Life Technologies announces second quarter 2010 Results; $350 million share repurchase authorization
Life Technologies Corporation (NASDAQ: LIFE) today announced results for its second quarter ending June 30, 2010. Non-GAAP revenue for the second quarter was $906 million, an increase of 8 percent over the $839 million reported for the second quarter of 2009.
- (1888PressRelease) August 02, 2010 - CARLSBAD, Calif. -- Excluding the impact of currency and prior acquisitions and divestitures, organic revenue for the quarter grew 6 percent over the same period in the previous year.
"I'm pleased with our second quarter results, which again demonstrates our ability to deliver sustained organic growth across our businesses," said Gregory T. Lucier, Chairman and Chief Executive Officer of Life Technologies. "Our continued focus on strong execution enabled us to once again deliver value to our shareholders through record levels of operating margin and strong year-over-year earnings per share growth."
Share Repurchase Program
The company also announced a share repurchase program for up to $350 million. This two-year program authorizes management, at its discretion, to repurchase shares on the open market or in privately negotiated transactions, subject to market conditions and other factors. "We are continually assessing the best way to optimize shareholder value," said David F. Hoffmeister, Chief Financial Officer of Life Technologies. "The share repurchase program reflects our strategy for balanced capital deployment. We will be within our target leverage after the convertible debt is redeemed, and given the company's free cash flow generation we have the ability to invest for future growth, as well as return excess cash to shareholders."
Analysis of Second Quarter 2010 Results
* Second quarter non-GAAP 2010 revenue increased 8 percent over the previous year, a result of growth in the Genetic Systems and Cell Systems divisions. Revenue growth without the impact from currency, completed acquisitions and divestitures was 6 percent. Foreign currency exchange had a positive 1.5-point effect and prior acquisitions and divestitures contributed 0.5-point to reported revenue growth.
* Non-GAAP gross margin in the second quarter was 67.7 percent, an improvement of 100 basis points over the prior year. Gross margin expansion was a result of price realization, synergies, manufacturing productivity and royalty revenue partially offset by product mix.
* Non-GAAP operating margin was a record 30.1 percent in the second quarter, representing an increase of approximately 290 basis points over the same period in 2009. The increase in operating margin primarily resulted from gross margin expansion, and synergies.
* Second quarter non-GAAP tax rate was 29.5 percent.
* Diluted weighted shares outstanding were 191 million in the second quarter.
* Cash flow from operating activities for the second quarter was $228 million. Second quarter capital expenditures were $25 million and resulting free cash flow was $203 million. The company ended the quarter with $706 million in cash and short-term investments, including $19 million held as restricted cash.
* The following analysis of diluted earnings per share identifies specific items that affect the comparability of results between periods. Reconciliations between the company's GAAP and non-GAAP results for the periods reported are presented in the attached tables and on the company's Investor Relations page at http://www.lifetechnologies.com.
* Genetic Systems division non-GAAP revenue was $235 million in the second quarter, an increase of 5 percent over the same period last year. Excluding the impact from currency and the completed divestiture of the SQL*LIMS business, organic revenue growth was 7 percent. This increase was a result of strong double-digit growth in next generation sequencing and mid single-digit growth in capillary electrophoresis instruments and reagents sold to research and clinical labs.
Technology highlights include:
o The approval by the United States Federal Bureau of Investigation of Identifiler(R) Direct and Identifiler(R) Plus forensic kits. These kits are for use by laboratories generating DNA profiles for inclusion in the National DNA Index System (NDIS) CODIS Database. The advanced capabilities of these new forensic kits enables a new era of efficiency and effectiveness for forensic DNA laboratories.
* Molecular Biology Systems division non-GAAP revenue was $434 million in the second quarter, an increase of approximately 6 percent over the same period last year. Organic revenue growth was 2 percent, excluding the impact from currency and acquisitions, and 6 percent excluding the impact of currency, acquisitions and H1N1 sales. Growth was a result of robust demand for genomic assays and strong growth in the Molecular Biology Reagents business.
Technology highlights include:
o The acquisition of a majority stake in Geneart AG, the global leader of the synthetic gene market segment. The combination of Geneart with Life Technologies' resources and commercial capabilities will create a well-capitalized synthetic biology company with advanced technology and production capabilities, providing products to fuel innovation in this emerging field.
* Cell Systems division non-GAAP revenue was $230 million in the second quarter, an increase of 13 percent over the same period last year. Excluding the impact from currency, organic revenue growth was also 13 percent year over year. This growth was a result of strong demand across the portfolio, including robust growth in the Primary Stem Cell, Beads Based Separation and BioProduction business.
Technology highlights include:
o The announcement of a collaboration between the University of California, San Diego, The Salk Institute for Biological Studies and Life Technologies to initiate cell transplant therapy studies for ALS. Along with the Company's recent introduction of the Gibco(R) CTS product platform, the collaboration is part of a broader effort to help researchers expedite promising cell-based therapies.
* Regional organic growth rates for the quarter compared to the same quarter of the prior year were as follows: the Americas increased 7 percent, Europe 4 percent, Asia Pacific 19 percent. Japan declined 4 percent.
* Revenue from orders transacted through Life Technologies' eCommerce channels grew 14 percent during the quarter. Approximately 52 percent of all transactions are now processed using eCommerce platforms.
Fiscal Year 2010 Outlook
Subject to the risk factors detailed in the Safe Harbor Statement section of this release, the company updated its expectations for fiscal year 2010 financial performance. Organic revenues are expected to increase in the mid- to high-single digits and full year non-GAAP earnings per share are expected to be between $3.35 to $3.50. The company will provide further detail on its business outlook during the conference call today.
Conference Call and Webcast Details
The company will discuss its financial and business results as well as its business outlook on its conference call at 8:30 AM EDT today. This conference call will contain forward-looking information. The conference call will include a discussion of "non-GAAP financial measures" as that term is defined in Regulation G. For actual results, the most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the company's financial results determined in accordance with GAAP, as well as other material financial and statistical information to be discussed on the conference call will be posted at the company's Investor Relations Web site at http://www.lifetechnologies.com. The webcast can be accessed through the investor relations page of the Life Technologies' website at http://www.lifetechnologies.com. Alternatively, callers may listen to the live conference call by dialing 866.788.0546 (domestic) or 857.350.1684 (international) and use passcode 83895683. A replay of the webcast will be available on the Company's website through Thursday August 12, 2010.
About Life Technologies
Life Technologies Corporation (NASDAQ: LIFE) is a global biotechnology tools company dedicated to improving the human condition. Our systems, consumables and services enable researchers to accelerate scientific exploration, driving to discoveries and developments that make life even better. Life Technologies customers do their work across the biological spectrum, working to advance personalized medicine, regenerative science, molecular diagnostics, agricultural and environmental research, and 21st century forensics. Life Technologies had sales of $3.3 billion in 2009, employs approximately 9,000 people, has a presence in approximately 160 countries, and possesses a rapidly growing intellectual property estate of approximately 3,900 patents and exclusive licenses. Life Technologies was created by the combination of Invitrogen Corporation and Applied Biosystems Inc., and manufactures both in-vitro diagnostic products and research use only-labeled products. For more information on how we are making a difference, please visit our website: http://www.lifetechnologies.com.
Safe Harbor Statement
This press release includes forward-looking statements about our anticipated results that involve risks and uncertainties. Some of the information contained in this press release, including, but not limited to, statements as to, financial projections, including revenue and non-GAAP earnings per share, momentum in 2010, plans to sustain and expand organic growth and increase operating margins, industry trends and Life Technologies' plans, objectives, expectations and strategy for its business, contains forward-looking statements that are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect" and the like, and/or future tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. Important factors which could cause actual results to differ materially from those in the forward-looking statements are detailed in filings made by Life Technologies with the Securities and Exchange Commission. Life Technologies undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.