Life Technologies (LIFE)
Q4 2012 Earnings Call
February 04, 2013 4:30 pm ET
Carol A. Cox - Senior Vice President of External Affairs & Corporate Communications
Gregory T. Lucier - Chairman and Chief Executive Officer
David F. Hoffmeister - Chief Financial Officer and Senior Vice President
Mark P. Stevenson - President and Chief Operating Officer
Ronald A. Andrews - President of Medical Sciences
Jonathan P. Groberg - Macquarie Research
Tycho W. Peterson - JP Morgan Chase & Co, Research Division
Daniel Brennan - Morgan Stanley, Research Division
Derik De Bruin - BofA Merrill Lynch, Research Division
Amit Bhalla - Citigroup Inc, Research Division
Amanda Murphy - William Blair & Company L.L.C., Research Division
Ross Muken - ISI Group Inc., Research Division
Alison Yang - Barclays Capital, Research Division
David Ferreiro - Oppenheimer & Co. Inc., Research Division
Jeffrey T. Elliott - Robert W. Baird & Co. Incorporated, Research Division
Daniel L. Leonard - Leerink Swann LLC, Research Division
Doug Schenkel - Cowen and Company, LLC, Research Division
Peter Lawson - Mizuho Securities USA Inc., Research Division
Vamil Divan - Crédit Suisse AG, Research Division
Previous Statements by LIFE
» Life Technologies Management Discusses Q3 2012 Results - Earnings Call Transcript
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Carol A. Cox
Great, thank you, Kay. And good afternoon, everyone. Welcome to Life Technologies Fourth Quarter and Full Year 2012 Earnings Conference Call. We issued our press release today earlier at 1 p.m. Pacific time and posted it on our website at lifetechnologies.com, which is also filed on Form 8-K with the Securities and Exchange Commission. Additionally, we have posted a deck of slides to accompany today's webcast, which may be found in the events and presentations section of the company's investor relations website with our other earnings materials.
Joining me on today's call are Greg Lucier, our Chairman and CEO; David Hoffmeister, our Chief Financial Officer; Mark Stevenson, our Chief Operating Officer; and Ronnie Andrews, our Head of Medical Sciences. They will also be available for Q&A portion of the call. If you have not had a chance to review the earnings release, it can be found on our website, at lifetechnologies.com.
Before we get started, I'd just like to remind everyone that our discussion today will include forward-looking statements, including, but not limited to statements about future expectations, plans and prospects for the company, corporate strategy and performance. We believe these statements are based on reasonable assumptions, but actual results may differ materially from those indicated.
Important factors, which could cause actual results to differ materially from those in the forward-looking statements, are detailed in the filings made by the company with the SEC. It is our intent that these forward-looking statements be protected in the safe harbor created by the Private Securities Litigation Reform Act of 1995. Additionally, we will be discussing GAAP and non-GAAP measures. A full reconciliation of the non-GAAP measures to GAAP may be found in today's press release or on our website.
I'll now turn the call over to Greg.
Gregory T. Lucier
Thanks, Carol, and thank you to everyone who is joining us today as we provide an overview of our fourth quarter and full year 2012 results and expectations for 2013.
We started 2012 with a promise to our shareholders to grow our underlying business, invest in growth markets and regions, deliver on balanced capital deployment strategy and introduce innovative new products to serve our customers even better.
Our performance during the year had its challenges, including the weakened macroeconomic environment that affected Life Sciences' industry globally, and uncertainty in NIH funding in the U.S., in particular. But our management team and employees remain focused and were able to deliver against the promises we made.
We introduced game-changing products across all our business groups, expanded further into emerging markets, built the foundation for our Molecular Diagnostics business, and increased our global manufacturing footprint in China, Singapore and Europe, allowing us to be ever more cost competitive.
Now let me turn to the results. For the full year, we delivered revenue and earnings per share growth for the 13th year in a row. Revenue increased 2.2% to $3.8 billion, and our operating margin expanded to 29.2%. Non-GAAP earnings per share increased 7% to $3.98, and our strong free cash flow totaled $662 million, enabling us to invest in growing our business and return $635 million to shareholders through share repurchases.
We finished the year strong with fourth quarter revenue growth at 4.5%, excluding currency. This growth was driven principally by Ion Torrent and our Research Consumables and Bioproduction businesses. Non-GAAP EPS of $1.11 came within the guidance we'd provided and included absorbing a negative $0.03 impact related to the benefit of the 2012 federal R&D tax credit being pushed from Q4 into the first quarter of 2013.
Additionally, we delivered results even though a large order on our Applied Science business moved out of Q4 into 2013. We have been very focused on driving our Consumables business even higher. Our mix of consumables and services is now 85% of our total revenue.
In addition, 2012 is the first year where over half our revenue has been generated outside of the Americas, making us an increasingly global company.
Finally, we have focused over the last 18 months on reducing our exposure to academia and government, which we have been able to reduce by 10%. While this is still an important customer base for us, given the leading edge science taking place in those end markets, we invest more heavily in expanding our footprint in the faster growing hospital and clinical end markets.