PerkinElmer Announces Financial Results for the First Quarter of 2021

PerkinElmer Announces Financial Results for the First Quarter of 2021

May 4, 2021 at 4:05 PM EDT
  • Revenue of $1.308 billion; 100% reported growth; 92% organic growth
  • GAAP EPS from continuing operations of $3.37; Adjusted EPS of $3.72
  • Initiates Second Quarter and Raises Full-Year Revenue and Earnings Guidance

WALTHAM, Mass.--(BUSINESS WIRE)--May 4, 2021-- PerkinElmer, Inc. (NYSE: PKI), a global leader committed to innovating for a healthier world, today reported financial results for the first quarter ended April 4, 2021.

The Company reported GAAP earnings per share from continuing operations of $3.37, as compared to GAAP earnings per share from continuing operations of $0.30 in the first quarter of 2020. GAAP revenue for the quarter was $1.308 billion, as compared to $652 million in the first quarter of 2020. GAAP operating income from continuing operations for the quarter was $468 million, as compared to $45 million for the same period a year ago. GAAP operating profit margin was 35.8% as a percentage of revenue, as compared to 6.8% in the first quarter of 2020.

Adjusted earnings per share from continuing operations for the quarter was $3.72, as compared to $0.67 in the first quarter of 2020. Adjusted revenue for the quarter was $1.309 billion, as compared to $653 million in the first quarter of 2020. Adjusted operating income from continuing operations for the quarter was $542 million, as compared to $100 million for the same period a year ago. Adjusted operating profit margin was 41.4% as a percentage of adjusted revenue, as compared to 15.3% in the first quarter of 2020.

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

“The first quarter performance reinforces that PerkinElmer is emerging from COVID as a stronger organization top-to-bottom,” said Prahlad Singh, president and chief executive officer of PerkinElmer. “Our additional investments in innovation, commercial excellence, and people in 2020 are taking hold and give us increased confidence that we are well positioned to deliver faster growth in both the short and long-term.”

 

Financial Overview by Reporting Segment for the First Quarter

Discovery & Analytical Solutions

  • First quarter 2021 revenue was $455 million, as compared to $398 million for the first quarter of 2020. Reported revenue increased 14% and organic revenue increased 6% as compared to the first quarter of 2020.
  • First quarter 2021 operating income from continuing operations was $43 million, as compared to $29 million for the comparable prior period.
  • First quarter 2021 adjusted operating income was $76 million, as compared to $54 million for the first quarter of 2020.

Diagnostics

  • First quarter 2021 revenue was $853 million, as compared to $254 million for the first quarter of 2020. Reported revenue increased 236% and organic revenue increased 227% as compared to the first quarter of 2020.
  • First quarter 2021 operating income from continuing operations was $441 million, as compared to $30 million for the comparable prior period.
  • First quarter 2021 adjusted operating income was $483 million, as compared to $59 million for the first quarter of 2020.

Initiates Second Quarter and Raises Full Year 2021 Guidance

For the second quarter of 2021, the Company forecasts GAAP revenue of approximately $1.11 billion, GAAP earnings per share from continuing operations of $1.90 and, on a non-GAAP basis, which is expected to include the adjustments noted in the attached reconciliation, adjusted earnings per share of $2.35.

For the full year of 2021, the Company now forecasts GAAP revenue of $4.37 billion, GAAP earnings per share from continuing operations of $7.77 and, on a non-GAAP basis, which is expected to include the adjustments noted in the attached reconciliation, adjusted earnings per share of $9.40.

Conference Call Information

The Company will discuss its first quarter 2021 results and its outlook for business trends in a conference call on May 4, 2021 at 5:00 p.m. Eastern Time. To access the call, please dial (720) 405-2250 prior to the scheduled conference call time and provide the access code 7294952.

A live audio webcast of the call will be available on the Investors section of the Company’s website, 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 website 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, acquisitions 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) 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 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 annual report on Form 10-K 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 $3.8 billion in 2020, has about 14,000 employees serving customers in more than 190 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.

 
 

PerkinElmer, Inc. and Subsidiaries

 
 

CONDENSED CONSOLIDATED INCOME STATEMENTS

 
               
               
     

Three Months Ended

   
  (In thousands, except per share data)  

April 4, 2021

 

April 5, 2020

   
               
               
  Revenue  

$

1,307,689

 

 

$

652,396

 

   
               
  Cost of revenue  

 

522,543

 

 

 

344,373

 

   
  Selling, general and administrative expenses  

 

251,410

 

 

 

208,569

 

   
  Research and development expenses  

 

60,216

 

 

 

48,914

 

   
  Restructuring and other, net  

 

5,744

 

 

 

5,858

 

   
               
  Operating income from continuing operations  

 

467,776

 

 

 

44,682

 

   
               
  Interest income  

 

(411

)

 

 

(265

)

   
  Interest expense  

 

14,126

 

 

 

13,665

 

   
  Change in fair value of financial securities  

 

(19,298

)

 

 

-

 

   
  Other income, net  

 

(7,123

)

 

 

(3,407

)

   
               
  Income from continuing operations, before income taxes  

 

480,482

 

 

 

34,689

 

   
               
  Provision for income taxes  

 

101,139

 

 

 

974

 

   
               
  Income from continuing operations  

 

379,343

 

 

 

33,715

 

   
               
  Loss on disposition of discontinued operations, before income taxes  

 

-

 

 

 

-

 

   
  Provision for income taxes on discontinued operations and dispositions  

 

38

 

 

 

50

 

   
               
  Loss from discontinued operations and dispositions  

 

(38

)

 

 

(50

)

   
               
  Net income  

$

379,305

 

 

$

33,665

 

   
               
               
  Diluted earnings per share:            
  Income from continuing operations  

$

3.37

 

 

$

0.30

 

   
               
  Loss from discontinued operations and dispositions  

 

(0.00

)

 

 

(0.00

)

   
               
  Net income  

$

3.37

 

 

$

0.30

 

   
               
               
  Weighted average diluted shares of common stock outstanding  

 

112,495

 

 

 

111,643

 

   
               
               
  ABOVE PREPARED IN ACCORDANCE WITH GAAP  
               
               
  Additional Supplemental Information (1):            
  (per share, continuing operations)            
               
  GAAP EPS from continuing operations  

$

3.37

 

 

$

0.30

 

   
  Amortization of intangible assets  

 

0.48

 

 

 

0.42

 

   
  Purchase accounting adjustments  

 

0.04

 

 

 

(0.10

)

   
  Acquisition and divestiture-related costs  

 

0.04

 

 

 

0.11

 

   
  Change in fair value of financial securities  

 

(0.17

)

 

 

-

 

   
  Significant litigation matters and settlements  

 

-

 

 

 

0.00

 

   
  Restructuring and other, net  

 

0.05

 

 

 

0.05

 

   
  Tax on above items  

 

(0.09

)

 

 

(0.12

)

   
  Adjusted EPS  

$

3.72

 

 

$

0.67

 

   
               
  (1) amounts may not sum due to rounding            
               
 
PerkinElmer, Inc. and Subsidiaries
REVENUE AND OPERATING INCOME (LOSS)

 

   

 

 

 

   

 

 

 

       

Three Months Ended

(In thousands, except percentages)  

April 4, 2021

 

April 5, 2020

       

 

 

 

       

 

 

 

DAS   Reported revenue  

$

454,609

 

 

$

398,395

 

    Purchase accounting adjustments  

 

1,027

 

 

 

-

 

    Adjusted Revenue  

 

455,636

 

 

 

398,395

 

       

 

 

 

    Reported operating income from continued operations  

 

42,947

 

 

 

28,513

 

    OP%  

 

9.4

%

 

 

7.2

%

    Amortization of intangible assets  

 

20,420

 

 

 

20,710

 

    Purchase accounting adjustments  

 

2,176

 

 

 

(11,470

)

    Acquisition and divestiture-related costs  

 

5,908

 

 

 

12,319

 

    Significant litigation matters and settlements  

 

-

 

 

 

398

 

    Restructuring and other, net  

 

4,129

 

 

 

3,909

 

    Adjusted operating income  

 

75,580

 

 

 

54,379

 

    Adjusted OP%  

 

16.6

%

 

 

13.6

%

       

 

 

 

Diagnostics   Reported revenue  

 

853,080

 

 

 

254,001

 

    Purchase accounting adjustments  

 

199

 

 

 

196

 

    Adjusted Revenue  

 

853,279

 

 

 

254,197

 

       

 

 

 

    Reported operating income from continued operations  

 

441,467

 

 

 

29,591

 

    OP%  

 

51.7

%

 

 

11.6

%

    Amortization of intangible assets  

 

33,737

 

 

 

26,540

 

    Purchase accounting adjustments  

 

2,271

 

 

 

429

 

    Acquisition and divestiture-related costs  

 

3,759

 

 

 

42

 

    Significant litigation matters and settlements  

 

-

 

 

 

45

 

    Restructuring and other, net  

 

1,615

 

 

 

1,949

 

    Adjusted operating income  

 

482,849

 

 

 

58,596

 

    Adjusted OP%  

 

56.6

%

 

 

23.1

%

       

 

 

 

Corporate   Reported operating loss  

 

(16,638

)

 

 

(13,422

)

       

 

 

 

Continuing Operations   Reported revenue  

$

1,307,689

 

 

$

652,396

 

    Purchase accounting adjustments  

 

1,226

 

 

 

196

 

    Adjusted Revenue  

 

1,308,915

 

 

 

652,592

 

       

 

 

 

    Reported operating income from continued operations  

 

467,776

 

 

 

44,682

 

    OP%  

 

35.8

%

 

 

6.8

%

    Amortization of intangible assets  

 

54,157

 

 

 

47,250

 

    Purchase accounting adjustments  

 

4,447

 

 

 

(11,041

)

    Acquisition and divestiture-related costs  

 

9,667

 

 

 

12,361

 

    Significant litigation matters and settlements  

 

-

 

 

 

443

 

    Restructuring and other, net  

 

5,744

 

 

 

5,858

 

    Adjusted operating income  

$

541,791

 

 

$

99,553

 

    Adjusted OP%  

 

41.4

%

 

 

15.3

%

       

 

 

 

REPORTED REVENUE AND REPORTED OPERATING INCOME (LOSS) PREPARED IN ACCORDANCE WITH GAAP
 
PerkinElmer, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
   
   
       
(In thousands) April 4, 2021   January 3, 2021
       
Current assets:      
Cash and cash equivalents

$

988,234

 

$

402,036

Accounts receivable, net

 

978,598

 

 

1,155,109

Inventories, net

 

529,908

 

 

514,567

Other current assets

 

177,831

 

 

167,208

Total current assets

 

2,674,571

 

 

2,238,920

       
Property, plant and equipment, net

 

371,102

 

 

368,304

Operating lease right-of-use assets

 

213,306

 

 

207,236

Intangible assets, net

 

1,473,256

 

 

1,365,693

Goodwill

 

3,683,790

 

 

3,447,114

Other assets, net

 

346,700

 

 

333,048

Total assets

$

8,762,725

 

$

7,960,315

       
Current liabilities:      
Current portion of long-term debt

$

358,435

 

$

380,948

Accounts payable

 

339,326

 

 

327,325

Accrued expenses and other current liabilities

 

822,749

 

 

943,916

Total current liabilities

 

1,520,510

 

 

1,652,189

       
Long-term debt

 

2,219,670

 

 

1,609,701

Long-term liabilities

 

827,636

 

 

774,531

Operating lease liabilities

 

192,604

 

 

188,402

Total liabilities

 

4,760,420

 

 

4,224,823

       
Total stockholders' equity

 

4,002,305

 

 

3,735,492

Total liabilities and stockholders' equity

$

8,762,725

 

$

7,960,315

       
PREPARED IN ACCORDANCE WITH GAAP
 
PerkinElmer, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
       
  Three Months Ended
  April 4, 2021   April 5, 2020
  (In thousands)
       
Operating activities:      
Net income

$

379,305

 

 

$

33,665

 

Loss from discontinued operations and dispositions, net of income taxes

 

38

 

 

 

50

 

Income from continuing operations

 

379,343

 

 

 

33,715

 

Adjustments to reconcile income from continuing operations      
to net cash provided by continuing operations:      
Stock-based compensation

 

5,157

 

 

 

3,050

 

Restructuring and other, net

 

5,744

 

 

 

5,858

 

Depreciation and amortization

 

70,186

 

 

 

60,758

 

Change in fair value of contingent consideration

 

240

 

 

 

(12,325

)

Amortization of deferred debt financing costs and accretion of discounts

 

896

 

 

 

707

 

Change in fair value of financial securities

 

(19,298

)

 

 

-

 

Amortization of acquired inventory revaluation

 

2,981

 

 

 

1,088

 

Changes in assets and liabilities which provided (used) cash, excluding      
effects from companies acquired:      
Accounts receivable, net

 

165,190

 

 

 

80,600

 

Inventories

 

(15,008

)

 

 

(54,758

)

Accounts payable

 

(5,048

)

 

 

3,164

 

Accrued expenses and other

 

(116,883

)

 

 

(61,807

)

Net cash provided by operating activities of continuing operations

 

473,500

 

 

 

60,050

 

       
Investing activities:      
Capital expenditures

 

(14,311

)

 

 

(20,488

)

Purchases of investments

 

(4,000

)

 

 

(1,638

)

Proceeds from surrender of life insurance policies

 

-

 

 

 

52

 

Proceeds from disposition of businesses and assets

 

-

 

 

 

60

 

Payment of acquisitions, net of cash, cash equivalents and restricted cash acquired

 

(443,543

)

 

 

-

 

Net cash used in investing activities of continuing operations

 

(461,854

)

 

 

(22,014

)

       
Financing Activities:      
Payments on borrowings

 

(743,545

)

 

 

(141,000

)

Proceeds from borrowings

 

584,000

 

 

 

125,000

 

Proceeds from sale of senior unsecured notes

 

799,856

 

 

 

-

 

Payments of debt financing costs

 

(7,882

)

 

 

-

 

Settlement of cash flow hedges

 

6,005

 

 

 

8,708

 

Net payments on other credit facilities

 

(9,799

)

 

 

(4,283

)

Proceeds from issuance of common stock under stock plans

 

4,987

 

 

 

1,106

 

Purchases of common stock

 

(42,779

)

 

 

(6,342

)

Dividends paid

 

(7,852

)

 

 

(7,781

)

Net cash provided by (used in) financing activities of continuing operations

 

582,991

 

 

 

(24,592

)

       
Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(6,849

)

 

 

(10,169

)

       
Net increase in cash, cash equivalents, and restricted cash

 

587,788

 

 

 

3,275

 

Cash, cash equivalents, and restricted cash at beginning of period

 

402,613

 

 

 

191,894

 

Cash, cash equivalents, and restricted cash at end of period

$

990,401

 

 

$

195,169

 

       
       
Supplemental disclosure of cash flow information:      
Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows:      
Cash and cash equivalents

$

988,234

 

 

$

195,146

 

Restricted cash included in other current assets

 

2,167

 

 

 

23

 

Total cash, cash equivalents and restricted cash

$

990,401

 

 

$

195,169

 

       
PREPARED IN ACCORDANCE WITH GAAP
 
PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)
             
(In millions, except per share data and percentages)   PKI  
     

Three Months Ended

     
   

April 4, 2021

 

April 5, 2020

   
             
Adjusted revenue:            
Revenue  

$

1,307.7

 

 

$

652.4

 

   
Purchase accounting adjustments  

 

1.2

 

 

 

0.2

 

   
Adjusted revenue  

$

1,308.9

 

 

$

652.6

 

   
             
Adjusted gross margin:            
Gross margin  

$

785.1

 

60.0

%

$

308.0

 

47.2

%

 
Amortization of intangible assets  

 

20.3

 

1.6

%

 

16.1

 

2.5

%

 
Purchase accounting adjustments  

 

4.2

 

0.3

%

 

1.3

 

0.2

%

 
Adjusted gross margin  

$

809.7

 

61.9

%

$

325.4

 

49.9

%

 
         
Adjusted SG&A:            
SG&A  

$

251.4

 

19.2

%

$

208.6

 

32.0

%

 
Amortization of intangible assets  

 

(33.9

)

-2.6

%

 

(31.2

)

-4.8

%

 
Purchase accounting adjustments  

 

(0.2

)

0.0

%

 

12.3

 

1.9

%

 
Acquisition and divestiture-related expenses  

 

(9.7

)

-0.7

%

 

(12.4

)

-1.9

%

 
Significant litigation matters and settlements  

 

-

 

0.0

%

 

(0.4

)

-0.1

%

 
Adjusted SG&A  

$

207.7

 

15.9

%

$

176.9

 

27.1

%

 
             
R&D  

$

60.2

 

4.6

%

$

48.9

 

7.5

%

 
             
Adjusted operating income:            
Operating income  

$

467.8

 

35.8

%

$

44.7

 

6.8

%

 
Amortization of intangible assets  

 

54.2

 

4.1

%

 

47.3

 

7.2

%

 
Purchase accounting adjustments  

 

4.4

 

0.3

%

 

(11.0

)

-1.7

%

 
Acquisition and divestiture-related expenses  

 

9.7

 

0.7

%

 

12.4

 

1.9

%

 
Significant litigation matters and settlements  

 

-

 

0.0

%

 

0.4

 

0.1

%

 
Restructuring and other, net  

 

5.7

 

0.4

%

 

5.9

 

0.9

%

 
Adjusted operating income  

$

541.8

 

41.4

%

$

99.6

 

15.3

%

 
             
    PKI  
     

Three Months Ended

     
   

April 4, 2021

 

April 5, 2020

   
             
Adjusted EPS:            
GAAP EPS  

$

3.37

 

 

$

0.30

 

   
Discontinued operations, net of income taxes  

 

(0.00

)

 

 

(0.00

)

   
GAAP EPS from continuing operations  

 

3.37

 

 

 

0.30

 

   
Amortization of intangible assets  

 

0.48

 

 

 

0.42

 

   
Purchase accounting adjustments  

 

0.04

 

 

 

(0.10

)

   
Acquisition and divestiture-related expenses  

 

0.04

 

 

 

0.11

 

   
Change in fair value of financial securities  

 

(0.17

)

 

 

-

 

   
Significant litigation matters and settlements  

 

-

 

 

 

0.00

 

   
Restructuring and other, net  

 

0.05

 

 

 

0.05

 

   
Tax on above items  

 

(0.09

)

 

 

(0.12

)

   
Adjusted EPS  

$

3.72

 

 

$

0.67

 

   
             
    PKI  
    Three Months Ended

Twelve Months Ended

 
    July 4, 2021 January 2, 2022  
Adjusted EPS:   Projected Projected  
GAAP EPS from continuing operations  

$

1.90

 

 

$

7.77

 

   
Amortization of intangible assets  

 

0.50

 

 

 

1.97

 

   
Purchase accounting adjustments  

 

0.03

 

 

 

0.08

 

   
Acquisition and divestiture-related expenses  

 

0.00

 

 

 

0.04

 

   
Change in fair value of financial securities  

 

-

 

 

 

(0.17

)

   
Restructuring and other, net  

 

0.06

 

 

 

0.20

 

   
Tax on above items  

 

(0.14

)

 

 

(0.49

)

   
Adjusted EPS  

$

2.35

 

 

$

9.40

 

   
             
    DAS  
     

Three Months Ended

     
   

April 4, 2021

 

April 5, 2020

   
             
Adjusted revenue:            
Revenue  

$

454.6

 

 

$

398.4

 

   
Purchase accounting adjustments  

 

1.0

 

 

 

-

 

   
Adjusted revenue  

$

455.6

 

 

$

398.4

 

   
             
Adjusted operating income:            
Operating income  

$

42.9

 

9.4

%

$

28.5

 

7.2

%

 
Amortization of intangible assets  

 

20.4

 

4.5

%

 

20.7

 

5.2

%

 
Purchase accounting adjustments  

 

2.2

 

0.5

%

 

(11.5

)

-2.9

%

 
Acquisition and divestiture-related expenses  

 

5.9

 

1.3

%

 

12.3

 

3.1

%

 
Significant litigation matters and settlements  

 

-

 

0.0

%

 

0.4

 

0.1

%

 
Restructuring and other, net  

 

4.1

 

0.9

%

 

3.9

 

1.0

%

 
Adjusted operating income  

$

75.6

 

16.6

%

$

54.4

 

13.6

%

 
             
   

Diagnostics

 
     

Three Months Ended

     
   

April 4, 2021

 

April 5, 2020

   
             
Adjusted revenue:            
Revenue  

$

853.1

 

 

$

254.0

 

   
Purchase accounting adjustments  

 

0.2

 

 

 

0.2

 

   
Adjusted revenue  

$

853.3

 

 

$

254.2

 

   
             
Adjusted operating income:            
Operating income  

$

441.5

 

51.7

%

$

29.6

 

11.6

%

 
Amortization of intangible assets  

 

33.7

 

4.0

%

 

26.5

 

10.4

%

 
Purchase accounting adjustments  

 

2.3

 

0.3

%

 

0.4

 

0.2

%

 
Acquisition and divestiture-related expenses  

 

3.8

 

0.4

%

 

0.0

 

0.0

%

 
Significant litigation matters and settlements  

 

-

 

0.0

%

 

0.0

 

0.0

%

 
Restructuring and other, net  

 

1.6

 

0.2

%

 

1.9

 

0.8

%

 
Adjusted operating income  

$

482.8

 

56.6

%

$

58.6

 

23.1

%

 
             
             
(1) amounts may not sum due to rounding            
 
PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)
     

 

   
     

 

   
   

PKI

 
     

Three Months Ended

   
     

April 4, 2021

   
Organic revenue growth:    

 

   
Reported revenue growth    

100%

   
Less: effect of foreign exchange rates    

3%

   
Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses    

5%

   
Organic revenue growth    

92%

   
     

 

   
     

 

   
   

DAS

 
     

Three Months Ended

   
     

April 4, 2021

   
Organic revenue growth:    

 

   
Reported revenue growth    

14%

   
Less: effect of foreign exchange rates    

3%

   
Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses    

5%

   
Organic revenue growth    

6%

   
     

 

   
     

 

   
   

Diagnostics

 
     

Three Months Ended

   
     

April 4, 2021

   
Organic revenue growth:    

 

   
Reported revenue growth    

236%

   
Less: effect of foreign exchange rates    

4%

   
Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses    

5%

   
Organic revenue growth    

227%

   
 
(1) amounts may not sum due to rounding
 

Explanation of Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, management believes that, in order to more fully understand our short-term and long-term financial and operational trends, investors may wish to consider the impact of certain non-cash, non-recurring or other items, which result from facts and circumstances that vary in frequency and impact on continuing operations. Accordingly, we present non-GAAP financial measures as a supplement to the financial measures we present in accordance with GAAP. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by adjusting for certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management's ability to make useful forecasts. Management believes these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors.

We use the term “adjusted revenue” to refer to GAAP revenue, including purchase accounting adjustments for revenue from contracts acquired in acquisitions that will not be fully recognized due to accounting rules. We use the related term “adjusted revenue growth” to refer to the measure of comparing current period adjusted revenue with the corresponding period of the prior year.

We use the term “organic revenue” to refer to GAAP revenue, excluding the effect of foreign currency changes and revenue from recent acquisitions and divestitures and including purchase accounting adjustments for revenue from contracts acquired in acquisitions that will not be fully recognized due to accounting rules. We use the related term “organic revenue growth” to refer to the measure of comparing current period organic revenue with the corresponding period of the prior year.

We use the term “adjusted gross margin” to refer to GAAP gross margin, excluding amortization of intangible assets and inventory fair value adjustments related to business acquisitions, asset impairments, and including purchase accounting adjustments for revenue from contracts acquired in acquisitions that will not be fully recognized due to business combination accounting rules. We use the related term “adjusted gross margin percentage” to refer to adjusted gross margin as a percentage of adjusted revenue.

We use the term “adjusted SG&A expense” to refer to GAAP SG&A expense, excluding amortization of intangible assets, purchase accounting adjustments, acquisition and divestiture-related expenses, acceleration of executive compensation, significant litigation matters and settlements, asset impairments, and significant environmental charges. We use the related term “adjusted SG&A percentage” to refer to adjusted SG&A expense as a percentage of adjusted revenue.

We use the term “adjusted R&D expense” to refer to GAAP R&D expense, excluding amortization of intangible assets and purchase accounting adjustments. We use the related term “adjusted R&D percentage” to refer to adjusted R&D expense as a percentage of adjusted revenue.

We use the term “adjusted net interest and other expense” to refer to GAAP net interest and other expense, excluding adjustments for mark-to-market accounting on post-retirement benefits, changes in the value of financial securities and debt extinguishment costs.

We use the term “adjusted operating income,” to refer to GAAP operating income, including revenue from contracts acquired in acquisitions that will not be fully recognized due to accounting rules, and excluding amortization of intangible assets, other purchase accounting adjustments, acquisition and divestiture-related expenses, acceleration of executive compensation, significant litigation matters and settlements, significant environmental charges, asset impairments, and restructuring and other charges. We use the related terms “adjusted operating profit percentage,” “adjusted operating profit margin,” or “adjusted operating margin” to refer to adjusted operating income as a percentage of adjusted revenue.

We use the term “adjusted earnings per share,” or “adjusted EPS,” to refer to GAAP earnings per share, including revenue from contracts acquired in acquisitions that will not be fully recognized due to accounting rules, and excluding discontinued operations, amortization of intangible assets, debt extinguishment costs, other purchase accounting adjustments, acquisition and divestiture-related expenses, acceleration of executive compensation, significant litigation matters and settlements, significant environmental charges, changes in the value of financial securities, disposition of businesses and assets, net, asset impairments and restructuring and other charges. We also exclude adjustments for mark-to-market accounting on post-retirement benefits, therefore only our projected costs have been used to calculate this non-GAAP measure. We also adjust for any tax impact related to the above items and exclude the impact of significant tax events.

 

Management includes or excludes the effect of each of the items identified below in the applicable non-GAAP financial measure referenced above for the reasons set forth below with respect to that item:

  • Amortization of intangible assets— purchased intangible assets are amortized over their estimated useful lives and generally cannot be changed or influenced by management after the acquisition. Accordingly, this item is not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred.
  • Debt extinguishment costs—we incur costs and income related to the extinguishment of debt; including make-whole payments to debt holders, accelerated amortization of debt fees and discounts, and expense or income from hedges to lock in make whole payments. We exclude the impact of these items from our non-GAAP measures because we believe they do not reflect the performance of our ongoing operations.
  • Revenue from contracts acquired in acquisitions that will not be fully recognized due to accounting rules— accounting rules require us to account for the fair value of revenue from contracts assumed in connection with our acquisitions. As a result, our GAAP results reflect the fair value of those revenues, which is not the same as the revenue that otherwise would have been recorded by the acquired entity. We include such revenue in our non-GAAP measures because we believe the fair value of such revenue does not accurately reflect the performance of our ongoing operations for the period in which such revenue is recorded.
  • Other purchase accounting adjustments—accounting rules require us to adjust various balance sheet accounts, including inventory and deferred rent balances to fair value at the time of the acquisition. As a result, the expenses for these items in our GAAP results are not the same as what would have been recorded by the acquired entity. Accounting rules also require us to estimate the fair value of contingent consideration at the time of the acquisition, and any subsequent changes to the estimate or payment of the contingent consideration and purchase accounting adjustments are charged to expense or income. We exclude the impact of any changes to contingent consideration from our non-GAAP measures because we believe these expenses or benefits do not accurately reflect the performance of our ongoing operations for the period in which such expenses or benefits are recorded.
  • Acquisition and divestiture-related expenses—we incur legal, due diligence, stay bonuses, incentive awards, interest expense, foreign exchange gains and losses, integration expenses and other costs related to acquisitions and divestitures. We exclude these expenses from our non-GAAP measures because we believe they do not reflect the performance of our ongoing operations.
  • Asset impairments—we incur expense related to asset impairments. Management does not believe such charges accurately reflect the performance of our ongoing operations for the periods in which such charges were incurred.
  • Acceleration of executive compensationthe announced retirement of a senior executive resulted in an acceleration of compensation expense. We exclude these expenses from our non-GAAP measures because we believe they do not reflect the performance of our ongoing operations.
  • Restructuring and other charges—restructuring and other charges consist of employee severance, other exit costs as well as the cost of terminating certain lease agreements or contracts as well as costs associated with relocating facilities. Management does not believe such costs accurately reflect the performance of our ongoing operations for the period in which such costs are reported.
  • Adjustments for mark-to-market accounting on post-retirement benefits—we exclude adjustments for mark-to-market accounting on post-retirement benefits, and therefore only our projected costs are used to calculate our non-GAAP measures. We exclude these adjustments because they do not represent what we believe our investors consider to be costs of producing our products, investments in technology and production, and costs to support our internal operating structure.
  • Significant litigation matters and settlements—we incur expenses related to significant litigation matters, including the costs to settle or resolve various claims and legal proceedings. Management does not believe such charges accurately reflect the performance of our ongoing operations for the periods in which such charges were incurred.
  • Significant environmental charges—we incur expenses related to significant environmental charges. Management does not believe such charges accurately reflect the performance of our ongoing operations for the periods in which such charges were incurred.
  • Disposition of businesses and assets, net—we exclude the impact of gains or losses from the disposition of businesses and assets from our adjusted earnings per share. Management does not believe such gains or losses accurately reflect the performance of our ongoing operations for the period in which such gains or losses are reported.
  • Impact of foreign currency changes on the current period— we exclude the impact of foreign currency from these measures by using the prior period’s foreign currency exchange rates for the current period because foreign currency exchange rates are subject to volatility and can obscure underlying trends.
  • Impact of significant tax events – we exclude the impact of significant tax events, such as the Tax Cuts and Jobs Act of 2017. Management does not believe the impact of significant tax events accurately reflects the performance of our ongoing operations for the periods in which the impact of such events was recorded.
  • Changes in value of financial securities—we exclude the impact of changes in the value of financial securities. Management does not believe such gains or losses accurately reflect the performance of our ongoing operations for the period in which such gains or losses are reported.
 

The tax effect for discontinued operations is calculated based on the authoritative guidance in the Financial Accounting Standards Board’s Accounting Standards Codification 740, Income Taxes. The tax effect for amortization of intangible assets, inventory fair value adjustments related to business acquisitions, changes to the fair values assigned to contingent consideration, debt extinguishment costs, other costs related to business acquisitions and divestitures, acceleration of executive compensation, significant litigation matters and settlements, significant environmental charges, changes in the fair value of financial securities, adjustments for mark-to-market accounting on post-retirement benefits, disposition of businesses and assets, net, restructuring and other charges, and the revenue from contracts acquired with various acquisitions is calculated based on operational results and applicable jurisdictional law, which contemplates tax rates currently in effect to determine our tax provision. The tax effect for the impact from foreign currency exchange rates on the current period is calculated based on the average rate currently in effect to determine our tax provision.

The non-GAAP financial measures described above are not meant to be considered superior to, or a substitute for, our financial statements prepared in accordance with GAAP. There are material limitations associated with non-GAAP financial measures because they exclude charges that have an effect on our reported results and, therefore, should not be relied upon as the sole financial measures by which to evaluate our financial results. Management compensates and believes that investors should compensate for these limitations by viewing the non-GAAP financial measures in conjunction with the GAAP financial measures. In addition, the non-GAAP financial measures included in this earnings announcement may be different from, and therefore may not be comparable to, similar measures used by other companies.

Each of the non-GAAP financial measures listed above is also used by our management to evaluate our operating performance, communicate our financial results to our Board of Directors, benchmark our results against our historical performance and the performance of our peers, evaluate investment opportunities including acquisitions and discontinued operations, and determine the bonus payments for senior management and employees.

Investor Relations:
PerkinElmer, Inc.
Bryan Kipp (781) 663-5583
bryan.kipp@perkinelmer.com

Media Contact:
PerkinElmer, Inc.
Fara Goldberg (781) 663-5699
fara.goldberg@perkinelmer.com

Source: PerkinElmer, Inc.

Related Links

IR Contact

ir@perkinelmer.com
(781) 663 - 6900
940 Winter Street
Waltham, MA 02451
United States
www.perkinelmer.com

Transfer Agent

Mailing addresses
Correspondence should be mailed to:
Computershare
P.O. Box 505000
Louisville, KY 40233

Overnight correspondence should be sent to:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202

Shareholder website www.computershare.com/investor
Shareholder online inquiries
www-us.computershare.com/investor/Contact