Full Press Release Details
PerkinElmer Announces Financial Results for the Second Quarter of 2022
Signs agreement with the intention to divest Applied, Food, and Enterprise Services businesses
Second quarter revenue of $1.23 billion; 0% reported growth, 8% non-COVID organic growth
Second quarter GAAP EPS from continuing operations of $1.42; adjusted EPS of $2.32
Initiates third quarter and raises full year guidance
Earnings call moved to today at 8:00 a.m. Eastern Time. Webcast information below
WALTHAM, Mass.--(BUSINESS WIRE)--August 1, 2022--PerkinElmer, Inc. (NYSE: PKI), a global leader committed to innovating for a healthier world, today reported financial results for the second quarter ended July 3, 2022.
The Company reported GAAP earnings per share from continuing operations of $1.42, as compared to GAAP earnings per share from continuing operations of $2.19 in the same period a year ago. GAAP revenue for the quarter was $1.23 billion, as
compared to $1.23 billion in the same period a year ago. GAAP operating income from continuing operations for the quarter was $251 million, as compared to $332 million for the same period a year ago. GAAP operating profit margin was 20.4% as a
percentage of revenue, as compared to 27.1% in the same period a year ago.
Adjusted earnings per share from continuing operations for the quarter was $2.32, as compared to $2.83 in the same period a year ago. Adjusted revenue for the quarter was $1.23 billion, as compared to $1.23 billion in the same period a year
ago. Adjusted operating income from continuing operations for the quarter was $402 million, as compared to $411 million for the same period a year ago. Adjusted operating profit margin was 32.7% as a percentage of adjusted revenue, as compared
to 33.5% in the same period a year ago.
Adjustments for the Company's non-GAAP financial measures have been noted in the attached reconciliations.
"Our strong performance in the quarter is a testament to our operational and commercial execution as well as our portfolio evolution over the last three years," said Prahlad Singh, president and chief executive officer of PerkinElmer. "With
today's divestiture announcement, we position the company to transform into a pureplay, high growth, high margin life sciences and diagnostics company with even more focus to capitalize on attractive end markets. This transformation will in
turn lead to significant financial strength, allowing us to continue to scale and accelerate our innovation investments, which help our customers bridge the chasm from research to clinic, and clinic to cure."
Financial Overview by Reporting Segment for the Second Quarter
Discovery & Analytical Solutions
Second quarter 2022 revenue was $661 million, as compared to $513 million in the same period a year ago. Reported revenue increased 29% and organic revenue increased 13% as compared to the same period a year ago.
Second quarter 2022 operating income from continuing operations was $70 million, as compared to $64 million for the same period a year ago.
Second quarter 2022 adjusted operating income was $178 million, as compared to $101 million for the same period a year ago.
Second quarter 2022 revenue was $569 million, as compared to $716 million for the same period a year ago. Reported revenue decreased 20% and organic revenue decreased 19% as compared to the same period a year ago.
Second quarter 2022 operating income from continuing operations was $201 million, as compared to $286 million for the same period a year ago.
Second quarter 2022 adjusted operating income was $245 million, as compared to $328 million for the same period a year ago.
Initiates Third Quarter and Raises Full Year 2022 Guidance
For the third quarter of 2022, the Company forecasts revenue of approximately $1.02-1.03 billion and adjusted earnings per share to be in a range $1.40-1.45.
For the full year 2022, the Company now forecasts revenue of $4.60-4.64 billion and adjusted earnings per share of $7.80-7.90.
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 Agreement with the Intention to Divest Applied, Food, and Enterprise Services Businesses
The Company is also announcing today that it has entered into an agreement with the intention to divest its Applied, Food, and Enterprise Services businesses to New Mountain Capital for a total consideration of $2.45 billion. The transaction
is expected to close in the first quarter of 2023, subject to regulatory approvals and other customary closing conditions. Management will provide additional detail regarding this transaction in a separate release and on today's webcast. A
presentation highlighting this transaction will be available on the Investors section of the Company's website, www.perkinelmer.com.
The Company will discuss its second quarter 2022 results, its outlook for business trends, and its intended divestiture of its Analytical, Food, and Enterprise Services businesses during a webcast on August 1, 2022, at 8:00 a.m. Eastern Time.
A live audio webcast and presentation will be available on the Investors section of the Company's website, www.perkinelmer.com.
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," "estimates", "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 and divestitures, such as the divestiture of the Applied, Food and
Enterprise Services businesses, 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.
PerkinElmer is a leading, global provider of end-to-end solutions that help scientists, researchers and clinicians better diagnose disease, discover new and more personalized drugs, monitor the safety and quality of our food, and drive
environmental and applied analysis excellence. With an 85-year legacy of advancing science and a mission of innovating for a healthier world, our dedicated team of more than 16,000 collaborates closely with commercial, government, academic and
healthcare customers to deliver reagents, assays, instruments, automation, informatics and strategic services that accelerate workflows, deliver actionable insights and support improved decision making. We are also deeply committed to good
corporate citizenship through our dynamic ESG and sustainability programs. The Company reported revenues of approximately $5 billion in 2021, serves customers in 190 countries, and is a component of the S&P 500 index. Additional information
is available at www.perkinelmer.com. Follow PerkinElmer on LinkedIn, Twitter, Facebook, Instagram, and YouTube.
| PerkinElmer, Inc. and Subsidiaries | |||||||||||||||||
| CONDENSED CONSOLIDATED INCOME STATEMENTS | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| (In thousands, except per share data) | July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
| Revenue | $ | 1,229,569 | $ | 1,228,471 | $ | 2,489,011 | $ | 2,536,160 | |||||||||
| Cost of revenue | 563,406 | 543,277 | 1,143,617 | 1,065,820 | |||||||||||||
| Selling, general and administrative expenses | 330,025 | 281,819 | 664,418 | 533,229 | |||||||||||||
| Research and development expenses | 73,352 | 65,824 | 149,961 | 126,040 | |||||||||||||
| Restructuring and other, net | 11,928 | 5,063 | 25,312 | 10,807 | |||||||||||||
| Operating income from continuing operations | 250,858 | 332,488 | 505,703 | 800,264 | |||||||||||||
| Interest income | (762 | ) | (367 | ) | (1,357 | ) | (778 | ) | |||||||||
| Interest expense | 27,128 | 16,750 | 55,516 | 30,876 | |||||||||||||
| Change in fair value of financial securities | (2,910 | ) | (8,633 | ) | 9,215 | (27,931 | ) | ||||||||||
| Other (income) expense, net | 2,930 | (1,319 | ) | 257 | (8,442 | ) | |||||||||||
| Income from continuing operations, before income taxes | 224,472 | 326,057 | 442,072 | 806,539 | |||||||||||||
| Provision for income taxes | 45,220 | 80,089 | 85,817 | 181,228 | |||||||||||||
| Income from continuing operations | 179,252 | 245,968 | 356,255 | 625,311 | |||||||||||||
| Loss on disposition of discontinued operations, before income taxes | - | - | - | - | |||||||||||||
| Provision for income taxes on discontinued operations and dispositions | 40 | 38 | 81 | 76 | |||||||||||||
| Loss from discontinued operations and dispositions | (40 | ) | (38 | ) | (81 | ) | (76 | ) | |||||||||
| Net income | $ | 179,212 | $ | 245,930 | $ | 356,174 | $ | 625,235 | |||||||||
| Diluted earnings per share: | |||||||||||||||||
| Income from continuing operations | $ | 1.42 | $ | 2.19 | $ | 2.81 | $ | 5.56 | |||||||||
| Loss from discontinued operations and dispositions | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | |||||||||
| Net income | $ | 1.42 | $ | 2.19 | $ | 2.81 | $ | 5.56 | |||||||||
| Weighted average diluted shares of common stock outstanding | 126,509 | 112,417 | 126,581 | 112,456 | |||||||||||||
| ABOVE PREPARED IN ACCORDANCE WITH GAAP | |||||||||||||||||
| Additional Supplemental Information (1) : | |||||||||||||||||
| (per share, continuing operations) | |||||||||||||||||
| GAAP EPS from continuing operations | $ | 1.42 | $ | 2.19 | $ | 2.81 | $ | 5.56 | |||||||||
| Amortization of intangible assets | 0.80 | 0.53 | 1.61 | 1.01 | |||||||||||||
| Debt extinguishment costs | 0.00 | - | 0.00 | - | |||||||||||||
| Purchase accounting adjustments | 0.14 | 0.03 | 0.28 | 0.07 | |||||||||||||
| Acquisition and divestiture-related costs | 0.17 | 0.09 | 0.34 | 0.13 | |||||||||||||
| Change in fair value of financial securities | (0.02 | ) | (0.08 | ) | 0.07 | (0.25 | ) | ||||||||||
| Significant litigation matters and settlements | (0.01 | ) | - | (0.01 | ) | - | |||||||||||
| Restructuring and other, net | 0.09 | 0.05 | 0.20 | 0.10 | |||||||||||||
| Tax on above items | (0.27 | ) | (0.11 | ) | (0.58 | ) | (0.21 | ) | |||||||||
| Significant tax items | - | 0.13 | - | 0.13 | |||||||||||||
| Adjusted EPS | $ | 2.32 | $ | 2.83 | $ | 4.73 | $ | 6.55 | |||||||||
| (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 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||||
| DAS | Reported revenue | $ | 660,541 | $ | 512,829 | $ | 1,262,907 | $ | 967,438 | ||||||||||
| Purchase accounting adjustments | - | 822 | - | 1,849 | |||||||||||||||
| Adjusted revenue | 660,541 | 513,651 | 1,262,907 | 969,287 | |||||||||||||||
| Reported operating income from continued operations | 70,112 | 64,155 | 84,627 | 107,102 | |||||||||||||||
| OP% | 10.6 | % | 12.5 | % | 6.7 | % | 11.1 | % | |||||||||||
| Amortization of intangible assets | 67,537 | 23,072 | 135,265 | 43,492 | |||||||||||||||
| Purchase accounting adjustments | 17,264 | 1,473 | 34,546 | 3,649 | |||||||||||||||
| Acquisition and divestiture-related costs | 15,023 | 8,597 | 28,288 | 14,505 | |||||||||||||||
| Significant litigation matters and settlements | (1,686 | ) | - | (1,261 | ) | - | |||||||||||||
| Restructuring and other, net | 9,444 | 3,615 | 22,825 | 7,744 | |||||||||||||||
| Adjusted operating income | 177,694 | 100,912 | 304,290 | 176,492 | |||||||||||||||
| Adjusted OP% | 26.9 | % | 19.6 | % | 24.1 | % | 18.2 | % | |||||||||||
| Diagnostics | Reported revenue | 569,028 | 715,642 | 1,226,104 | 1,568,722 | ||||||||||||||
| Purchase accounting adjustments | 203 | 199 | 406 | 398 | |||||||||||||||
| Adjusted revenue | 569,231 | 715,841 | 1,226,510 | 1,569,120 | |||||||||||||||
| Reported operating income from continued operations | 201,232 | 286,280 | 459,244 | 727,747 | |||||||||||||||
| OP% | 35.4 | % | 40.0 | % | 37.5 | % | 46.4 | % | |||||||||||
| Amortization of intangible assets | 33,354 | 36,489 | 68,276 | 70,226 | |||||||||||||||
| Purchase accounting adjustments | 705 | 2,107 | 1,427 | 4,378 | |||||||||||||||
| Acquisition and divestiture-related costs | 6,880 | 2,051 | 14,119 | 5,810 | |||||||||||||||
| Restructuring and other, net | 2,484 | 1,448 | 2,487 | 3,063 | |||||||||||||||
| Adjusted operating income | 244,655 | 328,375 | 545,553 | 811,224 | |||||||||||||||
| Adjusted OP% | 43.0 | % | 45.9 | % | 44.5 | % | 51.7 | % | |||||||||||
| Corporate | Reported operating loss | (20,486 | ) | (17,947 | ) | (38,168 | ) | (34,585 | ) | ||||||||||
| Continuing Operations | Reported revenue | $ | 1,229,569 | $ | 1,228,471 | $ | 2,489,011 | $ | 2,536,160 | ||||||||||
| Purchase accounting adjustments | 203 | 1,021 | 406 | 2,247 | |||||||||||||||
| Adjusted revenue | 1,229,772 | 1,229,492 | 2,489,417 | 2,538,407 | |||||||||||||||
| Reported operating income from continued operations | 250,858 | 332,488 | 505,703 | 800,264 | |||||||||||||||
| OP% | 20.4 | % | 27.1 | % | 20.3 | % | 31.6 | % | |||||||||||
| Amortization of intangible assets | 100,891 | 59,561 | 203,541 | 113,718 | |||||||||||||||
| Purchase accounting adjustments | 17,969 | 3,580 | 35,973 | 8,027 | |||||||||||||||
| Acquisition and divestiture-related costs | 21,903 | 10,648 | 42,407 | 20,315 | |||||||||||||||
| Significant litigation matters and settlements | (1,686 | ) | - | (1,261 | ) | - | |||||||||||||
| Restructuring and other, net | 11,928 | 5,063 | 25,312 | 10,807 | |||||||||||||||
| Adjusted operating income | $ | 401,863 | $ | 411,340 | $ | 811,675 | $ | 953,131 | |||||||||||
| Adjusted OP% | 32.7 | % | 33.5 | % | 32.6 | % | 37.5 | % | |||||||||||
| REPORTED REVENUE AND REPORTED OPERATING INCOME (LOSS) PREPARED IN ACCORDANCE WITH GAAP |
| PerkinElmer, Inc. and Subsidiaries | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (In thousands) | July 3, 2022 | January 2, 2022 | |||
| Current assets: | |||||
| Cash and cash equivalents | $ | 360,860 | $ | 618,319 | |
| Accounts receivable, net | 932,131 | 1,023,792 | |||
| Inventories, net | 624,297 | 624,714 | |||
| Other current assets | 190,484 | 173,955 | |||
| Total current assets | 2,107,772 | 2,440,780 | |||
| Property, plant and equipment, net | 533,645 | 545,605 | |||
| Operating lease right-of-use assets | 209,332 | 207,775 | |||
| Intangible assets, net | 3,771,221 | 4,063,104 | |||
| Goodwill | 7,243,492 | 7,416,584 | |||
| Other assets, net | 324,245 | 326,706 | |||
| Total assets | $ | 14,189,707 | $ | 15,000,554 | |
| Current liabilities: | |||||
| Current portion of long-term debt | $ | 4,180 | $ | 4,240 | |
| Accounts payable | 333,711 | 355,458 | |||
| Accrued expenses and other current liabilities | 705,922 | 854,046 | |||
| Total current liabilities | 1,043,813 | 1,213,744 | |||
| Long-term debt | 4,484,314 | 4,979,737 | |||
| Long-term liabilities | 1,311,435 | 1,480,469 | |||
| Operating lease liabilities | 182,990 | 185,359 | |||
| Total liabilities | 7,022,552 | 7,859,309 | |||
| Total stockholders' equity | 7,167,155 | 7,141,245 | |||
| Total liabilities and stockholders' equity | $ | 14,189,707 | $ | 15,000,554 | |
| PREPARED IN ACCORDANCE WITH GAAP |
| PerkinElmer, Inc. and Subsidiaries | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
| (In thousands) | (In thousands) | |||||||||||||||
| Operating activities: | ||||||||||||||||
| Net income | $ | 179,212 | $ | 245,930 | $ | 356,174 | $ | 625,235 | ||||||||
| Loss from discontinued operations and dispositions, net of income taxes | 40 | 38 | 81 | 76 | ||||||||||||
| Income from continuing operations | 179,252 | 245,968 | 356,255 | 625,311 | ||||||||||||
| Adjustments to reconcile income from continuing operations to net cash provided by continuing operations: | ||||||||||||||||
| Stock-based compensation | 16,029 | 7,204 | 31,292 | 12,361 | ||||||||||||
| Restructuring and other, net | 11,928 | 5,063 | 25,312 | 10,807 | ||||||||||||
| Depreciation and amortization | 119,406 | 75,636 | 239,457 | 145,822 | ||||||||||||
| Change in fair value of contingent consideration | 670 | 237 | 1,363 | 477 | ||||||||||||
| Amortization of deferred debt financing costs and accretion of discounts | 2,071 | 828 | 3,852 | 1,724 | ||||||||||||
| Change in fair value of financial securities | (2,910 | ) | (8,633 | ) | 9,215 | (27,931 | ) | |||||||||
| Debt extinguishment costs | 369 | - | 488 | - | ||||||||||||
| Amortization of acquired inventory revaluation | 16,856 | 2,322 | 33,724 | 5,303 | ||||||||||||
| Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired: | ||||||||||||||||
| Accounts receivable, net | (21,579 | ) | (9,920 | ) | 47,485 | 155,270 | ||||||||||
| Inventories | (23,329 | ) | 22,246 | (70,297 | ) | 7,239 | ||||||||||
| Accounts payable | (33,733 | ) | (21,747 | ) | (7,382 | ) | (26,795 | ) | ||||||||
| Accrued expenses and other | (167,545 | ) | (31,342 | ) | (290,064 | ) | (148,226 | ) | ||||||||
| Net cash provided by operating activities of continuing operations | 97,485 | 287,862 | 380,700 | 761,362 | ||||||||||||
| Investing activities: | ||||||||||||||||
| Capital expenditures | (23,154 | ) | (20,364 | ) | (52,585 | ) | (34,675 | ) | ||||||||
| Purchases of investments | (4,250 | ) | (10,507 | ) | (27,245 | ) | (14,507 | ) | ||||||||
| Proceeds from disposition of businesses and assets | 1,054 | - | 1,054 | - | ||||||||||||
| Cash paid for acquisitions, net of cash, cash equivalents and restricted cash acquired | (2,005 | ) | (259,154 | ) | (5,885 | ) | (702,697 | ) | ||||||||
| Net cash used in investing activities of continuing operations | (28,355 | ) | (290,025 | ) | (84,661 | ) | (751,879 | ) | ||||||||
| Financing Activities: | ||||||||||||||||
| Payments on borrowings | - | (20,000 | ) | (220,000 | ) | (763,545 | ) | |||||||||
| Proceeds from borrowings | - | 145,000 | 220,000 | 729,000 | ||||||||||||
| Payments of term loan | (350,000 | ) | - | (450,000 | ) | - | ||||||||||
| 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 | ) | (762 | ) | (5,935 | ) | |||||||||
| Net payments on other credit facilities | 239 | (2,027 | ) | (825 | ) | (11,826 | ) | |||||||||
| Payments for acquisition-related contingent consideration | (5 | ) | - | (5 | ) | - | ||||||||||
| Proceeds from issuance of common stock under stock plans | 4,444 | 9,198 | 5,841 | 14,185 | ||||||||||||
| Purchases of common stock | (456 | ) | (30,145 | ) | (56,048 | ) | (72,924 | ) | ||||||||
| Dividends paid | (8,830 | ) | (7,845 | ) | (17,667 | ) | (15,697 | ) | ||||||||
| Net cash (used in) provided by financing activities of continuing operations | (354,608 | ) | (257,724 | ) | (519,466 | ) | 325,267 | |||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (23,341 | ) | (3,810 | ) | (33,977 | ) | (10,659 | ) | ||||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (308,819 | ) | (263,697 | ) | (257,404 | ) | 324,091 | |||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 670,752 | 990,401 | 619,337 | 402,613 | ||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 361,933 | $ | 726,704 | $ | 361,933 | $ | 726,704 | ||||||||
| 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 | $ | 360,860 | $ | 572,810 | $ | 360,860 | $ | 572,810 | ||||||||
| Restricted cash included in other current assets | 1,073 | 1,750 | 1,073 | 1,750 | ||||||||||||
| Restricted cash included in other assets | - | 152,144 | - | 152,144 | ||||||||||||
| Total cash, cash equivalents and restricted cash | $ | 361,933 | $ | 726,704 | $ | 361,933 | $ | 726,704 | ||||||||
| 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 3, 2022 | July 4, 2021 | |||||||||||
| Adjusted revenue: | ||||||||||||
| Revenue | $ | 1,229.6 | $ | 1,228.5 | ||||||||
| Purchase accounting adjustments | 0.2 | 1.0 | ||||||||||
| Adjusted revenue | $ | 1,229.8 | $ | 1,229.5 | ||||||||
| Adjusted gross margin: | ||||||||||||
| Gross margin | $ | 666.2 | 54.2 | % | $ | 685.2 | 55.8 | % | ||||
| Amortization of intangible assets | 39.2 | 3.2 | % | 22.7 | 1.8 | % | ||||||
| Purchase accounting adjustments | 17.2 | 1.4 | % | 3.3 | 0.3 | % | ||||||
| Acquisition and divestiture-related costs | 1.5 | 0.1 | % | - | 0.0 | % | ||||||
| Adjusted gross margin | $ | 724.1 | 58.9 | % | $ | 711.2 | 57.8 | % | ||||
| Adjusted SG&A: | ||||||||||||
| SG&A | $ | 330.0 | 26.8 | % | $ | 281.8 | 22.9 | % | ||||
| Amortization of intangible assets | (61.7 | ) | -5.0 | % | (36.9 | ) | -3.0 | % | ||||
| Purchase accounting adjustments | (0.7 | ) | -0.1 | % | (0.2 | ) | 0.0 | % | ||||
| Acquisition and divestiture-related costs | (19.0 | ) | -1.5 | % | (10.6 | ) | -0.9 | % | ||||
| Significant litigation matters and settlements | 1.7 | 0.1 | % | - | 0.0 | % | ||||||
| Adjusted SG&A | $ | 250.3 | 20.3 | % | $ | 234.0 | 19.0 | % | ||||
| Adjusted R&D: | ||||||||||||
| R&D | $ | 73.4 | 6.0 | % | $ | 65.8 | 5.4 | % | ||||
| Purchase accounting adjustments | (0.1 | ) | 0.0 | % | - | 0.0 | % | |||||
| Acquisition and divestiture-related costs | (1.3 | ) | -0.1 | % | - | 0.0 | % | |||||
| Adjusted R&D | $ | 72.0 | 5.9 | % | $ | 65.8 | 5.4 | % | ||||
| Adjusted operating income: | ||||||||||||
| Operating income | $ | 250.9 | 20.4 | % | $ | 332.5 | 27.1 | % | ||||
| Amortization of intangible assets | 100.9 | 8.2 | % | 59.6 | 4.8 | % | ||||||
| Purchase accounting adjustments | 18.0 | 1.5 | % | 3.6 | 0.3 | % | ||||||
| Acquisition and divestiture-related costs | 21.9 | 1.8 | % | 10.6 | 0.9 | % | ||||||
| Significant litigation matters and settlements | (1.7 | ) | -0.1 | % | - | 0.0 | % | |||||
| Restructuring and other, net | 11.9 | 1.0 | % | 5.1 | 0.4 | % | ||||||
| Adjusted operating income | $ | 401.9 | 32.7 | % | $ | 411.3 | 33.5 | % | ||||
| PKI | ||||||||||||
| Three Months Ended | ||||||||||||
| July 3, 2022 | July 4, 2021 | |||||||||||
| Adjusted EPS: | ||||||||||||
| GAAP EPS | $ | 1.42 | $ | 2.19 | ||||||||
| Discontinued operations, net of income taxes | (0.00 | ) | (0.00 | ) | ||||||||
| GAAP EPS from continuing operations | 1.42 | 2.19 | ||||||||||
| Amortization of intangible assets | 0.80 | 0.53 | ||||||||||
| Debt extinguishment costs | 0.00 | - | ||||||||||
| Purchase accounting adjustments | 0.14 | 0.03 | ||||||||||
| Acquisition and divestiture-related costs | 0.17 | 0.09 | ||||||||||
| Change in fair value of financial securities | (0.02 | ) | (0.08 | ) | ||||||||
| Significant litigation matters and settlements | (0.01 | ) | - | |||||||||
| Restructuring and other, net | 0.09 | 0.05 | ||||||||||
| Tax on above items | (0.27 | ) | (0.11 | ) | ||||||||
| Significant tax items | - | 0.13 | ||||||||||
| Adjusted EPS | $ | 2.32 | $ | 2.83 | ||||||||
| DAS | ||||||||||||
| Three Months Ended | ||||||||||||
| July 3, 2022 | July 4, 2021 | |||||||||||
| Adjusted revenue: | ||||||||||||
| Revenue | $ | 660.5 | $ | 512.8 | ||||||||
| Purchase accounting adjustments | - | 0.8 | ||||||||||
| Adjusted revenue | $ | 660.5 | $ | 513.7 | ||||||||
| Adjusted operating income: | ||||||||||||
| Operating income | $ | 70.1 | 10.6 | % | $ | 64.2 | 12.5 | % | ||||
| Amortization of intangible assets | 67.5 | 10.2 | % | 23.1 | 4.5 | % | ||||||
| Purchase accounting adjustments | 17.3 | 2.6 | % | 1.5 | 0.3 | % | ||||||
| Acquisition and divestiture-related costs | 15.0 | 2.3 | % | 8.6 | 1.7 | % | ||||||
| Significant litigation matters and settlements | (1.7 | ) | -0.3 | % | - | 0.0 | % | |||||
| Restructuring and other, net | 9.4 | 1.4 | % | 3.6 | 0.7 | % | ||||||
| Adjusted operating income | $ | 177.7 | 26.9 | % | $ | 100.9 | 19.6 | % | ||||
| Diagnostics | ||||||||||||
| Three Months Ended | ||||||||||||
| July 3, 2022 | July 4, 2021 | |||||||||||
| Adjusted revenue: | ||||||||||||
| Revenue | $ | 569.0 | $ | 715.6 | ||||||||
| Purchase accounting adjustments | 0.2 | 0.2 | ||||||||||
| Adjusted revenue | $ | 569.2 | $ | 715.8 | ||||||||
| Adjusted operating income: | ||||||||||||
| Operating income | $ | 201.2 | 35.4 | % | $ | 286.3 | 40.0 | % | ||||
| Amortization of intangible assets | 33.4 | 5.9 | % | 36.5 | 5.1 | % | ||||||
| Purchase accounting adjustments | 0.7 | 0.1 | % | 2.1 | 0.3 | % | ||||||
| Acquisition and divestiture-related costs | 6.9 | 1.2 | % | 2.1 | 0.3 | % | ||||||
| Restructuring and other, net | 2.5 | 0.4 | % | 1.4 | 0.2 | % | ||||||
| Adjusted operating income | $ | 244.7 | 43.0 | % | $ | 328.4 | 45.9 | % | ||||
| (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 3, 2022 | July 4, 2021 | |||||||||||
| Adjusted revenue: | ||||||||||||
| Revenue | $ | 2,489.0 | $ | 2,536.2 | ||||||||
| Purchase accounting adjustments | 0.4 | 2.2 | ||||||||||
| Adjusted revenue | $ | 2,489.4 | $ | 2,538.4 | ||||||||
| Adjusted gross margin: | ||||||||||||
| Gross margin | $ | 1,345.4 | 54.1 | % | $ | 1,470.3 | 58.0 | % | ||||
| Amortization of intangible assets | 79.3 | 3.2 | % | 43.0 | 1.7 | % | ||||||
| Purchase accounting adjustments | 34.4 | 1.4 | % | 7.6 | 0.3 | % | ||||||
| Acquisition and divestiture-related costs | 3.2 | 0.1 | % | - | 0.0 | % | ||||||
| Adjusted gross margin | $ | 1,462.3 | 58.7 | % | $ | 1,520.9 | 59.9 | % | ||||
| Adjusted SG&A: | ||||||||||||
| SG&A | $ | 664.4 | 26.7 | % | $ | 533.2 | 21.0 | % | ||||
| Amortization of intangible assets | (124.3 | ) | -5.0 | % | (70.7 | ) | -2.8 | % | ||||
| Purchase accounting adjustments | (1.4 | ) | -0.1 | % | (0.5 | ) | 0.0 | % | ||||
| Acquisition and divestiture-related costs | (36.4 | ) | -1.5 | % | (20.3 | ) | -0.8 | % | ||||
| Significant litigation matters and settlements | 1.3 | 0.1 | % | - | 0.0 | % | ||||||
| Adjusted SG&A | $ | 503.5 | 20.2 | % | $ | 441.7 | 17.4 | % | ||||
| Adjusted R&D: | ||||||||||||
| R&D | $ | 150.0 | 6.0 | % | $ | 126.0 | 5.0 | % | ||||
| Purchase accounting adjustments | (0.1 | ) | 0.0 | % | - | 0.0 | % | |||||
| Acquisition and divestiture-related costs | (2.8 | ) | -0.1 | % | - | 0.0 | % | |||||
| Adjusted R&D | $ | 147.1 | 5.9 | % | $ | 126.0 | 5.0 | % | ||||
| Adjusted operating income: | ||||||||||||
| Operating income | $ | 505.7 | 20.3 | % | $ | 800.3 | 31.6 | % | ||||
| Amortization of intangible assets | 203.5 | 8.2 | % | 113.7 | 4.5 | % | ||||||
| Purchase accounting adjustments | 36.0 | 1.4 | % | 8.0 | 0.3 | % | ||||||
| Acquisition and divestiture-related costs | 42.4 | 1.7 | % | 20.3 | 0.8 | % | ||||||
| Significant litigation matters and settlements | (1.3 | ) | -0.1 | % | - | 0.0 | % | |||||
| Restructuring and other, net | 25.3 | 1.0 | % | 10.8 | 0.4 | % | ||||||
| Adjusted operating income | $ | 811.7 | 32.6 | % | $ | 953.1 | 37.5 | % | ||||
| PKI | ||||||||||||
| Six Months Ended | ||||||||||||
| July 3, 2022 | July 4, 2021 | |||||||||||
| Adjusted EPS: | ||||||||||||
| GAAP EPS | $ | 2.81 | $ | 5.56 | ||||||||
| Discontinued operations, net of income taxes | (0.00 | ) | (0.00 | ) | ||||||||
| GAAP EPS from continuing operations | 2.81 | 5.56 | ||||||||||
| Amortization of intangible assets | 1.61 | 1.01 | ||||||||||
| Debt extinguishment costs | 0.00 | - | ||||||||||
| Purchase accounting adjustments | 0.28 | 0.07 | ||||||||||
| Acquisition and divestiture-related costs | 0.34 | 0.13 | ||||||||||
| Change in fair value of financial securities | 0.07 | (0.25 | ) | |||||||||
| Significant litigation matters and settlements | (0.01 | ) | - | |||||||||
| Restructuring and other, net | 0.20 | 0.10 | ||||||||||
| Tax on above items | (0.58 | ) | (0.21 | ) | ||||||||
| Significant tax items | - | 0.13 | ||||||||||
| Adjusted EPS | $ | 4.73 | $ | 6.55 | ||||||||
| DAS | ||||||||||||
| Six Months Ended | ||||||||||||
| July 3, 2022 | July 4, 2021 | |||||||||||
| Adjusted revenue: | ||||||||||||
| Revenue | $ | 1,262.9 | $ | 967.4 | ||||||||
| Purchase accounting adjustments | - | 1.8 | ||||||||||
| Adjusted revenue | $ | 1,262.9 | $ | 969.3 | ||||||||
| Adjusted operating income: | ||||||||||||
| Operating income | $ | 84.6 | 6.7 | % | $ | 107.1 | 11.1 | % | ||||
| Amortization of intangible assets | 135.3 | 10.7 | % | 43.5 | 4.5 | % | ||||||
| Purchase accounting adjustments | 34.5 | 2.7 | % | 3.6 | 0.4 | % | ||||||
| Acquisition and divestiture-related costs | 28.3 | 2.2 | % | 14.5 | 1.5 | % | ||||||
| Significant litigation matters and settlements | (1.3 | ) | -0.1 | % | - | 0.0 | % | |||||
| Restructuring and other, net | 22.8 | 1.8 | % | 7.7 | 0.8 | % | ||||||
| Adjusted operating income | $ | 304.3 | 24.1 | % | $ | 176.5 | 18.2 | % | ||||
| Diagnostics | ||||||||||||
| Six Months Ended | ||||||||||||
| July 3, 2022 | July 4, 2021 | |||||||||||
| Adjusted revenue: | ||||||||||||
| Revenue | $ | 1,226.1 | $ | 1,568.7 | ||||||||
| Purchase accounting adjustments | 0.4 | 0.4 | ||||||||||
| Adjusted revenue | $ | 1,226.5 | $ | 1,569.1 | ||||||||
| Adjusted operating income: | ||||||||||||
| Operating income | $ | 459.2 | 37.5 | % | $ | 727.7 | 46.4 | % | ||||
| Amortization of intangible assets | 68.3 | 5.6 | % | 70.2 | 4.5 | % | ||||||
| Purchase accounting adjustments | 1.4 | 0.1 | % | 4.4 | 0.3 | % | ||||||
| Acquisition and divestiture-related costs | 14.1 | 1.2 | % | 5.8 | 0.4 | % | ||||||
| Restructuring and other, net | 2.5 | 0.2 | % | 3.1 | 0.2 | % | ||||||
| Adjusted operating income | $ | 545.6 | 44.5 | % | $ | 811.2 | 51.7 | % | ||||
| (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 3, 2022 | |||||
| Organic revenue growth: | |||||
| Reported revenue growth | 0% | ||||
| Less: effect of foreign exchange rates | -4% | ||||
| Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses | 10% | ||||
| Organic revenue growth | -5% | ||||
| Less: revenue growth from COVID products | -13% | ||||
| Organic revenue growth excluding COVID | 8% | ||||
| DAS | |||||
| Three Months Ended | |||||
| July 3, 2022 | |||||
| Organic revenue growth: | |||||
| Reported revenue growth | 29% | ||||
| Less: effect of foreign exchange rates | -5% | ||||
| Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses | 20% | ||||
| Organic revenue growth | 13% | ||||
| Diagnostics | |||||
| Three Months Ended | |||||
| July 3, 2022 | |||||
| Organic revenue growth: | |||||
| Reported revenue growth | -20% | ||||
| Less: effect of foreign exchange rates | -4% | ||||
| Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses | 2% | ||||
| Organic revenue growth | -19% | ||||
| (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 related term "non-COVID organic revenue growth" to refer to the measure of comparing current period organic revenue excluding revenue from COVID related products and services with the corresponding period of the prior year
excluding revenue from COVID related products and services.
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.