PerkinElmer Announces Financial Results for the Fourth Quarter and Full Year of 2020
02/02/2021 - 04:05 PM
PerkinElmer, Inc . (NYSE: PKI), a global leader committed to innovating for a healthier world, today reported financial results for the fourth quarter and full year ended January 3, 2021.
Fourth Quarter 2020
The Company reported GAAP earnings per share from continuing operations of $3.38, as compared to GAAP earnings per share from continuing operations of $0.58 in the fourth quarter of 2019. GAAP revenue for the quarter was $1.355 billion , as compared to $805 million in the fourth quarter of 2019. GAAP operating income from continuing operations for the quarter was $510 million , as compared to $138 million for the same period a year ago. GAAP operating profit margin was 37.7% as a percentage of revenue, as compared to 17.2% in the fourth quarter of 2019.
Adjusted earnings per share from continuing operations for the quarter was $3.96, as compared to $1.35 in the fourth quarter of 2019. Adjusted revenue for the quarter was $1.355 billion , as compared to $806 million in the fourth quarter of 2019. Adjusted operating income from continuing operations for the quarter was $571 million , as compared to $192 million for the same period a year ago. Adjusted operating profit margin was 42.2% as a percentage of adjusted revenue, as compared to 23.9% in the fourth quarter of 2019.
Full Year 2020
The Company reported GAAP earnings per share from continuing operations of $6.50, as compared to GAAP earnings per share from continuing operations of $2.04 in 2019. GAAP revenue for the year was $3.783 billion , as compared to $2.884 billion in 2019. GAAP operating income from continuing operations for the year was $979 million , as compared to $362 million in 2019. GAAP operating profit margin was 25.9% as a percentage of revenue, as compared to 12.6% in 2019.
Adjusted earnings per share from continuing operations for the year was $8.30, as compared to $4.10 in 2019. Adjusted revenue for the year was $3.784 billion , as compared to $2.884 billion in 2019. Adjusted operating income from continuing operations for the year was $1.203 billion , as compared to $596 million in 2019. Adjusted operating profit margin was 31.8% as a percentage of adjusted revenue, as compared to 20.7% in 2019.
Adjustments for the Company's non-GAAP financial measures have been noted in the attached reconciliations.
“While the fourth quarter and full year financial results are certainly impressive, we have many accomplishments beyond the headline financial numbers to be proud of,” said Prahlad Singh, president and chief executive officer of PerkinElmer. “The team’s response to the pandemic, and their resolute focus throughout 2020 to be a part of the solution, was humbling and inspiring to watch. As we look ahead, I could not be more excited about the future for PerkinElmer.”
Financial Overview by Reporting Segment for the Fourth Quarter and Full Year 2020
Discovery & Analytical Solutions
Fourth quarter 2020 revenue was $503 million , as compared to $496 million for the fourth quarter of 2019. Reported revenue increased 1% and organic revenue decreased 2% as compared to the fourth quarter of 2019. Full year 2020 revenue was $1.716 billion , as compared to $1.746 billion in 2019. Full year reported revenue decreased 2% and organic revenue decreased 4% .
Fourth quarter 2020 operating income from continuing operations was $73 million , as compared to $91 million for the comparable prior period. Full year 2020 operating income was $183 million , as compared to $238 million in 2019.
Fourth quarter 2020 adjusted operating income was $92 million , as compared to $116 million for the fourth quarter of 2019. Full year 2020 adjusted operating income was $267 million , as compared to $338 million in 2019.
Diagnostics
Fourth quarter 2020 revenue was $852 million , as compared to $309 million for the fourth quarter of 2019. Reported revenue increased 176% and organic revenue increased 172% as compared to the fourth quarter of 2019. Full year 2020 revenue was $2.067 billion , as compared to $1.138 billion in 2019. Full year reported revenue increased 82% and organic revenue increased 81% .
Fourth quarter 2020 operating income from continuing operations was $460 million , as compared to $61 million for the comparable prior period. Full year 2020 operating income was $874 million , as compared to $189 million in 2019.
Fourth quarter 2020 adjusted operating income was $502 million , as compared to $91 million for the fourth quarter of 2019. Full year 2020 adjusted operating income was $1.010 billion , as compared to $316 million in 2019.
Initiates Financial Guidance: First Quarter and Full Year 2021 Guidance
For the first quarter of 2021, the Company forecasts GAAP revenue of approximately $1.19 billion . GAAP earnings per share from continuing operations of at least $2.52 and, on a non-GAAP basis, which is expected to include the adjustments noted in the attached reconciliation, adjusted earnings per share of at least $3.00.
For the full year of 2021, the Company forecasts GAAP revenue of at least $4.08 billion . GAAP earnings per share from continuing operations of at least $6.73 and, on a non-GAAP basis, which is expected to include the adjustments noted in the attached reconciliation, adjusted earnings per share of at least $8.50.
Conference Call Information
The Company will discuss its fourth quarter and full year 2020 results and its outlook for business trends in a conference call on February 2, 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 2779705.
A live audio webcast of the call will be available on the Investors section of the Company’s Web site, 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 Web site 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 failure to adequately protect our intellectual property; (7) the loss of any of our licenses or licensed rights; (8) our ability to compete effectively; (9) fluctuation in our quarterly operating results and our ability to adjust our operations to address unexpected changes; (10) significant disruption in third-party package delivery and import/export services or significant increases in prices for those services; (11) disruptions in the supply of raw materials and supplies; (12) the manufacture and sale of products exposing us to product liability claims; (13) our failure to maintain compliance with applicable government regulations; (14) regulatory changes; (15) our failure to comply with healthcare industry regulations; (16) economic, political and other risks associated with foreign operations; (17) our ability to retain key personnel; (18) significant disruption in our information technology systems, or cybercrime; (19) our ability to obtain future financing; (20) restrictions in our credit agreements; (21) discontinuation or replacement of LIBOR; (22) the United Kingdom’s withdrawal from the European Union; (23) our ability to realize the full value of our intangible assets; (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
Twelve Months Ended
(In thousands, except per share data)
January 3, 2021
December 29, 2019
January 3, 2021
December 29, 2019
Revenue
$
1,354,606
$
805,496
$
3,782,745
$
2,883,673
Cost of revenue
527,541
407,315
1,672,868
1,487,618
Selling, general and administrative expenses
263,050
210,737
917,894
815,318
Research and development expenses
56,823
47,636
205,389
189,336
Restructuring and other, net
(3,062
)
1,560
8,013
29,428
Operating income from continuing operations
510,254
138,248
978,581
361,973
Interest income
(348
)
(570
)
(1,010
)
(1,495
)
Interest expense
12,404
14,421
49,712
63,627
Loss on disposition of businesses and assets, net
-
-
-
2,469
Debt extinguishment costs
-
32,070
-
32,541
Other expense (income), net
25,107
27,031
23,515
27,689
Income from continuing operations, before income taxes
473,091
65,296
906,364
237,142
Provision for income taxes
92,657
747
178,266
9,389
Income from continuing operations
380,434
64,549
728,098
227,753
Loss on disposition of discontinued operations, before income taxes
(76
)
-
(76
)
-
Provision for income taxes on discontinued operations and dispositions
(3
)
48
135
195
Loss from discontinued operations and dispositions
(73
)
(48
)
(211
)
(195
)
Net income
$
380,361
$
64,501
$
727,887
$
227,558
Diluted earnings per share:
Income from continuing operations
$
3.38
$
0.58
$
6.50
$
2.04
Loss from discontinued operations and dispositions
(0.00
)
(0.00
)
(0.00
)
(0.00
)
Net income
$
3.38
$
0.58
$
6.49
$
2.04
Weighted average diluted shares of common stock outstanding
112,537
111,625
112,085
111,501
ABOVE PREPARED IN ACCORDANCE WITH GAAP
Additional Supplemental Information (1) :
(per share, continuing operations)
GAAP EPS from continuing operations
$
3.38
$
0.58
$
6.50
$
2.04
Amortization of intangible assets
0.44
0.39
1.72
1.47
Debt extinguishment costs
-
0.29
-
0.29
Purchase accounting adjustments
0.01
0.07
(0.04
)
0.24
Acquisition and divestiture-related costs
0.02
0.01
0.08
0.06
Change in fair value of financial securities
-
(0.03
)
(0.00
)
(0.03
)
Acceleration of executive compensation
-
-
-
0.07
Significant litigation matters and settlements
0.03
0.01
0.06
0.02
Significant environmental matters
-
-
0.05
-
Disposition of businesses and assets, net
-
-
-
0.02
Mark to market on postretirement benefits
0.23
0.28
0.23
0.28
Restructuring and other, net
(0.03
)
0.01
0.07
0.26
Asset impairment
0.07
-
0.07
-
Tax on above items
(0.19
)
(0.25
)
(0.57
)
(0.65
)
Impact of tax act
-
-
-
0.02
Significant tax items
-
-
0.14
-
Adjusted EPS
$
3.96
$
1.35
$
8.30
$
4.10
(1) amounts may not sum due to rounding
PerkinElmer, Inc. and Subsidiaries
REVENUE AND OPERATING INCOME (LOSS)
Three Months Ended
Twelve Months Ended
(In thousands, except percentages)
January 3, 2021
December 29, 2019
January 3, 2021
December 29, 2019
DAS Reported revenue
$
502,783
$
496,457
$
1,715,803
$
1,746,161
Purchase accounting adjustments
297
-
297
-
Adjusted Revenue
503,080
496,457
1,716,100
1,746,161
Reported operating income from continued operations
72,839
91,368
183,471
238,331
OP%
14.5
%
18.4
%
10.7
%
13.6
%
Amortization of intangible assets
17,479
15,793
76,302
52,898
Purchase accounting adjustments
581
8,377
(10,753
)
20,857
Acquisition and divestiture-related costs
1,017
375
8,062
1,778
Significant litigation matters and settlements
3,492
569
5,891
2,189
Restructuring and other, net
(2,970
)
(469
)
3,763
21,958
Adjusted operating income
92,438
116,013
266,736
338,011
Adjusted OP%
18.4
%
23.4
%
15.5
%
19.4
%
Diagnostics Reported revenue
851,823
309,039
2,066,942
1,137,512
Purchase accounting adjustments
198
194
786
770
Adjusted Revenue
852,021
309,233
2,067,728
1,138,282
Reported operating income from continued operations
460,496
61,146
874,206
189,330
OP%
54.1
%
19.8
%
42.3
%
16.6
%
Amortization of intangible assets
32,207
27,335
116,250
111,429
Purchase accounting adjustments
930
(369
)
5,802
5,412
Acquisition and divestiture-related costs
348
332
671
2,210
Significant litigation matters and settlements
-
106
1,245
106
Asset impairment
7,937
-
7,937
-
Restructuring and other, net
(92
)
2,029
4,250
7,470
Adjusted operating income
501,826
90,579
1,010,361
315,957
Adjusted OP%
58.9
%
29.3
%
48.9
%
27.8
%
Corporate Reported operating loss
(23,081
)
(14,266
)
(79,096
)
(65,688
)
Significant environmental matters
-
-
5,242
-
Acceleration of executive compensation
-
-
-
7,721
Adjusted operating loss
(23,081
)
(14,266
)
(73,854
)
(57,967
)
Continuing Operations Reported revenue
$
1,354,606
$
805,496
$
3,782,745
$
2,883,673
Purchase accounting adjustments
495
194
1,083
770
Adjusted Revenue
1,355,101
805,690
3,783,828
2,884,443
Reported operating income from continued operations
510,254
138,248
978,581
361,973
OP%
37.7
%
17.2
%
25.9
%
12.6
%
Amortization of intangible assets
49,686
43,128
192,552
164,327
Purchase accounting adjustments
1,511
8,008
(4,951
)
26,269
Acquisition and divestiture-related costs
1,365
707
8,733
3,988
Acceleration of executive compensation
-
-
-
7,721
Significant litigation matters and settlements
3,492
675
7,136
2,295
Significant environmental matters
-
-
5,242
-
Asset impairment
7,937
-
7,937
-
Restructuring and other, net
(3,062
)
1,560
8,013
29,428
Adjusted operating income
$
571,183
$
192,326
$
1,203,243
$
596,001
Adjusted OP%
42.2
%
23.9
%
31.8
%
20.7
%
REPORTED REVENUE AND REPORTED OPERATING INCOME (LOSS) PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 3, 2021
December 29, 2019
Current assets:
Cash and cash equivalents
$
402,036
$
191,877
Accounts receivable, net
1,205,080
725,184
Inventories, net
514,567
356,937
Other current assets
167,208
100,381
Total current assets
2,288,891
1,374,379
Property, plant and equipment:
At cost
818,197
701,580
Accumulated depreciation
(449,893
)
(383,357
)
Property, plant and equipment, net
368,304
318,223
Operating lease right-of-use assets
207,236
167,276
Intangible assets, net
1,365,693
1,283,286
Goodwill
3,447,114
3,111,227
Other assets, net
333,048
284,173
Total assets
$
8,010,286
$
6,538,564
Current liabilities:
Current portion of long-term debt
$
380,948
$
9,974
Accounts payable
327,325
235,855
Short-term accrued restructuring and other
4,716
11,559
Accrued expenses and other current liabilities
986,998
503,332
Current liabilities of discontinued operations
2,173
2,112
Total current liabilities
1,702,160
762,832
Long-term debt
1,609,701
2,064,041
Long-term liabilities
774,531
751,468
Operating lease liabilities
188,402
146,399
Total liabilities
4,274,794
3,724,740
Total stockholders' equity
3,735,492
2,813,824
Total liabilities and stockholders' equity
$
8,010,286
$
6,538,564
PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
Twelve Months Ended
January 3, 2021
December 29, 2019
January 3, 2021
December 29, 2019
(In thousands)
(In thousands)
Operating activities:
Net income
$
380,361
$
64,501
$
727,887
$
227,558
Loss from discontinued operations and dispositions, net of income taxes
73
48
211
195
Income from continuing operations
380,434
64,549
728,098
227,753
Adjustments to reconcile income from continuing operations to net cash provided by continuing operations:
Stock-based compensation
9,355
6,409
29,126
31,514
Restructuring and other, net
(3,062
)
1,560
8,013
29,428
Depreciation and amortization
63,986
56,908
246,507
214,025
Pension and other postretirement expenses
18,012
26,107
18,012
26,107
Change in fair value of contingent consideration
(20
)
(518
)
(8,827
)
3,881
Amortization of deferred debt financing costs and accretion of discounts
833
1,068
3,391
3,846
Loss on disposition of businesses and assets, net
-
-
886
2,469
Change in fair value of financial securities
(35
)
(3,249
)
(35
)
(3,249
)
Debt extinguishment costs
-
32,070
-
32,541
Amortization of acquired inventory revaluation
1,036
8,332
2,793
21,590
Asset impairment
7,937
-
7,937
-
Deferred taxes
(32,437
)
(61,353
)
(32,437
)
(61,353
)
Contingencies and non-cash tax matters
4,516
(424
)
4,516
(424
)
Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired:
Accounts receivable, net
(356,171
)
(78,498
)
(423,866
)
(100,630
)
Inventories
(1,579
)
38,761
(122,513
)
(9,607
)
Accounts payable
46,363
41,394
62,753
7,351
Accrued expenses and other
342,931
82,094
367,823
(61,773
)
Net cash provided by operating activities of continuing operations
482,099
215,210
892,177
363,469
Net cash used in operating activities of discontinued operations
-
-
-
-
Net cash provided by operating activities
482,099
215,210
892,177
363,469
Investing activities:
Capital expenditures
(20,115
)
(23,249
)
(77,506
)
(76,331
)
Purchases of investments
(10,500
)
(1,000
)
(20,059
)
(6,387
)
Purchases of licenses
-
-
-
(5,000
)
Proceeds from surrender of life insurance policies
151
-
282
-
Proceeds from disposition of businesses and assets
1,857
-
4,280
550
Payment of acquisitions, net of cash, cash equivalents and restricted cash acquired
(407,794
)
(147,785
)
(411,495
)
(400,405
)
Net cash used in investing activities of continuing operations
(436,401
)
(172,034
)
(504,498
)
(487,573
)
Net cash provided by investing activities of discontinued operations
-
-
-
-
Net cash used in investing activities
(436,401
)
(172,034
)
(504,498
)
(487,573
)
Financing Activities:
Payments on borrowings
(382,464
)
(273,000
)
(897,674
)
(1,692,489
)
Proceeds from borrowings
457,698
565,000
714,698
1,599,416
Payments of senior debt
-
(530,276
)
-
(530,276
)
Proceeds from sale of senior debt
-
-
-
847,195
Payments of debt financing costs
-
(1,854
)
-
(9,879
)
Settlement of cash flow hedges
(2,465
)
307
(4,554
)
(1,280
)
Net payments on other credit facilities
3,630
(3,911
)
(4,494
)
(14,975
)
Payments for acquisition-related contingent consideration
(5,163
)
(1,742
)
(10,363
)
(29,942
)
Proceeds from issuance of common stock under stock plans
10,143
2,169
37,671
19,732
Purchases of common stock
(116
)
(112
)
(6,944
)
(6,313
)
Dividends paid
(7,831
)
(7,777
)
(31,212
)
(31,059
)
Net cash provided by (used in) financing activities of continuing operations
73,432
(251,196
)
(202,872
)
150,130
Net cash used in financing activities of discontinued operations
-
-
-
-
Net cash provided by (used in) financing activities
73,432
(251,196
)
(202,872
)
150,130
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
25,081
3,937
25,913
(447
)
Net increase (decrease) in cash, cash equivalents, and restricted cash
144,211
(204,083
)
210,720
25,579
Cash, cash equivalents, and restricted cash at beginning of period
258,403
395,977
191,894
166,315
Cash, cash equivalents, and restricted cash at end of period
$
402,614
$
191,894
$
402,614
$
191,894
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
$
402,036
$
191,877
$
402,036
$
191,877
Restricted cash included in other current assets
578
17
578
17
Total cash, cash equivalents and restricted cash
$
402,614
$
191,894
$
402,614
$
191,894
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
January 3, 2021
December 29, 2019
Adjusted revenue:
Revenue
$
1,354.6
$
805.5
Purchase accounting adjustments
0.5
0.2
Adjusted revenue
$
1,355.1
$
805.7
Adjusted gross margin:
Gross margin
$
827.1
61.1
%
$
398.2
49.4
%
Amortization of intangible assets
16.5
1.2
%
15.8
2.0
%
Purchase accounting adjustments
1.5
0.1
%
8.5
1.1
%
Asset impairment
7.9
0.6
%
-
0.0
%
Adjusted gross margin
$
853.0
62.9
%
$
422.5
52.4
%
Adjusted SG&A:
SG&A
$
263.1
19.4
%
$
210.7
26.2
%
Amortization of intangible assets
(33.2
)
-2.4
%
(27.4
)
-3.4
%
Purchase accounting adjustments
0.0
0.0
%
0.5
0.1
%
Acquisition and divestiture-related costs
(1.4
)
-0.1
%
(0.7
)
-0.1
%
Significant litigation matters and settlements
(3.5
)
-0.3
%
(0.7
)
-0.1
%
Adjusted SG&A
$
225.0
16.6
%
$
182.5
22.7
%
Adjusted R&D:
R&D
$
56.8
4.2
%
$
47.6
5.9
%
Adjusted R&D
$
56.8
4.2
%
$
47.6
5.9
%
Adjusted operating income:
Operating income
$
510.3
37.7
%
$
138.2
17.2
%
Amortization of intangible assets
49.7
3.7
%
43.1
5.4
%
Purchase accounting adjustments
1.5
0.1
%
8.0
1.0
%
Acquisition and divestiture-related costs
1.4
0.1
%
0.7
0.1
%
Significant litigation matters and settlements
3.5
0.3
%
0.7
0.1
%
Asset impairment
7.9
0.6
%
-
0.0
%
Restructuring and other, net
(3.1
)
-0.2
%
1.6
0.2
%
Adjusted operating income
$
571.2
42.2
%
$
192.3
23.9
%
PKI
Three Months Ended
January 3, 2021
December 29, 2019
Adjusted EPS:
GAAP EPS
$
3.38
$
0.58
Discontinued operations, net of income taxes
(0.00
)
(0.00
)
GAAP EPS from continuing operations
3.38
0.58
Amortization of intangible assets
0.44
0.39
Debt extinguishment costs
-
0.29
Purchase accounting adjustments
0.01
0.07
Acquisition and divestiture-related costs
0.02
0.01
Change in fair value of financial securities
-
(0.03
)
Significant litigation matters and settlements
0.03
0.01
Mark to market on postretirement benefits
0.23
0.28
Asset impairment
0.07
-
Restructuring and other, net
(0.03
)
0.01
Tax on above items
(0.19
)
(0.25
)
Adjusted EPS
$
3.96
$
1.35
DAS
Three Months Ended
January 3, 2021
December 29, 2019
Adjusted revenue:
Revenue
$
502.8
$
496.5
Purchase accounting adjustments
0.3
-
Adjusted revenue
$
503.1
$
496.5
Adjusted operating income:
Operating income
$
72.8
14.5
%
$
91.4
18.4
%
Amortization of intangible assets
17.5
3.5
%
15.8
3.2
%
Purchase accounting adjustments
0.6
0.1
%
8.4
1.7
%
Acquisition and divestiture-related costs
1.0
0.2
%
0.4
0.1
%
Significant litigation matters and settlements
3.5
0.7
%
0.6
0.1
%
Restructuring and other, net
(3.0
)
-0.6
%
(0.5
)
-0.1
%
Adjusted operating income
$
92.4
18.4
%
$
116.0
23.4
%
Diagnostics
Three Months Ended
January 3, 2021
December 29, 2019
Adjusted revenue:
Revenue
$
851.8
$
309.0
Purchase accounting adjustments
0.2
0.2
Adjusted revenue
$
852.0
$
309.2
Adjusted operating income:
Operating income
$
460.5
54.1
%
$
61.1
19.8
%
Amortization of intangible assets
32.2
3.8
%
27.3
8.8
%
Purchase accounting adjustments
0.9
0.1
%
(0.4
)
-0.1
%
Acquisition and divestiture-related costs
0.3
0.0
%
0.3
0.1
%
Significant litigation matters and settlements
-
0.0
%
0.1
0.0
%
Asset impairment
7.9
0.9
%
-
0.0
%
Restructuring and other, net
(0.1
)
0.0
%
2.0
0.7
%
Adjusted operating income
$
501.8
58.9
%
$
90.6
29.3
%
(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
Twelve Months Ended
January 3, 2021
December 29, 2019
Adjusted revenue:
Revenue
$
3,782.7
$
2,883.7
Purchase accounting adjustments
1.1
0.8
Adjusted revenue
$
3,783.8
$
2,884.4
Adjusted gross margin:
Gross margin
$
2,109.9
55.8
%
$
1,396.1
48.4
%
Amortization of intangible assets
65.3
1.7
%
61.4
2.1
%
Purchase accounting adjustments
3.9
0.1
%
22.4
0.8
%
Asset impairment
7.9
0.2
%
-
0.0
%
Adjusted gross margin
$
2,186.9
57.8
%
$
1,479.8
51.3
%
Adjusted SG&A:
SG&A
$
917.9
24.3
%
$
815.3
28.3
%
Amortization of intangible assets
(127.3
)
-3.4
%
(103.0
)
-3.6
%
Purchase accounting adjustments
8.8
0.2
%
(3.9
)
-0.1
%
Acquisition and divestiture-related costs
(8.7
)
-0.2
%
(4.0
)
-0.1
%
Acceleration of executive compensation
-
0.0
%
(7.7
)
-0.3
%
Significant litigation matters and settlements
(7.1
)
-0.2
%
(2.3
)
-0.1
%
Significant environmental matters
(5.2
)
-0.1
%
-
0.0
%
Adjusted SG&A
$
778.3
20.6
%
$
694.5
24.1
%
Adjusted R&D:
R&D
$
205.4
5.4
%
$
189.3
6.6
%
Adjusted R&D
$
205.4
5.4
%
$
189.3
6.6
%
Adjusted operating income:
Operating income
$
978.6
25.9
%
$
362.0
12.6
%
Amortization of intangible assets
192.6
5.1
%
164.3
5.7
%
Purchase accounting adjustments
(5.0
)
-0.1
%
26.3
0.9
%
Acquisition and divestiture-related costs
8.7
0.2
%
4.0
0.1
%
Acceleration of executive compensation
-
0.0
%
7.7
0.3
%
Significant litigation matters and settlements
7.1
0.2
%
2.3
0.1
%
Significant environmental matters
5.2
0.1
%
-
0.0
%
Asset impairment
7.9
0.2
%
-
0.0
%
Restructuring and other, net
8.0
0.2
%
29.4
1.0
%
Adjusted operating income
$
1,203.2
31.8
%
$
596.0
20.7
%
PKI
Twelve Months Ended
January 3, 2021
December 29, 2019
Adjusted EPS:
GAAP EPS
$
6.49
$
2.04
Discontinued operations
(0.00
)
(0.00
)
GAAP EPS from continuing operations
6.50
2.04
Amortization of intangible assets
1.72
1.47
Debt extinguishment costs
-
0.29
Purchase accounting adjustments
(0.04
)
0.24
Significant litigation matters and settlements
0.06
0.02
Significant environmental matters
0.05
-
Acquisition and divestiture-related costs
0.08
0.06
Change in fair value of financial securities
(0.00
)
(0.03
)
Acceleration of executive compensation
-
0.07
Loss on disposition of businesses and assets, net
-
0.02
Mark to market on postretirement benefits
0.23
0.28
Asset impairment
0.07
-
Restructuring and other, net
0.07
0.26
Tax on above items
(0.57
)
(0.65
)
Impact of tax act
-
0.02
Significant tax items
0.14
-
Adjusted EPS
$
8.30
$
4.10
PKI
Three Months Ended
Twelve Months Ended
April 4, 2021
January 2, 2022
Adjusted EPS: Projected Projected
GAAP EPS from continuing operations
at least $2.52
at least $6.73
Amortization of intangible assets
0.48
2.02
Purchase accounting adjustments
0.03
0.06
Acquisition and divestiture-related costs
0.05
0.05
Restructuring and other, net
0.06
0.21
Tax on above items
(0.14
)
(0.57
)
Adjusted EPS
at least $3.00
at least $8.50
DAS
Twelve Months Ended
January 3, 2021
December 29, 2019
Adjusted revenue:
Revenue
$
1,715.8
$
1,746.2
Purchase accounting adjustments
0.3
-
Adjusted revenue
$
1,716.1
$
1,746.2
Adjusted operating income:
Operating income
$
183.5
10.7
%
$
238.3
13.6
%
Amortization of intangible assets
76.3
4.4
%
52.9
3.0
%
Purchase accounting adjustments
(10.8
)
-0.6
%
20.9
1.2
%
Acquisition and divestiture-related costs
8.1
0.5
%
1.8
0.1
%
Significant litigation matters and settlements
5.9
0.3
%
2.2
0.1
%
Restructuring and other, net
3.8
0.2
%
22.0
1.3
%
Adjusted operating income
$
266.7
15.5
%
$
338.0
19.4
%
Diagnostics
Twelve Months Ended
January 3, 2021
December 29, 2019
Adjusted revenue:
Revenue
$
2,066.9
$
1,137.5
Purchase accounting adjustments
0.8
0.8
Adjusted revenue
$
2,067.7
$
1,138.3
Adjusted operating income:
Operating income
$
874.2
42.3
%
$
189.3
16.6
%
Amortization of intangible assets
116.3
5.6
%
111.4
9.8
%
Purchase accounting adjustments
5.8
0.3
%
5.4
0.5
%
Acquisition and divestiture-related costs
0.7
0.0
%
2.2
0.2
%
Significant litigation matters and settlements
1.2
0.1
%
0.1
0.0
%
Asset impairment
7.9
0.4
%
-
0.0
%
Restructuring and other, net
4.3
0.2
%
7.5
0.7
%
Adjusted operating income
$
1,010.4
48.9
%
$
316.0
27.8
%
(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
January 3, 2021
Organic revenue growth:
Reported revenue growth
68%
Less: effect of foreign exchange rates
3%
Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses
0%
Organic revenue growth
65%
DAS
Three Months Ended
January 3, 2021
Organic revenue growth:
Reported revenue growth
1%
Less: effect of foreign exchange rates
3%
Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses
0%
Organic revenue growth
-2%
Diagnostics
Three Months Ended
January 3, 2021
Organic revenue growth:
Reported revenue growth
176%
Less: effect of foreign exchange rates
3%
Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses
0%
Organic revenue growth
172%
(1) amounts may not sum due to rounding
PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)
DAS
Twelve Months Ended
January 3, 2021
Organic revenue growth:
Reported revenue growth
-2%
Less: effect of foreign exchange rates
0%
Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses
2%
Organic revenue growth
-4%
Diagnostics
Twelve Months Ended
January 3, 2021
Organic revenue growth:
Reported revenue growth
82%
Less: effect of foreign exchange rates
0%
Less: effect of acquisitions including purchase accounting adjustments and impact of divested businesses
0%
Organic revenue growth
81%
(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 including acquisitions growth from the comparable prior period, and including purchase accounting adjustments for revenue from contracts acquired in acquisitions that will not be fully recognized due to accounting rules. We also exclude the impact of sales from divested businesses by deducting the effects of divested business revenue from the current and prior periods. 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, 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, 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, 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
Debt extinguishment costs
Revenue from contracts acquired in acquisitions that will not be fully recognized due to accounting rules
Other purchase accounting adjustments
Acquisition and divestiture-related expenses
Asset impairments
Acceleration of executive compensation —
Restructuring and other charges
Adjustments for mark-to-market accounting on post-retirement benefits
Significant litigation matters and settlements
Significant environmental charges
Disposition of businesses and assets, net
Impact of foreign currency changes on the current period
Impact of significant tax events
Changes in value of financial securities
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.
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