PerkinElmer's CEO Discusses Q1 2012 Results - Earnings Call Transcript

PerkinElmer (PKI)

Q1 2012 Earnings Call

April 26, 2012 5:00 pm ET

Executives

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 -

Analysts

Daniel Brennan - Morgan Stanley, Research Division

Jonathan P. Groberg - Macquarie Research

Peter Lawson - Mizuho Securities USA Inc., Research Division

Quintin J. Lai - Robert W. Baird & Co. Incorporated, Research Division

Zarak Khurshid - Wedbush Securities Inc., Research Division

Daniel L. Leonard - Leerink Swann LLC, Research Division

Jon Davis Wood - Jefferies & Company, Inc., Research Division

Isaac Ro - Goldman Sachs Group Inc., Research Division

Bryan Brokmeier - Maxim Group LLC, Research Division

Daniel Arias - UBS Investment Bank, Research Division

Derik De Bruin - BofA Merrill Lynch, Research Division

Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the PerkinElmer First Quarter 2012 Earnings Conference Call. My name is Maria and I will be your operator for today. [Operator Instructions] I would now like to turn the conference over to your host for today, Mr. Dave Francisco, Vice President of Investor Relations. Please proceed.

David C. Francisco

Thank you. Good afternoon, and welcome to the PerkinElmer First Quarter 2012 Earnings Conference Call. With me on the call are Robert Friel, Chairman and Chief Executive Officer; and Andy Wilson, Senior Vice President and Chief Financial Officer.

If you have not received your 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 (877) PKI-NYSE. Please note, this call is being webcast live and will be archived in our website until May 10, 2012.

Before we begin, we need to remind everyone of the Safe Harbor Statement 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.

During this call, we will be referring to certain non-GAAP financial measures. A reconciliation to the non-GAAP financial measures we plan to use during this call to 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, but 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.

I'm pleased to report that we had another very good quarter in which we delivered strong financial results while making excellent progress against our 2012 strategic priorities.

During the first quarter, we grew adjusted revenue 16% year-over-year, delivering better than expected growth despite very difficult comps from the first quarter of last year, particularly in Environmental Health, which grew 17% organically in the first quarter of 2011.

In the first quarter of this year, Human Health increased adjusted revenue by 27% due to the addition of Caliper and solid organic growth from Diagnostics and Medical Imaging.

Environmental Health grew by 6%, reflecting notable contributions from our inorganic analysis offerings plus strong end market drivers, such us water and chemical analysis. Organically, our revenue grew 6%, with Human Health up 9% and Environmental Health up 3%.

Our continued focus on improving our operational efficiencies and expanding our operating margins enabled us to exceed our plans for earnings per share in the quarter and deliver adjusted EPS growth of 23%.

Across our end markets, there are 2 fundamental themes that are changing the behavior and needs of our customers. These themes uniquely position PerkinElmer to play a significant role in improving world health.

First, there is an increasing interconnectivity between human and environmental health resulting in the convergence of our 3 core end markets, Diagnostics, Environmental and Life Sciences. As the developed world faces increasing health care costs, we can leverage our complementary capabilities in these markets for better outcomes and reduce cost. We have the capabilities to aid in both understanding genetic predisposition to disease, as well as helping people avoid potential environmental triggers to disease.

Additionally, we can aid in identifying diseases, they're always possible, and help discover more effective targeted therapies.

The second overarching theme is that, as the developing world continues to grow rapidly, it is demanding greater access to health care. While many of these developing countries today are focused on necessities such as access to clean air and water and safe food, the rising middle class is demanding improved living standards. This will cause many countries to require advanced medical capabilities, such as early disease screening or diagnostic tests. Today, there is a great need to serve these customers across the increasing level of the requirements and spanning virtually every region of the globe.

PerkinElmer's extensive global channel and footprint enables us to address these needs head-on. We have a unique ability to tailor our technologies for the developed world and then bridge them into the emerging markets. While well-positioned to leverage these 2 macro themes to improve global health, we cannot stand still. Critical to our success is our ability to apply our knowledge and expertise to develop cutting-edge innovations that solve customer needs. In that regard, during the quarter, we introduced several innovative new products targeting our core end markets. These included, the HER2Sense preclinical imaging agent which supports breast cancer discovery research. The Panthera-Puncher for the handling of neonatal blood spots. An Ensemble for Biology, a suite of informatics applications intended to serve as an integrated biology workflow for use in research and development, as well as in quality assurance and control.

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