Millipore (MIL)

Q1 2010 Earnings Call

May 06, 2010 4:45 pm ET

Executives

Martin Madaus - Chairman of the Board, Chief Executive Officer and President

Joshua Young - Director of Investor Relations

Charles Wagner - Chief Financial Officer and Corporate Vice President

Presentation

Operator

Good afternoon. My name is Tiffany and I will be your conference operator today. At this time, I would like to welcome everyone to the Millipore's First Quarter 2010 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Joshua Young. Please go ahead, sir.

Joshua Young

Thank you very much, Tiffany. Good evening. I'd like to welcome everyone to Millipore's First Quarter 2010 Earnings Conference Call. My name is Joshua Young and I am the Director of Investor Relations for Millipore. And joining me on today's call are: Martin Madaus, Chairman, President and CEO; and Charlie Wagner, Chief Financial Officer.

In addition to the earnings release we issued earlier today, we will also be referencing a slide presentation as part of today's call. The presentation can be viewed by clicking on the webcast link on the millipore.com homepage or by accessing Millipore's Investor Relations website. A PDF copy of the slides is posted to the website currently.

We will also be highlighting non-GAAP financial information. A reconciliation of our GAAP financials to our non-GAAP financial measures is included in our earnings release and posted on our website.

Before we begin, I'd like to make the usual Safe Harbor statement that during the course of this conference call, we will make forward-looking statements regarding future events for the financial performance of the company that involve risks and uncertainties. The company's actual results may differ materially from the projections described in such statements. Factors that might cause such differences include, but are not limited to, those discussed in today's earnings release and in our Form 10-K, as well as other subsequent SEC filings.

Also note that the following information is related to current business conditions and our outlook as of today, May 6, 2010. Consistent with our prior practice, we do not intend to update our projections based on new information, future events or other reasons prior to the release of our second quarter 2010 financial results.

On today's call, we will provide details of our current business performance and market trends. However, due to our pending transaction with Merck, we will not hold a formal Q&A session and will conclude the call at the end of our formal remarks. Now, I'd like to turn the call over to Martin Madaus.

Martin Madaus

Thanks, Joshua, and good evening, everyone. And thank you for joining us on the call today. Q1 was an outstanding quarter for Millipore. We started 2010 right where we left off in 2009, delivering exceptional financial performance, outperforming many of our peers who faced easier year-over-year comparisons. We posted record quality sales and non-GAAP earnings per share in Q1. While continuing to improve our balance sheet, we generate attractive cash flow.

Our execution is strong as it has ever been and we're launching innovative products that are taking market share from competitors, from our billing capabilities that are strengthening organization. So we're on track for a great 2010.

The key takeaways for Q1 are the following: Our growth is strong and well-balanced between both our Bioprocess, Bioscience divisions. Each division generated impressive double-digit growth in the Americas and Asia, and saw strong underlying demand among our core businesses.

Second, we're seeing a significant contribution to our revenue growth from new products. So we have implemented a number of initiatives to accelerate our innovations and we have increased the number of innovative products that we launch in each year. So I'm really happy to report that these products are actually making an impact penetrating the market and driving higher growth.

Third, our Bioscience division rebounded and generated impressive top line growth after a somewhat challenging year in 2009. The division reported strong laboratory instrumentation sales. And saw a sharp uptick in demand from a large North American pharmaceutical customer same time in the week last year. So I'm encouraged by the strong start and we expect the division to benefit at global economic conditions steadily improve.

Fourth, our Bioprocess business picked up right where it left off last year. The division generated exceptional growth of demand. And the biotechnology industry continues to be very robust. This performance is impressive when you consider that Bioprocess faced a challenging year-over-year comparisons and has generated 13% organic revenue growth in the first quarter of 2009.

Finally, we continue to generate attractive free cash flow as a result of improving the efficiency of working capital. We continue in making substantial improvements on working capital last year in this program, again, continue in 2010, and they show some great results. So those were the key takeaways. Let me now move into more detail about the results of the first quarter.

Financials first. So first quarter as revenues increased 14% to $463 million, excluding a 5% favorable effect from changes in currency -- foreign currency exchange rates. Organic revenue growth on the quarter was 9%. From a divisional perspective, if you exclude the effects of changes in foreign currency exchange rates, both the Bioprocess and the Bioscience division also grew 9% organically. On the bottom line, we reported $1.21 in non-GAAP earnings per share which was a 14% improvement over last year. And our free cash flow grew 12% over last year, totaling $77 million in the first quarter.

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