PerkinElmer Announces Financial Results for the Second Quarter of 2021

PerkinElmer Announces Financial Results for the Second Quarter of 2021

July 26, 2021 at 6:31 AM EDT
  • Revenue of $1.228 billion; 51% reported growth; 41% organic growth
  • GAAP EPS from continuing operations of $2.19; Adjusted EPS of $2.83
  • Initiates Third Quarter and Raises Full-Year Revenue and Earnings Guidance
  • Announces Agreement to Acquire BioLegend – Leading Antibody & Research Reagent Provider

Earnings Call Moved to Today at 8:00 a.m. Eastern Time; Dial-in Information Below

WALTHAM, Mass.--(BUSINESS WIRE)--Jul. 26, 2021-- PerkinElmer, Inc. (NYSE: PKI), a global leader committed to innovating for a healthier world, today reported financial results for the second quarter ended July 4, 2021.

The Company reported GAAP earnings per share from continuing operations of $2.19, as compared to GAAP earnings per share from continuing operations of $1.23 in the second quarter of 2020. GAAP revenue for the quarter was $1.228 billion, as compared to $812 million in the second quarter of 2020. GAAP operating income from continuing operations for the quarter was $332 million, as compared to $176 million for the same period a year ago. GAAP operating profit margin was 27.1% as a percentage of revenue, as compared to 21.6% in the second quarter of 2020.

Adjusted earnings per share from continuing operations for the quarter was $2.83, as compared to $1.57 in the second quarter of 2020. Adjusted revenue for the quarter was $1.229 billion, as compared to $812 million in the second quarter of 2020. Adjusted operating income from continuing operations for the quarter was $411 million, as compared to $228 million for the same period a year ago. Adjusted operating profit margin was 33.5% as a percentage of adjusted revenue, as compared to 28.1% in the second quarter of 2020.

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

“The organization continues to perform extremely well through the first half of 2021. Underpinned by the strategic pillars we highlighted at our recent Analyst Day and now the exciting addition of BioLegend, PerkinElmer is well positioned to execute on both our near- and long-term goals,” said Prahlad Singh, president and chief executive officer of PerkinElmer. “The tremendous efforts by the more than 14,000 PerkinElmer employees across the globe have been instrumental in transforming the company into what it is today. I could not be more excited for what is to come in the years ahead.”

Financial Overview by Reporting Segment for the Second Quarter

Discovery & Analytical Solutions

  • Second quarter 2021 revenue was $513 million, as compared to $391 million for the second quarter of 2020. Reported revenue increased 31% and organic revenue increased 22% as compared to the second quarter of 2020.
  • Second quarter 2021 operating income from continuing operations was $64 million, as compared to $39 million for the comparable prior period.
  • Second quarter 2021 adjusted operating income was $101 million, as compared to $57 million for the second quarter of 2020.

Diagnostics

  • Second quarter 2021 revenue was $716 million, as compared to $421 million for the second quarter of 2020. Reported revenue increased 70% and organic revenue increased 59% as compared to the second quarter of 2020.
  • Second quarter 2021 operating income from continuing operations was $286 million, as compared to $160 million for the comparable prior period.
  • Second quarter 2021 adjusted operating income was $328 million, as compared to $190 million for the second quarter of 2020.

Initiates Third Quarter Guidance and Raises Full Year 2021 Guidance

For the third quarter of 2021, the Company forecasts adjusted revenue of approximately $1.00 billion and adjusted earnings per share of $1.62.

For the full year of 2021, the Company now forecasts adjusted revenue of $4.57 billion and adjusted earnings per share of $9.88.

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 Acquisition of BioLegend

The Company has also announced today that it has reached an agreement to acquire BioLegend, a leading manufacturer of innovative antibodies and research reagents for $5.25 billion. Please see today’s separate release for additional details on this transaction.

Conference Call Information

The Company will discuss its second quarter 2021 results, its outlook for business trends, and its acquisition of BioLegend in a conference call on July 26, 2021 at 8:00 a.m. Eastern Time. To access the call, please dial 720-405-2250 prior to the scheduled conference call time and provide the access code 9275741.

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, such as BioLegend, 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 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 $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

 

Six Months Ended

(In thousands, except per share data) July 4, 2021 July 5, 2020 July 4, 2021 July 5, 2020
 
 
Revenue

$1,228,471

 

$811,718

 

$2,536,160

 

$1,464,114

 

 
Cost of revenue

543,277

 

364,374

 

1,065,820

 

708,747

 

Selling, general and administrative expenses

281,819

 

221,026

 

533,229

 

429,595

 

Research and development expenses

65,824

 

49,521

 

126,040

 

98,435

 

Restructuring and other, net

5,063

 

1,158

 

10,807

 

7,016

 

 
Operating income from continuing operations

332,488

 

175,639

 

800,264

 

220,321

 

 
Interest income

(367

)

(192

)

(778

)

(457

)

Interest expense

16,750

 

11,586

 

30,876

 

25,251

 

Change in fair value of financial securities

(8,633

)

-

 

(27,931

)

-

 

Other income, net

(1,319

)

(582

)

(8,442

)

(3,989

)

 
Income from continuing operations, before income taxes

326,057

 

164,827

 

806,539

 

199,516

 

 
Provision for income taxes

80,089

 

27,614

 

181,228

 

28,588

 

 
Income from continuing operations

245,968

 

137,213

 

625,311

 

170,928

 

 
Loss on disposition of discontinued operations, before income taxes

-

 

-

 

-

 

-

 

Provision for income taxes on discontinued operations and dispositions

38

 

51

 

76

 

101

 

 
Loss from discontinued operations and dispositions

(38

)

(51

)

(76

)

(101

)

 
Net income

$245,930

 

$137,162

 

$625,235

 

$170,827

 

 
 
Diluted earnings per share:
Income from continuing operations

$2.19

 

$1.23

 

$5.56

 

$1.53

 

 
Loss from discontinued operations and dispositions

(0.00

)

(0.00

)

(0.00

)

(0.00

)

 
Net income

$2.19

 

$1.23

 

$5.56

 

$1.53

 

 
 
Weighted average diluted shares of common stock outstanding

112,417

 

111,869

 

112,456

 

111,756

 

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

$2.19

 

$1.23

 

$5.56

 

$1.53

 

Amortization of intangible assets

0.53

 

0.42

 

1.01

 

0.84

 

Purchase accounting adjustments

0.03

 

0.01

 

0.07

 

(0.09

)

Acquisition and divestiture-related costs

0.09

 

(0.05

)

0.13

 

0.06

 

Change in fair value of financial securities

(0.08

)

-

 

(0.25

)

-

 

Significant litigation matters and settlements

-

 

0.03

 

-

 

0.03

 

Significant environmental matters

-

 

0.05

 

-

 

0.05

 

Restructuring and other, net

0.05

 

0.01

 

0.10

 

0.06

 

Tax on above items

(0.11

)

(0.13

)

(0.21

)

(0.25

)

Significant tax items

0.13

 

-

 

0.13

 

-

 

Adjusted EPS

$2.83

 

$1.57

 

$6.55

 

$2.24

 

 
(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 4, 2021 July 5, 2020 July 4, 2021 July 5, 2020
 
 
DAS Reported revenue

$512,829

 

$391,002

 

$967,438

 

$789,397

 

Purchase accounting adjustments

822

 

-

 

1,849

 

-

 

Adjusted revenue

513,651

 

391,002

 

969,287

 

789,397

 

 
Reported operating income from continued operations

64,155

 

39,430

 

107,102

 

67,943

 

OP%

12.5

%

10.1

%

11.1

%

8.6

%

Amortization of intangible assets

23,072

 

20,506

 

43,492

 

41,216

 

Purchase accounting adjustments

1,473

 

136

 

3,649

 

(11,334

)

Acquisition and divestiture-related costs

8,597

 

(5,486

)

14,505

 

6,833

 

Significant litigation matters and settlements

-

 

2,001

 

-

 

2,399

 

Restructuring and other, net

3,615

 

845

 

7,744

 

4,754

 

Adjusted operating income

100,912

 

57,432

 

176,492

 

111,811

 

Adjusted OP%

19.6

%

14.7

%

18.2

%

14.2

%

 
Diagnostics Reported revenue

715,642

 

420,716

 

1,568,722

 

674,717

 

Purchase accounting adjustments

199

 

196

 

398

 

392

 

Adjusted revenue

715,841

 

420,912

 

1,569,120

 

675,109

 

 
Reported operating income from continued operations

286,280

 

160,300

 

727,747

 

189,891

 

OP%

40.0

%

38.1

%

46.4

%

28.1

%

Amortization of intangible assets

36,489

 

26,211

 

70,226

 

52,751

 

Purchase accounting adjustments

2,107

 

1,336

 

4,378

 

1,765

 

Acquisition and divestiture-related costs

2,051

 

263

 

5,810

 

305

 

Significant litigation matters and settlements

-

 

1,200

 

-

 

1,245

 

Restructuring and other, net

1,448

 

313

 

3,063

 

2,262

 

Adjusted operating income

328,375

 

189,623

 

811,224

 

248,219

 

Adjusted OP%

45.9

%

45.1

%

51.7

%

36.8

%

 
Corporate Reported operating loss

(17,947

)

(24,091

)

(34,585

)

(37,513

)

Significant environmental matters

-

 

5,242

 

-

 

5,242

 

Adjusted operating loss

(17,947

)

(18,849

)

(34,585

)

(32,271

)

 
Continuing Operations Reported revenue

$1,228,471

 

$811,718

 

$2,536,160

 

$1,464,114

 

Purchase accounting adjustments

1,021

 

196

 

2,247

 

392

 

Adjusted revenue

1,229,492

 

811,914

 

2,538,407

 

1,464,506

 

 
Reported operating income from continued operations

332,488

 

175,639

 

800,264

 

220,321

 

OP%

27.1

%

21.6

%

31.6

%

15.0

%

Amortization of intangible assets

59,561

 

46,717

 

113,718

 

93,967

 

Purchase accounting adjustments

3,580

 

1,472

 

8,027

 

(9,569

)

Acquisition and divestiture-related costs

10,648

 

(5,223

)

20,315

 

7,138

 

Significant litigation matters and settlements

-

 

3,201

 

-

 

3,644

 

Significant environmental matters

-

 

5,242

 

-

 

5,242

 

Restructuring and other, net

5,063

 

1,158

 

10,807

 

7,016

 

Adjusted operating income

$411,340

 

$228,206

 

$953,131

 

$327,759

 

Adjusted OP%

33.5

%

28.1

%

37.5

%

22.4

%

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

$572,810

$402,036

Accounts receivable, net  

992,602

1,155,109

Inventories, net  

513,429

514,567

Other current assets  

181,151

167,208

Total current assets  

2,259,992

2,238,920

   
Property, plant and equipment, net  

379,065

368,304

Operating lease right-of-use assets  

208,494

207,236

Intangible assets, net  

1,561,534

1,365,693

Goodwill  

3,844,070

3,447,114

Other assets, net  

486,306

333,048

Total assets  

$8,739,461

$7,960,315

   
Current liabilities:  
Current portion of long-term debt  

$4,669

$380,948

Accounts payable  

324,711

327,325

Accrued expenses and other current liabilities  

793,443

943,916

Total current liabilities  

1,122,823

1,652,189

   
Long-term debt  

2,348,523

1,609,701

Long-term liabilities  

838,974

774,531

Operating lease liabilities  

189,334

188,402

Total liabilities  

4,499,654

4,224,823

   
Total stockholders' equity  

4,239,807

3,735,492

Total liabilities and stockholders' equity  

$8,739,461

$7,960,315

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

$245,930

 

$137,162

 

$625,235

 

$170,827

 

Loss from discontinued operations and dispositions, net of income taxes  

38

 

51

 

76

 

101

 

Income from continuing operations  

245,968

 

137,213

 

625,311

 

170,928

 

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

7,204

 

9,604

 

12,361

 

12,654

 

Restructuring and other, net  

5,063

 

1,158

 

10,807

 

7,016

 

Depreciation and amortization  

75,636

 

59,289

 

145,822

 

120,047

 

Change in fair value of contingent consideration  

237

 

879

 

477

 

(11,446

)

Amortization of deferred debt financing costs and accretion of discounts  

828

 

935

 

1,724

 

1,642

 

Change in fair value of financial securities  

(8,633

)

-

 

(27,931

)

-

 

Amortization of acquired inventory revaluation  

2,322

 

397

 

5,303

 

1,485

 

Loss on disposition of businesses and assets, net  

-

 

485

 

-

 

485

 

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

(9,920

)

(76,288

)

155,270

 

4,312

 

Inventories  

22,246

 

(71,949

)

7,239

 

(126,707

)

Accounts payable  

(21,747

)

17,744

 

(26,795

)

20,907

 

Accrued expenses and other  

(31,342

)

59,130

 

(148,226

)

(2,677

)

Net cash provided by operating activities of continuing operations  

287,862

 

138,597

 

761,362

 

198,646

 

   
Investing activities:  
Capital expenditures  

(20,364

)

(16,650

)

(34,675

)

(37,138

)

Purchases of investments  

(10,507

)

(5,755

)

(14,507

)

(7,393

)

Proceeds from surrender of life insurance policies  

-

 

79

 

-

 

131

 

Proceeds from disposition of businesses and assets  

-

 

1,755

 

-

 

1,815

 

Cash paid for acquisitions, net of cash, cash equivalents and restricted cash acquired  

(259,154

)

(2,990

)

(702,697

)

(2,990

)

Net cash used in investing activities of continuing operations  

(290,025

)

(23,561

)

(751,879

)

(45,575

)

   
Financing Activities:  
Payments on borrowings  

(20,000

)

(149,000

)

(763,545

)

(290,000

)

Proceeds from borrowings  

145,000

 

63,000

 

729,000

 

188,000

 

Payments of senior debt  

(339,605

)

-

 

(339,605

)

Proceeds from sale of senior debt  

-

 

-

 

799,856

 

-

 

Payments of debt financing costs  

(360

)

-

 

(8,242

)

-

 

Settlement of cash flow hedges  

(11,940

)

(3,671

)

(5,935

)

5,037

 

Net payments on other credit facilities  

(2,027

)

(1,753

)

(11,826

)

(6,036

)

Payments for acquisition-related contingent consideration  

-

 

(5,200

)

-

 

(5,200

)

Proceeds from issuance of common stock under stock plans  

9,198

 

8,968

 

14,185

 

10,074

 

Purchases of common stock  

(30,145

)

(327

)

(72,924

)

(6,669

)

Dividends paid  

(7,845

)

(7,791

)

(15,697

)

(15,572

)

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

(257,724

)

(95,774

)

325,267

 

(120,366

)

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

(3,810

)

5,510

 

(10,659

)

(4,658

)

   
Net (decrease) increase in cash, cash equivalents, and restricted cash  

(263,697

)

24,772

 

324,091

 

28,047

 

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

990,401

 

195,169

 

402,613

 

191,894

 

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

$726,704

 

$219,941

 

$726,704

 

$219,941

 

   
   
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  

$572,810

 

$218,536

 

$572,810

 

$218,536

 

Restricted cash included in other current assets  

1,750

 

1,405

 

1,750

 

1,405

 

Restricted cash included in other assets  

152,144

 

-

 

152,144

 

-

 

Total cash, cash equivalents and restricted cash  

$726,704

 

$219,941

 

$726,704

 

$219,941

 

   
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

July 4, 2021     July 5, 2020  
       
Adjusted revenue:      
Revenue

$1,228.5

 

   

$811.7

 

 
Purchase accounting adjustments

1.0

 

   

0.2

 

 
Adjusted revenue

$1,229.5

 

   

$811.9

 

 
       
Adjusted gross margin:      
Gross margin

$685.2

 

 

55.8

%

 

$447.3

 

 

55.1

%

Amortization of intangible assets

22.7

 

 

1.8

%

 

16.0

 

 

2.0

%

Purchase accounting adjustments

3.3

 

 

0.3

%

 

0.6

 

 

0.1

%

Adjusted gross margin

$711.2

 

 

57.8

%

 

$463.9

 

 

57.1

%

   
Adjusted SG&A:      
SG&A

$281.8

 

 

22.9

%

 

$221.0

 

 

27.2

%

Amortization of intangible assets

(36.9

)

 

-3.0

%

 

(30.7

)

 

-3.8

%

Purchase accounting adjustments

(0.2

)

 

0.0

%

 

(0.9

)

 

-0.1

%

Acquisition and divestiture-related expenses

(10.6

)

 

-0.9

%

 

5.2

 

 

0.6

%

Significant litigation matters and settlements

-

 

 

0.0

%

 

(3.2

)

 

-0.4

%

Significant environmental matters

-

 

 

0.0

%

 

(5.2

)

 

-0.6

%

Adjusted SG&A

$234.0

 

 

19.0

%

 

$186.2

 

 

22.9

%

       
R&D

$65.8

 

 

5.4

%

 

$49.5

 

 

6.1

%

       
Adjusted operating income:      
Operating income

$332.5

 

 

27.1

%

 

$175.6

 

 

21.6

%

Amortization of intangible assets

59.6

 

 

4.8

%

 

46.7

 

 

5.8

%

Purchase accounting adjustments

3.6

 

 

0.3

%

 

1.5

 

 

0.2

%

Acquisition and divestiture-related costs

10.6

 

 

0.9

%

 

(5.2

)

 

-0.6

%

Significant litigation matters and settlements

-

 

 

0.0

%

 

3.2

 

 

0.4

%

Significant environmental matters

-

 

 

0.0

%

 

5.2

 

 

0.6

%

Restructuring and other, net

5.1

 

 

0.4

%

 

1.2

 

 

0.1

%

Adjusted operating income

$411.3

 

 

33.5

%

 

$228.2

 

 

28.1

%

       
PKI

Three Months Ended

July 4, 2021     July 5, 2020  
       
Adjusted EPS:      
GAAP EPS

$2.19

 

   

$1.23

 

 
Discontinued operations, net of income taxes

(0.00

)

   

(0.00

)

 
GAAP EPS from continuing operations

2.19

 

   

1.23

 

 
Amortization of intangible assets

0.53

 

   

0.42

 

 
Purchase accounting adjustments

0.03

 

   

0.01

 

 
Acquisition and divestiture-related costs

0.09

 

   

(0.05

)

 
Change in fair value of financial securities

(0.08

)

   

-

 

 
Significant litigation matters and settlements

-

 

   

0.03

 

 
Significant environmental matters

-

 

   

0.05

 

 
Restructuring and other, net

0.05

 

   

0.01

 

 
Tax on above items

(0.11

)

   

(0.13

)

 
Significant tax items

0.13

 

   

-

 

 
Adjusted EPS

$2.83

 

   

$1.57

 

 
       
DAS

Three Months Ended

July 4, 2021     July 5, 2020  
       
Adjusted revenue:      
Revenue

$512.8

 

   

$391.0

 

 
Purchase accounting adjustments

0.8

 

   

-

 

 
Adjusted revenue

$513.7

 

   

$391.0

 

 
       
Adjusted operating income:      
Operating income

$64.2

 

 

12.5

%

 

$39.4

 

 

10.1

%

Amortization of intangible assets

23.1

 

 

4.5

%

 

20.5

 

 

5.2

%

Purchase accounting adjustments

1.5

 

 

0.3

%

 

0.1

 

 

0.0

%

Acquisition and divestiture-related costs

8.6

 

 

1.7

%

 

(5.5

)

 

-1.4

%

Significant litigation matters and settlements

-

 

 

0.0

%

 

2.0

 

 

0.5

%

Restructuring and other, net

3.6

 

 

0.7

%

 

0.8

 

 

0.2

%

Adjusted operating income

$100.9

 

 

19.6

%

 

$57.4

 

 

14.7

%

       
Diagnostics

Three Months Ended

July 4, 2021     July 5, 2020  
       
Adjusted revenue:      
Revenue

$715.6

 

   

$420.7

 

 
Purchase accounting adjustments

0.2

 

   

0.2

 

 
Adjusted revenue

$715.8

 

   

$420.9

 

 
       
Adjusted operating income:      
Operating income

$286.3

 

 

40.0

%

 

$160.3

 

 

38.1

%

Amortization of intangible assets

36.5

 

 

5.1

%

 

26.2

 

 

6.2

%

Purchase accounting adjustments

2.1

 

 

0.3

%

 

1.3

 

 

0.3

%

Acquisition and divestiture-related costs

2.1

 

 

0.3

%

 

0.3

 

 

0.1

%

Significant litigation matters and settlements

-

 

 

0.0

%

 

1.2

 

 

0.3

%

Restructuring and other, net

1.4

 

 

0.2

%

 

0.3

 

 

0.1

%

Adjusted operating income

$328.4

 

 

45.9

%

 

$189.6

 

 

45.1

%

       
(1) amounts may not sum due to rounding      
PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)
       
(In millions, except per share data and percentages) PKI

Six Months Ended

July 4, 2021     July 5, 2020  
       
Adjusted revenue:      
Revenue

$2,536.2

 

   

$1,464.1

 

 
Purchase accounting adjustments

2.2

 

   

0.4

 

 
Adjusted revenue

$2,538.4

 

   

$1,464.5

 

 
       
Adjusted gross margin:      
Gross margin

$1,470.3

 

 

58.0

%

 

$755.4

 

 

51.6

%

Amortization of intangible assets

43.0

 

 

1.7

%

 

32.1

 

 

2.2

%

Purchase accounting adjustments

7.6

 

 

0.3

%

 

1.9

 

 

0.1

%

Adjusted gross margin

$1,520.9

 

 

59.9

%

 

$789.3

 

 

53.9

%

   
Adjusted SG&A:      
SG&A

$533.2

 

 

21.0

%

 

$429.6

 

 

29.3

%

Amortization of intangible assets

(70.7

)

 

-2.8

%

 

(61.9

)

 

-4.2

%

Purchase accounting adjustments

(0.5

)

 

0.0

%

 

11.4

 

 

0.8

%

Acquisition and divestiture-related expenses

(20.3

)

 

-0.8

%

 

(7.1

)

 

-0.5

%

Significant litigation matters and settlements

-

 

 

0.0

%

 

(3.6

)

 

-0.2

%

Significant environmental matters

-

 

 

0.0

%

 

(5.2

)

 

-0.4

%

Adjusted SG&A

$441.7

 

 

17.4

%

 

$363.1

 

 

24.8

%

       
R&D

$126.0

 

 

5.0

%

 

$98.4

 

 

6.7

%

       
Adjusted operating income:      
Operating income

$800.3

 

 

31.6

%

 

$220.3

 

 

15.0

%

Amortization of intangible assets

113.7

 

 

4.5

%

 

94.0

 

 

6.4

%

Purchase accounting adjustments

8.0

 

 

0.3

%

 

(9.6

)

 

-0.7

%

Acquisition and divestiture-related costs

20.3

 

 

0.8

%

 

7.1

 

 

0.5

%

Significant litigation matters and settlements

-

 

 

0.0

%

 

3.6

 

 

0.2

%

Significant environmental matters

-

 

 

0.0

%

 

5.2

 

 

0.4

%

Restructuring and other, net

10.8

 

 

0.4

%

 

7.0

 

 

0.5

%

Adjusted operating income

$953.1

 

 

37.5

%

 

$327.8

 

 

22.4

%

       
PKI

Six Months Ended

July 4, 2021     July 5, 2020  
       
Adjusted EPS:      
GAAP EPS

$5.56

 

   

$1.53

 

 
Discontinued operations

(0.00

)

   

(0.00

)

 
GAAP EPS from continuing operations

5.56

 

   

1.53

 

 
Amortization of intangible assets

1.01

 

   

0.84

 

 
Purchase accounting adjustments

0.07

 

   

(0.09

)

 
Significant litigation matters and settlements

-

 

   

0.03

 

 
Significant environmental matters

-

 

   

0.05

 

 
Acquisition and divestiture-related costs

0.13

 

   

0.06

 

 
Change in fair value of financial securities

(0.25

)

   

-

 

 
Restructuring and other, net

0.10

 

   

0.06

 

 
Tax on above items

(0.21

)

   

(0.25

)

 
Significant tax items

0.13

 

   

-

 

 
Adjusted EPS

$6.55

 

   

$2.24

 

 
       
DAS

Six Months Ended

July 4, 2021     July 5, 2020  
       
Adjusted revenue:      
Revenue

$967.4

 

   

$789.4

 

 
Purchase accounting adjustments

1.8

 

   

-

 

 
Adjusted revenue

$969.3

 

   

$789.4

 

 
       
Adjusted operating income:      
Operating income

$107.1

 

 

11.1

%

 

$67.9

 

 

8.6

%

Amortization of intangible assets

43.5

 

 

4.5

%

 

41.2

 

 

5.2

%

Purchase accounting adjustments

3.6

 

 

0.4

%

 

(11.3

)

 

-1.4

%

Acquisition and divestiture-related costs

14.5

 

 

1.5

%

 

6.8

 

 

0.9

%

Significant litigation matters and settlements

-

 

 

0.0

%

 

2.4

 

 

0.3

%

Restructuring and other, net

7.7

 

 

0.8

%

 

4.8

 

 

0.6

%

Adjusted operating income

$176.5

 

 

18.2

%

 

$111.8

 

 

14.2

%

       
Diagnostics

Six Months Ended

July 4, 2021     July 5, 2020  
       
Adjusted revenue:      
Revenue

$1,568.7

 

   

$674.7

 

 
Purchase accounting adjustments

0.4

 

   

0.4

 

 
Adjusted revenue

$1,569.1

 

   

$675.1

 

 
       
Adjusted operating income:      
Operating income

$727.7

 

 

46.4

%

 

$189.9

 

 

28.1

%

Amortization of intangible assets

70.2

 

 

4.5

%

 

52.8

 

 

7.8

%

Purchase accounting adjustments

4.4

 

 

0.3

%

 

1.8

 

 

0.3

%

Acquisition and divestiture-related costs

5.8

 

 

0.4

%

 

0.3

 

 

0.0

%

Significant litigation matters and settlements

-

 

 

0.0

%

 

1.2

 

 

0.2

%

Restructuring and other, net

3.1

 

 

0.2

%

 

2.3

 

 

0.3

%

Adjusted operating income

$811.2

 

 

51.7

%

 

$248.2

 

 

36.8

%

       
(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
July 4, 2021
Organic revenue growth:
Reported revenue growth

51%

Less: effect of foreign exchange rates

5%

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

6%

Organic revenue growth

41%

 
DAS
Three Months Ended
July 4, 2021
Organic revenue growth:
Reported revenue growth

31%

Less: effect of foreign exchange rates

4%

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

6%

Organic revenue growth

22%

 
Diagnostics
Three Months Ended
July 4, 2021
Organic revenue growth:
Reported revenue growth

70%

Less: effect of foreign exchange rates

5%

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

6%

Organic revenue growth

59%

 
(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.
Steve Willoughby (781) 663-5677
steve.willoughby@perkinelmer.com

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

Source: PerkinElmer

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