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PerkinElmer Announces Financial Results for the Second Quarter of 2022

·11 min read

Signs agreement with the intention to divest Applied, Food, and Enterprise Services businesses

  • Second quarter revenue of $1.23 billion; 0% reported growth, 8% non-COVID organic growth

  • Second quarter GAAP EPS from continuing operations of $1.42; adjusted EPS of $2.32

  • Initiates third quarter and raises full year guidance

  • Earnings call moved to today at 8:00 a.m. Eastern Time. Webcast information below

WALTHAM, Mass., August 01, 2022--(BUSINESS WIRE)--PerkinElmer, Inc. (NYSE: PKI), a global leader committed to innovating for a healthier world, today reported financial results for the second quarter ended July 3, 2022.

The Company reported GAAP earnings per share from continuing operations of $1.42, as compared to GAAP earnings per share from continuing operations of $2.19 in the same period a year ago. GAAP revenue for the quarter was $1.23 billion, as compared to $1.23 billion in the same period a year ago. GAAP operating income from continuing operations for the quarter was $251 million, as compared to $332 million for the same period a year ago. GAAP operating profit margin was 20.4% as a percentage of revenue, as compared to 27.1% in the same period a year ago.

Adjusted earnings per share from continuing operations for the quarter was $2.32, as compared to $2.83 in the same period a year ago. Adjusted revenue for the quarter was $1.23 billion, as compared to $1.23 billion in the same period a year ago. Adjusted operating income from continuing operations for the quarter was $402 million, as compared to $411 million for the same period a year ago. Adjusted operating profit margin was 32.7% as a percentage of adjusted revenue, as compared to 33.5% in the same period a year ago.

Adjustments for the Company's non-GAAP financial measures have been noted in the attached reconciliations.

"Our strong performance in the quarter is a testament to our operational and commercial execution as well as our portfolio evolution over the last three years," said Prahlad Singh, president and chief executive officer of PerkinElmer. "With today’s divestiture announcement, we position the company to transform into a pureplay, high growth, high margin life sciences and diagnostics company with even more focus to capitalize on attractive end markets. This transformation will in turn lead to significant financial strength, allowing us to continue to scale and accelerate our innovation investments, which help our customers bridge the chasm from research to clinic, and clinic to cure."

Financial Overview by Reporting Segment for the Second Quarter

Discovery & Analytical Solutions

  • Second quarter 2022 revenue was $661 million, as compared to $513 million in the same period a year ago. Reported revenue increased 29% and organic revenue increased 13% as compared to the same period a year ago.

  • Second quarter 2022 operating income from continuing operations was $70 million, as compared to $64 million for the same period a year ago.

  • Second quarter 2022 adjusted operating income was $178 million, as compared to $101 million for the same period a year ago.

Diagnostics

  • Second quarter 2022 revenue was $569 million, as compared to $716 million for the same period a year ago. Reported revenue decreased 20% and organic revenue decreased 19% as compared to the same period a year ago.

  • Second quarter 2022 operating income from continuing operations was $201 million, as compared to $286 million for the same period a year ago.

  • Second quarter 2022 adjusted operating income was $245 million, as compared to $328 million for the same period a year ago.

Initiates Third Quarter and Raises Full Year 2022 Guidance

For the third quarter of 2022, the Company forecasts revenue of approximately $1.02-1.03 billion and adjusted earnings per share to be in a range $1.40-1.45.

For the full year 2022, the Company now forecasts revenue of $4.60-4.64 billion and adjusted earnings per share of $7.80-7.90.

Guidance for the third quarter and full year is provided on a non-GAAP basis and cannot be reconciled to the closest GAAP measures without unreasonable effort due to the unpredictability of the amounts and timing of events affecting the items the Company excludes from these non-GAAP measures. The timing and amounts of such events and items could be material to the Company’s results prepared in accordance with GAAP.

Announces Agreement with the Intention to Divest Applied, Food, and Enterprise Services Businesses

The Company is also announcing today that it has entered into an agreement with the intention to divest its Applied, Food, and Enterprise Services businesses to New Mountain Capital for a total consideration of $2.45 billion. The transaction is expected to close in the first quarter of 2023, subject to regulatory approvals and other customary closing conditions. Management will provide additional detail regarding this transaction in a separate release and on today’s webcast. A presentation highlighting this transaction will be available on the Investors section of the Company’s website, www.perkinelmer.com.

Webcast Information

The Company will discuss its second quarter 2022 results, its outlook for business trends, and its intended divestiture of its Analytical, Food, and Enterprise Services businesses during a webcast on August 1, 2022, at 8:00 a.m. Eastern Time. A live audio webcast and presentation will be available on the Investors section of the Company’s website, www.perkinelmer.com.

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, acquisitions and divestitures. Words such as "believes," "intends," "anticipates," "plans," "expects," "estimates", "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) the effect of the COVID-19 pandemic on our sales and operations; (3) fluctuations in the global economic and political environments; (4) our failure to introduce new products in a timely manner; (5) our ability to execute acquisitions and divestitures, such as the divestiture of the Applied, Food and Enterprise Services businesses, license technologies, or to successfully integrate acquired businesses and licensed technologies into our existing business or to make them profitable, or successfully divest businesses; (6) our ability to compete effectively; (7) fluctuation in our quarterly operating results and our ability to adjust our operations to address unexpected changes; (8) significant disruption in third-party package delivery and import/export services or significant increases in prices for those services; (9) disruptions in the supply of raw materials and supplies; (10) our ability to retain key personnel; (11) significant disruption in our information technology systems, or cybercrime; (12) our ability to realize the full value of our intangible assets; (13) our failure to adequately protect our intellectual property; (14) the loss of any of our licenses or licensed rights; (15) the manufacture and sale of products exposing us to product liability claims; (16) our failure to maintain compliance with applicable government regulations; (17) regulatory changes; (18) our failure to comply with healthcare industry regulations; (19) economic, political and other risks associated with foreign operations; (20) the United Kingdom’s withdrawal from the European Union; (21) our ability to obtain future financing; (22) restrictions in our credit agreements; (23) discontinuation or replacement of LIBOR; (24) significant fluctuations in our stock price; (25) reduction or elimination of dividends on our common stock; and (26) 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 is a leading, global provider of end-to-end solutions that help scientists, researchers and clinicians better diagnose disease, discover new and more personalized drugs, monitor the safety and quality of our food, and drive environmental and applied analysis excellence. With an 85-year legacy of advancing science and a mission of innovating for a healthier world, our dedicated team of more than 16,000 collaborates closely with commercial, government, academic and healthcare customers to deliver reagents, assays, instruments, automation, informatics and strategic services that accelerate workflows, deliver actionable insights and support improved decision making. We are also deeply committed to good corporate citizenship through our dynamic ESG and sustainability programs. The Company reported revenues of approximately $5 billion in 2021, serves customers in 190 countries, and is a component of the S&P 500 index. Additional information is available at www.perkinelmer.com. Follow PerkinElmer on LinkedIn, Twitter, Facebook, Instagram, and YouTube.

PerkinElmer, Inc. and Subsidiaries

CONDENSED CONSOLIDATED INCOME STATEMENTS

Three Months Ended

Six Months Ended

(In thousands, except per share data)

July 3, 2022

July 4, 2021

July 3, 2022

July 4, 2021

Revenue

$

1,229,569

$

1,228,471

$

2,489,011

$

2,536,160

Cost of revenue

563,406

543,277

1,143,617

1,065,820

Selling, general and administrative expenses

330,025

281,819

664,418

533,229

Research and development expenses

73,352

65,824

149,961

126,040

Restructuring and other, net

11,928

5,063

25,312

10,807

Operating income from continuing operations

250,858

332,488

505,703

800,264

Interest income

(762

)

(367

)

(1,357

)

(778

)

Interest expense

27,128

16,750

55,516

30,876

Change in fair value of financial securities

(2,910

)

(8,633

)

9,215

(27,931

)

Other (income) expense, net

2,930

(1,319

)

257

(8,442

)

Income from continuing operations, before income taxes

224,472

326,057

442,072

806,539

Provision for income taxes

45,220

80,089

85,817

181,228

Income from continuing operations

179,252

245,968

356,255

625,311

Loss on disposition of discontinued operations, before income taxes

-

-

-

-

Provision for income taxes on discontinued operations and dispositions

40

38

81

76

Loss from discontinued operations and dispositions

(40

)

(38

)

(81

)

(76

)

Net income

$

179,212

$

245,930

$

356,174

$

625,235

Diluted earnings per share:

Income from continuing operations

$

1.42

$

2.19

$

2.81

$

5.56

Loss from discontinued operations and dispositions

(0.00

)

(0.00

)

(0.00

)

(0.00

)

Net income

$

1.42

$

2.19

$

2.81

$

5.56

Weighted average diluted shares of common stock outstanding

126,509

112,417

126,581

112,456

ABOVE PREPARED IN ACCORDANCE WITH GAAP

Additional Supplemental Information (1):

(per share, continuing operations)

GAAP EPS from continuing operations

$

1.42

$

2.19

$

2.81

$

5.56

Amortization of intangible assets

0.80

0.53

1.61

1.01

Debt extinguishment costs

0.00

-

0.00

-

Purchase accounting adjustments

0.14

0.03

0.28

0.07

Acquisition and divestiture-related costs

0.17

0.09

0.34

0.13

Change in fair value of financial securities

(0.02

)

(0.08

)

0.07

(0.25

)

Significant litigation matters and settlements

(0.01

)

-

(0.01

)

-

Restructuring and other, net

0.09

0.05

0.20

0.10

Tax on above items

(0.27

)

(0.11

)

(0.58

)

(0.21

)

Significant tax items

-

0.13

-

0.13

Adjusted EPS

$

2.32

$

2.83

$

4.73

$

6.55

(1) amounts may not sum due to rounding

PerkinElmer, Inc. and Subsidiaries

REVENUE AND OPERATING INCOME (LOSS)

Three Months Ended

Six Months Ended

(In thousands, except percentages)

July 3, 2022

July 4, 2021

July 3, 2022

July 4, 2021

DAS

Reported revenue

$

660,541

$

512,829

$

1,262,907

$

967,438

Purchase accounting adjustments

-

822

-

1,849

Adjusted revenue

660,541

513,651

1,262,907

969,287

Reported operating income from continued operations

70,112

64,155

84,627

107,102

OP%

10.6

%

12.5

%

6.7

%

11.1

%

Amortization of intangible assets

67,537

23,072

135,265

43,492

Purchase accounting adjustments

17,264

1,473

34,546

3,649

Acquisition and divestiture-related costs

15,023

8,597