WALTHAM, Mass., Dec. 14 /PRNewswire-FirstCall/ -- Thermo Fisher Scientific Inc. today announced that it is raising its full-year 2007 adjusted earnings per share (EPS) estimate to a range of $2.35 to $2.45, from $2.27 to $2.37 presented on May 8, 2006, when the merger of Thermo Electron and Fisher Scientific was announced. The company also increased its full-year 2006 adjusted EPS guidance, which includes earnings from Fisher since the November 9 closing, to a range of $1.83 to $1.86 (factoring in expected fourth quarter adjusted EPS of $0.52 to $0.54).
Revenues in 2007 are expected to grow to $9.4 to $9.5 billion, an increase of approximately 7 to 8% over the company's pro forma 2006 estimate of $8.8 billion, as if the companies had been combined for all of 2006. This guidance includes the favorable impact of a full year of results from 2006 acquisitions and approximately 6% organic growth over the pro forma estimate. It also takes into account the unfavorable effects of 2006 divestitures.
The 2007 guidance does not factor in any acquisitions or divestitures that may be completed during the year, and is based on present currency exchange rates. In addition, the adjusted EPS estimate excludes amortization expense for acquisition-related intangible assets and certain other items detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."
"We are very excited about the significant growth opportunities we now have as the world leader in serving science," said Marijn E. Dekkers, president and chief executive officer of Thermo Fisher Scientific. "We are focused on providing our customers with the most advanced integrated technology solutions which, combined with unparalleled purchasing choice and convenience, will enable them to be more efficient and more successful than ever before. We are confident that, as the new Thermo Fisher Scientific, we will continue to deliver on our commitments to our customers, employees and shareholders."
Adjusted EPS is a non-GAAP measure that is described below under the heading "Use of Non-GAAP Financial Measures."
Analyst Meeting
Thermo Fisher Scientific will hold an Analyst Meeting today, December 14, at 10:00 a.m. Eastern time. The meeting will be held in the auditorium at The Equitable Center, 787 Seventh Avenue, New York, NY. You can also listen to the meeting live on the Web at http://www.thermofisher.com, under "Investors." An archive of the Webcast will be available in that section of our Website through January 8, 2007.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including adjusted EPS, adjusted operating income and adjusted operating margin, which exclude restructuring and other costs/income and amortization of acquisition-related intangible assets. Adjusted EPS also excludes certain other gains and losses, tax provisions/benefits related to the previous items, benefits from tax credit carryforwards, the impact of significant tax audits or events and discontinued operations. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. We believe that the use of non-GAAP measures helps investors to gain a better understanding of our core operating results and future prospects, consistent with how management measures and forecasts the company's performance, especially when comparing such results to previous periods or forecasts.
For example:
We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities in connection with the Fisher merger and our Kendro acquisition. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.
We exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition, accelerated vesting of our equity-based arrangements resulting from the change in control occurring at the date of the Fisher merger ($49.6 million of pre-tax unamortized equity-based compensation existed at September 30, 2006) and acquisition-related professional fees. We exclude these costs because we do not believe they are indicative of our normal operating costs.
We exclude the expense and tax effects associated with the amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of 5 to 10 years. Exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.
We also exclude certain gains/losses and related tax effects, benefits from tax credit carryforwards and the impact of significant tax audits or events, which are either isolated or cannot be expected to occur again with any regularity or predictability and that we believe are not indicative of our normal operating gains and losses. We exclude gains/losses from the sale of our equity interests in Newport Corporation and Thoratec Corporation, as well as other items such as the sale of a business or real estate, the early retirement of debt and discontinued operations. (We sold our remaining shares of Newport and Thoratec during the second quarter of 2005.)
Thermo Fisher's management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the company's core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes.
The non-GAAP financial measures used by Thermo Fisher's management are not meant to be considered superior to or a substitute for Thermo Fisher's results of operations prepared in accordance with GAAP. Thermo Fisher's earnings guidance is only provided on an adjusted basis. It is not feasible to provide GAAP EPS guidance because the items excluded are difficult to predict and estimate and are primarily dependent on future events, such as the impact of accounting principles not yet adopted and decisions concerning the location and timing of facility consolidations.
About Thermo Fisher Scientific
Thermo Fisher Scientific is the world leader in serving science, enabling our customers to make the world healthier, cleaner and safer. With annual sales of more than $9 billion, we employ 30,000 people and serve over 350,000 customers within pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental and industrial process control settings. Serving customers through two premier brands, Thermo Scientific and Fisher Scientific, we help solve analytical challenges from routine testing to complex research and discovery. Thermo Scientific offers customers a complete range of high-end analytical instruments as well as laboratory equipment, software, services, consumables and reagents to enable integrated laboratory workflow solutions. Fisher Scientific provides a complete portfolio of laboratory equipment, chemicals, supplies and services used in healthcare, scientific research, safety and education. Together, we offer the most convenient purchasing options to customers and continuously advance our technologies to accelerate the pace of scientific discovery, enhance value for customers and fuel growth for shareholders and employees alike. Visit http://www.thermofisher.com.
The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include those discussed in Thermo Electron and Fisher Scientific's Quarterly Reports on Form 10-Q for the third quarter of 2006 under the caption "Risk Factors," both of which are on file with the Securities and Exchange Commission and available in the "Investors" section of our Website under the heading "SEC Filings." We also may make forward-looking statements about the benefits of the merger of Thermo Electron and Fisher Scientific, including statements about future financial and operating results, the new company's plans, objectives, expectations and intentions and other statements that are not historical facts. Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; competition and its effect on pricing, spending, third-party relationships and revenues; the need to develop new products and adapt to significant technological change; implementation of strategies for improving internal growth; use and protection of intellectual property; dependence on customers' capital spending policies and government funding policies; realization of potential future savings from new productivity initiatives; dependence on customers that operate in cyclical industries; general worldwide economic conditions and related uncertainties; the effect of changes in governmental regulations; exposure to product liability claims in excess of insurance coverage; and the effect of exchange rate fluctuations on international operations. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change and, therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.
Media Contact Information: Lori Gorski Phone: 781-622-1242 E-mail: lori.gorski@thermofisher.com Investor Contact Information: Ken Apicerno Phone: 781-622-1111 E-mail: ken.apicerno@thermofisher.com Website: http://www.thermofisher.com
Thermo Fisher ScientificCONTACT: Media: Lori Gorski, +1-781-622-1242,lori.gorski@thermofisher.com, or Investor: Ken Apicerno, +1-781-622-1111,ken.apicerno@thermofisher.com, both of Thermo Fisher Scientific
Web site: http://www.thermofisher.com//
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