
|
|
1,476
|
|
|
15.8
|
%
|
|
1,336
|
|
|
15.7
|
%
|
Specialty
Diagnostics
|
|
1,362
|
|
|
14.6
|
%
|
|
1,430
|
|
|
16.8
|
%
|
Laboratory Products
and Services
|
|
3,487
|
|
|
37.4
|
%
|
|
3,112
|
|
|
36.5
|
%
|
Eliminations
|
|
(716)
|
|
|
-7.7
|
%
|
|
(781)
|
|
|
-9.2
|
%
|
Consolidated
Revenues
|
|
$
|
9,330
|
|
|
100.0
|
%
|
|
$
|
8,521
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
Operating Income
and Operating Margin
|
|
|
|
|
|
|
|
|
Life Sciences
Solutions
|
|
$
|
1,821
|
|
|
48.9
|
%
|
|
$
|
1,879
|
|
|
54.9
|
%
|
Analytical
Instruments
|
|
264
|
|
|
17.8
|
%
|
|
171
|
|
|
12.8
|
%
|
Specialty
Diagnostics
|
|
310
|
|
|
22.7
|
%
|
|
398
|
|
|
27.9
|
%
|
Laboratory Products
and Services
|
|
383
|
|
|
11.0
|
%
|
|
355
|
|
|
11.4
|
%
|
Subtotal Reportable
Segments
|
|
2,778
|
|
|
29.8
|
%
|
|
2,803
|
|
|
32.9
|
%
|
|
|
|
|
|
|
|
|
|
Cost of Revenues
Charges (c)
|
|
—
|
|
|
0.0
|
%
|
|
(1)
|
|
|
0.0
|
%
|
Selling, General and
Administrative (Charges) Credits (d)
|
|
(59)
|
|
|
-0.6
|
%
|
|
55
|
|
|
0.7
|
%
|
Restructuring and
Other Costs (e)
|
|
(18)
|
|
|
-0.2
|
%
|
|
(17)
|
|
|
-0.2
|
%
|
Amortization of
Acquisition-related Intangible Assets
|
|
(423)
|
|
|
-4.6
|
%
|
|
(414)
|
|
|
-4.9
|
%
|
GAAP Operating Income
(a)
|
|
$
|
2,278
|
|
|
24.4
|
%
|
|
$
|
2,426
|
|
|
28.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) "GAAP" (reported)
results were determined in accordance with U.S. generally accepted
accounting principles (GAAP).
|
(b) Adjusted results
are non-GAAP measures and, for income measures, exclude certain
charges to cost of revenues (see note (c) for details); certain
credits/charges to selling, general and administrative expenses
(see note (d) for details); amortization of acquisition-related
intangible assets; restructuring and other costs (see note (e) for
details); certain other gains or losses that are either isolated or
cannot be expected to occur again with any predictability (see note
(f) for details); and the tax consequences of the preceding items
and certain other tax items (see note (g) for details).
|
(c) Reported results in
2020 include accelerated depreciation on manufacturing assets to be
abandoned due to facility consolidations.
|
(d) Reported results in
2021 and 2020 include certain third-party expenses (credits),
principally transaction/integration costs (including reimbursement
thereof) related to recent/terminated acquisitions; charges
(credits) for changes in estimates of contingent acquisition
consideration; and costs associated with product liability
litigation.
|
(e) Reported results in
2021 and 2020 include restructuring and other costs consisting
principally of severance, abandoned facility and other expenses of
headcount reductions within several businesses and real estate
consolidations. Reported results in 2021 also include $4 of credits
for the settlement of environmental-related matters, offset in part
by $3 of net charges for pre-acquisition related matters. Reported
results in 2020 also include $10 of charges for impairment of
acquired technology.
|
(f) Reported results in
2021 and 2020 include gains on investments and charges for the
amortization of bridge loan commitment fees related to
pending/terminated acquisitions. Reported results in 2020 also
include $5 of net charges for the settlement/curtailment of pension
plans.
|
(g) Reported provision
for income taxes in 2021 and 2020 includes incremental tax benefit
for the pre-tax reconciling items between GAAP and adjusted net
income. Reported results in 2020 also include $11 of incremental
tax benefit from adjusting the company's non-U.S. deferred tax
balances as a result of tax rate changes.
|
Notes:
|
Consolidated
depreciation expense is $205 and $161 in 2021 and 2020,
respectively.
|
|
|
Base Business
Organic Revenue Growth
|
|
|
|
|
Three Months
Ended
|
|
|
October 2,
|
|
|
2021
|
|
|
|
Revenue
Growth
|
|
9
|
%
|
COVID-19 Response
Revenue (a) (b)
|
|
-2
|
%
|
Base Business
Revenue Growth
|
|
11
|
%
|
Acquisitions
|
|
0
|
%
|
Currency
Translation
|
|
1
|
%
|
Base Business
Organic Revenue Growth
|
|
10
|
%
|
|
|
|
(a) COVID-19 response
revenue includes effects of COVID-19 response revenues from
acquired businesses and foreign currency translation.
|
(b) Adjustment to
exclude the impact of COVID-19 response revenue.
|
Condensed
Consolidated Statement of Income (unaudited) (a)(b)
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
October 2,
|
|
% of
|
|
September
26,
|
|
% of
|
(In millions except
per share amounts)
|
|
2021
|
|
Revenues
|
|
2020
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
28,509
|
|
|
|
|
$
|
21,668
|
|
|
|
Costs and Operating
Expenses:
|
|
|
|
|
|
|
|
|
Cost of revenues
(c)
|
|
13,675
|
|
|
48.0
|
%
|
|
10,846
|
|
|
50.1
|
%
|
Selling, general and
administrative expenses (d)
|
|
4,884
|
|
|
17.1
|
%
|
|
3,971
|
|
|
18.3
|
%
|
Amortization of
acquisition-related intangible assets
|
|
1,295
|
|
|
4.6
|
%
|
|
1,256
|
|
|
5.8
|
%
|
Research and
development expenses
|
|
1,014
|
|
|
3.6
|
%
|
|
805
|
|
|
3.7
|
%
|
Restructuring and
other costs (e)
|
|
151
|
|
|
0.5
|
%
|
|
67
|
|
|
0.3
|
%
|
|
|
21,019
|
|
|
73.7
|
%
|
|
16,945
|
|
|
78.2
|
%
|
Operating
Income
|
|
7,490
|
|
|
26.3
|
%
|
|
4,723
|
|
|
21.8
|
%
|
Interest
Income
|
|
32
|
|
|
|
|
53
|
|
|
|
Interest
Expense
|
|
(375)
|
|
|
|
|
(407)
|
|
|
|
Other Expense
(f)
|
|
(174)
|
|
|
|
|
(36)
|
|
|
|
Income Before Income
Taxes
|
|
6,973
|
|
|
|
|
4,333
|
|
|
|
Provision for Income
Taxes (g)
|
|
(906)
|
|
|
|
|
(456)
|
|
|
|
Net Income
|
|
$
|
6,067
|
|
|
21.3
|
%
|
|
$
|
3,877
|
|
|
17.9
|
%
|
|
|
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
15.41
|
|
|
|
|
$
|
9.79
|
|
|
|
Diluted
|
|
$
|
15.29
|
|
|
|
|
$
|
9.71
|
|
|
|
Weighted Average
Shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
394
|
|
|
|
|
396
|
|
|
|
Diluted
|
|
397
|
|
|
|
|
399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Operating Income and Adjusted Operating
Margin
|
|
|
|
|
|
|
|
|
GAAP Operating Income
(a)
|
|
$
|
7,490
|
|
|
26.3
|
%
|
|
$
|
4,723
|
|
|
21.8
|
%
|
Cost of Revenues
Charges (c)
|
|
8
|
|
|
0.0
|
%
|
|
5
|
|
|
0.0
|
%
|
Selling, General and
Administrative Charges (Credits) (d)
|
|
33
|
|
|
0.1
|
%
|
|
(7)
|
|
|
0.0
|
%
|
Restructuring and
Other Costs (e)
|
|
151
|
|
|
0.5
|
%
|
|
67
|
|
|
0.3
|
%
|
Amortization of
Acquisition-related Intangible Assets
|
|
1,295
|
|
|
4.6
|
%
|
|
1,256
|
|
|
5.8
|
%
|
Adjusted Operating
Income (b)
|
|
$
|
8,977
|
|
|
31.5
|
%
|
|
$
|
6,044
|
|
|
27.9
|
%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net Income
|
|
|
|
|
|
|
|
|
GAAP Net Income
(a)
|
|
$
|
6,067
|
|
|
|
|
$
|
3,877
|
|
|
|
Cost of Revenues
Charges (c)
|
|
8
|
|
|
|
|
5
|
|
|
|
Selling, General and
Administrative Charges (Credits) (d)
|
|
33
|
|
|
|
|
(7)
|
|
|
|
Restructuring and
Other Costs (e)
|
|
151
|
|
|
|
|
67
|
|
|
|
Amortization of
Acquisition-related Intangible Assets
|
|
1,295
|
|
|
|
|
1,256
|
|
|
|
Other Expense
(f)
|
|
200
|
|
|
|
|
79
|
|
|
|
Benefit from Income
Taxes (g)
|
|
(380)
|
|
|
|
|
(302)
|
|
|
|
Adjusted Net Income
(b)
|
|
$
|
7,374
|
|
|
|
|
$
|
4,975
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Earnings per Share
|
|
|
|
|
|
|
|
|
GAAP Diluted EPS
(a)
|
|
$
|
15.29
|
|
|
|
|
$
|
9.71
|
|
|
|
Cost of Revenues
Charges, Net of Tax (c)
|
|
0.02
|
|
|
|
|
0.01
|
|
|
|
Selling, General and
Administrative Charges (Credits), Net of Tax (d)
|
|
0.04
|
|
|
|
|
(0.01)
|
|
|
|
Restructuring and
Other Costs, Net of Tax (e)
|
|
0.29
|
|
|
|
|
0.13
|
|
|
|
Amortization of
Acquisition-related Intangible Assets, Net of Tax
|
|
2.54
|
|
|
|
|
2.49
|
|
|
|
Other Expense, Net of
Tax (f)
|
|
0.43
|
|
|
|
|
0.15
|
|
|
|
Benefit from Income
Taxes (g)
|
|
(0.03)
|
|
|
|
|
(0.02)
|
|
|
|
Adjusted EPS
(b)
|
|
$
|
18.58
|
|
|
|
|
$
|
12.46
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Free Cash Flow
|
|
|
|
|
|
|
|
|
GAAP Net Cash Provided
by Operating Activities (a)
|
|
$
|
6,855
|
|
|
|
|
$
|
4,950
|
|
|
|
Purchases of Property,
Plant and Equipment
|
|
(1,692)
|
|
|
|
|
(888)
|
|
|
|
Proceeds from Sale of
Property, Plant and Equipment
|
|
9
|
|
|
|
|
7
|
|
|
|
Free Cash
Flow
|
|
$
|
5,172
|
|
|
|
|
$
|
4,069
|
|
|
|
Segment
Data
|
|
Nine Months
Ended
|
|
|
October 2,
|
|
% of
|
|
September
26,
|
|
% of
|
(In
millions)
|
|
2021
|
|
Revenues
|
|
2020
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Life Sciences
Solutions
|
|
$
|
11,481
|
|
|
40.3
|
%
|
|
$
|
7,800
|
|
|
36.0
|
%
|
Analytical
Instruments
|
|
4,344
|
|
|
15.2
|
%
|
|
3,488
|
|
|
16.1
|
%
|
Specialty
Diagnostics
|
|
4,212
|
|
|
14.8
|
%
|
|
3,376
|
|
|
15.6
|
%
|
Laboratory Products
and Services
|
|
10,667
|
|
|
37.4
|
%
|
|
8,629
|
|
|
39.8
|
%
|
Eliminations
|
|
(2,195)
|
|
|
-7.7
|
%
|
|
(1,625)
|
|
|
-7.5
|
%
|
Consolidated
Revenues
|
|
$
|
28,509
|
|
|
100.0
|
%
|
|
$
|
21,668
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
Operating Income
and Operating Margin
|
|
|
|
|
|
|
|
|
Life Sciences
Solutions
|
|
$
|
5,818
|
|
|
50.7
|
%
|
|
$
|
3,788
|
|
|
48.6
|
%
|
Analytical
Instruments
|
|
816
|
|
|
18.8
|
%
|
|
477
|
|
|
13.7
|
%
|
Specialty
Diagnostics
|
|
983
|
|
|
23.3
|
%
|
|
848
|
|
|
25.1
|
%
|
Laboratory Products
and Services
|
|
1,360
|
|
|
12.8
|
%
|
|
931
|
|
|
10.8
|
%
|
Subtotal Reportable
Segments
|
|
8,977
|
|
|
31.5
|
%
|
|
6,044
|
|
|
27.9
|
%
|
|
|
|
|
|
|
|
|
|
Cost of Revenues
Charges (c)
|
|
(8)
|
|
|
0.0
|
%
|
|
(5)
|
|
|
0.0
|
%
|
Selling, General and
Administrative (Charges) Credits (d)
|
|
(33)
|
|
|
-0.1
|
%
|
|
7
|
|
|
0.0
|
%
|
Restructuring and
Other Costs (e)
|
|
(151)
|
|
|
-0.5
|
%
|
|
(67)
|
|
|
-0.3
|
%
|
Amortization of
Acquisition-related Intangible Assets
|
|
(1,295)
|
|
|
-4.6
|
%
|
|
(1,256)
|
|
|
-5.8
|
%
|
GAAP Operating Income
(a)
|
|
$
|
7,490
|
|
|
26.3
|
%
|
|
$
|
4,723
|
|
|
21.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) "GAAP" (reported)
results were determined in accordance with U.S. generally accepted
accounting principles (GAAP).
|
(b) Adjusted results
are non-GAAP measures and, for income measures, exclude certain
charges to cost of revenues (see note (c) for details); certain
credits/charges to selling, general and administrative expenses
(see note (d) for details); amortization of acquisition-related
intangible assets; restructuring and other costs (see note (e) for
details); certain other gains or losses that are either isolated or
cannot be expected to occur again with any predictability (see note
(f) for details); and the tax consequences of the preceding items
and certain other tax items (see note (g) for details).
|
(c) Reported results
in 2021 include charges for the sale of inventories revalued at the
date of acquisition. Reported results in 2020 include $2 of charges
to conform the accounting policies of a recently acquired business
with the company's accounting policies and $3 of accelerated
depreciation on manufacturing assets to be abandoned due to
facility consolidations.
|
(d) Reported results
in 2021 and 2020 include certain third-party expenses (credits),
principally transaction/integration costs (including reimbursement
thereof) related to recent/terminated acquisitions; credits for
changes in estimates of contingent acquisition consideration; and
charges associated with product liability litigation.
|
(e) Reported results
in 2021 and 2020 include restructuring and other costs consisting
principally of severance, abandoned facility and other expenses of
headcount reductions within several businesses and real estate
consolidations, and charges for impairment of acquired technology.
Reported results in 2021 include $13 of charges for compensation
contractually due to employees of acquired businesses at the date
of acquisition; $3 of net charges for pre-acquisition related
matters; offset in part by $4 of credits for the settlement of
environmental-related matters.
|
(f) Reported results
in 2021 and 2020 include gains on investments and charges
associated with entering hedging contracts and amortization of
bridge loan commitment fees for pending/terminated acquisitions.
Reported results in 2021 include $197 of losses on the early
extinguishment of debt. Reported results in 2020 include $6 of net
charges for the settlement/curtailment of pension plans.
|
(g) Reported
provision for income taxes in 2021 and 2020 includes incremental
tax benefit for the pre-tax reconciling items between GAAP and
adjusted net income and $12 and $5 of incremental tax benefit,
respectively, from adjusting the company's non-U.S. deferred tax
balances as a result of tax rate changes. Reported results in 2020
also include $2 of incremental tax benefit from audit
settlements.
|
Notes:
|
Consolidated
depreciation expense is $614 and $467 in 2021 and 2020,
respectively.
|
|
|
Condensed
Consolidated Balance Sheet (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
October 2,
|
|
December
31,
|
(In
millions)
|
|
2021
|
|
2020
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
12,027
|
|
|
$
|
10,325
|
|
Accounts receivable,
net
|
|
5,557
|
|
|
5,741
|
|
Inventories
|
|
4,906
|
|
|
4,029
|
|
Other current
assets
|
|
2,234
|
|
|
1,862
|
|
Total current
assets
|
|
24,724
|
|
|
21,957
|
|
Property, Plant and
Equipment, Net
|
|
7,049
|
|
|
5,912
|
|
Acquisition-related
Intangible Assets, Net
|
|
11,927
|
|
|
12,685
|
|
Other
Assets
|
|
2,991
|
|
|
2,457
|
|
Goodwill
|
|
26,909
|
|
|
26,041
|
|
Total
Assets
|
|
$
|
73,600
|
|
|
$
|
69,052
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Short-term obligations
and current maturities of long-term obligations
|
|
$
|
19
|
|
|
$
|
2,628
|
|
Other current
liabilities
|
|
7,734
|
|
|
7,676
|
|
Total current
liabilities
|
|
7,753
|
|
|
10,304
|
|
Other Long-term
Liabilities
|
|
5,449
|
|
|
5,134
|
|
Long-term
Obligations
|
|
21,688
|
|
|
19,107
|
|
Total Shareholders'
Equity
|
|
38,710
|
|
|
34,507
|
|
Total Liabilities and
Shareholders' Equity
|
|
$
|
73,600
|
|
|
$
|
69,052
|
|
|
|
Condensed
Consolidated Statement of Cash Flows (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
October 2,
|
|
September
26,
|
(In
millions)
|
|
2021
|
|
2020
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
Net income
|
|
$
|
6,067
|
|
|
$
|
3,877
|
|
|
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
1,909
|
|
|
1,723
|
|
Change in deferred
income taxes
|
|
(455)
|
|
|
(496)
|
|
Other non-cash
expenses, net
|
|
544
|
|
|
354
|
|
Changes in assets and
liabilities, excluding the effects of acquisitions and
disposition
|
|
(1,210)
|
|
|
(508)
|
|
Net cash provided by
operating activities
|
|
6,855
|
|
|
4,950
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Acquisitions, net of
cash acquired
|
|
(1,519)
|
|
|
(3)
|
|
Purchases of property,
plant and equipment
|
|
(1,692)
|
|
|
(888)
|
|
Proceeds from sale of
property, plant and equipment
|
|
9
|
|
|
7
|
|
Other investing
activities, net
|
|
(38)
|
|
|
—
|
|
Net cash used in
investing activities
|
|
(3,240)
|
|
|
(884)
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Net proceeds from
issuance of debt
|
|
3,122
|
|
|
3,464
|
|
Repayment of
debt
|
|
(2,807)
|
|
|
(712)
|
|
Net proceeds from
issuance of commercial paper
|
|
—
|
|
|
383
|
|
Repayment of
commercial paper
|
|
—
|
|
|
(387)
|
|
Purchases of company
common stock
|
|
(2,000)
|
|
|
(1,500)
|
|
Dividends
paid
|
|
(292)
|
|
|
(250)
|
|
Net proceeds from
issuance of company common stock under employee stock
plans
|
|
101
|
|
|
156
|
|
Other financing
activities, net
|
|
(10)
|
|
|
(146)
|
|
Net cash (used in)
provided by financing activities
|
|
(1,886)
|
|
|
1,008
|
|
|
|
|
|
|
Exchange Rate Effect
on Cash
|
|
(17)
|
|
|
74
|
|
Increase in Cash,
Cash Equivalents and Restricted Cash
|
|
1,712
|
|
|
5,148
|
|
Cash, Cash
Equivalents and Restricted Cash at Beginning of Period
|
|
10,336
|
|
|
2,422
|
|
Cash, Cash
Equivalents and Restricted Cash at End of Period
|
|
$
|
12,048
|
|
|
$
|
7,570
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
(a)
|
|
$
|
5,172
|
|
|
$
|
4,069
|
|
|
|
|
|
|
|
|
|
|
|
(a) Free cash flow is
net cash provided by operating activities less net purchases of
property, plant and equipment.
|
|
View original
content:https://www.prnewswire.com/news-releases/thermo-fisher-scientific-reports-third-quarter-2021-results-301409348.html
SOURCE Thermo Fisher Scientific