10-QPeriod: Q1 FY2013

THERMO FISHER SCIENTIFIC INC. Quarterly Report for Q1 Ended Mar 30, 2013

Filed May 3, 2013For Securities:TMO

Summary

Thermo Fisher Scientific Inc. reported its first quarter 2013 financial results, showcasing a solid increase in revenue and net income compared to the prior year. Revenue grew by 4% to $3.19 billion, driven by organic growth and strategic acquisitions, with particular strength noted in the Specialty Diagnostics and Laboratory Products and Services segments. Net income saw a significant jump of 21% to $336.2 million, or $0.93 per diluted share, reflecting improved operating efficiencies and a lower effective tax rate. The company also announced a major development: the agreement to acquire Life Technologies Corporation for approximately $13.6 billion, a move poised to significantly expand its presence in genetic analysis and scientific research markets.

Financial Highlights

56 data points
Beta

Revenue

$3.19B

41.9% Gross Margin

Net Income

$336.20M

10.5% Net Margin

EPS (Diluted)

$0.93

Total Assets

$27.41B

Cash & Equivalents

$958.50M

Free Cash Flow

$232.30M

Financial Statements
Beta
Revenue$3.19B
Cost of Revenue$1.53B
Gross Profit$1.34B
R&D Expenses$98.20M
SG&A Expenses$829.50M
Operating Expenses$2.80B
Operating Income$387.10M
Interest Expense$64.40M
Net Income$336.20M
EPS (Basic)$0.94
EPS (Diluted)$0.93
Shares Outstanding (Basic)358.10M
Shares Outstanding (Diluted)361.70M

Key Highlights

  • 1Revenue increased by 4% to $3.19 billion for the first quarter of 2013 compared to the same period in 2012.
  • 2Net income rose by 21% to $336.2 million, with diluted EPS at $0.93, up from $0.75 in Q1 2012.
  • 3Operating income increased by 7% to $387.1 million, and the operating margin improved to 12.1% from 11.8%.
  • 4The company announced a definitive agreement to acquire Life Technologies Corporation for approximately $13.6 billion, expected to close in early 2014.
  • 5Cash provided by operating activities was $298.3 million, though lower than the prior year's $392.0 million, primarily due to changes in working capital.
  • 6The company's effective tax rate significantly decreased to 0.6% in Q1 2013, down from 9.7% in Q1 2012, due to tax planning initiatives and R&D tax credits.
  • 7Significant restructuring charges of $36 million were recorded in Q1 2013, related to headcount reductions and facility consolidations.

Frequently Asked Questions

The most significant development is the announcement of Thermo Fisher Scientific's agreement to acquire Life Technologies Corporation for approximately $13.6 billion. This transformative acquisition is expected to significantly enhance the company's capabilities in scientific research and genetic analysis.

Thermo Fisher Scientific reported a 4% increase in revenue to $3.19 billion and a 21% increase in net income to $336.2 million compared to the first quarter of 2012. Operating income also grew by 7%.

The company noted strong demand in Specialty Diagnostics and Laboratory Products and Services. However, it anticipates continued weakness in academic and government markets due to funding uncertainties and slowness in industrial markets due to macroeconomic conditions.

The company plans to finance the acquisition through a combination of cash on hand, new debt issuance totaling $9.5 to $10.0 billion, and cash from equity issuance of up to $4.0 billion. They have secured a $12.5 billion bridge loan facility.