x
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarter Ended April 2, 2011
|
o
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
04-2209186
|
(State of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
81 Wyman Street
|
|
Waltham, Massachusetts
|
02451
|
(Address of principal executive offices)
|
(Zip Code)
|
Class
|
Outstanding at April 2, 2011
|
|
Common Stock, $1.00 par value
|
383,259,036
|
April 2,
|
December 31,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Assets
|
|||||||
Current Assets:
|
|||||||
Cash and cash equivalents
|
$ | 2,788.7 | $ | 917.1 | |||
Short-term investments, at quoted market value (cost of $5.8 and $9.6)
|
5.2 | 8.9 | |||||
Accounts receivable, less allowances of $41.2 and $39.2
|
1,565.5 | 1,473.8 | |||||
Inventories:
|
|||||||
Raw materials
|
297.3 | 281.6 | |||||
Work in process
|
136.8 | 108.4 | |||||
Finished goods
|
829.9 | 782.9 | |||||
Deferred tax assets
|
183.8 | 181.3 | |||||
Other current assets
|
382.1 | 381.0 | |||||
6,189.3 | 4,135.0 | ||||||
Property, Plant and Equipment, at Cost
|
2,283.4 | 2,199.2 | |||||
Less: Accumulated depreciation and amortization
|
(894.4 | ) | (839.0 | ) | |||
1,389.0 | 1,360.2 | ||||||
Acquisition-related Intangible Assets, net of Accumulated Amortization
of $2,705.8 and $2,539.1
|
5,857.0 | 5,913.7 | |||||
Other Assets
|
957.3 | 944.8 | |||||
Goodwill
|
9,038.0 | 8,995.7 | |||||
$ | 23,430.6 | $ | 21,349.4 |
April 2,
|
December 31,
|
||||||
(In millions except share amounts)
|
2011
|
2010
|
|||||
Liabilities and Shareholders' Equity
|
|||||||
Current Liabilities:
|
|||||||
Short-term obligations and current maturities of long-term obligations
|
$ | 2,499.4 | $ | 105.8 | |||
Accounts payable
|
616.9 | 546.7 | |||||
Accrued payroll and employee benefits
|
251.2 | 304.5 | |||||
Accrued income taxes
|
32.4 | 59.2 | |||||
Deferred revenue
|
193.2 | 158.2 | |||||
Other accrued expenses
|
552.9 | 535.4 | |||||
4,146.0 | 1,709.8 | ||||||
Deferred Income Taxes
|
1,606.0 | 1,626.1 | |||||
Other Long-term Liabilities
|
623.1 | 621.2 | |||||
Long-term Obligations
|
1,800.8 | 2,031.3 | |||||
Shareholders' Equity:
|
|||||||
Preferred stock, $100 par value, 50,000 shares authorized; none issued
|
|||||||
Common stock, $1 par value, 1,200,000,000 shares authorized;
403,444,913 and 401,779,152 shares issued
|
403.4 | 401.8 | |||||
Capital in excess of par value
|
10,085.4 | 10,019.7 | |||||
Retained earnings
|
5,638.6 | 5,386.4 | |||||
Treasury stock at cost, 20,185,877 and 10,409,268 shares
|
(1,036.7 | ) | (490.5 | ) | |||
Accumulated other comprehensive items
|
164.0 | 43.6 | |||||
15,254.7 | 15,361.0 | ||||||
$ | 23,430.6 | $ | 21,349.4 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions except per share amounts)
|
2011
|
2010
|
|||||
Revenues
|
|||||||
Product revenues
|
$ | 2,336.1 | $ | 2,282.4 | |||
Service revenues
|
385.3 | 344.5 | |||||
2,721.4 | 2,626.9 | ||||||
Costs and Operating Expenses:
|
|||||||
Cost of product revenues
|
1,354.8 | 1,350.1 | |||||
Cost of service revenues
|
246.3 | 210.4 | |||||
Selling, general and administrative expenses
|
708.7 | 698.3 | |||||
Research and development expenses
|
74.8 | 66.1 | |||||
Restructuring and other costs, net
|
15.3 | 17.4 | |||||
2,399.9 | 2,342.3 | ||||||
Operating Income
|
321.5 | 284.6 | |||||
Other Expense, Net
|
(22.5 | ) | (24.9 | ) | |||
Income from Continuing Operations Before Provision for Income Taxes
|
299.0 | 259.7 | |||||
Provision for Income Taxes
|
(51.8 | ) | (35.1 | ) | |||
Income from Continuing Operations
|
247.2 | 224.6 | |||||
Income from Discontinued Operations (net of income tax provision of $3.6
and $3.2)
|
5.5 | 5.2 | |||||
(Loss) Gain on Disposal of Discontinued Operations, Net (net of income tax
benefit of $0.3 in 2011; net of income tax
provision of $1.5 in 2010)
|
(0.5 | ) | 2.5 | ||||
Net Income
|
$ | 252.2 | $ | 232.3 | |||
Earnings per Share from Continuing Operations
|
|||||||
Basic
|
$ | .64 | $ | .55 | |||
Diluted
|
$ | .63 | $ | .54 | |||
Earnings per Share
|
|||||||
Basic
|
$ | .65 | $ | .57 | |||
Diluted
|
$ | .64 | $ | .56 | |||
Weighted Average Shares
|
|||||||
Basic
|
388.6 | 409.6 | |||||
Diluted
|
394.6 | 418.2 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Operating Activities
|
|||||||
Net Income
|
$ | 252.2 | $ | 232.3 | |||
Income from discontinued operations
|
(5.5 | ) | (5.2 | ) | |||
Loss (gain) on disposal of discontinued operations
|
0.5 | (2.5 | ) | ||||
Income from continuing operations
|
247.2 | 224.6 | |||||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | |||||||
Depreciation and amortization
|
184.3 | 193.6 | |||||
Change in deferred income taxes
|
(43.0 | ) | (44.6 | ) | |||
Non-cash stock-based compensation
|
21.6 | 18.8 | |||||
Non-cash interest expense on convertible debt
|
1.4 | 3.4 | |||||
Tax benefits from stock-based compensation awards
|
(6.4 | ) | (4.8 | ) | |||
Other non-cash expenses, net
|
10.6 | 16.8 | |||||
Changes in assets and liabilities, excluding the effects of
acquisitions and dispositions:
|
|||||||
Accounts receivable
|
(64.0 | ) | (103.7 | ) | |||
Inventories
|
(63.1 | ) | (34.6 | ) | |||
Other assets
|
9.0 | (21.9 | ) | ||||
Accounts payable
|
68.3 | 73.7 | |||||
Other liabilities
|
(32.0 | ) | 19.2 | ||||
Contributions to retirement plans
|
(8.0 | ) | (4.9 | ) | |||
Net cash provided by continuing operations
|
325.9 | 335.6 | |||||
Net cash provided by discontinued operations
|
12.7 | 7.5 | |||||
Net cash provided by operating activities
|
338.6 | 343.1 | |||||
Investing Activities
|
|||||||
Acquisitions, net of cash acquired
|
(23.7 | ) | (229.1 | ) | |||
Purchase of property, plant and equipment
|
(63.7 | ) | (49.1 | ) | |||
Proceeds from sale of property, plant and equipment
|
0.9 | 1.0 | |||||
Other investing activities, net
|
(0.4 | ) | 0.8 | ||||
Net cash used in continuing operations
|
(86.9 | ) | (276.4 | ) | |||
Net cash used in discontinued operations
|
(2.0 | ) | (1.5 | ) | |||
Net cash used in investing activities
|
$ | (88.9 | ) | $ | (277.9 | ) |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Financing Activities
|
|||||||
Net proceeds from issuance of debt
|
$ | 2,176.4 | $ | — | |||
Settlement of convertible debt
|
(35.2 | ) | (206.9 | ) | |||
Redemption and repayment of long-term obligations
|
(0.3 | ) | (2.5 | ) | |||
Purchases of company common stock
|
(537.5 | ) | — | ||||
Net proceeds from issuance of company common stock
|
44.5 | 26.8 | |||||
Tax benefits from stock-based compensation awards
|
6.4 | 4.8 | |||||
Decrease in short-term notes payable
|
(2.8 | ) | (0.3 | ) | |||
Net cash provided by (used in) financing activities
|
1,651.5 | (178.1 | ) | ||||
Exchange Rate Effect on Cash
|
(29.6 | ) | (19.5 | ) | |||
Increase (Decrease) in Cash and Cash Equivalents
|
1,871.6 | (132.4 | ) | ||||
Cash and Cash Equivalents at Beginning of Period
|
917.1 | 1,564.1 | |||||
Cash and Cash Equivalents at End of Period
|
$ | 2,788.7 | $ | 1,431.7 | |||
Supplemental Cash Flow Information
|
|||||||
Fair value of assets of acquired businesses
|
$ | 2.1 | $ | 330.5 | |||
Cash paid for acquired businesses
|
(1.1 | ) | (244.6 | ) | |||
Fair value of liabilities assumed of acquired businesses
|
$ | 1.0 | $ | 85.9 | |||
Issuance of stock upon vesting of restricted stock units
|
$ | 21.6 | $ | 14.9 |
Three Months Ended
|
|||||||
April 2, |
April 3,
|
||||||
(In millions)
|
2011
|
2010 | |||||
Revenues
|
$ | 54.3 | $ | 49.9 | |||
Pre-tax Income
|
9.1 | 8.5 |
April 2,
|
December 31,
|
||||||
2011
|
2010
|
||||||
Other Current Assets
|
$ | 54.9 | $ | 64.8 | |||
Other Assets
|
448.0 | 451.0 | |||||
Other Accrued Expenses
|
14.1 | 17.6 | |||||
Other Long-term Liabilities
|
53.2 | 58.4 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Revenues
|
|||||||
Analytical Technologies
|
$ | 1,177.7 | $ | 1,083.4 | |||
Laboratory Products and Services
|
1,685.3 | 1,670.6 | |||||
Eliminations
|
(141.6 | ) | (127.1 | ) | |||
Consolidated revenues
|
2,721.4 | 2,626.9 | |||||
Segment Income
|
|||||||
Analytical Technologies (a)
|
247.6 | 223.3 | |||||
Laboratory Products and Services (a)
|
230.6 | 231.6 | |||||
Subtotal reportable segments (a)
|
478.2 | 454.9 | |||||
Cost of revenues charges
|
(2.9 | ) | (5.1 | ) | |||
Selling, general and administrative charges, net
|
(3.1 | ) | (1.1 | ) | |||
Restructuring and other costs, net
|
(15.3 | ) | (17.4 | ) | |||
Amortization of acquisition-related intangible assets
|
(135.4 | ) | (146.7 | ) | |||
Consolidated operating income
|
321.5 | 284.6 | |||||
Other expense, net (b)
|
(22.5 | ) | (24.9 | ) | |||
Income from continuing operations before provision for income taxes
|
$ | 299.0 | $ | 259.7 | |||
Depreciation
|
|||||||
Analytical Technologies
|
$ | 22.5 | $ | 21.7 | |||
Laboratory Products and Services
|
26.4 | 25.2 | |||||
Consolidated depreciation
|
$ | 48.9 | $ | 46.9 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Interest Income
|
$ | 5.0 | $ | 2.4 | |||
Interest Expense
|
(27.8 | ) | (22.3 | ) | |||
Other Items, Net
|
0.3 | (5.0 | ) | ||||
$ | (22.5 | ) | $ | (24.9 | ) |
Three Months Ended | |||||||
April 2, | April 3, | ||||||
(In millions)
|
2011 | 2010 | |||||
Stock Option Awards
|
$ | 13.0 | $ | 11.4 | |||
Restricted Share/Unit Awards
|
8.6 | 7.4 | |||||
Total Stock-based Compensation Expense
|
$ | 21.6 | $ | 18.8 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Cost of Revenues
|
$ | 1.5 | $ | 1.3 | |||
Selling, General and Administrative Expenses
|
19.6 | 17.1 | |||||
Research and Development Expenses
|
0.5 | 0.4 | |||||
Total Stock-based Compensation Expense
|
$ | 21.6 | $ | 18.8 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Service Cost
|
$ | 3.1 | $ | 2.8 | |||
Interest Cost on Benefit Obligation
|
13.4 | 13.2 | |||||
Expected Return on Plan Assets
|
(14.3 | ) | (13.8 | ) | |||
Amortization of Net Loss
|
1.4 | 0.5 | |||||
Net Periodic Benefit Cost
|
$ | 3.6 | $ | 2.7 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Service Cost
|
$ | 0.2 | $ | 0.1 | |||
Interest Cost on Benefit Obligation
|
0.5 | 0.5 | |||||
Amortization of Net Gain
|
(0.1 | ) | (0.1 | ) | |||
Net Periodic Benefit Cost
|
$ | 0.6 | $ | 0.5 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions except per share amounts)
|
2011
|
2010
|
|||||
Income from Continuing Operations
|
$ | 247.2 | $ | 224.6 | |||
Income from Discontinued Operations
|
5.5 | 5.2 | |||||
(Loss) Gain on Disposal of Discontinued Operations, Net
|
(0.5 | ) | 2.5 | ||||
Net Income
|
252.2 | 232.3 | |||||
Income Allocable to Participating Securities
|
— | — | |||||
Net Income for Earnings per Share
|
$ | 252.2 | $ | 232.3 | |||
Basic Weighted Average Shares
|
388.6 | 409.6 | |||||
Effect of:
|
|||||||
Convertible debentures
|
2.2 | 5.4 | |||||
Stock options and restricted stock/units
|
3.8 | 3.2 | |||||
Diluted Weighted Average Shares
|
394.6 | 418.2 | |||||
Basic Earnings per Share:
|
|||||||
Continuing operations
|
$ | .64 | $ | .55 | |||
Discontinued operations
|
.01 | .02 | |||||
$ | .65 | $ | .57 | ||||
Diluted Earnings per Share:
|
|||||||
Continuing operations
|
$ | .63 | $ | .54 | |||
Discontinued operations
|
.01 | .02 | |||||
$ | .64 | $ | .56 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Contractual Coupon Interest
|
$ | 1.8 | $ | 2.9 | |||
Amortization of Discount on Convertible Debt
|
1.4 | 3.4 | |||||
Interest Expense
|
$ | 3.2 | $ | 6.3 | |||
Effective Interest Rate
|
3.8% | 4.0% |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Net Income
|
$ | 252.2 | $ | 232.3 | |||
Other Comprehensive Items:
|
|||||||
Currency translation adjustment
|
119.8 | (140.5 | ) | ||||
Unrealized gains on available-for-sale investments, net of tax
|
0.4 | 0.3 | |||||
Unrealized gains on hedging instruments, net of tax provision
|
0.1 | 0.1 | |||||
Pension and other postretirement benefit liability adjustments, net of tax
|
0.1 | 0.8 | |||||
120.4 | (139.3 | ) | |||||
Comprehensive Income
|
$ | 372.6 | $ | 93.0 |
April 2,
|
Quoted Prices
in Active Markets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
||||||||||
(In millions)
|
2011
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||
Assets
|
|||||||||||||
Cash equivalents
|
$ | 2,201.4 | $ | 2,201.4 | $ | — | $ | — | |||||
Investments in mutual funds, unit trusts
and other similar instruments
|
34.1 | 34.1 | — | — | |||||||||
Insurance contracts
|
48.5 | — | 48.5 | — | |||||||||
Auction rate securities
|
4.5 | — | — | 4.5 | |||||||||
Derivative contracts
|
35.9 | — | 35.9 | — | |||||||||
Total Assets
|
$ | 2,324.4 | $ | 2,235.5 | $ | 84.4 | $ | 4.5 | |||||
Liabilities
|
|||||||||||||
Derivative contracts
|
$ | 4.2 | $ | — | $ | 4.2 | $ | — | |||||
Contingent consideration
|
3.8 | — | — | 3.8 | |||||||||
Total Liabilities
|
$ | 8.0 | $ | — | $ | 4.2 | $ | 3.8 |
December 31,
|
Quoted Prices
in Active
Markets
|
Significant
Other
Observable
Inputs
|
Significant Unobservable Inputs
|
||||||||||
(In millions)
|
2010
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||
Assets
|
|||||||||||||
Cash equivalents
|
$ | 301.6 | $ | 301.6 | $ | — | $ | — | |||||
Investments in mutual funds, unit trusts
and other similar instruments
|
36.3 | 36.3 | — | — | |||||||||
Insurance contracts
|
42.6 | — | 42.6 | — | |||||||||
Auction rate securities
|
4.6 | — | — | 4.6 | |||||||||
Derivative contracts
|
40.1 | — | 40.1 | — | |||||||||
Total Assets
|
$ | 425.2 | $ | 337.9 | $ | 82.7 | $ | 4.6 | |||||
Liabilities
|
|||||||||||||
Derivative contracts
|
$ | 3.5 | $ | — | $ | 3.5 | $ | — | |||||
Contingent consideration
|
28.7 | — | — | 28.7 | |||||||||
Total Liabilities
|
$ | 32.2 | $ | — | $ | 3.5 | $ | 28.7 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Auction Rate Securities
|
|||||||
Beginning Balance
|
$ | 4.6 | $ | 5.4 | |||
Sale of securities
|
(0.1 | ) | (0.2 | ) | |||
Ending Balance
|
$ | 4.5 | $ | 5.2 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Contingent Consideration
|
|||||||
Beginning Balance
|
$ | 28.7 | $ | 0.6 | |||
Additions
|
— | 21.7 | |||||
Payments
|
(25.0 | ) | — | ||||
Currency translation
|
0.1 | — | |||||
Ending Balance
|
$ | 3.8 | $ | 22.3 |
Fair Value – Assets
|
Fair Value – Liabilities
|
||||||||||||
April 2,
|
December 31,
|
April 2,
|
December 31,
|
||||||||||
(In millions)
|
2011
|
2010
|
2011
|
2010
|
|||||||||
Derivatives Designated as Hedging
Instruments
|
|||||||||||||
Interest rate swaps (a)
|
$ | 35.5 | $ | 37.3 | $ | — | $ | — | |||||
Derivatives Not Designated as Hedging
Instruments
|
|||||||||||||
Foreign currency exchange contracts (b)
|
0.4 | 2.8 | 4.2 | 3.5 | |||||||||
Total derivatives
|
$ | 35.9 | $ | 40.1 | $ | 4.2 | $ | 3.5 |
Gain (Loss) Recognized
|
|||||||
Three Months Ended
|
|||||||
April 2, | April 3, | ||||||
(In millions) | 2011 | 2010 | |||||
Derivatives Designated as Fair Value
Hedges
|
|||||||
Interest rate contracts
|
$ | 6.4 | $ | 3.4 | |||
Derivatives Not Designated as Fair Value
Hedges
|
|||||||
Foreign currency exchange contracts
|
(26.7 | ) | 17.9 |
April 2, 2011
|
December 31, 2010
|
||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||
(In millions)
|
Value
|
Value
|
Value
|
Value
|
|||||||||
Notes Receivable
|
$ | 7.1 | $ | 7.1 | $ | 7.4 | $ | 7.4 | |||||
Debt Obligations:
|
|||||||||||||
Convertible obligations
|
$ | 302.3 | $ | 416.8 | $ | 327.9 | $ | 461.4 | |||||
Senior notes
|
3,976.3 | 4,045.7 | 1,784.9 | 1,806.3 | |||||||||
Other
|
21.6 | 21.6 | 24.3 | 24.3 | |||||||||
$ | 4,300.2 | $ | 4,484.1 | $ | 2,137.1 | $ | 2,292.0 |
Three Months Ended
|
|||||||
April 2,
|
April 3,
|
||||||
(In millions)
|
2011
|
2010
|
|||||
Beginning Balance
|
$ | 41.7 | $ | 45.2 | |||
Provision charged to income
|
11.0 | 10.8 | |||||
Usage
|
(12.7 | ) | (10.1 | ) | |||
Adjustments to previously provided warranties, net
|
(0.1 | ) | 0.4 | ||||
Other, net
|
1.5 | (0.8 | ) | ||||
Ending Balance
|
$ | 41.4 | $ | 45.5 |
(In millions)
|
Analytical Technologies
|
Laboratory Products and Services
|
Corporate
|
Total
|
|||||||||
Cost of Revenues
|
$ | 0.8 | $ | 2.1 | $ | — | $ | 2.9 | |||||
Selling, General and Administrative Expenses
|
3.1 | — | — | 3.1 | |||||||||
Restructuring and Other Costs, Net
|
11.6 | 3.5 | 0.2 | 15.3 | |||||||||
$ | 15.5 | $ | 5.6 | $ | 0.2 | $ | 21.3 |
Abandonment
|
|||||||||||||
(In millions)
|
Severance
|
of Excess Facilities
|
Other (a)
|
Total
|
|||||||||
Pre-2010 Restructuring Plans
|
|||||||||||||
Balance At December 31, 2010
|
$ | 8.1 | $ | 5.2 | $ | 0.1 | $ | 13.4 | |||||
Costs incurred in 2011 (b)
|
0.1 | 0.4 | — | 0.5 | |||||||||
Payments
|
(1.3 | ) | (1.0 | ) | — | (2.3 | ) | ||||||
Currency translation
|
0.4 | 0.1 | — | 0.5 | |||||||||
Balance At April 2, 2011
|
$ | 7.3 | $ | 4.7 | $ | 0.1 | $ | 12.1 | |||||
2010 Restructuring Plans
|
|||||||||||||
Balance At December 31, 2010
|
$ | 2.2 | $ | 0.5 | $ | 0.1 | $ | 2.8 | |||||
Costs incurred in 2011 (b)
|
1.2 | — | 0.4 | 1.6 | |||||||||
Payments
|
(1.2 | ) | (0.2 | ) | (0.3 | ) | (1.7 | ) | |||||
Currency translation
|
0.1 | — | — | 0.1 | |||||||||
Balance At April 2, 2011
|
$ | 2.3 | $ | 0.3 | $ | 0.2 | $ | 2.8 | |||||
2011 Restructuring Plans
|
|||||||||||||
Costs incurred in 2011 (b)
|
$ | 8.8 | $ | 4.0 | $ | 0.6 | $ | 13.4 | |||||
Payments
|
(4.6 | ) | (0.7 | ) | (0.3 | ) | (5.6 | ) | |||||
Currency translation
|
— | 0.2 | — | 0.2 | |||||||||
Balance At April 2, 2011
|
$ | 4.2 | $ | 3.5 | $ | 0.3 | $ | 8.0 |
·
|
Fermentas, a manufacturer and global distributor of enzymes, reagents and kits for molecular and cellular biology research, was acquired in July 2010 to expand the company’s ability to provide complete workflows for genomics research.
|
·
|
Finnzymes, a provider of integrated tools for molecular biology analysis, including reagents, instruments, consumables and kits, was acquired in March 2010 to expand the company’s portfolio of reagents and other consumables for the molecular biology research and diagnostics markets.
|
·
|
Ahura Scientific, a provider of handheld spectroscopy instruments that are used worldwide in the identification of chemicals for safety, security and pharmaceutical applications, was acquired in February 2010 to expand the company’s portfolio of portable analytical devices.
|
Three Months Ended
|
|||||||||||||||||||
April 2,
|
April 3,
|
Total
|
Currency
|
Acquisitions/
|
|||||||||||||||
(In millions)
|
2011
|
2010
|
Change
|
Translation
|
Divestitures
|
Operations
|
|||||||||||||
Revenues
|
|||||||||||||||||||
Analytical Technologies
|
$ | 1,177.7 | $ | 1,083.4 | $ | 94.3 | $ | 13.9 | $ | 27.3 | $ | 53.1 | |||||||
Laboratory Products
and Services
|
1,685.3 | 1,670.6 | 14.7 | 14.9 | 13.5 | (13.7 | ) | ||||||||||||
Eliminations
|
(141.6 | ) | (127.1 | ) | (14.5 | ) | (0.4 | ) | — | (14.1 | ) | ||||||||
Consolidated Revenues
|
$ | 2,721.4 | $ | 2,626.9 | $ | 94.5 | $ | 28.4 | $ | 40.8 | $ | 25.3 |
Three Months Ended
|
|||||||||
April 2,
|
April 3,
|
||||||||
(Dollars in millions)
|
2011
|
2010
|
Change
|
||||||
Revenues
|
|||||||||
Analytical Technologies
|
$ | 1,177.7 | $ | 1,083.4 | 9% | ||||
Laboratory Products and Services
|
1,685.3 | 1,670.6 | 1% | ||||||
Eliminations
|
(141.6 | ) | (127.1 | ) | 11% | ||||
Consolidated Revenues
|
$ | 2,721.4 | $ | 2,626.9 | 4% | ||||
Segment Income
|
|||||||||
Analytical Technologies
|
$ | 247.6 | $ | 223.3 | 11% | ||||
Laboratory Products and Services
|
230.6 | 231.6 | 0% | ||||||
Subtotal Reportable Segments
|
478.2 | 454.9 | 5% | ||||||
Cost of Revenues Charges
|
(2.9 | ) | (5.1 | ) | |||||
Selling, General and Administrative Charges, Net
|
(3.1 | ) | (1.1 | ) | |||||
Restructuring and Other Costs, Net
|
(15.3 | ) | (17.4 | ) | |||||
Amortization of Acquisition-related Intangible Assets
|
(135.4 | ) | (146.7 | ) | |||||
Consolidated Operating Income
|
$ | 321.5 | $ | 284.6 | 13% | ||||
Reportable Segments Operating Income Margin
|
17.6% | 17.3% | |||||||
Consolidated Operating Income Margin
|
11.8% | 10.8% |
Three Months Ended | |||||||||
April 2, | April 3, | ||||||||
(Dollars in millions)
|
2011 | 2010 | Change | ||||||
Revenues
|
$ | 1,177.7 | $ | 1,083.4 | 9% | ||||
Operating Income Margin
|
21.0% | 20.6% | 0.4 |
Three Months Ended
|
|||||||||
April 2, | April 3, | ||||||||
(
Dollars in millions)
|
2011 | 2010 | Change | ||||||
Revenues
|
$ | 1,685.3 | $ | 1,670.6 | 1% | ||||
Operating Income Margin
|
13.7% | 13.9% | (0.2 | ) |
|
•
|
strengthening our presence in selected geographic markets;
|
|
•
|
allocating research and development funding to products with higher growth prospects;
|
|
•
|
developing new applications for our technologies;
|
|
•
|
expanding our service offerings;
|
|
•
|
continuing key customer initiatives;
|
|
•
|
combining sales and marketing operations in appropriate markets to compete more effectively;
|
|
•
|
finding new markets for our products; and
|
|
•
|
continuing the development of commercial tools and infrastructure to increase and support cross-selling opportunities of products and services to take advantage of our depth in product offerings.
|
|
•
|
reduced demand for some of our products;
|
|
•
|
increased rate of order cancellations or delays;
|
|
•
|
increased risk of excess and obsolete inventories;
|
|
•
|
increased pressure on the prices for our products and services; and
|
|
•
|
greater difficulty in collecting accounts receivable.
|
Period
|
Total
Number of
Shares
Purchased
|
Average
Price Paid
per Share
|
Total
Number of
Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs (1)
|
Maximum
Dollar Amount
of Shares That
May Yet Be
Purchased Under
the Plans or
Programs (1)
(in millions)
|
||||||
Fiscal January (Jan. 1 – Feb. 5)
|
1,200,000
|
$
|
56.51
|
1,200,000
|
$
|
419.7
|
||||
Fiscal February (Feb. 6 – Mar. 5)
|
3,303,756
|
56.51
|
3,303,756
|
983.0
|
||||||
Fiscal March (Mar. 6 – Apr. 2)
|
5,116,872
|
55.31
|
5,116,872
|
700.0
|
||||||
Total First Quarter
|
9,620,628
|
$
|
55.87
|
9,620,628
|
$
|
700.0
|
THERMO FISHER SCIENTIFIC INC.
|
|
/s/ Peter M. Wilver
|
|
Peter M. Wilver
|
|
Senior Vice President and Chief Financial Officer
|
|
/s/ Peter E. Hornstra
|
|
Peter E. Hornstra
|
|
Vice President and Chief Accounting Officer
|
Exhibit
Number
|
Description of Exhibit
|
|
10.1 | Form of Thermo Fisher Scientific Inc.’s February 2011 Restricted Stock Unit Agreement for Directors.* | |
31.1 | Certification of Chief Executive Officer required by Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer required by Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer required by Exchange Act Rules 13a-14(b) and 15d-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** | |
32.2 | Certification of Chief Financial Officer required by Exchange Act Rules 13a-14(b) and 15d-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** | |
The Registrant agrees, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, to furnish to the Commission upon request, a copy of each instrument with respect to long-term debt of the Registrant or its consolidated subsidiaries. | ||
101.INS
|
XBRL Instance Document. | |
101.SCH
|
XBRL Taxonomy Extension Schema Document. | |
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document. | |
101.DEF
|
XBRL Taxonomy Definition Linkbase Document.
|
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document. | |
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Thermo Fisher Scientific Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Marc N. Casper
|
|
Marc N. Casper
President and Chief Executive Officer
|
|
I, Peter M. Wilver, certify that:
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Thermo Fisher Scientific Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date: May 6, 2011
|
/s/ Peter M. Wilver
|
|
Peter M. Wilver
Senior Vice
President and Chief Financial Officer
|
/s/ Marc N. Casper
|
|
Marc N. Casper
President and Chief Executive Officer
|
/s/ Peter M. Wilver
|
|
Peter M. Wilver
Senior Vice
President and Chief Financial Officer
|