CARLSBAD, Calif., July 31, 2012 /PRNewswire/ -- Life Technologies Corporation (NASDAQ: LIFE) today announced results for its second quarter ended June 30, 2012. Revenue for the second quarter was $950 million, an increase of 1 percent over the $945 million reported for the second quarter of 2011. Excluding the impact of currency, revenue growth for the quarter was 1 percent compared to the same period of the prior year.
"We finished the first half of 2012 in line with our expectations, as strength in our BioProduction and Ion Torrent businesses enabled us to grow revenue in the second quarter by 5 percent, excluding nearly $40 million in headwinds from expected declines in sales of our SOLiD 5500 product and qPCR royalties," said Gregory T. Lucier, chairman and chief executive officer of Life Technologies.
"During the quarter, we continued to deliver on our innovation pipeline, launching new Ion AmpliSeq clinical research products, selling a record number of our QuantStudio digital qPCR instruments and expanding our capabilities to commercialize novel stem cell technologies. In July, we made significant progress in building out our diagnostics franchise with the tuck-in acquisitions of Navigenics and Pinpoint Genomics, which in combination will allow us to offer a unique lung cancer clinical test to the pathology and oncology community."
"For the second half of 2012, we continue to expect solid growth in our Ion Torrent platform, as we begin shipping Ion Proton Sequencers in September, and in our emerging and applied markets. However, based primarily on increased headwinds from currency and an incrementally more conservative outlook for our European operations, we are revising our 2012 guidance. We are now expecting our organic revenue growth to be at the low end of our previously provided range of 2 to 4 percent and non-GAAP earnings per share in a range of $3.90 to $4.00."
Life Technologies reported current quarter results compared to the quarter ended June 30, 2011. Results are non-GAAP unless indicated otherwise. A full reconciliation of the non-GAAP measures to GAAP can be found in the tables of today's press release.
Analysis of Second Quarter 2012 Results
- Second quarter revenue increased 1 percent over the prior year. Revenue growth without the impact from currency was 1 percent.
- Gross margin in the second quarter was 65.4 percent, approximately 120 basis points higher than the same period of the prior year primarily driven by favorable product mix from an expected decline in SOLiD revenue and a benefit from the roll off of currency hedges which were in place last year, partially offset by lower royalty revenue.
- Operating margin was 28.6 percent in the second quarter, approximately 80 basis points higher than the same period of the prior year. Operating margin improvement was primarily due to improved gross margins, partially offset by the company's annual merit and promotion increases and continued investment in Greater China, Ion Torrent and Medical Sciences.
- Second quarter tax rate was 27.6 percent.
- Second quarter EPS increased 8 percent to $0.96 and included a $0.02 impact from weaker foreign exchange rates compared to the company's guidance at March month end rates.
- Diluted weighted shares outstanding were 181.3 million in the second quarter, a decrease of 3.5 million shares over the prior year. The decrease was a result of the continuation of the company's share repurchase program, partially offset by dilution from employee equity programs and issuance of shares associated with Ion Torrent milestone. The company repurchased $150 million or 3.6 million shares through July. Year to date, the company repurchased a total of $335 million or 7.6 million shares.
- Cash flow from operating activities for the second quarter was $256 million. Second quarter capital expenditures were $24 million, resulting in free cash flow of $232 million. The company ended the quarter with $303 million in cash and short-term investments.
Business Group Highlights:
- Research Consumables revenue was $403 million, an increase of 1 percent compared to the prior year. Excluding the impact from currency, revenue for the business group grew 1 percent, as a result of growth in cell culture products, benchtop instruments, and molecular biology consumables.
- Genetic Analysis revenue was $353 million in the second quarter, a decrease of 6 percent over the same period last year. Excluding the impact from currency, revenue decreased 6 percent as a result of an expected $30 million decline in SOLiD instrument sales and an $8 million decline in qPCR royalties, offset by increased sales in Ion Torrent. Excluding the impact of the SOLiD and qPCR royalties, Genetic Analysis increased 5 percent.
- Applied Sciences revenue was $194 million in the second quarter, an increase of 15 percent over the same period last year. Excluding the impact from currency, revenue grew 15 percent, primarily due to increases in BioProduction and Forensics.
- Regional revenue growth rates excluding currency for the quarter compared to the same quarter of the prior year were as follows: the Americas declined 2 percent, Europe grew 1 percent, Asia Pacific grew 17 percent and Japan declined 6 percent. Excluding the decline in SOLiD and qPCR royalty revenues, the Americas grew 2 percent, Europe grew 4 percent, Asia Pacific grew 19 percent and Japan grew 2 percent.
Board of Directors Authorized $750 million Share Repurchase
The company announced that its Board of Directors has approved a share repurchase program, authorizing the company to purchase up to $750 million of its common stock. This is in addition to the approximately $62 million remaining as of July 31, 2012 from existing share repurchase authorizations.
"We remain committed to a balanced capital allocation program that includes returning a significant portion of our free cash flow annually to investors and using the remaining cash flow to support strategic opportunities in key franchises and expansion into new markets," said Gregory T. Lucier, chairman and chief executive officer of Life Technologies. "In 2012, we have already spent $335 million to repurchase shares and are committed to executing on this new authorization beginning in the second half of 2012."
Fiscal Year 2012 Outlook
Subject to the risk factors detailed in the Safe Harbor Statement section of this release, the company is updating its guidance to reflect increased headwinds from foreign exchange rates at June month end rates and an incrementally more conservative outlook to its operations in Europe. The company's updated 2012 guidance is for organic revenue growth at the low end of its previously provided range of 2 to 4 percent over 2011 revenues of $3.7 billion. Additionally, the company is lowering the top end of its range by $0.05 and is now expecting non-GAAP earnings per share in a range of $3.90 to $4.00. The revision to non-GAAP EPS range is based on weaker foreign exchange rates at June month end and the dilution from the recently announced acquisitions of Navigenics, Inc. and Pinpoint Genomics, Inc. The company will provide further detail on its business outlook during the webcast today.
The company will discuss its financial and business results as well as its business outlook on its webcast at 4:30 PM ET today. This webcast will contain forward-looking information. The webcast will include a discussion of "non-GAAP financial measures" as that term is defined in Regulation G. For actual results, the most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the company's financial results determined in accordance with GAAP, as well as other material financial and statistical information to be discussed on the webcast will be posted at the company's investor relations website at https://ir.lifetechnologies.com. The webcast can be accessed through the investor relations page of the company's website at https://ir.lifetechnologies.com/events.cfm. A replay of the webcast will be available on the company's website through Tuesday, August 21, 2012.
About Life Technologies
Life Technologies Corporation (NASDAQ: LIFE) is a global biotechnology company with customers in more than 160 countries using its innovative solutions to solve some of today's most difficult scientific challenges. Quality and innovation are accessible to every lab with its reliable and easy-to-use solutions spanning the biological spectrum with more than 50,000 products for agricultural biotechnology, translational research, molecular medicine and diagnostics, stem cell-based therapies, forensics, food safety and animal health. Its systems, reagents and consumables represent some of the most cited brands in scientific research including: Ion Torrent, Applied Biosystems®, Invitrogen, GIBCO®, Ambion®, Molecular Probes®, Novex®, and TaqMan®. Life Technologies employs approximately 10,400 people and upholds its ongoing commitment to innovation with more than 4,000 patents and exclusive licenses. LIFE had sales of $3.7 billion in 2011. Visit us at our website: www.lifetechnologies.com.