Life Technologies Announces Third Quarter 2011 Results

CARLSBAD, Calif., Oct. 25, 2011 /PRNewswire/ -- Life Technologies Corporation (NASDAQ: LIFE) today announced results for its third quarter ending September 30, 2011. Non-GAAP revenue for the third quarter was $929 million, an increase of 7 percent over the $869 million reported for the third quarter of 2010. Excluding the impact of currency, revenue growth for the quarter was 4 percent compared to the same period of the prior year.

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“We are pleased with our third quarter results. We have seen an improvement in our Greater China business and continue to gain traction with our Ion Torrent products,” said Gregory T. Lucier, Chairman and Chief Executive Officer of Life Technologies. “Although academic government funding pressures are expected to continue in the U.S. and Europe, we are positioning our products and cost structure to succeed in this new environment.”

Analysis of Third Quarter 2011 Results

• Third quarter non-GAAP 2011 revenue increased 7 percent over the prior year. Revenue growth without the impact from currency was 4 percent.
• Non-GAAP gross margin in the third quarter was 66.1 percent, approximately 70 basis points lower than the same period of the prior year due to the negative impact from higher instrument sales and lower royalty revenue, partially offset by the positive impact from productivity and price.
• Non-GAAP operating margin was 29.4 percent in the third quarter, approximately 40 basis points higher than the same period of the prior year. Operating margin improvement was primarily due to the company’s continued focus on operational efficiencies.
• Third quarter non-GAAP tax rate was 27.1 percent.
• Diluted weighted shares outstanding were 186.8 million in the third quarter, a decrease of 3.3 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. The company has repurchased $100 million or 2.6 million shares in the last 90 days, 1.9 million of which were repurchased within the third quarter.
• Cash flow from operating activities for the third quarter was $174 million. Third quarter capital expenditures were $32 million, resulting in free cash flow of $142 million. The company ended the quarter with $636 million in cash and short-term investments.
• The following analysis of diluted earnings per share identifies specific items that affect the comparability of results between periods. Reconciliations between the company’s GAAP and non-GAAP results for the periods reported are presented in the attached tables and on the company’s Investor Relations page at http://ir.lifetechnologies.com.

Business Highlights:

• Cell Systems division non-GAAP revenue was $244 million in the third quarter, an increase of 10 percent over the same period last year. Excluding the impact from currency, revenue grew 6 percent year over year. This growth was a result of solid growth across the portfolio, as well as low double digit growth in BioProduction and improvements in Asia.
• Molecular Biology Systems division non-GAAP revenue was $426 million, an increase of 3% compared to the prior year. Excluding the impact from currency, revenue for the division was flat to prior year, as a result of the general funding environment.
• Genetic Systems division non-GAAP revenue was $256 million in the third quarter, an increase of 12 percent over the same period last year. Excluding the impact from currency, revenue increased 8 percent. Strong sales of the Ion Torrent PGM and related products, as well as, growth in forensic instrument placements were partially offset by lower sales of the 5500 instrument and consumables.
• Regional revenue growth rates for the quarter compared to the same quarter of the prior year were as follows: the Americas grew 2 percent, Europe 5 percent, Asia Pacific 14 percent and Japan declined 2 percent.
• Revenue from orders transacted through Life Technologies’ eCommerce channels grew 8 percent during the quarter. Over 50 percent of all transactions are processed using eCommerce platforms.

Product Highlights:

• Continuing to build its consumables product portfolio, the company has launched several products that will be used in the research and applied markets. These products include:
  • The launch of the first and only USDA approved Real-Time PCR test to detect Swine Influenza Virus with the VetMAX-Gold SIV Detection Kit,
  • The MagMAX RNA and DNA Isolation Kits which help scientists to more efficiently and effectively isolate RNA and DNA from cancer tumor tissue samples,
  • Two diagnostic control products were also launched with the AcroMetrix® KRAS FFPE Process Controls and the AcroMetrix® Quantitative Panels, Plasma Controls and CSF Controls. These research use only products monitor the performance of molecular tests across an entire workflow.
• The company has signed an agreement with GlaxoSmithKline to develop a diagnostic to be used in companion with an innovative cancer therapy which is in phase III clinical trials. For more details, please reference press release dated October 25, 2011.
• Extending its qPCR franchise, the company announced the QuantStudio 12k Flex Real-Time system. This high throughput system can provide up to 110,000 data points in one workday. The instrument can also run digital PCR. For more details, please reference press release dated October 12, 2011.
• Accelerating the pace of discovery by making research simpler, faster and more accurate, the company announced eight innovative Ion Torrent products including the launch of the Ion AmpliSeq Cancer Panel, the Ion Sequencing 200 Kit and the release of a 1 Gb dataset on the new Ion 318 chip, demonstrating 100x scaling of the platform in under a year. For more details, please reference press release dated October 12, 2011.

Fiscal Year 2011 Outlook

Subject to the risk factors detailed in the Safe Harbor Statement section of this release, the company reiterated its expectations for fiscal year 2011 financial performance. Revenue growth, excluding currency, is expected to be between 2 and 4 percent. This level of revenue growth is expected to result in approximately $3.70 to $3.80 of non-GAAP earnings per share. The company will provide further detail on its business outlook during the webcast today.

Webcast Details

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 Web site at http://ir.lifetechnologies.com. The webcast can be accessed through the investor relations page of the Life Technologies’ website at http://ir.lifetechnologies.com/events.cfm. A replay of the webcast will be available on the company’s website through Tuesday, November 15, 2011.

About Life Technologies

Life Technologies Corporation (NASDAQ: LIFE) is a global biotechnology company dedicated to improving the human condition. Our systems, consumables and services enable researchers to accelerate scientific and medical advancements that make life even better. Life Technologies customers do their work across the biological spectrum, working to advance the fields of discovery and translational research, molecular medicine, stem cell-based therapies, food safety and animal health, and 21st century forensics. The company manufactures both molecular diagnostic and research use only products. Life Technologies’ industry-leading brands are found in nearly every life sciences lab in the world and include innovative instrument systems under the Applied Biosystems and Ion Torrent names, as well as, the broadest range of reagents with its Invitrogen, GIBCO, Ambion, Molecular Probes and Taqman products. Life Technologies had sales of $3.6 billion in 2010, has a workforce of approximately 11,000 people, has a presence in approximately 160 countries, and possesses one of the largest intellectual property estates in the life sciences industry, with approximately 3,900 patents and exclusive licenses. For more information on how we are making a difference, please visit our website: http://www.lifetechnologies.com.

Safe Harbor Statement

Certain statements contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and Life Technologies intend that such forward-looking statements be subject to the safe harbor created thereby. Forward-looking statements may be identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements about the expected future business and financial performance of the company. Such forward-looking statements include, but are not limited to, statements relating to financial projections, including revenue and pro forma EPS projections; success of acquired businesses, including cost and revenue synergies; development and increased flow of new products; leveraging technology and personnel; advanced opportunities and efficiencies; opportunities for growth; expectations of prospective new standards, new delivery platforms, and new selling specialization and effectiveness; and corporate strategy and performance. A number of the matters discussed in this press release and presentation that are not historical or current facts deal with potential future circumstances and developments, including future research and development plans. The discussion of such matters is qualified by the inherent risks and uncertainties surrounding future expectations generally and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: volatility of the financial markets; and the risks that are described from time to time in Life Technologies’ reports filed with the SEC. This press release and presentation speaks only as of its date, and the company disclaims any duty to update the information herein.