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Thermo Fisher Scientific: Press Release And Financial Tables

The following excerpt is from the company's SEC filing.

tmo8kearningsq315ex99_1.htm

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 Third Quarter 2015 Results

Raises Full-year Revenue and Earnings Guidance

WALTHAM, Mass. (Oct. 21, 2015) – Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, today rep orted its financial results for the third quarter of 2015, ended September 26, 2015.

Third Quarter 2015 Highlights

Grew adjusted earnings per share (EPS) by 5% to $1.80.

Delivered revenue of $4.12 billion.

Expanded adjusted operating margin by 70 basis points to 22.6%.

Launched Ion S5 and Ion S5 XL to enable targeted next-generation sequencing, including gene panels as well as small genomes, exomes, transcriptomes and custom assays, on a single platform.

Strengthened clinical offering by introducing a range of new Thermo Scientific products at AACC, including new immunodiagnostic tests and instruments, and a high-throughput HPLC; obtained CE marks for clinical use of HPLC, mass spectrometry and related software in Europe.

Achieved strong revenue growth in China, driven by customer demand in biopharma, environmental and food safety markets.

Completed acquisition of Alfa Aesar for approximately $400 million just after quarter end, giving research customers access to a broader offering of laboratory chemicals, solvents and reagents.

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.”

“We’re pleased to deliver another quarter of solid financial performance,” said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. “We continued to leverage our scale in key geographic markets to drive growth, and reported another strong quarter in China. We also made further progress in capturing revenue synergies by demonstrating the strength of our customer value proposition.

“Our strategic R&D investments are creating significant value for our customers, with a number of innovative new products introduced across our businesses. For example, in next-generation sequencing we launched the new Ion S5 and S5 XL benchtop systems, which provide a cost-effective, flexible platform that supports multiple applications. For our clinical customers, we introduced a range of products that help deliver test results faster and more accurately. Among the highlights were the Phadia 2500E Laboratory System, several EliA autoimmune assays and the Prelude LX-4 MD for high-throughput HPLC analysis.

“In terms of capital deployment, we recently completed the acquisition of Alfa Aesar to strengthen our customer offering. We also continued to pay down debt and made good progress toward achieving our target leverage.”

Casper concluded, “With a strong nine months behind us, we’re on track to achieve our growth goals for the year.”

For the third quarter of 2015, adjusted EPS grew 5% to $1.80, versus $1.71 in the third quarter of 2014. Revenue for the quarter was $4.12 billion versus $4.17 billion in the third quarter of 2014. Organic revenue growth was 4%; currency translation reduced revenue by 6% and acquisitions, net of divestitures, increased revenue slightly. Adjusted operating income for the third quarter of 2015 increased 2% compared with the year-ago quarter, and adjusted operating margin expanded to 22.6%, compared with 21.9% in the third quarter of 2014.

GAAP diluted EPS in 2015 was $1.18, versus $1.17 in the same quarter last year. GAAP operating income for the third quarter of 2015 was $563 million, compared with $640 million in 2014. GAAP operating margin was 13.7%, compared with 15.3% in the 2014 quarter. The 2014 period included a gain on the sale of the Cole-Parmer business.

2015 Guidance Update

Thermo Fisher is raising its full-year 2015 revenue and adjusted EPS guidance primarily to reflect current foreign currency exchange rates and the addition of Alfa Aesar. The company now expects revenue for 2015 to be in the range of $16.81 to $16.91 billion, compared with its previous guidance of $16.72 to $16.86 billion. Thermo Fisher is also raising adjusted EPS guidance to a new range of $7.33 to $7.41 from the $7.28 to $7.41 previously announced, for 5% to 6% growth over 2014.

The 2015 guidance does not include any future acquisitions or divestitures and is based on current foreign exchange rates. In addition, 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 four business segments, as highlighted below. Year-over-year results were negatively affected by the impact of foreign currency exchange rates.

Life Sciences Solutions Segment

In the third quarter of 2015, Life Sciences Solutions Segment revenue grew to $1.08 billion, compared with revenue of $1.07 billion in the third quarter of 2014. Segment adjusted operating margin increased to 30.8%, compared with 28.6% in the 2014 quarter.

Analytical Instruments Segment

Analytical Instruments Segment revenue was $779 million in the third quarter of 2015, compared with revenue of $786 million in the third quarter of 2014. Segment adjusted operating margin increased to 18.8%, versus 17.5% in the 2014 quarter.

Specialty Diagnostics Segment

In the third quarter of 2015, Specialty Diagnostics Segment revenue was $777 million, compared with revenue of $812 million in the third quarter of 2014. Segment adjusted operating margin was 26.4%, compared with 27.6% in the year-ago quarter.

Laboratory Products and Services Segment

Laboratory Products and Services Segment revenue grew to $1.64 billion in the third quarter of 2015, compared with revenue of $1.63 billion in the 2014 quarter. Segment adjusted operating margin increased to 15.2%, versus 15.1% in the 2014 quarter.

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...


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