PerkinElmer, Inc. (PKI)

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PerkinElmer (PKI)

Q1 2011 Earnings Call

May 05, 2011 5:00 pm ET

Executives

David Francisco - Assistant Treasurer of Perkinelmer Las Inc. and Assistant Treasurer of Perkinelmer Automotive Research Inc

Robert Friel - Chairman, Chief Executive Officer, President, Chairman of Executive Committee and Member of Finance Committee

Frank Wilson - Chief Financial Officer and Senior Vice President

Analysts

Vijay Kumar - Deutsche Bank AG

Jonathan Groberg - Macquarie Research

Quintin Lai - Robert W. Baird & Co. Incorporated

Paul Knight - Credit Agricole Securities (USA) Inc.

Daniel Leonard - Leerink Swann LLC

Peter Lawson - Mizuho Securities USA Inc.

Isaac Ro - Goldman Sachs Group Inc.

Jon Wood - Jefferies & Company, Inc.

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2011 PerkinElmer Inc. Earnings Conference Call. My name is Francine, and I am your operator for today. [Operator Instructions] We’d now like to turn the presentation over to your host for today's call, Mr. Dave Francisco, Vice President of Investor Relations. Sir, you may proceed.

David Francisco

Thank you, Francine. Good afternoon, and welcome to the First Quarter 2011 Earnings Conference Call. With me on the call are Rob Friel, Chairman and Chief Executive Officer; and Andy Wilson, Senior Vice President and Chief Financial Officer.

If you have not received a copy of our earnings press release, you may get one from the Investors Section of our website at www.perkinelmer.com, or from our toll-free investor hotline at 1-877-PKI-NYSE. Please note this call is being webcast live and will be archived on our website until May 19, 2011.

Before we begin, we need to remind everyone of the Safe Harbor statements we’ve outlined in our earnings press release issued earlier this afternoon and also those in our SEC filings.

Any forward-looking statements made today represent our views only as of today. We disclaim any obligation to update forward-looking statements in the future even if our estimates change. So you should not rely on any of today’s forward-looking statements as representing our views as of any date after today.

During this call, we will be referring to certain non-GAAP financial measures. A reconciliation of the non-GAAP financial measures we plan to use during this call to the most directly comparable GAAP measures is available as an attachment to our earnings press release. To the extent we use non-GAAP financial measures during this call that are not reconciled to GAAP in that attachment, we will provide reconciliations promptly.

I'm now pleased to introduce the Chairman and Chief Executive Officer of PerkinElmer, Rob Friel.

Robert Friel

Thanks, Dave. Good afternoon, everyone, and thank you for joining us. I'm pleased to report that PerkinElmer had a very successful start to the year as we delivered excellent financial results while continuing to fund strategic investments, supporting our longer term growth initiatives.

Looking at the first quarter, we generated very strong growth in revenue and adjusted earnings per share, exceeding both our top and bottom line guidance that we shared with you in February.

Reported revenue, it was up 14%. Organic revenue grew 10%. Adjusted operating profit margins expanded 160 basis points and adjusted earnings per share grew 36%. Andy will provide the specific details on our financial performance. However, in summary, the growth we experienced in the first quarter was attributable to improving end markets; growth from new products; continued strength in emerging territories; and our efforts to focus the company on fewer, more attractive market segments and applications.

Furthermore, the emphasis we are placing on expanding our operating margins was apparent in the quarter as we experienced very good flow-through from the incremental revenue despite headwinds from an unfavorable mix. The 160 basis points increase over first quarter of last year reinforces our belief that we can achieve adjusted operating profit margins in the high teens by 2014.

Just as important as a strong financial performance in the quarter, we also made very good progress on increasing the growth profile of the company through internal investments as well as external collaborations and acquisitions.

In the first quarter, we continued to expand our capabilities within selected geographies and applications. This is allowing us to capitalize on increasingly stringent environmental regulations and the growing demand for greater access to health care in emerging territories, particularly related to newborn, maternal health and infectious disease.

During the quarter, we funded a series of investments targeted at providing our customers with better tools to advance human and environmental health. In particular, several of our new product innovations provide customers with multiple modes of operation within one instrument, creating a more efficient lab environment. Three of these multimode innovations are the label-free EnSpire Plate Reader, which helps scientists to enable discovery of potential new therapeutic targets; the Spectrum Two infrared analyzer, which provides better near and midrange infrared capabilities for characterizing chemical and biological materials;

and the NexION ICP-MS system, which advances trace element analysis through 3 modes of operation for better food and water analysis.

I'm also pleased with our ability to leverage adjacencies in the diagnostics and therapeutic markets with new applications such as OncoChip, a new microarray technology to aid in faster, earlier and more accurate diagnosis of hematological malignancies. Additionally, we expanded our Cord Blood Banking business to include umbilical cord tissue banking services, which will help to provide patients more options in new cell therapies.

And finally, we introduced our new epigenetics-based detection reagents, which help to accelerate drug discovery research for novel therapeutic strategies for diseases such as cancer, diabetes and Alzheimer's. In the first quarter, we also made a number of strategic acquisitions that increase our ability to address our customers' growing needs. While each of the acquired businesses brings us unique capabilities, the acquisitions are targeted on 2 critical areas. The first area is the need for better tools to interpret and manage the vast amounts of data that laboratories generate every day. Through the CambridgeSoft and ArtusLabs acquisitions, we will have the capability of providing a robust informatics platform that will enable customers to maximize their laboratory efficiency and harness critical information and insights.

Read the rest of this transcript for free on seekingalpha.com