News
Exhibit 99.1
 
 
FOR IMMEDIATE RELEASE
 
 
Media Contact Information:
Karen Kirkwood
Investor Contact Information:
Ken Apicerno
 
Phone: 781-622-1306
Phone: 781-622-1294
 
E-mail: karen.kirkwood@thermofisher.com
E-mail: ken.apicerno@thermofisher.com
 
Website: www.thermofisher.com
 

Thermo Fisher Scientific Reports Fourth Quarter and Full Year 2013 Results

Initiates Guidance for Full Year 2014
 
WALTHAM, Mass. (January 30, 2014) – Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, today reported its financial results for the fourth quarter and full year ended December 31, 2013.
 
Fourth Quarter and Full Year 2013 Highlights

·  
Grew full year adjusted earnings per share (EPS) by 10% to a record $5.42, and fourth quarter adjusted EPS by 5% to a record $1.43.

·  
Increased fourth quarter revenue by 6% to a record $3.47 billion.

·  
Expanded adjusted operating margin in the fourth quarter by 40 basis points to 20.0%.

·  
Generated free cash flow of $1.75 billion for the full year.

·  
Launched innovative new Thermo Scientific products during the year to strengthen leading mass spectrometry, chromatography, specialty diagnostics and biosciences offerings, highlighted by the breakthrough Orbitrap Fusion Tribrid and new triple-quad platforms.

·  
Achieved 20% growth in China for the year by leveraging investments to expand R&D, manufacturing and commercial capabilities, and delivered strong results in other high-growth markets, including Korea and Brazil.

·  
Returned more than $300 million of capital to shareholders through stock buybacks and dividends.

·  
Acquiring Life Technologies to add complementary genomics, next-generation sequencing and forensic science capabilities for customers in life sciences and applied markets, and to expand presence in APAC and emerging markets.


Adjusted EPS, adjusted operating income, adjusted operating margin and free cash flow are non-GAAP measures that exclude certain items detailed later in this press release under the heading “Use of Non-GAAP Financial Measures.”

“Our teams executed very well in the quarter to achieve outstanding results on both the top and bottom line,” said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. “All three business segments reported solid growth, and drove productivity to deliver 40 basis points of adjusted operating margin expansion. Our excellent operating performance throughout 2013 extended our track record of delivering strong adjusted EPS growth, and led to a 10% increase for the full year.

“These results demonstrate the success of our growth strategy and our ability to further differentiate Thermo Fisher in the markets we serve. We strengthened our innovation leadership by launching new products across our portfolio for customers in research, bioproduction, specialty diagnostics and applied markets. We also leveraged our scale and depth of capabilities to help our customers in high-growth emerging markets respond to the need for better air quality, safer food supplies and growing demand for specialty diagnostics.

 
“Last, we look forward to completing our acquisition of Life Technologies, which will enhance our unique customer value proposition by broadening our product offering and adding another premier life sciences brand. We’re excited about the new opportunities we will have by combining our genomics, proteomics and specialty diagnostics technologies to help our customers accelerate results and improve human health.”
 
Fourth Quarter 2013

For the fourth quarter of 2013, adjusted EPS grew 5% to $1.43, versus $1.36 in the fourth quarter of 2012. Revenue for the quarter grew 6% to $3.47 billion in 2013, versus $3.26 billion in 2012. Organic revenue growth was also 6% as the effects of acquisitions and currency translation were immaterial. Adjusted operating income for the fourth quarter of 2013 increased 9% compared with the year-ago period, and adjusted operating margin expanded to 20.0%, compared with 19.6% in the fourth quarter of 2012.

GAAP diluted EPS for the fourth quarter of 2013 was $0.92, versus $1.04 in the same quarter last year. The 2012 period included a favorable impact related to a tax rate change in a foreign jurisdiction. GAAP operating income for the fourth quarter of 2013 increased 14% to $455 million, compared with $401 million in 2012. GAAP operating margin increased to 13.1%, compared with 12.3% in the fourth quarter of 2012.
 
Full Year 2013

For the full year 2013, adjusted EPS grew 10% to $5.42, versus $4.94 in 2012. Revenue for 2013 grew 5% to $13.09 billion, versus $12.51 billion a year ago. Organic revenue grew 3%; acquisitions increased revenue by 2% and currency translation had a nominal impact. Adjusted operating income for 2013 increased 7% compared with 2012, and adjusted operating margin expanded to 19.5%, compared with 19.0% a year ago.

GAAP diluted EPS for 2013 was $3.48, versus $3.21 in 2012. GAAP operating income for 2013 increased 9% to $1.61 billion, compared with $1.48 billion a year ago. GAAP operating margin increased to 12.3%, compared with 11.8% in 2012.

Annual Guidance for 2014

Casper added, “Our excellent performance in 2013 positions us well for the year ahead. We look forward to successfully integrating Life Technologies and fully leveraging our depth of capabilities to create value for our customers and achieve our goals for growth in 2014.”

Thermo Fisher is initiating adjusted EPS and revenue guidance for the full year 2014. The company expects to achieve adjusted EPS in the range of $6.70 to $6.90 for 2014, which would result in 24% to 27% adjusted EPS growth over 2013. The company expects to achieve 2014 revenue in the range of $16.63 billion to $16.83 billion, for 27% to 29% revenue growth year over year.

The company’s 2014 guidance includes the results of Life Technologies from an assumed close date, and includes the results of the previously announced divestitures through an assumed sale date. The guidance does not include any other future acquisitions or divestitures and is based on current foreign exchange rates. The adjusted EPS estimate excludes amortization expense for acquisition-related intangible assets and certain other items detailed later in this press release under the heading “Use of Non-GAAP Financial Measures.”
 
Segment Results

Management uses adjusted operating results to monitor and evaluate performance of the company’s three business segments, as highlighted below.
 
Analytical Technologies Segment

In the fourth quarter of 2013, Analytical Technologies Segment revenue increased 6% to $1.14 billion, compared with revenue of $1.08 billion in the fourth quarter of 2012. Segment adjusted operating income increased 8% in the fourth quarter of 2013, and adjusted operating margin was 20.4%, versus 19.9% in the 2012 quarter.

For the full year 2013, Analytical Technologies Segment revenue increased 3% to $4.13 billion, compared with revenue of $4.02 billion in 2012. Segment adjusted operating income increased 2% in 2013, and adjusted operating margin was 18.6% in both periods.
 
Specialty Diagnostics Segment

Specialty Diagnostics Segment revenue in the fourth quarter increased 5% to $833 million in 2013, compared with revenue of $792 million in the fourth quarter of 2012. Segment adjusted operating income increased 9% in the fourth quarter of 2013, and adjusted operating margin increased to 26.9%, versus 25.9% in the 2012 quarter.

For the full year 2013, Specialty Diagnostics Segment revenue increased 8% to $3.19 billion, compared with revenue of $2.96 billion in 2012. Segment adjusted operating income increased 14% in 2013, and adjusted operating margin increased to 27.2%, versus 2012 results of 25.7%.
 
Laboratory Products and Services Segment

In the fourth quarter of 2013, Laboratory Products and Services Segment revenue increased 8% to $1.64 billion, compared with revenue of $1.52 billion in the fourth quarter of 2012. Segment adjusted operating income increased 9% in the fourth quarter of 2013, and adjusted operating margin was 14.4%, versus 14.3% in the 2012 quarter.

For the full year 2013, Laboratory Products and Services Segment revenue increased 5% to $6.35 billion, compared with revenue of $6.05 billion in 2012. Segment adjusted operating income increased 6% in 2013, and adjusted operating margin was 14.5%, versus 14.4% in the 2012 quarter.
 
Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including adjusted EPS, adjusted operating income and adjusted operating margin, which exclude restructuring and other costs/income and amortization of acquisition-related intangible assets. Adjusted EPS also excludes certain other gains and losses, tax provisions/benefits related to the previous items, benefits from tax credit carryforwards, the impact of significant tax audits or events and discontinued operations. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. We also use a non-GAAP measure, free cash flow, which excludes operating cash flows from discontinued operations and deducts net capital expenditures. We believe that the use of non-GAAP measures helps investors to gain a better understanding of our core operating results and future prospects, consistent with how management measures and forecasts the company’s performance, especially when comparing such results to previous periods or forecasts.

For example:

We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.

We exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition and significant transaction costs. We exclude these costs because we do not believe they are indicative of our normal operating costs.

We exclude the expense and tax effects associated with the amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of 5 to 20 years. Our adjusted EPS estimate for 2014 excludes approximately $2.25 of expense for the amortization of acquisition-related intangible assets, including Life Technologies as of an assumed close date. Exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.

We also exclude certain gains/losses and related tax effects, benefits from tax credit carryforwards and the impact of significant tax audits or events (such as the one-time effect on deferred tax balances of enacted changes in tax rates), which are either isolated or cannot be expected to occur again with any regularity or predictability and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business or real estate, gains or losses on significant litigation-related matters, gains on curtailments of pension plans, the early retirement of debt and discontinued operations.

We also report free cash flow, which is operating cash flow, net of capital expenditures, and also excludes operating cash flows from discontinued operations to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities.

Thermo Fisher’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the company’s core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes.

The non-GAAP financial measures of Thermo Fisher’s results of operations and cash flows included in this press release are not meant to be considered superior to or a substitute for Thermo Fisher’s results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables. Thermo Fisher’s earnings guidance, however, is only provided on an adjusted basis. It is not feasible to provide GAAP EPS guidance because the items excluded, other than the amortization expense, are difficult to predict and estimate and are primarily dependent on future events, such as acquisitions and decisions concerning the location and timing of facility consolidations.
 
Conference Call

Thermo Fisher Scientific will hold its earnings conference call today, January 30, 2014, at 8:00 a.m. Eastern time. To listen, dial (877) 312-9206 within the U.S. or (408) 774-4001 outside the U.S. You may also listen to the call live on our website, www.thermofisher.com, by clicking on “Investors.” You will find this press release, including the accompanying reconciliation of non-GAAP financial measures and related information, in that section of our website under “Financial Results.” An audio archive of the call will be available under “Webcasts and Presentations” through Friday, February 28, 2014.
 
About Thermo Fisher Scientific

Thermo Fisher Scientific Inc. (NYSE: TMO) is the world leader in serving science. Our mission is to enable our customers to make the world healthier, cleaner and safer. With revenue of $13 billion, we have 39,000 employees and serve customers within pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as in environmental and process control industries. We create value for our key stakeholders through three premier brands, Thermo Scientific, Fisher Scientific and Unity Lab Services, which offer a unique combination of innovative technologies, convenient purchasing options and a single solution for laboratory operations management. Our products and services help our customers solve complex analytical challenges, improve patient diagnostics and increase laboratory productivity. Visit www.thermofisher.com.

The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties. Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: the need to develop new products and adapt to significant technological change; implementation of strategies for improving growth; general economic conditions including economic conditions in the countries in which Thermo Fisher and Life Technologies sell products, and related uncertainties; dependence on customers' capital spending policies and government funding policies; the effect of exchange rate fluctuations on international operations; the effect of healthcare reform legislation; use and protection of intellectual property; the effect of changes in governmental regulations; and the effect of laws and regulations governing government contracts, as well as the possibility that expected benefits related to the transaction may not materialize as expected; the transaction not being timely completed, if completed at all; prior to the completion of the transaction, Life Technologies’ business experiencing disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, licensees, other business partners or governmental entities; difficulty retaining certain key employees; and the parties being unable to successfully implement integration strategies or to achieve expected synergies and operating efficiencies within the expected time-frames or at all. Additional important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in Thermo Fisher’s Quarterly Report on Form 10-Q for the quarter ended September 28, 2013, which is on file with the SEC and available in the “Investors” section of Thermo Fisher’s website under the heading “SEC Filings,” and in Life Technologies’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, which is on file with the SEC and available in the “Investor Relations” section of Life Technologies’ website under the heading “SEC Filings.” While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if estimates change and, therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.
 
 

###

 
 

The following information was filed by Thermo Fisher Scientific Inc. (TMO) on Thursday, January 30, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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