10-KPeriod: FY2016

THERMO FISHER SCIENTIFIC INC. Annual Report, Year Ended Dec 31, 2016

Filed February 28, 2017For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) for the fiscal year ended December 30, 2016, reported revenues of $18.27 billion, a 7.8% increase from the previous year, driven by organic growth and strategic acquisitions. The company's mission to 'enable our customers to make the world healthier, cleaner and safer' is supported by its broad portfolio of products and services across four key segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services. Significant acquisitions in 2016 included Affymetrix, Inc. and FEI Company, which are expected to enhance the company's capabilities in genetic analysis and high-performance electron microscopy, respectively. Despite a strengthening US dollar impacting reported revenues, the company demonstrated robust performance, with increases in operating income and cash flow from operations. Management expressed confidence in the company's ability to meet its financial obligations and fund future operations through existing cash, cash flow, and credit facilities.

Financial Highlights

58 data points
Beta

Revenue

$18.27B

55.1% Gross Margin

Net Income

$2.02B

11.1% Net Margin

EPS (Diluted)

$5.09

Total Assets

$45.91B

Cash & Equivalents

$786.00M

Free Cash Flow

$2.81B

Financial Statements
Beta
Revenue$18.27B
Cost of Revenue$8.21B
Gross Profit$10.06B
R&D Expenses$754.00M
SG&A Expenses$4.97B
Operating Expenses$15.82B
Operating Income$2.46B
Interest Expense$469.00M
Net Income$2.02B
EPS (Basic)$5.12
EPS (Diluted)$5.09
Shares Outstanding (Basic)395.00M
Shares Outstanding (Diluted)397.00M

Key Highlights

  • 1Reported revenues of $18.27 billion for the fiscal year 2016, a 7.8% increase from 2015.
  • 2Completed two significant acquisitions in 2016: Affymetrix, Inc. for $1.34 billion and FEI Company for $4.08 billion.
  • 3Maintained strong operational performance with operating income of $2.45 billion and operating income margin of 13.4% in 2016.
  • 4Generated $3.16 billion in cash flow from operations in 2016, an increase from $2.82 billion in 2015.
  • 5The company operates through four key business segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services.
  • 6The backlog of firm orders at year-end 2016 was $2.79 billion, a significant increase from $1.89 billion in 2015, indicating strong future revenue potential.
  • 7Thermo Fisher Scientific actively repurchased shares, with $1.25 billion in stock repurchases during the fourth quarter of 2016.

Frequently Asked Questions

In 2016, Thermo Fisher Scientific made two significant strategic acquisitions: Affymetrix, Inc. on March 31st for $1.34 billion, bolstering its genetic analysis portfolio, and FEI Company on September 19th for $4.08 billion, enhancing its high-performance electron microscopy capabilities. These acquisitions are aimed at strengthening the company's market position and expanding its technology offerings.

The strengthening of the US dollar against other currencies had an unfavorable effect on Thermo Fisher Scientific's reported revenues, resulting in a decrease of $145 million in 2016. The company anticipates this trend may continue to impact reported revenue and operating income in 2017.

Thermo Fisher Scientific expressed confidence in its financial position. As of December 31, 2016, the company had $786 million in cash and cash equivalents. Combined with expected future cash flow from operations and its $2.50 billion revolving credit facility, management believes it has sufficient resources to meet its cash requirements for at least the next 24 months.