Millipore Corporation (NYSE:MIL), a leading provider of technologies, tools and services for the global life science industry, today reported financial results for its first quarter ended April 3, 2010.

Revenues for the first quarter grew 14 percent from the previous year, totaling $463.0 million. Excluding a 5 percent favorable impact from changes in foreign currency, Millipore generated organic revenue growth of 9 percent. On a divisional basis, excluding changes in foreign currency, Millipore’s Bioscience Division and Bioprocess Division each grew 9 percent from the previous year.

Millipore’s first quarter earnings per share were $0.99, compared to $0.95 per share in the first quarter of 2009. Non-GAAP earnings per share grew 14 percent to $1.21 per share, compared to $1.06 per share in the first quarter of last year. A reconciliation of GAAP to non-GAAP financial measures is provided in the Company’s financial tables accompanying this press release.

“We delivered exceptional revenue growth in the first quarter, as we benefited from the contribution of new products, a strengthening economic environment, and continued momentum in our core business,” said Martin Madaus, Chairman & CEO of Millipore. “Our results were well-balanced between both divisions, and from a geographic perspective we generated impressive results in North America and Asia. While strong demand from biotechnology customers continued to drive our Bioprocess Division performance, our Bioscience Division benefited from a rebound in spending from large pharmaceutical customers and higher sales of our laboratory instrumentation products.

“We continue to accelerate our investments into initiatives that will drive product innovation. The success of these initiatives over the past five years has enabled us to fundamentally increase the growth profile of our business. During the first quarter, we increased our R&D spending by 19 percent and advanced key collaborations with technology partners, which will help to drive long-term revenue growth. Our proposed transaction with Merck KGaA remains on track and we look forward to closing the transaction and creating a world-class partner for the Life Science industry.”

Proposed Merck KGaA Transaction

During the quarter, Millipore announced key milestones relating to the proposed transaction, including:
  • The waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act expired on April 19th without a second request for information.
  • The Special Shareholder’s Meeting to vote on the proposed transaction will take place on Thursday, June 3rd at 10:00 a.m.
  • The Company filed its definitive proxy with the Securities and Exchange Commission on April 30th.

Q1 2010 Financial Performance

Millipore reported Q1 non-GAAP gross margin of 56.6 percent and non-GAAP operating profit margin of 22.6 percent, an improvement of 40 basis points from the previous year. During the quarter, Millipore generated $77 million in free cash flow and ended the first quarter with $223 million in cash and cash equivalents.

“Our first quarter revenue growth translated into outstanding profitability and cash flow,” said Charles Wagner, Chief Financial Officer of Millipore. “We demonstrated attractive operating leverage in the business, while continuing to fund our innovation initiatives. Our cash conversion cycle improved by 24 days and was driven by a significant improvement in our inventory management. Over the past three years, we have lowered our days of inventory outstanding from a high of 149 days to 109 days at the end of the quarter. After growing our free cash flow by an impressive 54 percent in 2009, our working capital initiatives enabled us to still deliver an $8 million year-over-year improvement in free cash flow during the first quarter.”
 

Revenue Growth by Geography ($ millions):
 
Three Months Ended

April 3,2010
 

April 4,2009
 

%Growth
Americas $ 188.9 $ 165.2 14 %
Europe 166.7 162.9 2 %
Asia/Pacific   107.4   79.8 35 %
Total $ 463.0 $ 407.9 14 %
 

Revenue Growth by Division ($ millions):
     
Three Months Ended

April 3,2010

April 4,2009

%Growth
Bioprocess $ 258.3 $ 230.0 12 %
Bioscience   204.7   177.9 15 %
Total $ 463.0 $ 407.9 14 %

Quarterly Earnings Call

Millipore will host a conference call and webcast to discuss its financial results, business outlook, and related corporate and financial matters at 4:45 p.m. Eastern Daylight Time today. The call can be accessed through Millipore’s website: http://www.millipore.com. A replay of the call will be archived on the Investor Relations section of the website and will also be available via telephone by dialing 800-642-1687 or 706-645-9291 and entering confirmation code: 63837291. The telephonic replay will be available beginning at 5:45 p.m. Eastern Daylight Time on May 6, 2010 until 11:59 p.m. Eastern Daylight Time on May 10, 2010.

About Millipore

Millipore (NYSE: MIL) is a life science leader providing cutting-edge technologies, tools, and services for bioscience research and biopharmaceutical manufacturing. As a strategic partner, we collaborate with customers to confront the world's challenging human health issues. From research to development to production, our scientific expertise and innovative solutions help customers tackle their most complex problems and achieve their goals. Millipore Corporation is an S&P 500 company with more than 5,900 employees in 30 countries worldwide.

Advancing Life Science Together ®

Research. Development. Production.

Use of Non-GAAP Financial Measures

The non-GAAP financial measures used in this press release are non-GAAP gross profit, gross profit margin, operating profit, operating margin, pre-tax income, net income attributable to Millipore, diluted earnings per share, and free cash flow. Non-GAAP gross profit, gross profit margin, operating profit, operating margin, pre-tax income, net income attributable to Millipore and diluted earnings per share exclude costs related to global supply chain initiatives, acquisition and related integration expenses, amortization of acquired intangible assets and inventory fair value adjustments related to business acquisitions, gain on business acquisition, and non-cash interest expense on convertible debt. We define free cash flow as net cash provided by operating activities less additions to property, plant, and equipment.

We believe that the non-GAAP financial measures provide useful and supplementary information to investors regarding our operating performance, although they may not be directly comparable to measures used by other companies. It is our belief that these non-GAAP financial measures have been particularly useful to investors over the last few years because of the significant changes that have occurred outside of our day-to-day business in accordance with the execution of our strategy.

We regularly use non-GAAP financial measures internally to understand, manage, and evaluate our business results and make operating decisions. We also measure our employees and compensate them, in part, based on such non-GAAP measures. Non-GAAP information should not be construed as an alternative to GAAP information as the items excluded from the non-GAAP measures often have a material impact on our financial results. Management uses, and investors should use, non-GAAP measures in conjunction with our GAAP results.

Forward Looking Statements:

The matters discussed herein, as well as in future oral and written statements by management of Millipore Corporation that are forward-looking statements, are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements.

Potential risks and uncertainties that could affect Millipore's future operating results include, without limitation, failure to achieve design wins into our pharmaceutical and biotechnology customers’ manufacturing design phase for a particular drug; delay, suspension or termination of a customer’s volume production; lack of availability of raw materials or component products on a timely basis; regulatory delay in the approval of customers’ therapeutics; limitations on cash flow available for operations and investment due to debt service obligations; the inability to establish and maintain necessary product and process quality levels; reduced demand for animal-derived cell culture products; the inability to realize the expected benefits of development, marketing, licensing and other alliances; competitive factors such as new membrane or chromatography technology; the inability to achieve anticipated cost benefits of our supply chain initiatives; risks relating to our concentration of principal manufacturing operations; the inability to utilize technology in current or planned products due to overriding rights by third parties; potential environmental liabilities; conditions in the economy in general and in the bioscience and bioprocess markets in particular; foreign exchange fluctuations; reduced private and government research funding; exposure to product liability claims; and difficulties inherent in transferring or outsourcing of manufacturing operations. Please refer to our filings with the SEC, including our most recent Annual Report on Form 10-K, for more information on these and other risks that could cause actual results to differ.

-tables follow-
 
Millipore Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
     
Three Months Ended
April 3, April 4,
  2010     2009  
 
 
Revenues $ 463,033 $ 407,940
Cost of revenues   203,671     184,621  
Gross profit 259,362 223,319
 
Selling, general and administrative expenses 141,141 126,788
Research and development expenses   30,084     25,203  
Operating profit 88,137 71,328
 
Gain on business acquisition - 8,542
Interest income 113 242
Interest expense   (14,259 )   (14,609 )
Income before provision for income taxes 73,991 65,503
Provision for income taxes   16,776     11,949  
 
Net income 57,215 53,554
Less: Net income attributable to noncontrolling interest   -     529  
Net income attributable to Millipore $ 57,215   $ 53,025  
 
Diluted earnings per share $ 0.99   $ 0.95  
 
Diluted weighted average shares outstanding   57,906     55,779  
 
Millipore Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
       
April 3, December 31,
  2010   2009
 
ASSETS
Current assets:
Cash and cash equivalents $ 222,676 $ 168,333
Accounts receivable, net 314,539 280,930
Inventories 237,913 257,809
Deferred income taxes and other current assets   108,605   95,196
Total current assets 883,733 802,268
Property, plant and equipment, net 574,111 595,611
Deferred income taxes 13,587 40,175
Intangible assets, net 324,223 337,696
Goodwill 1,016,534 1,017,683
Other assets   16,941   17,356
Total assets $ 2,829,129 $ 2,810,789
 
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 11,084 $ 42,851
Accounts payable 88,579 75,056
Income taxes payable 20,854 16,739
Accrued expenses and other current liabilities   177,426   185,061
Total current liabilities 297,943 319,707
Deferred income taxes 14,456 17,681
Long-term debt 873,724 890,242
Other liabilities 81,189 80,125
Equity   1,561,817   1,503,034
Total liabilities and equity $ 2,829,129 $ 2,810,789
 
Millipore Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
   
Three Months Ended
April 3, April 4,
  2010     2009  
 
Cash flows from operating activities:
Net income $ 57,215 $ 53,554
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 30,260 30,523
Stock-based compensation 7,486 5,791
Amortization of deferred financing costs 849 844
Amortization of debt discount 3,965 3,704
Deferred income tax (benefit) provision (1,306 ) 6,829
Gain on business acquisition - (8,542 )
Business acquisition inventory fair value adjustment - 610
Other (2,547 ) 4,161
Changes in operating assets and liabilities, net of effects of business acquisitions:
Accounts receivable (40,471 ) (22,464 )
Inventories 11,384 2,250
Other assets 449 5,535
Accounts payable 15,676 9,493
Accrued expenses and other current liabilities 4,172 (3,603 )
Other liabilities   1,125     (4,458 )
Net cash provided by operating activities   88,257     84,227  
Cash flows from investing activities:
Additions to property, plant and equipment (11,577 ) (15,708 )
Acquisition of businesses, net of cash acquired - (18,766 )
Other   (748 )   (1,362 )
Net cash (used for) investing activities   (12,325 )   (35,836 )
Cash flows from financing activities:
Proceeds from issuance of common stock under stock plans 16,876 1,710
Net repayments under the revolving credit facility - (67,174 )
Net (repayments of) borrowings from short-term debt (32,289 ) 71,747
Dividends paid to noncontrolling interest   -     (460 )
Net cash provided by (used for) financing activities   (15,413 )   5,823  
Effect of foreign exchange rates on cash and cash equivalents   (6,176 )   2,446  
Net increase in cash and cash equivalents 54,343 56,660
Cash and cash equivalents at beginning of year   168,333     115,462  
Cash and cash equivalents at end of period $ 222,676   $ 172,122  
 
Millipore Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures *
Three Months Ended April 3, 2010
(dollars in thousands, except EPS data)
               

Gross Profit

GrossProfitMargin

OperatingProfit

OperatingMargin

Pre-tax Income

Net IncomeAttributable toMillipore

Diluted EPS
GAAP results, three months ended April 3, 2010 $ 259,362 56.0 % $ 88,137 19.0 % $ 73,991 $ 57,215 $ 0.99
Non-GAAP adjustments:
Costs related to global supply chain initiatives 612 0.1 % 628 0.2 % 628 404 0.01
Acquisition and related integration expenses - - 2,346 0.5 % 2,346 1,511 0.02
Purchased intangibles amortization 1,968 0.5 % 13,426 2.9 % 13,426 8,645 0.15
Non-cash interest expense on convertible debt - - - - 3,843 2,474 0.04
             
Total non-GAAP adjustments   2,580 0.6 %   16,400 3.6 %   20,243   13,034   0.22
Non-GAAP results, three months ended April 3, 2010 $ 261,942 56.6 % $ 104,537 22.6 % $ 94,234 $ 70,249 $ 1.21
 
* Please refer to our press release for a full explanation for the use of non-GAAP measures.
 
Millipore Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures *
Three Months Ended April 4, 2009
(dollars in thousands, except EPS data)
               

Gross Profit

GrossProfitMargin

OperatingProfit

OperatingMargin

Pre-tax Income

Net incomeattributable toMillipore
Diluted EPS
GAAP results, three months ended April 4, 2009 $ 223,319 54.7 % $ 71,328 17.5 % $ 65,503 $ 53,025 $ 0.95
Non-GAAP adjustments:
Costs related to global supply chain initiatives 3,602 0.9 % 3,844 0.9 % 3,844 2,466 0.04
Business acquisition inventory fair value adjustment 610 0.2 % 610 0.2 % 610 391 0.01
Acquisition and related integration expenses - - 894 0.2 % 894 574 0.01
Purchased intangibles amortization 1,949 0.5 % 13,995 3.4 % 13,995 8,979 0.16
Gain on business acquisition - - - - (8,542 ) (8,542 ) (0.15 )
Non-cash interest expense on convertible debt - - - - 3,584 2,299 0.04
             
Total non-GAAP adjustments   6,161 1.6 %   19,343 4.7 %   14,385     6,167     0.11  
Non-GAAP results, three months ended April 4, 2009 $ 229,480 56.3 % $ 90,671 22.2 % $ 79,888   $ 59,192   $ 1.06  
 
* Please refer to our press release for a full explanation for the use of non-GAAP measures.

Copyright Business Wire 2010

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