Life Technologies Corporation (LIFE)
Q1 2010 Earnings Call Transcript
April 27, 2010 4:30 pm ET
Eileen Pattinson – Senior Director, IR
Greg Lucier – Chairman & CEO
David Hoffmeister – SVP & CFO
Bernd Brust – President & Chief Commercial Operations Officer
Mark Stevenson – President & COO
Quintin Lai – Robert Baird
Tycho Peterson – JPMorgan
Doug Schenkel – Cowen and Company
Marshall Urist – Morgan Stanley
Jon Groberg – Macquarie Capital
Steven Lichtman – JMP Securities
Derik De Bruin – UBS Capital
Jon Wood – Jefferies
Jeff Ares – Leerink Swann
Dan Leonard – First Analysis
Peter Lawson – Thomas Weisel Partners
Ross Muken – Deutsche Bank
Previous Statements by LIFE
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Good day, ladies and gentlemen, and welcome to the Q1 2010 Life Technologies Corporation earnings conference call. My name is Tamina [ph] and I will be your operator for today. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator instructions) As a reminder this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. Eileen Pattinson, Head of Investor Relations. Please proceed, ma’am.
Thank you, Tamina, and good afternoon everyone. Welcome to Life Technologies' First Quarter 2010 Earnings Conference Call.
Joining me on the call today are Greg Lucier, our Chairman and CEO and David Hoffmeister, Chief Financial Officer. In addition, Mark Stevenson, our Chief Operating Officer and Bernd Brust, our Chief Commercial Officer are available during the Q&A portion of the call.
If you haven't received a copy of today's press release, you may obtain one from our website at lifetechnologies.com.
I want to remind our listeners that our discussion today will include forward-looking statements including, but not limited to, statements about future expectations, plans and prospects for the Company. We believe these statements are based on reasonable assumptions, but actual results may differ materially from those indicated. It is our intent that these forward-looking statements be protected under 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 can be found in today's press release or on our website.
I will now hand the call over to Greg Lucier.
Thanks, Eileen, and thanks to all of you for joining us. I hope you’ve had a chance to review the press release we put out this afternoon. As you can see from our results, we delivered another quarter of strong top and bottom line growth and we are pleased with how we have started 2010.
Revenue grew 10% organically to $887 million, a result of terrific growth in both instruments and consumables. Operating margins expanded by 330 basis points to hit a record 29.5%. And earnings per share grew 21% to $0.87 for the quarter. This quarter marks the 14
quarter in a row that this Company has met or exceeded its financial targets on both the top and the bottom line. This milestone demonstrates how seriously we take our commitments to our shareholders. Our teams around the world have proven that they know how to put their heads down and get the work done, driving above market revenue growth with a relentless focus on execution.
As I do every quarter, I will take a few moments now to talk about these results in the context of our strategic imperatives delivering on the integration, realizing the potential of this new Company, and investing for the future. First, we made significant progress on our integration goals for the year. The sales force reorganization is complete and our reps are hitting the street with a singular purpose of adding value for our customers. Our ultimate goal is to become their partner of choice by providing unparalled customer service, and offering an expansive portfolio of innovative products that simplify and streamline entire workflows.
In addition, we announced the closure of two manufacturing site in Camarillo, California, and Bromborough, UK. The work to consolidate these operations into our facilities in Frederick, Maryland and Warrington in the UK is well underway and going successfully. These initiatives, as well as many others will generate an additional $20 million in annualized synergies. This brings us one step closer to our goal of putting action plans in place that will generate an additional $70 million in annualized savings by the end of this year.
Our diligence [ph] approach to the integration has not only paid off from a near term synergy perspective, but has set us up for success in other important ways. In particular, we’ve made great strides in realizing the potential of the new Company, which is our second strategic imperative. Let me now share with you some ways in which we optimize the value of our combined Company in the first quarter.
As I mentioned, we grew revenue 10% organically. Regionally, Japan was a standup performer with 23% growth for the quarter. Throughout 2009 our team in Japan executed on a strategy to optimize our commercial structure in the region. Among other actions, we increased the number of sales reps in the field and implemented a new dealer strategy that more closely aligned incentives with performance. These efforts position us well to take advantage of the additional research funding that the Japanese government released in the first quarter of 2010. As a result, we had strong sales across all of our businesses in Japan with a notable increase in sales of the new 3500 Genetic Analyzer and the Neon Transfection system.