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VWR Corporation Reports Strong First Quarter 2016 Financial Results

RADNOR, Pa., May 5, 2016 /PRNewswire/ -- VWR Corporation VWR, +0.14% the leading global independent provider of product and service solutions to laboratory and production customers, today reported its financial results for the first quarter ended March 31, 2016.

Highlights:

  • First quarter record quarterly net sales of $1.10 billion, up 6.7% year-over-year, and up 6.0% on an organic basis.
  • 1Q16 Americas and EMEA-APAC segments' organic net sales increased 7.6% and 3.6%, respectively.
  • 1Q16 record quarterly Adjusted EPS of $0.40, up 21.2% compared to $0.33 in the prior year quarter. GAAP diluted EPS was $0.29 compared to $0.54 in 1Q15.
  • Cash flow from operating activities of $42.0 million compared to a use of $(9.9) million in 1Q15.
  • Management increased 2016 guidance: 2016 net sales of $4.54 to $4.63 billion (prev. $4.49 to $4.57 billion) and Adjusted EPS of $1.68 to $1.74 (prev. $1.62 to $1.70).

Manuel Brocke-Benz, President and Chief Executive Officer of VWR, commented: "We are delighted to report a very strong start to 2016. In the Americas, organic revenue growth climbed to 7.6%, led by double digit growth in sales to biopharma and government customers. EMEA-APAC organic revenues increased 3.6%, also with strong sales to biopharma customers. Our robust revenue performance, coupled with $8 million year-over-year savings in quarterly interest expense, drove Adjusted EPS to $0.40, up 21.2% compared to prior year. We are continuing to build on our foundation of supply chain innovation and excellence. Over the past years, we have made significant investments to develop our specialty distribution platform, and we continue to expand our offerings and develop innovative, customized solutions that better meet the needs of our customers."

Mr. Brocke-Benz continued: "The success of VWR depends on the efforts of our team. We could not have achieved this strong performance without the hard work and collaboration of our dedicated and talented VWR associates around the world. I would like to thank all of our associates, as well as our loyal suppliers, for helping us deliver a great first quarter."

First Quarter 2016 — Consolidated Results

Net sales were $1.10 billion, up $68.7 million, or 6.7% compared to prior year. The foreign exchange impact of the strengthening of the U.S. dollar compared to the euro and other major currencies reduced net sales by $19.3 million, or 1.9%. Recent acquisitions increased net sales by an additional $26.7 million, or 2.6%. On an organic basis, net sales increased $61.3 million, or 6.0%.

Operating income was $79.7 million, up $5.9 million, or 8.0% compared to prior year. Adjusted EPS increased 21.2% year-over-year to $0.40, up from $0.33 in the prior year.

First Quarter 2016 — Segment Results

Americas

Net sales were $666.7 million, up $61.4 million, or 10.1% compared to prior year, and up 7.6% on an organic basis. The increase in the Americas net sales was driven by strong sales to biopharma and government customers.

Operating income was $43.4 million, up $7.7 million, or 21.6% compared to prior year. Secondary offering expenses of $0.4 million and an unfavorable earn-out adjustment of $0.2 million were included in first quarter 2016 results. The first quarter of 2015 included legacy facility exit charges of $1.4 million.

EMEA-APAC

Net sales were $431.6 million, up $7.3 million, or 1.7% year-over-year. The strengthening of the U.S. dollar as compared to the euro and other currencies reduced net sales by $12.8 million, or 3.0%, while acquisitions added $4.9 million, or 1.2%. On an organic basis, net sales increased 3.6%. Operating income was $36.3 million, down $1.8 million, or 4.7% compared to prior year.

Full Year 2016 Outlook

Greg Cowan, Senior Vice President and Chief Financial Officer commented: "VWR continues to generate strong cash flows, with operating cash flow of $42.0 million in the first quarter, up almost $52 million compared to a use of $9.9 million last year. We will continue to utilize our strong cash flow generation capabilities to delever our balance sheet, execute on our value creating acquisition strategy, and invest in our business to generate significant returns. As a result of our strong performance in the first quarter of 2016, our continuing solid business momentum, a slightly more favorable foreign exchange environment, and a modest reduction to our 2016 interest forecast, we are increasing our annual guidance for 2016."

Management increased 2016 guidance and now anticipates 2016 net sales in the range of $4.54 to $4.63 billion (previously $4.49 to $4.57 billion) and Adjusted EPS in the range of $1.68 to $1.74 (previously $1.62 to $1.70).

Our full year 2016 outlook assumes:

  • Currency exchange rates for the remainder of 2016 remain consistent with current rates.
  • Interest expense of about $86 to $87 million.
  • Adjusted diluted shares outstanding of approximately 132 million.
  • The income tax rate to calculate full-year 2016 Adjusted EPS of slightly above 35%.
  • Share-based compensation expense of approximately $8.6 million before tax.
  • No impact from acquisitions closed after May 5, 2016.

Balance Sheet & Cash Flows

At March 31, 2016, total debt was $2.108 billion, up $119 million compared to total debt of $1.989 billion as of December 31, 2015, with the increase driven by a payment under the Income Tax Receivable Agreement, the Therapak acquisition, and changes in foreign exchange rates, partially offset by cash flow from operations.

First quarter 2016 cash generated by operating activities was $42.0 million compared to a use of $9.9 million in the first quarter of 2015. Capital expenditures in first quarter 2016 were $14.3 million compared to $9.5 million in the first quarter of last year.

Conference Call

As previously announced, VWR Corporation will hold a conference call today, May 5, 2016, to discuss its first quarter 2016 financial results beginning at 8:30 a.m. ET. The conference call can be accessed live over the phone by dialing (877) 845-1003, or for international callers, (760) 298-5093. Callers will need to request to join the VWR Corporation first quarter 2016 earnings conference call. A replay will be available two hours after the conclusion of the live call and can be accessed by dialing (855) 859-2056, or for international callers, (404) 537-3406. The conference ID number for both the live call and...


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