Company Announcements

PerkinElmer Announces Financial Results for the Third Quarter of 2022

  • Third quarter revenue of $712 million; (17)% reported growth
  • Pro forma* total revenue of $1,033 million; 9% pro forma non-COVID organic growth
  • Third quarter GAAP EPS from continuing operations of $0.55; pro forma adjusted EPS of $1.51
  • Initiates fourth quarter and updates full year pro forma guidance

WALTHAM, Mass.--(BUSINESS WIRE)--Nov. 8, 2022-- PerkinElmer, Inc. (NYSE: PKI), a global leader committed to innovating for a healthier world, today reported financial results for the third quarter ended October 2, 2022.

The Company reported GAAP earnings per share from continuing operations of $0.55, as compared to GAAP earnings per share from continuing operations of $0.94 in the same period a year ago. GAAP revenue for the quarter was $712 million, as compared to $861 million in the same period a year ago. GAAP operating income from continuing operations for the quarter was $111 million, as compared to $196 million for the same period a year ago. GAAP operating profit margin was 15.6% as a percentage of revenue, as compared to 22.7% in the same period a year ago.

Adjusted operating income from continuing operations was $224 million, as compared to $322 million for the same period a year ago. Adjusted operating profit margin was 31.4% as a percentage of revenue, as compared to 37.4% in the same period a year ago.

Pro forma adjusted earnings per share for the quarter was $1.51, as compared to $2.31 in the same period a year ago. Pro forma adjusted revenue for the quarter was $1.03 billion, as compared to $1.17 billion in the same period a year ago. Pro forma adjusted operating income for the quarter was $272 million, as compared to $359 million for the same period a year ago. Pro forma adjusted operating profit margin was 26.3% as a percentage of adjusted revenue, as compared to 30.8% in the same period a year ago.

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

*Pro forma information includes results from the Applied, Food and Enterprise Services (“AES”) businesses currently held for sale.

“It was great to see how we continued to execute at a high level across the company in the quarter, both operationally and financially,” said Prahlad Singh, president and chief executive officer of PerkinElmer. “The energy and excitement amongst our employees in all our businesses remains exceptional as we continue to prepare for the upcoming split into two separate companies. I am proud to see the impact our efforts are having on society and how we accomplish this each day.”

Financial Overview by Reporting Segment for the Third Quarter

Discovery & Analytical Solutions Continuing Operations

  • Third quarter 2022 revenue was $313 million, as compared to $208 million in the same period a year ago. Reported revenue increased 51% and organic revenue increased 14% as compared to the same period a year ago.
  • Third quarter 2022 operating income from continuing operations was $33 million, as compared to $(19) million for the same period a year ago.
  • Third quarter 2022 adjusted operating income was $117 million, as compared to $58 million for the same period a year ago.

Discovery & Analytical Solutions Pro Forma* Operations

  • Third quarter 2022 pro forma revenue was $633 million, as compared to $513 million in the same period a year ago. Pro forma revenue increased 23% and pro forma organic revenue increased 12% as compared to the same period a year ago.
  • Third quarter 2022 pro forma operating income was $58 million, as compared to $7 million for the same period a year ago.
  • Third quarter 2022 pro forma adjusted operating income was $165 million, as compared to $95 million for the same period a year ago.

Diagnostics

  • Third quarter 2022 revenue was $399 million, as compared to $654 million for the same period a year ago. Reported revenue decreased 39% and organic revenue decreased 33% as compared to the same period a year ago.
  • Third quarter 2022 operating income from continuing operations was $95 million, as compared to $238 million for the same period a year ago.
  • Third quarter 2022 adjusted operating income was $123 million, as compared to $287 million for the same period a year ago.

Initiates Fourth Quarter and Updates Full Year 2022 Guidance

For the fourth quarter of 2022, the Company forecasts total revenue from continuing operations of $0.73 billion. Pro forma total revenue is expected to be in a range of approximately $1.06-$1.07 billion and pro forma adjusted earnings per share are expected to be in a range $1.65-$1.67.

For the full year 2022, the Company now forecasts total revenue from continuing operations of $3.30 billion. Pro forma total revenue is expected to be in the range of approximately $4.59-$4.60 billion and pro forma adjusted earnings per share are expected to be in a range of $7.89-$7.91.

The Company’s guidance for the fourth quarter and full year with respect to non-GAAP metrics 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.

Webcast Information

The Company will discuss its third quarter 2022 results and its outlook for business trends during a webcast on November 8, 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.

About PerkinElmer

PerkinElmer is a leading, global provider of end-to-end solutions that help scientists, researchers and clinicians better diagnose disease, discover new and more personalized drugs, monitor the safety and quality of our food, and drive environmental and applied analysis excellence. With an 85-year legacy of advancing science and a mission of innovating for a healthier world, our dedicated team of more than 16,000 collaborates closely with commercial, government, academic and healthcare customers to deliver reagents, assays, instruments, automation, informatics and strategic services that accelerate workflows, deliver actionable insights and support improved decision making. We are also deeply committed to good corporate citizenship through our dynamic ESG and sustainability programs. The Company reported revenues of approximately $5 billion in 2021, serves customers in 190 countries, and is a component of the S&P 500 index. Additional information is available at www.perkinelmer.com. Follow PerkinElmer on LinkedIn, Twitter, Facebook, Instagram, and YouTube.

  PerkinElmer, Inc. and Subsidiaries  
  CONDENSED CONSOLIDATED INCOME STATEMENTS  
           
   

Three Months Ended

 

Nine Months Ended

 
  (In thousands, except per share data)  

October 2, 2022

 

October 3, 2021

 

October 2, 2022

 

October 3, 2021

 
           
           
  Revenue  

$

711,803

 

 

$

861,316

 

 

$

2,570,608

 

 

$

2,799,898

 

 
           
  Cost of revenue  

 

304,759

 

 

 

338,454

 

 

 

1,017,108

 

 

 

1,009,707

 

 
  Selling, general and administrative expenses  

 

239,969

 

 

 

275,869

 

 

 

765,746

 

 

 

681,311

 

 
  Research and development expenses  

 

53,521

 

 

 

49,421

 

 

 

167,081

 

 

 

139,753

 

 
  Restructuring and other, net  

 

2,774

 

 

 

2,011

 

 

 

15,443

 

 

 

10,517

 

 
           
  Operating income from continuing operations  

 

110,780

 

 

 

195,561

 

 

 

605,230

 

 

 

958,610

 

 
           
  Interest income  

 

(667

)

 

 

(544

)

 

 

(2,024

)

 

 

(1,322

)

 
  Interest expense  

 

25,931

 

 

 

43,531

 

 

 

81,447

 

 

 

74,407

 

 
  Change in fair value of financial securities  

 

5,106

 

 

 

19,365

 

 

 

14,321

 

 

 

(8,566

)

 
  Other (income) expense, net  

 

(1,732

)

 

 

(1,803

)

 

 

(1,904

)

 

 

(9,787

)

 
           
  Income from continuing operations, before income taxes  

 

82,142

 

 

 

135,012

 

 

 

513,390

 

 

 

903,878

 

 
           
  Provision for income taxes  

 

12,634

 

 

 

27,381

 

 

 

98,211

 

 

 

198,531

 

 
           
  Income from continuing operations  

 

69,508

 

 

 

107,631

 

 

 

415,179

 

 

 

705,347

 

 
           
  Income from discontinued operations, before income taxes  

 

25,180

 

 

 

26,656

 

 

 

36,004

 

 

 

64,329

 

 
  Provision for income taxes on discontinued operations and dispositions  

 

9,341

 

 

 

6,549

 

 

 

9,662

 

 

 

16,703

 

 
           
  Income from discontinued operations and dispositions  

 

15,839

 

 

 

20,107

 

 

 

26,342

 

 

 

47,626

 

 
           
  Net income  

$

85,347

 

 

$

127,738

 

 

$

441,521

 

 

$

752,973

 

 
           
           
  Diluted earnings per share:          
  Income from continuing operations  

$

0.55

 

 

$

0.94

 

 

$

3.28

 

 

$

6.23

 

 
           
  Income from discontinued operations and dispositions  

 

0.13

 

 

 

0.17

 

 

 

0.21

 

 

 

0.42

 

 
           
  Net income  

$

0.67

 

 

$

1.11

 

 

$

3.49

 

 

$

6.65

 

 
           
           
  Weighted average diluted shares of common stock outstanding  

 

126,540

 

 

 

115,022

 

 

 

126,544

 

 

 

113,307

 

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

$

0.55

 

 

$

0.94

 

 

$

3.28

 

 

$

6.23

 

 
  Amortization of intangible assets  

 

0.72

 

 

 

0.55

 

 

 

2.22

 

 

 

1.40

 

 
  Gain from debt extinguishment  

 

(0.00

)

 

 

-

 

 

 

(0.00

)

 

 

-

 

 
  Purchase accounting adjustments  

 

0.08

 

 

 

0.09

 

 

 

0.36

 

 

 

0.17

 

 
  Acquisition and divestiture-related costs  

 

0.07

 

 

 

0.61

 

 

 

0.20

 

 

 

0.64

 

 
  Change in fair value of financial securities  

 

0.04

 

 

 

0.17

 

 

 

0.11

 

 

 

(0.08

)

 
  Asset impairment  

 

-

 

 

 

0.03

 

 

 

-

 

 

 

0.03

 

 
  Significant litigation matters and settlements  

 

0.00

 

 

 

-

 

 

 

(0.00

)

 

 

-

 

 
  Disposition of businesses and assets, net  

 

-

 

 

 

(0.02

)

 

 

-

 

 

 

(0.02

)

 
  Restructuring and other, net  

 

0.02

 

 

 

0.02

 

 

 

0.12

 

 

 

0.09

 

 
  Tax on above items  

 

(0.24

)

 

 

(0.31

)

 

 

(0.77

)

 

 

(0.49

)

 
  Significant tax items  

 

(0.03

)

 

 

(0.01

)

 

 

(0.03

)

 

 

0.12

 

 
  Adjusted EPS from Continuing Operations  

$

1.21

 

 

$

2.07

 

 

$

5.50

 

 

$

8.10

 

 
           
  Adjusted EPS from AES  

$

0.30

 

 

$

0.24

 

 

$

0.75

 

 

$

0.74

 

 
           
  Pro Forma Adjusted EPS including the results of AES  

$

1.51

 

 

$

2.31

 

 

$

6.24

 

 

$

8.84

 

 
           
  (1) amounts may not sum due to rounding          
           
PerkinElmer, Inc. and Subsidiaries
REVENUE AND OPERATING INCOME (LOSS)
         
    Three Months Ended   Nine Months Ended
(In thousands, except percentages)   October 2, 2022   October 3, 2021   October 2, 2022   October 3, 2021
           
           
DAS   Reported revenue   $

312,783

 

  $

207,511

 

  $

945,484

 

  $

577,371

 

  Purchase accounting adjustments  

-

 

 

-

 

 

-

 

 

1,849

 

  Adjusted revenue  

312,783

 

 

207,511

 

 

945,484

 

 

579,220

 

           
  Reported operating income (loss) from continued operations

32,631

 

 

(19,263

)

 

106,005

 

 

50,624

 

  OP%  

10.4

%

 

-9.3

%

 

11.2

%

 

8.8

%

  Amortization of intangible assets  

64,426

 

 

25,757

 

 

185,094

 

 

50,903

 

  Purchase accounting adjustments  

9,164

 

 

5,673

 

 

43,710

 

 

9,322

 

  Acquisition and divestiture-related costs  

8,475

 

 

44,409

 

 

11,746

 

 

46,498

 

  Significant litigation matters and settlements  

629

 

 

-

 

 

(632

)

 

-

 

  Restructuring and other, net  

1,556

 

 

1,424

 

 

11,738

 

 

6,867

 

  Adjusted operating income  

116,881

 

 

58,000

 

 

357,661

 

 

164,214

 

  Adjusted OP%  

37.4

%

 

28.0

%

 

37.8

%

 

28.4

%

           
Diagnostics   Reported revenue  

399,020

 

 

653,805

 

 

1,625,124

 

 

2,222,527

 

  Purchase accounting adjustments  

203

 

 

199

 

 

609

 

 

597

 

  Adjusted revenue  

399,223

 

 

654,004

 

 

1,625,733

 

 

2,223,124

 

           
  Reported operating income from continued operations  

94,654

 

 

237,903

 

 

553,898

 

 

965,650

 

  OP%  

23.7

%

 

36.4

%

 

34.1

%

 

43.4

%

  Amortization of intangible assets  

27,099

 

 

37,517

 

 

95,375

 

 

107,743

 

  Purchase accounting adjustments  

457

 

 

5,107

 

 

1,884

 

 

9,485

 

  Asset impairment  

-

 

 

3,868

 

 

-

 

 

3,868

 

  Acquisition and divestiture-related costs  

-

 

 

2,023

 

 

14,119

 

 

7,833

 

  Restructuring and other, net  

1,218

 

 

587

 

 

3,705

 

 

3,650

 

  Adjusted operating income  

123,428

 

 

287,005

 

 

668,981

 

 

1,098,229

 

  Adjusted OP%  

30.9

%

 

43.9

%

 

41.1

%

 

49.4

%

           
Corporate   Reported operating loss  

(16,505

)

 

(23,079

)

 

(54,673

)

 

(57,664

)

           
Continuing Operations   Reported revenue   $

711,803

 

  $

861,316

 

  $

2,570,608

 

  $

2,799,898

 

  Purchase accounting adjustments  

203

 

 

199

 

 

609

 

 

2,446

 

  Adjusted revenue  

712,006

 

 

861,515

 

 

2,571,217

 

 

2,802,344

 

           
  Reported operating income from continued operations  

110,780

 

 

195,561

 

 

605,230

 

 

958,610

 

  OP%  

15.6

%

 

22.7

%

 

23.5

%

 

34.2

%

  Amortization of intangible assets  

91,525

 

 

63,274

 

 

280,469

 

 

158,646

 

  Purchase accounting adjustments  

9,621

 

 

10,780

 

 

45,594

 

 

18,807

 

  Acquisition and divestiture-related costs  

8,475

 

 

46,432

 

 

25,865

 

 

54,331

 

  Asset impairment  

-

 

 

3,868

 

 

-

 

 

3,868

 

  Significant litigation matters and settlements  

629

 

 

-

 

 

(632

)

 

-

 

  Restructuring and other, net  

2,774

 

 

2,011

 

 

15,443

 

 

10,517

 

  Adjusted operating income   $

223,804

 

  $

321,926

 

  $

971,969

 

  $

1,204,779

 

  Adjusted OP%  

31.4

%

 

37.4

%

 

37.8

%

 

43.0

%

           
REPORTED REVENUE AND REPORTED OPERATING INCOME (LOSS) PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)
         
  Three Months Ended   Nine Months Ended
(In thousands, except percentages)   October 2, 2022   October 3, 2021   October 2, 2022   October 3, 2021
         
         
DAS Reported revenue   $

312,783

 

  $

207,511

 

  $

945,484

 

  $

577,371

 

Purchase accounting adjustments  

-

 

 

-

 

 

-

 

 

1,849

 

Adjusted revenue  

312,783

 

 

207,511

 

 

945,484

 

 

579,220

 

         
Reported operating income from continued operations  

32,631

 

 

(19,263

)

 

106,005

 

 

50,624

 

OP%  

10.4

%

 

-9.3

%

 

11.2

%

 

8.8

%

Amortization of intangible assets  

64,426

 

 

25,757

 

 

185,094

 

 

50,903

 

Purchase accounting adjustments  

9,164

 

 

5,673

 

 

43,710

 

 

9,322

 

Acquisition and divestiture-related costs  

8,475

 

 

44,409

 

 

11,746

 

 

46,498

 

Significant litigation matters and settlements  

629

 

 

-

 

 

(632

)

 

-

 

Restructuring and other, net  

1,556

 

 

1,424

 

 

11,738

 

 

6,867

 

Adjusted operating income  

116,881

 

 

58,000

 

 

357,661

 

 

164,214

 

Adjusted OP%  

37.4

%

 

28.0

%

 

37.8

%

 

28.4

%

         
AES Discontinued Operations Revenue in Discontinued Ops  

320,616

 

 

305,369

 

 

950,822

 

 

902,946

 

         
Reported operating income in discontinued operations  

25,389

 

 

26,409

 

 

36,642

 

 

63,624

 

OP%  

7.9

%

 

8.6

%

 

3.9

%

 

7.0

%

Amortization of intangible assets  

2,387

 

 

7,680

 

 

16,984

 

 

26,026

 

Acquisition and divestiture-related costs  

22,026

 

 

2,651

 

 

47,042

 

 

15,066

 

Restructuring and other, net  

486

 

 

200

 

 

13,131

 

 

2,501

 

Pro-Forma deprecation on assets held for sale  

(2,363

)

 

-

 

 

(2,363

)

 

-

 

Adjusted operating income of AES  

47,925

 

 

36,940

 

 

111,436

 

 

107,217

 

Adjusted OP%  

14.9

%

 

12.1

%

 

11.7

%

 

11.9

%

         
Pro Forma DAS Revenue including AES  

633,399

 

 

512,880

 

 

1,896,306

 

 

1,480,317

 

Purchase accounting adjustments  

-

 

 

-

 

 

-

 

 

1,849

 

Adjusted revenue including AES  

633,399

 

 

512,880

 

 

1,896,306

 

 

1,482,166

 

         
Operating income including AES  

58,020

 

 

7,146

 

 

142,647

 

 

114,248

 

OP%  

9.2

%

 

1.4

%

 

7.5

%

 

7.7

%

Amortization of intangible assets  

66,813

 

 

33,437

 

 

202,078

 

 

76,929

 

Purchase accounting adjustments  

9,164

 

 

5,673

 

 

43,710

 

 

9,322

 

Acquisition and divestiture-related costs  

30,501

 

 

47,060

 

 

58,788

 

 

61,564

 

Significant litigation matters and settlements  

629

 

 

-

 

 

(632

)

 

-

 

Restructuring and other, net  

2,042

 

 

1,624

 

 

24,869

 

 

9,368

 

Pro-Forma deprecation on assets held for sale  

(2,363

)

 

-

 

 

(2,363

)

 

-

 

Adjusted operating income including AES  

164,806

 

 

94,940

 

 

469,097

 

 

271,431

 

Adjusted OP%  

26.0

%

 

18.5

%

 

24.7

%

 

18.3

%

         
Diagnostics Reported revenue  

399,020

 

 

653,805

 

 

1,625,124

 

 

2,222,527

 

Purchase accounting adjustments  

203

 

 

199

 

 

609

 

 

597

 

Adjusted revenue  

399,223

 

 

654,004

 

 

1,625,733

 

 

2,223,124

 

         
Reported operating income from continued operations  

94,654

 

 

237,903

 

 

553,898

 

 

965,650

 

OP%  

23.7

%

 

36.4

%

 

34.1

%

 

43.4

%

Amortization of intangible assets  

27,099

 

 

37,517

 

 

95,375

 

 

107,743

 

Purchase accounting adjustments  

457

 

 

5,107

 

 

1,884

 

 

9,485

 

Asset impairment  

-

 

 

3,868

 

 

-

 

 

3,868

 

Acquisition and divestiture-related costs  

-

 

 

2,023

 

 

14,119

 

 

7,833

 

Restructuring and other, net  

1,218

 

 

587

 

 

3,705

 

 

3,650

 

Adjusted operating income  

123,428

 

 

287,005

 

 

668,981

 

 

1,098,229

 

Adjusted OP%  

30.9

%

 

43.9

%

 

41.1

%

 

49.4

%

         
Corporate Reported operating loss  

(16,505

)

 

(23,079

)

 

(54,673

)

 

(57,664

)

         
Pro Forma Operating Results including AES Revenue including AES   $

1,032,419

 

  $

1,166,685

 

  $

3,521,430

 

  $

3,702,844

 

Purchase accounting adjustments  

203

 

 

199

 

 

609

 

 

2,446

 

Adjusted revenue including AES  

1,032,622

 

 

1,166,884

 

 

3,522,039

 

 

3,705,290

 

         
Operating income including AES  

136,169

 

 

221,970

 

 

641,872

 

 

1,022,234

 

OP%  

13.2

%

 

19.0

%

 

18.2

%

 

27.6

%

Amortization of intangible assets  

93,912

 

 

70,954

 

 

297,453

 

 

184,672

 

Purchase accounting adjustments  

9,621

 

 

10,780

 

 

45,594

 

 

18,807

 

Acquisition and divestiture-related costs  

30,501

 

 

49,083

 

 

72,907

 

 

69,397

 

Asset impairment  

-

 

 

3,868

 

 

-

 

 

3,868

 

Significant litigation matters and settlements  

629

 

 

-

 

 

(632

)

 

-

 

Restructuring and other, net  

3,260

 

 

2,211

 

 

28,574

 

 

13,018

 

Pro-Forma deprecation on assets held for sale  

(2,363

)

 

-

 

 

(2,363

)

 

-

 

Adjusted operating income including AES   $

271,729

 

  $

358,866

 

  $

1,083,405

 

  $

1,311,996

 

Adjusted OP%  

26.3

%

 

30.8

%

 

30.8

%

 

35.4

%

         
REPORTED REVENUE AND REPORTED OPERATING INCOME (LOSS) PREPARED IN ACCORDANCE WITH GAAP
         
(1) amounts may not sum due to rounding
PerkinElmer, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
     
(In thousands)   October 2, 2022   January 2, 2022
     
Current assets:    
Cash and cash equivalents  

$

400,741

 

$

603,320

Accounts receivable, net  

 

540,867

 

 

707,941

Inventories, net  

 

378,256

 

 

425,890

Other current assets  

 

138,867

 

 

148,255

Current assets of discontinued operations  

 

1,657,749

 

 

555,374

Total current assets  

 

3,116,480

 

 

2,440,780

     
Property, plant and equipment, net  

 

460,397

 

 

485,531

Operating lease right-of-use assets  

 

160,120

 

 

164,040

Intangible assets, net  

 

3,401,143

 

 

3,821,847

Goodwill  

 

6,373,327

 

 

6,627,119

Other assets, net  

 

312,297

 

 

312,887

Long-term assets of discontinued operations  

 

-

 

 

1,148,350

Total assets  

$

13,823,764

 

$

15,000,554

     
Current liabilities:    
Current portion of long-term debt  

$

503,549

 

$

4,240

Accounts payable  

 

275,824

 

 

324,811

Accrued expenses and other current liabilities  

 

471,570

 

 

728,445

Current liabilities of discontinued operations  

 

234,788

 

 

156,248

Total current liabilities  

 

1,485,731

 

 

1,213,744

     
Long-term debt  

 

3,898,267

 

 

4,979,737

Long-term liabilities  

 

1,231,724

 

 

1,413,196

Operating lease liabilities  

 

142,842

 

 

147,395

Long-term liabilities of discontinued operations  

 

-

 

 

105,237

Total liabilities  

 

6,758,564

 

 

7,859,309

     
Total stockholders' equity  

 

7,065,200

 

 

7,141,245

Total liabilities and stockholders' equity  

$

13,823,764

 

$

15,000,554

     
     
PREPARED IN ACCORDANCE WITH GAAP
PerkinElmer, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
     
         
  Three Months Ended   Nine Months Ended
  October 2, 2022   October 3, 2021   October 2, 2022   October 3, 2021
  (In thousands)   (In thousands)
         
Operating activities:        
Net income  

$

85,347

 

 

$

127,738

 

 

$

441,521

 

 

$

752,973

 

Income from discontinued operations and dispositions, net of income taxes  

 

(15,839

)

 

 

(20,107

)

 

 

(26,342

)

 

 

(47,626

)

Income from continuing operations  

 

69,508

 

 

 

107,631

 

 

 

415,179

 

 

 

705,347

 

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

 

10,112

 

 

 

5,835

 

 

 

39,776

 

 

 

16,718

 

Restructuring and other, net  

 

2,774

 

 

 

2,011

 

 

 

15,443

 

 

 

10,517

 

Depreciation and amortization  

 

104,736

 

 

 

76,146

 

 

 

322,766

 

 

 

197,386

 

Change in fair value of contingent consideration  

 

(2,132

)

 

 

1,076

 

 

 

(769

)

 

 

1,553

 

Amortization of deferred debt financing costs and accretion of discounts  

 

2,194

 

 

 

1,500

 

 

 

6,046

 

 

 

3,224

 

Change in fair value of financial securities  

 

5,106

 

 

 

19,365

 

 

 

14,321

 

 

 

(8,566

)

Debt extinguishment income  

 

(580

)

 

 

-

 

 

 

(92

)

 

 

-

 

Amortization of acquired inventory revaluation  

 

11,315

 

 

 

9,425

 

 

 

45,039

 

 

 

14,728

 

Gain on disposition of businesses and assets, net  

 

-

 

 

 

(1,970

)

 

 

-

 

 

 

(1,970

)

Asset impairment  

 

-

 

 

 

3,868

 

 

 

-

 

 

 

3,868

 

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

 

28,637

 

 

 

87,718

 

 

 

93,092

 

 

 

224,162

 

Inventories  

 

(19,996

)

 

 

7,796

 

 

 

(61,632

)

 

 

14,683

 

Accounts payable  

 

(16,429

)

 

 

(9,358

)

 

 

(24,314

)

 

 

(40,009

)

Accrued expenses and other  

 

(72,496

)

 

 

(20,787

)

 

 

(338,223

)

 

 

(168,949

)

Net cash provided by operating activities of continuing operations  

 

122,749

 

 

 

290,256

 

 

 

526,632

 

 

 

972,692

 

Net cash provided by operating activities of discontinued operations  

 

37,205

 

 

 

23,539

 

 

 

14,020

 

 

 

102,466

 

Net cash provided by operating activities  

 

159,954

 

 

 

313,795

 

 

 

540,652

 

 

 

1,075,158

 

         
Investing activities:        
Capital expenditures  

 

(13,095

)

 

 

(26,365

)

 

 

(59,502

)

 

 

(59,066

)

Purchases of investments  

 

(17,765

)

 

 

(4,623

)

 

 

(45,010

)

 

 

(19,130

)

Proceeds from notes receivables  

 

8,890

 

 

 

-

 

 

 

8,890

 

 

 

-

 

Proceeds from disposition of businesses and assets  

 

4,610

 

 

 

1,460

 

 

 

5,664

 

 

 

1,460

 

Cash paid for acquisitions, net of cash acquired  

 

(1,884

)

 

 

(3,264,981

)

 

 

(7,768

)

 

 

(3,967,678

)

Net cash used in investing activities of continuing operations  

 

(19,244

)

 

 

(3,294,509

)

 

 

(97,726

)

 

 

(4,044,414

)

Net cash used in investing activities of discontinued operations  

 

(3,263

)

 

 

(6,419

)

 

 

(9,441

)

 

 

(8,393

)

Net cash used in investing activities  

 

(22,507

)

 

 

(3,300,928

)

 

 

(107,167

)

 

 

(4,052,807

)

         
Financing Activities:        
Payments on borrowings  

 

-

 

 

 

(427,580

)

 

 

(220,000

)

 

 

(1,191,125

)

Proceeds from borrowings  

 

-

 

 

 

415,282

 

 

 

220,000

 

 

 

1,144,282

 

Payments of term loan  

 

(50,000

)

 

 

-

 

 

 

(500,000

)

 

 

-

 

Proceeds from term loan  

 

-

 

 

 

500,000

 

 

 

-

 

 

 

500,000

 

Payments of senior debt  

 

(7,472

)

 

 

-

 

 

 

(7,472

)

 

 

(339,605

)

Proceeds from sale of senior debt  

 

-

 

 

 

2,286,239

 

 

 

-

 

 

 

3,086,095

 

Payments of debt financing costs  

 

-

 

 

 

(22,741

)

 

 

-

 

 

 

(30,983

)

Settlement of cash flow hedges  

 

-

 

 

 

4,477

 

 

 

(762

)

 

 

(1,459

)

Net payments on other credit facilities  

 

343

 

 

 

(905

)

 

 

(487

)

 

 

(12,731

)

Proceeds from issuance of common stock under stock plans  

 

413

 

 

 

8,575

 

 

 

6,254

 

 

 

22,760

 

Purchases of common stock  

 

(89

)

 

 

(89

)

 

 

(56,137

)

 

 

(73,013

)

Dividends paid  

 

(8,835

)

 

 

(7,842

)

 

 

(26,502

)

 

 

(23,539

)

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

 

(65,640

)

 

 

2,755,416

 

 

 

(585,106

)

 

 

3,080,682

 

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

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net cash (used in) provided by financing activities  

 

(65,640

)

 

 

2,755,416

 

 

 

(585,106

)

 

 

3,080,682

 

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

 

(17,427

)

 

 

(5,925

)

 

 

(51,404

)

 

 

(16,584

)

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

 

54,380

 

 

 

(237,642

)

 

 

(203,025

)

 

 

86,449

 

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

 

361,932

 

 

 

726,704

 

 

 

619,337

 

 

 

402,613

 

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

$

416,312

 

 

$

489,062

 

 

$

416,312

 

 

$

489,062

 

         
         
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  

$

400,741

 

 

$

472,374

 

 

$

400,741

 

 

$

472,374

 

Restricted cash included in other current assets  

 

284

 

 

 

1,689

 

 

 

284

 

 

 

1,689

 

Restricted cash included in other assets  

 

288

 

 

 

-

 

 

 

288

 

 

 

-

 

Cash and cash equivalents included in current assets of discontinued operations  

 

14,999

 

 

 

14,999

 

 

 

14,999

 

 

 

14,999

 

Total cash, cash equivalents and restricted cash  

$

416,312

 

 

$

489,062

 

 

$

416,312

 

 

$

489,062

 

         
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

 

October 2, 2022

   

October 3, 2021

 
Adjusted revenue:        
Revenue  

$

711.8

 

   

$

861.3

 

 
Purchase accounting adjustments  

 

0.2

 

   

 

0.2

 

 
Adjusted revenue  

$

712.0

 

   

$

861.5

 

 
         
Adjusted gross margin:        
Gross margin  

$

407.0

 

 

57.2

%

 

$

522.9

 

 

60.7

%

Amortization of intangible assets  

 

35.3

 

 

5.0

%

 

 

28.5

 

 

3.3

%

Purchase accounting adjustments  

 

11.7

 

 

1.6

%

 

 

9.6

 

 

1.1

%

Acquisition and divestiture-related costs  

 

1.5

 

 

0.2

%

 

 

-

 

 

0.0

%

Adjusted gross margin  

$

455.5

 

 

64.0

%

 

$

560.9

 

 

65.1

%

     
Adjusted SG&A:        
SG&A  

$

240.0

 

 

33.7

%

 

$

275.9

 

 

32.0

%

Amortization of intangible assets  

 

(56.2

)

 

-7.9

%

 

 

(34.8

)

 

-4.0

%

Purchase accounting adjustments  

 

2.1

 

 

0.3

%

 

 

(1.2

)

 

-0.1

%

Acquisition and divestiture-related costs  

 

(5.7

)

 

-0.8

%

 

 

(46.4

)

 

-5.4

%

Asset impairment  

 

-

 

 

0.0

%

 

 

(3.9

)

 

-0.4

%

Significant litigation matters and settlements  

 

(0.6

)

 

-0.1

%

 

 

-

 

 

0.0

%

Adjusted SG&A  

$

179.6

 

 

25.2

%

 

$

189.6

 

 

22.0

%

         
Adjusted R&D:        
R&D  

$

53.5

 

 

7.5

%

 

$

49.4

 

 

5.7

%

Purchase accounting adjustments  

 

(0.1

)

 

0.0

%

 

 

-

 

 

0.0

%

Acquisition and divestiture-related costs  

 

(1.3

)

 

-0.2

%

 

 

-

 

 

0.0

%

Adjusted R&D  

$

52.2

 

 

7.3

%

 

$

49.4

 

 

5.7

%

         
Adjusted operating income:        
Operating income  

$

110.8

 

 

15.6

%

 

$

195.6

 

 

22.7

%

Amortization of intangible assets  

 

91.5

 

 

12.9

%

 

 

63.3

 

 

7.3

%

Purchase accounting adjustments  

 

9.6

 

 

1.4

%

 

 

10.8

 

 

1.3

%

Acquisition and divestiture-related costs  

 

8.5

 

 

1.2

%

 

 

46.4

 

 

5.4

%

Asset impairment  

 

-

 

 

0.0

%

 

 

3.9

 

 

0.4

%

Significant litigation matters and settlements  

 

0.6

 

 

0.1

%

 

 

-

 

 

0.0

%

Restructuring and other, net  

 

2.8

 

 

0.4

%

 

 

2.0

 

 

0.2

%

Adjusted operating income  

$

223.8

 

 

31.4

%

 

$

321.9

 

 

37.4

%

         
  PKI
 

Three Months Ended

 

October 2, 2022

   

October 3, 2021

 
Adjusted EPS:        
GAAP EPS  

$

0.67

 

   

$

1.11

 

 
Discontinued operations, net of income taxes  

 

0.13

 

   

 

0.17

 

 
GAAP EPS from continuing operations  

 

0.55

 

   

 

0.94

 

 
Amortization of intangible assets  

 

0.72

 

   

 

0.55

 

 
Debt extinguishment costs  

 

(0.00

)

   

 

-

 

 
Purchase accounting adjustments  

 

0.08

 

   

 

0.09

 

 
Acquisition and divestiture-related costs  

 

0.07

 

   

 

0.61

 

 
Change in fair value of financial securities  

 

0.04

 

   

 

0.17

 

 
Asset impairment  

 

-

 

   

 

0.03

 

 
Significant litigation matters and settlements  

 

0.00

 

   

 

-

 

 
Disposition of businesses and assets, net  

 

-

 

   

 

(0.02

)

 
Restructuring and other, net  

 

0.02

 

   

 

0.02

 

 
Tax on above items  

 

(0.24

)

   

 

(0.31

)

 
Significant tax items  

 

(0.03

)

   

 

(0.01

)

 
Adjusted EPS  

$

1.21

 

   

$

2.07

 

 
         
GAAP EPS from discontinued operations  

 

0.13

 

   

 

0.17

 

 
Amortization of intangible assets included in discontinued operations  

 

0.02

 

   

 

0.07

 

 
Acquisition and divestiture-related costs included in discontinued operations  

 

0.17

 

   

 

0.02

 

 
Restructuring and other, net included in discontinued operations  

 

0.00

 

   

 

0.00

 

 
Pro Forma depreciation expense on assets held for sale  

 

(0.02

)

   

 

-

 

 
Tax on above items  

 

(0.00

)

   

 

(0.02

)

 
Less non-AES income tax items in discontinued operations  

 

0.00

 

   

 

0.00

 

 
Adjusted EPS from AES  

$

0.30

 

   

$

0.24

 

 
         
Pro Forma Adjusted EPS including the results of AES  

$

1.51

 

   

$

2.31

 

 
         
  DAS
 

Three Months Ended

 

October 2, 2022

   

October 3, 2021

 
         
Revenue  

$

312.8

 

   

$

207.5

 

 
         
Adjusted operating income:        
Operating income  

$

32.6

 

 

10.4

%

 

$

(19.3

)

 

-9.3

%

Amortization of intangible assets  

 

64.4

 

 

20.6

%

 

 

25.8

 

 

12.4

%

Purchase accounting adjustments  

 

9.2

 

 

2.9

%

 

 

5.7

 

 

2.7

%

Acquisition and divestiture-related costs  

 

8.5

 

 

2.7

%

 

 

44.4

 

 

21.4

%

Significant litigation matters and settlements  

 

0.6

 

 

0.2

%

 

 

-

 

 

0.0

%

Restructuring and other, net  

 

1.6

 

 

0.5

%

 

 

1.4

 

 

0.7

%

Adjusted operating income  

$

116.9

 

 

37.4

%

 

$

58.0

 

 

28.0

%

         
  Diagnostics
 

Three Months Ended

 

October 2, 2022

   

October 3, 2021

 
Adjusted revenue:        
Revenue  

$

399.0

 

   

$

653.8

 

 
Purchase accounting adjustments  

 

0.2

 

   

 

0.2

 

 
Adjusted revenue  

$

399.2

 

   

$

654.0

 

 
         
Adjusted operating income:        
Operating income  

$

94.7

 

 

23.7

%

 

$

237.9

 

 

36.4

%

Amortization of intangible assets  

 

27.1

 

 

6.8

%

 

 

37.5

 

 

5.7

%

Purchase accounting adjustments  

 

0.5

 

 

0.1

%

 

 

5.1

 

 

0.8

%

Asset impairment  

 

-

 

 

0.0

%

 

 

3.9

 

 

0.6

%

Acquisition and divestiture-related costs  

 

-

 

 

0.0

%

 

 

2.0

 

 

0.3

%

Restructuring and other, net  

 

1.2

 

 

0.3

%

 

 

0.6

 

 

0.1

%

Adjusted operating income  

$

123.4

 

 

30.9

%

 

$

287.0

 

 

43.9

%

         
(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
 

Nine Months Ended

  October 2, 2022     October 3, 2021  
Adjusted revenue:        
Revenue  

$

2,570.6

 

   

$

2,799.9

 

 
Purchase accounting adjustments  

 

0.6

 

   

 

2.4

 

 
Adjusted revenue  

$

2,571.2

 

   

$

2,802.3

 

 
         
Adjusted gross margin:        
Gross margin  

$

1,553.5

 

 

60.4

%

 

$

1,790.2

 

 

63.9

%

Amortization of intangible assets  

 

107.1

 

 

4.2

%

 

 

64.3

 

 

2.3

%

Purchase accounting adjustments  

 

46.1

 

 

1.8

%

 

 

17.2

 

 

0.6

%

Acquisition and divestiture-related costs  

 

4.7

 

 

0.2

%

 

 

-

 

 

0.0

%

Adjusted gross margin  

$

1,711.3

 

 

66.6

%

 

$

1,871.7

 

 

66.8

%

     
Adjusted SG&A:        
SG&A  

$

765.7

 

 

29.8

%

 

$

681.3

 

 

24.3

%

Amortization of intangible assets  

 

(173.4

)

 

-6.7

%

 

 

(94.3

)

 

-3.4

%

Purchase accounting adjustments  

 

0.6

 

 

0.0

%

 

 

(1.6

)

 

-0.1

%

Acquisition and divestiture-related costs  

 

(17.1

)

 

-0.7

%

 

 

(54.3

)

 

-1.9

%

Asset impairment  

 

-

 

 

0.0

%

 

 

(3.9

)

 

-0.1

%

Significant litigation matters and settlements  

 

0.6

 

 

0.0

%

 

 

-

 

 

0.0

%

Adjusted SG&A  

$

576.5

 

 

22.4

%

 

$

527.1

 

 

18.8

%

         
Adjusted R&D:        
R&D  

$

167.1

 

 

6.5

%

 

$

139.8

 

 

5.0

%

Purchase accounting adjustments  

 

(0.2

)

 

0.0

%

 

 

-

 

 

0.0

%

Acquisition and divestiture-related costs  

 

(4.1

)

 

-0.2

%

 

 

-

 

 

0.0

%

Adjusted R&D  

$

162.8

 

 

6.3

%

 

$

139.8

 

 

5.0

%

         
Adjusted operating income:        
Operating income  

$

605.2

 

 

23.5

%

 

$

958.6

 

 

34.2

%

Amortization of intangible assets  

 

280.5

 

 

10.9

%

 

 

158.6

 

 

5.7

%

Purchase accounting adjustments  

 

45.6

 

 

1.8

%

 

 

18.8

 

 

0.7

%

Acquisition and divestiture-related costs  

 

25.9

 

 

1.0

%

 

 

54.3

 

 

1.9

%

Asset impairment  

 

-

 

 

0.0

%

 

 

3.9

 

 

0.1

%

Significant litigation matters and settlements  

 

(0.6

)

 

0.0

%

 

 

-

 

 

0.0

%

Restructuring and other, net  

 

15.4

 

 

0.6

%

 

 

10.5

 

 

0.4

%

Adjusted operating income  

$

972.0

 

 

37.8

%

 

$

1,204.8

 

 

43.0

%

         
  PKI
 

Nine Months Ended

  October 2, 2022     October 3, 2021  
Adjusted EPS:        
GAAP EPS  

$

3.49

 

   

$

6.65

 

 
Discontinued operations  

 

0.21

 

   

 

0.42

 

 
GAAP EPS from continuing operations  

 

3.28

 

   

 

6.23

 

 
Amortization of intangible assets  

 

2.22

 

   

 

1.40

 

 
Debt extinguishment costs  

 

(0.00

)

   

 

-

 

 
Purchase accounting adjustments  

 

0.36

 

   

 

0.17

 

 
Acquisition and divestiture-related costs  

 

0.20

 

   

 

0.64

 

 
Change in fair value of financial securities  

 

0.11

 

   

 

(0.08

)

 
Asset impairment  

 

-

 

   

 

0.03

 

 
Significant litigation matters and settlements  

 

(0.00

)

   

 

-

 

 
Disposition of businesses and assets, net  

 

-

 

   

 

(0.02

)

 
Restructuring and other, net  

 

0.12

 

   

 

0.09

 

 
Tax on above items  

 

(0.77

)

   

 

(0.49

)

 
Significant tax items  

 

(0.03

)

   

 

0.12

 

 
Adjusted EPS  

$

5.50

 

   

$

8.10

 

 
         
GAAP EPS from discontinued operations  

 

0.21

 

   

 

0.42

 

 
Amortization of intangible assets included in discontinued operations  

 

0.13

 

   

 

0.23

 

 
Acquisition and divestiture-related costs included in discontinued operations  

 

0.37

 

   

 

0.13

 

 
Restructuring and other, net included in discontinued operations  

 

0.10

 

   

 

0.02

 

 
Pro Forma depreciation expense on assets held for sale  

 

(0.02

)

   

 

-

 

 
Tax on above items  

 

(0.05

)

   

 

(0.06

)

 
Less non-AES income tax items in discontinued operations  

 

0.00

 

   

 

0.00

 

 
Adjusted EPS from AES  

$

0.75

 

   

$

0.74

 

 
         
Pro forma adjusted EPS including the results of AES  

$

6.24

 

   

$

8.84

 

 
         
  PKI
 

Three Months Ended

 

 

 

Twelve Months Ended

 
 

January 1, 2023

 

 

 

January 1, 2023

 
Pro forma adjusted revenue:  

Projected

 

 

 

Projected

 
GAAP revenue from continuing operations  

$

730

   

$

3,300

 
AES revenue  

 

330 - 340

   

1,290 - 1,300

 
Pro forma adjusted revenue  

$1,060 - $1,070

   

$4,590 $4,600

 
         
  DAS
 

Nine Months Ended

  October 2, 2022     October 3, 2021  
         
Revenue  

$

945.5

 

   

$

577.4

 

 
         
Adjusted operating income:        
Operating income  

$

106.0

 

 

11.2

%

 

$

50.6

 

 

8.8

%

Amortization of intangible assets  

 

185.1

 

 

19.6

%

 

 

50.9

 

 

8.8

%

Purchase accounting adjustments  

 

43.7

 

 

4.6

%

 

 

9.3

 

 

1.6

%

Acquisition and divestiture-related costs  

 

11.7

 

 

1.2

%

 

 

46.5

 

 

8.1

%

Significant litigation matters and settlements  

 

(0.6

)

 

-0.1

%

 

 

-

 

 

0.0

%

Restructuring and other, net  

 

11.7

 

 

1.2

%

 

 

6.9

 

 

1.2

%

Adjusted operating income  

$

357.7

 

 

37.8

%

 

$

164.2

 

 

28.4

%

         
  Diagnostics
 

Nine Months Ended

  October 2, 2022     October 3, 2021  
Adjusted revenue:        
Revenue  

$

1,625.1

 

   

$

2,222.5

 

 
Purchase accounting adjustments  

 

0.6

 

   

 

0.6

 

 
Adjusted revenue  

$

1,625.7

 

   

$

2,223.1

 

 
         
Adjusted operating income:        
Operating income  

$

553.9

 

 

34.1

%

 

$

965.7

 

 

43.4

%

Amortization of intangible assets  

 

95.4

 

 

5.9

%

 

 

107.7

 

 

4.8

%

Purchase accounting adjustments  

 

1.9

 

 

0.1

%

 

 

9.5

 

 

0.4

%

Asset impairment  

 

-

 

 

0.0

%

 

 

3.9

 

 

0.2

%

Acquisition and divestiture-related costs  

 

14.1

 

 

0.9

%

 

 

7.8

 

 

0.4

%

Restructuring and other, net  

 

3.7

 

 

0.2

%

 

 

3.7

 

 

0.2

%

Adjusted operating income  

$

669.0

 

 

41.1

%

 

$

1,098.2

 

 

49.4

%

         
         
(1) amounts may not sum due to rounding        
PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)
 
Continuing Operations
Three Months Ended
October 2, 2022
Organic revenue growth:
Reported revenue growth from continuing operations

 

-17%

 

Less: effect of foreign exchange rates

 

-6%

 

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

 

11%

 

Organic revenue growth from continuing operations

 

-23%

 

Less: effect of COVID products

 

-31%

 

Non-COVID organic revenue growth from continuing operations

 

8%

 

 

 

 

 

 

 

Pro Forma PKI

 

Three Months Ended

 

 

October 2, 2022

 

Pro forma organic revenue growth:

 

 

 

Reported revenue growth from continuing operations

 

-17%

 

Plus: effect of discontinued operations

 

6%

 

Less: effect of foreign exchange rates

 

-6%

 

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

 

8%

 

Pro forma organic revenue growth

 

-13%

 

Less: effect of COVID products

 

-23%

 

Pro Forma non-COVID organic revenue growth

 

9%

 

 

 

 

 

 

 

DAS

 

Three Months Ended

 

 

October 2, 2022

 

Organic revenue growth:

 

 

 

Reported revenue growth continuing operations

 

51%

 

Less: effect of foreign exchange rates

 

-5%

 

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

 

42%

 

Organic revenue growth from continuing operations

 

14%

 

 

 

 

 

 

 

Pro Forma DAS

 

Three Months Ended

 

 

October 2, 2022

 

Pro forma organic revenue growth:

 

 

 

Reported revenue growth from DAS continuing operations

 

51%

 

Plus: effect of discontinued operations

 

-27%

 

Less: effect of foreign exchange rates

 

-6%

 

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

 

17%

 

Pro forma organic revenue growth

 

12%

 

 

 

 

 

 

 

Diagnostics

 

Three Months Ended

 

 

October 2, 2022

 

Organic revenue growth:

 

 

 

Reported revenue growth continuing operations

 

-39%

 

Less: effect of foreign exchange rates

 

-6%

 

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

 

1%

 

Organic revenue growth from continuing operations

 

-33%

 

Less: effect of COVID products

 

-38%

 

Non-COVID organic revenue growth from continuing operations

 

5%

 

 
(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 “pro forma 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 and including revenue from the AES business reported in discontinued operations. We use the related term “pro forma adjusted revenue growth” to refer to the measure of comparing current period pro forma 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 related term “non-COVID organic revenue growth” to refer to the measure of comparing current period organic revenue excluding revenue from COVID related products and services with the corresponding period of the prior year excluding revenue from COVID related products and services.

We use the term “pro forma 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 and including revenue from the AES business reported in discontinued operations. 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 related term “pro forma non-COVID organic revenue growth” to refer to the measure of comparing current period organic revenue excluding revenue from COVID related products and services with the corresponding period of the prior year excluding revenue from COVID related products and services.

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 “pro forma adjusted gross margin” to refer to GAAP gross margin, adjusted for the inclusion of the AES business reported in discontinued operations and including the depreciation of long-lived assets that is ceased upon reporting the business as held for sale. Additional adjustments include: 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 “pro forma adjusted gross margin percentage” to refer to pro forma adjusted gross margin as a percentage of pro forma 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 “pro forma adjusted SG&A expense” to refer to GAAP SG&A expense, adjusted for the inclusion of the AES business reported in discontinued operations and including the depreciation of long-lived assets that is ceased upon reporting the business as held for sale. Additional adjustments include: 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 “pro forma adjusted SG&A percentage” to refer to pro forma adjusted SG&A expense as a percentage of pro forma 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 “pro forma adjusted R&D expense” to refer to GAAP R&D expense, adjusted for the inclusion of the AES business reported in discontinued operations and including the depreciation of long-lived assets that is ceased upon reporting the business as held for sale. Additional adjustments include: excluding amortization of intangible assets and purchase accounting adjustments. We use the related term “pro forma adjusted R&D percentage” to refer to pro forma adjusted R&D expense as a percentage of pro forma 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 “pro forma adjusted operating income,” to refer to GAAP operating income, adjusted for the inclusion of the AES business reported in discontinued operations and including the depreciation of long-lived assets that is ceased upon reporting the business as held for sale. Additional adjustments include: 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 “pro forma adjusted operating profit percentage,” “pro forma adjusted operating profit margin,” or “pro forma adjusted operating margin” to refer to pro forma adjusted operating income as a percentage of pro forma 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.

We use the term “pro forma adjusted earnings per share,” or “pro forma adjusted EPS,” to refer to GAAP earnings per share, adjusted for the inclusion of the AES business reported in discontinued operations and including the depreciation of long-lived assets that is ceased upon reporting the business as held for sale. Additional adjustments include: 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, fixed assets 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, stock-based compensation, 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.
  • Inclusion of the AES business in pro forma information —we report the results of the AES business in discontinued operations and include those results as a component of pro forma information. Management believes that including the results of the AES business in discontinued operations as a component of pro forma information increases the comparability of the financial results with historically presented results as well as recent forecasts.
  • Depreciation of fixed assets ceased upon reporting the business as held for sale —we exclude the impact of ceasing depreciation of fixed assets that are held for sale. Management does not believe such charges accurately reflect the performance of our ongoing operations for the periods in which such expenses were ceased.

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

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

Source: PerkinElmer, Inc.