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Q4 2011 Earnings Call
February 02, 2012 5:00 pm ET
David C. Francisco - Assistant Treasurer of Perkinelmer Las Inc. and Assistant Treasurer of Perkinelmer Automotive Research Inc
Robert F. Friel - Chairman, Chief Executive Officer, President, Chairman of Executive Committee and Member of Finance Committee
Frank A. Wilson - Chief Financial Officer and Senior Vice President
Kevin Hrusovsky -
Jonathan P. Groberg - Macquarie Research
Daniel L. Leonard - Leerink Swann LLC, Research Division
Ross Muken - Deutsche Bank AG, Research Division
Quintin J. Lai - Robert W. Baird & Co. Incorporated, Research Division
Nandita Koshal - Barclays Capital, Research Division
Jon Davis Wood - Jefferies & Company, Inc., Research Division
Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division
Peter Lawson - Mizuho Securities USA Inc., Research Division
Daniel Arias - UBS Investment Bank, Research Division
Steve Willoughby - Cleveland Research Company
Isaac Ro - Goldman Sachs Group Inc., Research Division
Previous Statements by PKI
» PerkinElmer Inc. Presents at The 30th Annual JPMorgan Chase Healthcare Conference, Jan-11-2012 02:30 PM
» PerkinElmer's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» PerkinElmer's CEO Discusses Q2 2011 Results - Earnings Call Transcript
David C. Francisco
Thank you. Good afternoon and welcome to the PerkinElmer Fourth Quarter 2011 Earnings Conference Call. If you have not received a copy of our earnings press release, you may get one from the Investors section of our website at perkinelmer.com or from our toll-free investor hotline at 1 (877) PKI-NYSE. Please note, this call is being webcast live and be archived on our website until February 16, 2012.
Before we begin, we need to remind everyone of our Safe Harbor statements that 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.
And during this call, we will be referring to certain non-GAAP financial measures. A reconciliation to non-GAAP financial measures we plan to use during this call for 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 F. Friel
Thanks, Dave. Good afternoon, and thank you for joining us today. We're pleased to report another great quarter for PerkinElmer, rounding out a very good year for the company and a year in which we made significant progress across a number of parameters. Given that Andy will discuss our financial results and key market segments in more detail, I'll provide high-level financial highlights and focus more on our strategic progress, as well as discuss our outlook and guidance going forward.
Turning first to our fourth quarter financial performance, PerkinElmer delivered strong growth in revenue, adjusted earnings per share and cash flow. Revenue grew 15% and organic revenue grew 6% in the period. Adjusted operating margins increased approximately 250 basis points and operating cash flow was $82.5 million, up 95% over Q4 last year.
Adjusted earnings per share were $0.62 in the fourth quarter, up 38% from the fourth quarter of last year and significantly better than our guidance of $0.49 to $0.51. This much stronger performance was attributable to 3 fundamental reasons. First, our revenue growth was stronger than we forecasted, largely due to higher growth in Europe than we had expected with particular strength from Eastern Europe.
Second, a more favorable mix and improved operating execution resulted in excellent conversion of our incremental revenue. And finally, the profitability of Caliper during this stub period was better than expected. While stub periods are sometimes difficult to forecast, Caliper's performance benefited from the timing of the closing as their expenses in the quarter were fairly linear but their revenue was skewed towards the end of the quarter. The higher-than-planned profit from Caliper contributed about 1/3 of the approximate 250 basis point margin improvement for the company, with the remainder coming from solid revenue growth, favorable mix and improved operating execution offset somewhat by the stronger U.S. dollar.
Turning to the full year. Revenue grew 13% and organically, revenue grew 6% at the high end of our original guidance with solid contributions from all territories. We expanded adjusted operating margins by 150 basis points to 15.4%, well in excess of our stated objective. Our progress in 2011 gives us even greater confidence in our ability to meet our objective of 18% adjusted operating margins in 2014.
This improved profitability translated into adjusted earnings per share growth for 2011 of 35%.
Lastly, adjusted operating cash flow grew 24%.
During 2011, we also made significant progress improving the growth profile of the company through the introduction of several market-driven, innovative new products and a number of acquisitions that expanded our capabilities and considerably increased our addressable markets. In particular, we significantly strengthened our capabilities in molecular analysis, imaging, sample preparation and informatics. And combined with our historical strength, we now believe we have put together a portfolio of highly differentiated offerings to serve the diagnostic, research and environmental markets. While it is still early, we are extremely pleased with how the acquisition integrations are proceeding, and our strong results in the back half of 2011 are partially due to our recent acquisitions exceeding our expectations during last year.