RADNOR, Pa., Aug. 4, 2016 /PRNewswire/ -- VWR Corporation (NASDAQ: VWR), the leading global independent provider of product and service solutions to laboratory and production customers, today reported its financial results for the second quarter ended June 30, 2016.
Highlights:
- 2Q16 diluted EPS of $0.32 vs. $0.14 in 2Q15, 2Q16 Adjusted EPS of $0.42 vs. $0.34 in 2Q15.
- Second quarter net sales of $1.15 billion, up 6.3% year-over-year, and up 4.4% on an organic basis.
- 2Q16 Americas net sales increased 6.6% year-over-year, up 3.9% organic. EMEA-APAC net sales increased 5.9% year-over-year, up 5.1% organic. A description and reconciliation of GAAP to non-GAAP Adjusted EPS and net sales to organic net sales is attached.
- 1H16 cash flow from operating activities of $119.6 million, up 23.2% compared to prior year.
- Reaffirm 2016 guidance.
Manuel Brocke-Benz, President and Chief Executive Officer of VWR, commented: "Our second quarter financial results demonstrate the robust nature of our business model and our ability to generate solid top and bottom line results. In the second quarter, VWR delivered balanced revenue growth across both of its segments, with the Americas and EMEA-APAC segments each posting roughly 6% revenue growth. A combination of strong underlying revenue growth, margin expansion and lower interest expense drove strong earnings per share growth. As we move forward, we will continue to strengthen our platform of supply-chain excellence, delivering innovative, customized solutions that eliminate our customers' pain points, enabling them to be more productive and efficient."
Second Quarter 2016 Results
Net sales were $1.15 billion, up $68.3 million or 6.3% compared to prior year. Operating income was $84.6 million, up $7.0 million or 9.0% year-over-year.
Americas net sales were $694.9 million, up $43.1 million or 6.6% year-over-year, with the increase driven by strong sales to biopharma and government customers. Americas operating income was $43.6 million, up $2.4 million or 5.8% compared to prior year. Second quarter 2016 results in the Americas segment included $0.4 million of secondary offering expenses as compared to $0.9 million in the prior year quarter.
EMEA-APAC net sales were $454.6 million, up $25.2 million or 5.9% year-over-year, with the increase driven by strong sales to biopharma and industrial customers. EMEA-APAC operating income was $41.0 million, up $4.6 million or 12.6% compared to prior year. Second quarter 2015 EMEA-APAC results included a non-cash earn-out benefit of $0.2 million.
Full Year 2016 Outlook
Greg Cowan, Senior Vice President and Chief Financial Officer, commented: "VWR delivered solid financial results in the second quarter and operating cash flow of $119.6 million in the first six months of the year, up 23.2% compared to the first half of 2015. We continue to deploy our strong cash flows to delever the balance sheet, invest in the business, and to execute on attractive acquisition opportunities."
Management reaffirmed 2016 guidance. Full year 2016 outlook assumes:
- Currency exchange rates for the remainder of 2016 remain consistent with current rates;
- Interest expense of about $83 to $84 million;
- Diluted shares outstanding of approximately 132 million;
- Share-based compensation expense of approximately $8.6 million before tax;
- Full-year 2016 income tax rate of slightly below 35%; and
- No impact from acquisitions closed after August 4, 2016.
Balance Sheet & Cash Flows
At June 30, 2016, total debt was $2.025 billion and cash was $112.9 million. First half 2016 cash provided by operating activities was $119.6 million compared to $97.1 million in the first half of 2015. Capital expenditures in the first half of 2016 were $29.8 million compared to $16.5 million in the first half of 2015.
Conference Call
As previously announced, VWR will hold a conference call today, August 4, 2016, to discuss its second quarter 2016 financial results beginning at 8:00 a.m. ET. The conference call can be accessed live over the phone by dialing (877) 845-1003, or for international callers, (760) 298-5093. Callers will need to request to join the VWR Corporation second quarter 2016 earnings conference call. A replay will be available two hours after the conclusion of the live call and can be accessed by dialing (855) 859-2056, or for international callers, (404) 537-3406. The conference ID number for both the live call and replay will be 40733272. The replay will be available through August 9, 2016. A presentation relating to the conference call will be available at http://investors.vwr.com.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of our website at http://investors.vwr.com. The online replay will remain available for a limited time beginning immediately following the call. To learn more about VWR, please visit our website at www.vwr.com.
Use of Non-GAAP Financial Measures
As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles ("GAAP") with certain non-GAAP financial measurements that are used by management, and which we believe are useful to investors, as supplemental operational measurements to evaluate our financial performance. These measurements should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measurements, and such measurements may not be comparable to similarly-titled measurements reported by other companies. Rather, these measurements should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements included in publicly filed reports in their entirety and not rely solely on any one, single financial measurement.
The non-GAAP measurements used in this press release are Adjusted EPS and organic net sales:
- Adjusted EPS is a non-GAAP financial measurement that eliminates the effect of the amortization of acquired intangible assets, changes in foreign currency exchange rates related to financing decisions and certain other items. We then add or subtract an estimated incremental income tax effect applicable to those items. We believe that this measurement is useful to investors as an additional way to analyze the underlying trends in our business consistently across the periods presented. This measurement is used by our management for the same reason.
- Organic net sales is a non-GAAP financial measurement that eliminates the contribution from recently acquired businesses and the impact of changes in foreign currency exchange rates from our reported net sales. We believe that this measurement is useful to investors as a way to measure and evaluate our underlying commercial operating performance consistently across the periods presented. This measurement is used by our management for the same reason.
Reconciliations of our non-GAAP measurements to their most directly comparable GAAP-based financial measurements are included at the end of this press release.
About VWR Corporation
VWR (NASDAQ: VWR), headquartered in Radnor, Pennsylvania, is the leading global independent provider of product and service solutions to laboratory and production customers. With sales in excess of $4.3 billion in 2015, VWR enables science for customers in the pharmaceutical, biotechnology, industrial, education, government and healthcare industries. With more than 160 years of experience, VWR has cultivated a value proposition delivering product choice, operational excellence and differentiated services to improve our customers' productivity from research to production. VWR's differentiated services provide innovative, flexible and customized solutions from scientific research services to custom-manufactured chemical blends. Our dedicated team of more than 9,300 associates is focused on supporting scientists, medical professionals and production engineers to achieve their goals.
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