On August 1, 2022 PerkinElmer, Inc. (NYSE: PKI), a global leader committed to innovating for a healthier world, reported financial results for the second quarter ended July 3, 2022 (Press release, PerkinElmer, AUG 1, 2022, View Source [SID1234617198]).
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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.