- The Company’s Medical Imaging business has been moved into discontinued operations due to the pending sale
- Announces new reporting segments of Discovery & Analytical Solutions (DAS) and Diagnostics
WALTHAM, Mass.--(BUSINESS WIRE)--PerkinElmer, Inc. (NYSE: PKI), a global leader focused on innovating for a healthier world, today reported financial results for the fourth quarter and full year ended January 1, 2017.
“As we exit 2016, I am pleased with our performance in delivering strong margin expansion and cash flow growth while making significant progress against our strategic priorities”
The Company announced the divestiture of its Medical Imaging business in the fourth quarter of 2016. With the announcement, the Company has moved the operating results of that business into discontinued operations thereby impacting comparability to previously issued financial guidance.
Fourth Quarter 2016
The Company reported GAAP earnings per share from continuing operations of $0.57 versus $0.56 in the comparable prior period of 2015. Revenue was $566.8 million versus $569.9 million in the comparable prior period of 2015 resulting in a decline of 1%. GAAP operating income from continuing operations was $80.4 million versus $77.2 million in the comparable prior period of 2015.
Adjusted earnings per share from continuing operations of $0.83, as compared to $0.81 in the comparable prior period in 2015. Adjusted revenue was $567.0 million versus $570.1 million in the comparable prior period of 2015 resulting in organic revenue growth of 1%. Adjusted operating income was $120.6 million versus $118.1 million in the comparable prior period of 2015.
Full Year 2016
The Company reported GAAP earnings per share from continuing operations of $1.96, compared to $1.67 in 2015 representing 17% earnings per share growth. GAAP revenue was $2.12 billion versus $2.10 billion in the comparable prior period representing 1% growth. GAAP operating income from continuing operations was $283.1 million as compared to $250.9 million in 2015, representing 13% operating income growth.
Adjusted earnings per share from continuing operations of $2.60, compared to $2.33 in 2015 representing 12% adjusted earnings per share growth. Adjusted revenue was $2.12 billion, as compared to $2.11 billion in 2015 resulting in organic revenue growth of 2%. Adjusted operating income was $393.6 million, compared to $363.2 million in 2015 representing 8% adjusted operating income growth.
Adjustments for the Company’s non-GAAP financial measures have been noted in the attached reconciliations.
“As we exit 2016, I am pleased with our performance in delivering strong margin expansion and cash flow growth while making significant progress against our strategic priorities,” said Robert Friel, chairman and chief executive officer of PerkinElmer. “We have undertaken substantial steps to strengthen our organization, accelerate our operational capabilities and increase our focus on innovation, that better position us to improve revenue growth and increase profitability.”
Cash Flow
For the full year, operating cash flow from continuing operations was $323.8 million as compared to $263.8 million in 2015.
Historical Financial Data
The Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2017 will be the Company’s first periodic report to reflect the Company’s new segment structure and the exclusion of the Company’s Medical Imaging business from continuing operations. Financial information relating to prior years will be retrospectively adjusted to reflect these changes.
The Company has made available on the Investor Relations section of its website (ir.perkinelmer.com) unaudited historical financial data that retrospectively reflect the Company’s new segment structure and the exclusion of the Company’s Medical Imaging business from continuing operations as well as schedules reconciling the Company’s 2016 financial results and guidance.
Financial Overview by Reporting Segment for the Fourth Quarter and Full Year 2016
Discovery & Analytical Solutions
- Fourth quarter 2016 revenue of $409.9 million, as compared to $418.2 million for the fourth quarter of 2015. Fourth quarter 2016 reported revenue declined 2% and organic revenue declined 1%. Full year 2016 revenue of $1,513.0 million, as compared to $1,528.4 million in 2015. Full year 2016 reported revenue declined 1% and organic revenue was unchanged.
- Fourth quarter 2016 operating income of $72.0 million, as compared to operating income of $64.4 million for the fourth quarter of 2015. Full year 2016 operating income of $207.5 million, as compared to operating income of $173.7 million for 2015.
- Fourth quarter 2016 adjusted operating income of $85.2 million, as compared to $86.6 million in the fourth quarter of 2015. Fourth quarter 2016 adjusted operating profit margin was 20.8% as a percentage of revenue, as compared to 20.7% in the fourth quarter of 2015. Full year 2016 adjusted operating income of $266.5 million, as compared to adjusted operating income of $248.2 million for 2015. Full year 2016 adjusted operating profit margin was 17.6% as a percentage of revenue, as compared to 16.2% in 2015.
Diagnostics
- Fourth quarter 2016 revenue of $156.8 million, as compared to $151.7 million for the fourth quarter of 2015. Fourth quarter 2016 reported revenue increased 3% and organic revenue increased 7%. Full year 2016 revenue of $602.5 million, as compared to $576.4 million in 2015. Full year 2016 reported revenue increased 5% and organic revenue increased 8%.
- Fourth quarter 2016 operating income of $34.0 million, as compared to $37.0 million for the fourth quarter of 2015. Full year 2016 operating income of $138.9 million, as compared to operating income of $135.6 million for 2015.
- Fourth quarter 2016 adjusted operating income of $45.7 million, as compared to $44.2 million in the fourth quarter of 2015. Fourth quarter 2016 adjusted operating profit margin was 29.1% as a percentage of adjusted revenue, flat as compared to the fourth quarter of 2015. Full year 2016 adjusted operating income of $175.1 million, as compared to adjusted operating income of $160.9 million for 2015. Full year 2016 adjusted operating profit margin was 29.0% as a percentage of adjusted revenue, as compared to 27.9% in 2015.
Financial Guidance – Full Year 2017
For the full year 2017, the Company forecasts GAAP earnings per share from continuing operations in the range of $2.06 to $2.16 and on a non-GAAP basis, which is expected to include the adjustments noted in the attached reconciliation, adjusted earnings per share of $2.75 to $2.85.
Conference Call Information
The Company will discuss its fourth quarter and full year 2016 results and its outlook for business trends in a conference call on February 2, 2017 at 5:00 p.m. Eastern Time. To access the call, please dial (541) 797-2422 prior to the scheduled conference call time and provide the access code 40914697.
A live audio webcast of the call will be available on the Investor section of the Company’s Web site, www.perkinelmer.com. Please go to the site at least 15 minutes prior to the call in order to register, download, and install any necessary software. An archived version of the webcast will be posted on the Company’s Web site for a two week period beginning approximately two hours after the call.
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 and divestitures. Words such as “believes,” “intends,” “anticipates,” “plans,” “expects,” “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) fluctuations in the global economic and political environments; (3) our failure to introduce new products in a timely manner; (4) our ability to execute acquisitions and license technologies, or to successfully integrate acquired businesses and licensed technologies into our existing business or to make them profitable, or successfully divest businesses; (5) our failure to adequately protect our intellectual property; (6) the loss of any of our licenses or licensed rights; (7) our ability to compete effectively; (8) fluctuation in our quarterly operating results and our ability to adjust our operations to address unexpected changes; (9) significant disruption in third-party package delivery and import/export services or significant increases in prices for those services; (10) disruptions in the supply of raw materials and supplies; (11) the manufacture and sale of products exposing us to product liability claims; (12) our failure to maintain compliance with applicable government regulations; (13) regulatory changes; (14) our failure to comply with healthcare industry regulations; (15) economic, political and other risks associated with foreign operations; (16) our ability to retain key personnel; (17) significant disruption in our information technology systems; (18) our ability to obtain future financing; (19) restrictions in our credit agreements; (20) the approval of the Brexit Referendum in the United Kingdom; (21) our ability to realize the full value of our intangible assets; (22) significant fluctuations in our stock price; (23) reduction or elimination of dividends on our common stock; and (24) 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.
About PerkinElmer
PerkinElmer, Inc. is a global leader focused on innovating for a healthier world. The Company reported revenue of approximately $2.1 billion in 2016, has about 9,000 employees serving customers in more than 150 countries, and is a component of the S&P 500 Index. Additional information is available through 1-877-PKI-NYSE, or at www.perkinelmer.com.
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