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Beckman Coulter Announces Second Quarter 2008 Results
(Logo: http://www.newscom.com/cgi-bin/prnh/20031202/BECLOGO)
Three Months Ended Six Months Ended
June 30 June 30
2008 2007 % Chg 2008 2007 % Chg
Reported Results
(in millions, except
amounts per share)
Revenue $798.3 $689.7 15.7% $1,528.8 $1,303.3 17.3%
Operating Income $74.0 $73.0 1.4% $142.3 $130.3 9.2%
Diluted Earnings
per Share $0.74 $1.09 (32.1%) $1.41 $1.67 (15.6%)
Adjusted Results
Operating Income $90.7 $78.2 16.0% $160.7 $142.4 12.9%
Diluted Earnings
per Share $0.89 $0.75 18.7% $1.57 $1.40 12.1%
See "Non-GAAP Financial Measures," where the impacts of certain items on reported results are discussed.
Recurring revenue comprised of supplies, test kits, service, royalty revenue and operating-type lease payments, continued its steady performance increasing more than 13%. Clinical Diagnostics' recurring revenue increased 14.1% over prior year quarter, led by Access-family Immunoassay growth of more than 20%. Total company cash instrument sales increased 25%; continued strength in emerging markets, sales in Chemistry and Clinical Automation and a reduction of the Cellular Analysis backlog were the big contributors to cash instrument sales growth.
On a geographic basis, second quarter revenue in
Garrett said, "We continued to make great progress in the second quarter extending our installed base and emerging markets' position with placements of new systems. Accelerated penetration of Clinical Lab Automation also contributed to the rapid growth of cash instrument sales. While expansion of our installed base, particularly outside the U.S., is unfavorable in the short-term from a mix and gross margin perspective, the associated recurring revenue in future periods positions the company for reliable and sustainable revenue and earnings growth. Within the quarter, rising transportation costs and adverse mix were effectively absorbed to deliver on our earnings objectives."
Despite these challenges, gross profit margin improved 30 basis points to
46.2% versus second quarter 2007. Operating income was
Non-operating expense was
Recent Developments
-- Declared a
-- Re-purchased in the second quarter approximately one million shares of
Beckman Coulter stock at an average price of
-- Announced the release of the AutoMate(TM) 600 Sample Processor, the latest member of our family of market leading Clinical Lab Automation products, a fully automated system designed to streamline pre- and post- analytical sample handling processes for mid- to high-volume laboratories.
-- Entered into an agreement with Siemens Healthcare Diagnostics for sublicense of certain U.S. rights relating to testing for the hepatitis C virus (HCV). Under the agreement, Beckman Coulter can develop, manufacture and sell a quantitative viral load HCV blood test for use on the company's molecular diagnostics instrument, which is in development.
First Half Summary
For the first six months of 2008, revenue increased 17.3%, with the
recently acquired flow cytometry products contributing 1% to this growth.
Revenue growth was 12.8% in constant currency, versus first half 2007.
Year-to-date recurring revenue was up 13.1%, or 8.5% in constant currency.
Year-to-date gross margin, impacted by mix reflecting high growth levels in
cash instrument and international sales, decreased 100 basis points to 46.1%
compared to the first six months of 2007. Adjusting for special items,
operating income increased by 12.9% to
Adjusted operating margin decreased 40 basis points due to
Full Year Outlook
Garrett continued, "I am pleased that first half operating income grew almost 13% despite pressures from transportation costs and incremental costs associated with the currency swap extension and dilution from the flow cytometry acquisition. Revenue across all major diagnostics product areas was up considerably. Strong growth in diagnostics recurring revenue signals the productivity of recent additions to our installed base.
"Cash instrument sales growth, ahead of expectations in the first half,
has led us to adjust our revenue and operating margin outlook for the year.
Assuming stable currency, full year revenue growth should be in the range of
12% to 14%. We expect 2008 adjusted operating margin to be approximately 12%.
The outlook for adjusted non-operating expense for the full year should be
about
"As we look to the second half of 2008, we anticipate that the above market growth in Cellular Analysis will moderate due to the first half resolution of the backlog affecting Hematology and Flow Cytometry instrumentation. Further, growth in Life Sciences is expected to return to low single digits. These anticipated trends should contribute to a lower growth rate for the second half and a less instrument-intensive mix. Strong growth in Immunoassay as well as Chemistry and Clinical Automation should continue as new product introductions, such as the AutoMate 600 Sample Processor and three additional work cells, support positive momentum. Strong growth of total and recurring revenue along with the benefits of our lean six sigma program should enable us to meet our EPS objectives while funding investment in important high potential growth areas, such as molecular diagnostics, work cells, next generation cellular systems, new tests, technologies and emerging markets," Garrett concluded.
Investor Conference Call
As previously announced, there will be a conference call today,
About Beckman Coulter
Beckman Coulter, Inc., based in
Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Such statements contain words
such as "may," "will," "might," "expect," "believe," "anticipate," "could,"
"would," "estimate," "continue," "pursue," or the negative thereof or
comparable terminology, and may include without limitation information
regarding the company's expectations, goals or intentions regarding the
future, including without limitation statements regarding the company's
anticipated recurring revenue growth (and that such growth will support future
growth and earnings goals), expectations on earnings growth (and that such
growth will be in line with the Company's objectives), potential or planned
investment in future growth vehicles, the full year outlook for the Company's
tax rate, earnings and per share objectives, instrument placements relative to
the Company's future growth potential, hardware mix, growth in the Life
Sciences, Immunoassay, Chemistry, and Clinical Automation product areas, the
company's expectations on expanding its installed base, and statements under
the heading "Full Year Outlook," including expectations for revenue growth,
operating margin, non-operating expense, pretax profit growth, tax rate,
earnings per diluted share, earnings before interest, taxes, depreciation and
amortization ("EBITDA"), capital expenditures, and depreciation and
amortization. The outlook provided is based on fiscal year ended 2007 and the
three and six months ended
This press release contains the Company's unaudited financial results for
the three and six months ended
Forward-looking statements included in this press release involve certain
risks and uncertainties and are based on management's current expectations,
estimates, forecasts and projections about the Company and are subject to
risks and uncertainties, some of which may be beyond the company's control,
that could cause actual results and events to differ materially from those
stated in the forward-looking statements. These risks and uncertainties
include, but are not limited to market demand for the Company's new and
existing products and its ability to increase revenues; the Company's ability
to maintain operating expenses within anticipated levels; the Company's
ability to successfully and cost effectively establish and manage operations
in foreign jurisdictions; the Company's ability to attract and retain
qualified personnel; successful development and introduction of new products;
the Company's ability to successfully integrate acquired businesses and
realize the anticipated benefits from such acquisitions; pricing pressures and
other competitive factors; industry consolidation; order and shipment
uncertainty; changes in customers' inventory levels and inventory management
practices; product defects; intellectual property infringement claims by
others and the ability to protect the company's intellectual property;
competition; litigation; financial community and rating agency perceptions of
the Company; changes in laws and regulations, including increased taxes;
regulation, economic, credit and capital market conditions; and the effects of
war, terrorist or similar activity. Additional factors that could cause actual
results to differ are discussed in Part I, Item 1A (Risk Factors) of the
Company's report to the SEC on Form 10-K filed with the SEC on
Changes in Presentation
In connection with the preparation of the Consolidated Financial
Statements for the year ended
Previously
Reported restated
Depreciation and amortization $99.9 $95.7
Change in inventories (28.7) (33.3)
Change in long-term lease receivables 6.2 4.4
Change in other (7.9) (6.4)
Net cash provided by operating activities 197.0 187.9
Additions to property, plant and equipment (147.5) (138.4)
Net cash used in investing activities (158.3) (149.2)
Change in Accounting for Convertible Debt Securities
In
Non-GAAP Financial Measures
"GAAP" refers to financial information presented in accordance with
generally accepted accounting principles in
To supplement the condensed consolidated financial statements and
discussion presented on a GAAP basis, this press release includes non-GAAP
financial measures with respect to the three and six months ended
Adjusted operating income excludes the impact of charges or write-offs associated with acquisitions, restructuring, or relocations in connection with our supply chain improvement initiatives and other operating income and expense items that we do not expect to be recurring. Some of the items excluded may be beyond the control of management and are less predictable than our core performance. Although management expects to incur costs for its supply chain initiatives in 2008 and 2009, management has not developed plans for those initiatives in sufficient detail to estimate the costs to be incurred in those periods and believes those costs do not reflect the ongoing performance of the core business. Management uses adjusted operating income to prepare operating budgets and forecasts and to measure our performance against those budgets and forecasts. Additionally, the Company uses adjusted operating income to evaluate management performance for compensation purposes. A reconciliation of operating income, the GAAP measure most directly comparable to adjusted operating income, is provided on the attached schedule.
Adjusted operating margin is calculated using adjusted operating income, as described above, divided by revenue. Management uses adjusted operating margin in its analysis of operating budgets and forecasts and to measure our performance against those budgets and forecasts, since this measure is reflective of our operating costs on an ongoing basis and excludes transactions or events that may be beyond the control of management or which are unpredictable. Management uses adjusted operating margin when evaluating the performance trends of our company compared to others. A reconciliation of operating margin, the GAAP measure most directly comparable to adjusted operating margin, is provided on the attached schedule.
Adjusted net earnings excludes the impact of income and expense items excluded from adjusted operating income, as described above, and non-operating income and expense items that we do not expect to be recurring. Adjusted net earnings also exclude the related incremental tax effect of these items. Adjusted diluted earnings per share exclude the effect of those same items from diluted earnings per share. Reconciliations of net earnings, the GAAP measure most directly comparable to adjusted net earnings, and earnings per share, the GAAP measure most directly comparable to adjusted earnings per share, are provided on the attached schedule.
Adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") is a non-GAAP measure that management believes provides useful supplemental information for management and investors. Adjusted EBITDA is a tool that provides a measure of the adjusted net earnings, as described above, of the business before considering the impact of interest, taxes, depreciation and amortization. We believe adjusted EBITDA provides management with a means to analyze and evaluate the profitability of our business and its ability to generate cash flow before the effect of interest, taxes, depreciation and amortization. A reconciliation of net earnings, the GAAP measure most directly comparable to adjusted EBITDA, is provided on the attached schedule.
Our discussion of international revenue includes comparisons on a constant currency basis, which we have previously defined in our annual report on Form 10-K. We believe use of this measure aids in the understanding of our operations without the impact of foreign currency. This presentation is consistent with our internal use of the measure, which we use to measure the profitability of ongoing operating results against prior periods and against our internally developed targets. We believe our investors also use this measure to analyze the underlying trends in our international operations.
Our Outlook for 2008 adjusted operating income, adjusted operating margin, adjusted pretax profit growth, adjusted non-operating expense, adjusted tax rate, adjusted net earnings, adjusted net earnings per share and adjusted EBITDA excludes the impact of charges or write-offs associated with acquisitions, restructuring, including relocations in connection with our supply chain improvement initiatives, gains or losses upon sale of assets or businesses and other items that we do not expect to be recurring, because we are unable to forecast such items with reasonable predictability and do not include those items in our operating budgets. Although management expects to incur costs for its supply chain initiatives in 2008 and 2009, management has not developed plans for those initiatives in sufficient detail to estimate the costs to be incurred in those periods and believes those costs do not reflect of the ongoing performance of the core business. The Company is not able to provide a reconciliation of projected non-GAAP financial measures to expected reported results due to the unknown effect, timing and potential significance of special charges and our inability to forecast charges associated with future transactions and initiatives. However, management believes our Outlook for 2008, using the non-GAAP measures indicated, reflects management's expectation of the performance of the core operations of the company and believes this information is useful to investors to view our operations through the eyes of management.
The presentation of historical non-GAAP financial measures is not meant to be considered in isolation from or as a substitute for results prepared in accordance with GAAP. We use these non-GAAP measures to supplement net earnings and other corresponding measures on a basis prepared in conformance with GAAP. These non-GAAP financial measures reflect additional ways of viewing aspects of our operations that when viewed with our GAAP results provide a more complete understanding of factors and trends affecting our business. However, investors should understand that the excluded items are actual income and expenses that may impact the cash available to us for other uses. We strongly encourage investors to consider both net earnings and cash flows determined under GAAP as compared to the non-GAAP measures presented and to perform their own analysis, as appropriate.
Reconciling Items to Non-GAAP Financial Measures
The non-GAAP measures described above exclude the following items:
a) Restructuring expenses -- In
b) HCV sublicense -- During the second quarter of 2008, we entered into an
agreement with Siemens Healthcare Diagnostics and recorded an R&D charge of
c)
d) Fair market value inventory adjustment -- During the first quarter of
2008, in connection with our acquisition of the flow cytometry business of
Dako A/S, we recorded a
e) Rental tax dispute -- In 1998, the Company entered into a
sale-leaseback transaction with Cardbeck Miami Trust ("Cardbeck") in
connection with the Company's
f) Biosite break-up fee -- On
BECKMAN COULTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except amounts per share and share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Product revenue $680.7 $584.7 $1,299.0 $1,097.1
Service revenue 117.6 105.0 229.8 206.2
Total revenue 798.3 689.7 1,528.8 1,303.3
Cost of goods sold 342.7 292.2 650.9 536.0
Cost of service 86.5 81.1 173.5 153.5
Total cost of sales 429.2 373.3 824.4 689.5
Gross profit 369.1 316.4 704.4 613.8
Operating costs and
expenses
Selling, general and
administrative 212.7 181.0 416.3 356.4
Research and
development 77.7 58.8 140.4 116.6
Restructuring 4.7 2.8 5.4 9.7
Asset impairment
charges - 0.8 - 0.8
Total operating
costs and expenses 295.1 243.4 562.1 483.5
Operating income 74.0 73.0 142.3 130.3
Non-operating (income)
expense
Interest income (3.6) (3.2) (6.2) (7.8)
Interest expense 12.2 14.3 21.2 26.7
Other, net 0.1 (40.9) 5.3 (38.7)
Total non-operating
expense (income) 8.7 (29.8) 20.3 (19.8)
Earnings before income
taxes 65.3 102.8 122.0 150.1
Income taxes 17.5 33.4 31.3 43.6
Net earnings $47.8 $69.4 $90.7 $106.5
Basic earnings per share $0.76 $1.11 $1.44 $1.71
Diluted earnings per
share $0.74 $1.09 $1.41 $1.67
Weighted average number
of shares outstanding
(in thousands)
Basic 62,969 62,389 63,005 62,120
Diluted 64,397 63,838 64,435 63,603
BECKMAN COULTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
June 30, December 31,
2008 2007
Assets
Current assets
Cash and cash equivalents $69.5 $83.0
Trade and other receivables, net 754.6 726.5
Inventories 586.7 523.9
Deferred income taxes 74.8 79.2
Prepaids and other current assets 76.2 75.5
Total current assets 1,561.8 1,488.1
Property, plant and equipment, net 908.4 867.4
Goodwill 705.9 707.4
Other intangible assets, net 411.4 418.4
Other assets 105.9 113.0
Total assets $3,693.4 $3,594.3
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $231.3 $224.8
Accrued expenses 410.2 438.2
Income taxes payable - 32.0
Notes payable 113.6 89.4
Current maturities of long-term debt 4.2 12.8
Total current liabilities 759.3 797.2
Long-term debt, less current maturities 922.0 888.6
Deferred income taxes 83.3 73.4
Other liabilities 370.0 393.4
Total liabilities 2,134.6 2,152.6
Commitments and contingencies
Stockholders' equity
Preferred stock - -
Common stock 6.9 6.8
Additional paid-in capital 542.5 519.3
Retained earnings 1,315.7 1,246.2
Accumulated other comprehensive income (loss) 43.3 (12.8)
Treasury stock, at cost (349.6) (317.8)
Common stock held in grantor trust, at cost (18.9) (17.8)
Grantor trust liability 18.9 17.8
Total stockholders' equity 1,558.8 1,441.7
Total liabilities and stockholders' equity $3,693.4 $3,594.3
BECKMAN COULTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Six Months Ended June 30,
restated
2008 2007
Cash flows from operating activities
Net earnings $90.7 $106.5
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation and amortization 122.4 95.7
Provision for doubtful accounts receivable 4.4 3.3
Share-based compensation expense 18.1 12.4
Gain on sale of building and land (5.9) -
Asset impairment charges - 0.8
U.S. pension trust contributions (8.2) (9.3)
Deferred income taxes 5.7 (1.5)
Changes in assets and liabilities
Trade and other receivables (6.0) 12.7
Inventories (38.5) (33.3)
Accounts payable and accrued expenses (30.5) 22.3
Income taxes payable (32.2) (19.7)
Long-term lease receivables 7.3 4.4
Other 5.0 (6.4)
Net cash provided by operating activities 132.3 187.9
Cash flows from investing activities
Additions to property, plant and equipment (135.2) (138.4)
Proceeds from sale of building and land 7.4 -
Payments for business acquisitions and
technology licenses (15.3) (10.8)
Net cash used in investing activities (143.1) (149.2)
Cash flows from financing activities
Dividends to stockholders (21.2) (20.5)
Proceeds from issuance of stock 38.4 46.0
Repurchase of common stock as treasury stock (70.9) (0.5)
Repurchase of common stock held in grantor trust (1.1) (0.7)
Excess tax benefits from share-based payment
transactions 6.3 12.2
Debt borrowings, net 83.4 8.1
Debt repayments (41.6) (96.7)
Debt acquisition costs - (0.4)
Net cash used in financing activities (6.7) (52.5)
Effect of exchange rates on cash and cash
equivalents 4.0 0.6
Change in cash and cash equivalents (13.5) (13.2)
Cash and cash equivalents-beginning of period 83.0 75.2
Cash and cash equivalents-end of period $69.5 $62.0
BECKMAN COULTER, INC
REVENUE BY SEGMENT
(in millions)
(unaudited)
Three Months Ended
June 30, Constant
Reported Currency
2008 2007 Growth % Growth % *
Clinical Diagnostics
Chemistry and Clinical
Automation $233.0 $205.0 13.7% 9.4%
Cellular 244.5 208.3 17.4% 13.0%
Immunoassay and
Molecular Diagnostics 193.3 159.7 21.0% 16.3%
Total Clinical
Diagnostics 670.8 573.0 17.1% 12.6%
Life Sciences 127.5 116.7 9.3% 4.3%
Total revenue $798.3 $689.7 15.7% 11.2%
Six Months Ended
June 30, Constant
Reported Currency
2008 2007 Growth % Growth % *
Clinical Diagnostics
Chemistry and Clinical
Automation $448.6 $389.0 15.3% 11.0%
Cellular 476.0 402.7 18.2% 13.8%
Immunoassay and
Molecular Diagnostics 366.2 301.6 21.4% 16.8%
Total Clinical
Diagnostics 1,290.8 1,093.3 18.1% 13.7%
Life Sciences 238.0 210.1 13.3% 8.1%
Total revenue $1,528.8 $1,303.3 17.3% 12.8%
Note: Amounts may not foot due to rounding.
* Constant currency growth as presented herein represents:
Current period constant currency revenue less prior year reported revenue
Prior year reported revenue
Clinical Diagnostics
Chemistry and Clinical Automation includes:
> Autochemistry
> Protein and rapid test products
> Clinical Automation
Cellular includes:
> Hematology
> Coagulation
> Flow cytometry and related products
Immunoassay and Molecular Diagnositcs includes:
> All immunoassay products
> Molecular diagnostics products
Life Sciences
Life Sciences includes:
> Life science tools: (All robotic automation, genetic analysis
products, centrifuge and analytical systems)
> Industrial particle characterization
BECKMAN COULTER, INC
REVENUE BY SEGMENT
(in millions)
(unaudited)
2007
Qtr 1 Qtr 2 Qtr 3 Qtr 4 YTD
Clinical
Diagnostics
Chemistry and
Clinical
Automation $183.9 $205.0 $196.5 $229.9 $815.3
Cellular 194.4 208.3 203.0 235.2 840.9
Immunoassay and
Molecular
Diagnostics 141.9 159.7 159.6 165.9 627.1
Total
Clinical
Diagnostics 520.2 573.0 559.1 631.0 2,283.3
Life Sciences 93.4 116.7 109.9 158.0 478.0
Total
revenue $613.6 $689.7 $669.0 $789.0 $2,761.3
2006
Qtr 1 Qtr 2 Qtr 3 Qtr 4 YTD
Clinical
Diagnostics
Chemistry and
Clinical
Automation $163.9 $175.3 $180.9 $196.1 $716.2
Cellular 184.0 196.6 202.8 223.0 806.4
Immunoassay and
Molecular
Diagnostics 119.4 131.2 127.4 140.4 518.4
Total
Clinical
Diagnostics 467.3 503.1 511.1 559.5 2,041.0
Life Sciences 101.7 113.2 120.1 152.5 487.5
Total
revenue $569.0 $616.3 $631.2 $712.0 $2,528.5
Note: Amounts may not foot due to rounding.
BECKMAN COULTER, INC
REVENUE BY GEOGRAPHY
(in millions)
(unaudited)
Three Months Ended
June 30, Constant
Reported Currency
2008 2007 Growth % Growth %
Revenue by geography:
United States $389.7 $360.1 8.2% 8.2%
Europe 183.5 150.9 21.6% 9.1%
Emerging Markets* 70.0 55.9 25.2% 21.8%
Asia Pacific 100.9 78.5 28.5% 20.4%
Other** 54.3 44.2 22.8% 13.8%
Total revenue $798.3 $689.7 15.7% 11.2%
Six Months Ended
June 30, Constant
Reported Currency
2008 2007 Growth % Growth %
Revenue by geography:
United States $756.9 $691.9 9.4% 9.4%
Europe 346.5 289.3 19.8% 8.3%
Emerging Markets* 136.3 99.3 37.3% 32.1%
Asia Pacific 184.6 136.6 35.1% 27.0%
Other** 104.6 86.1 21.4% 10.3%
Total revenue $1,528.8 $1,303.3 17.3% 12.8%
Note: Amounts may not foot due to rounding.
* Includes Eastern Europe, Russia, Middle East, Africa and India
** Includes Canada and Latin America
BECKMAN COULTER, INC
SALES MIX
(in millions)
(unaudited)
2008
Qtr 1 Qtr 2 Qtr 3 Qtr 4 YTD
Cash instrument
sales $151.2 $179.6 $330.8
Recurring
revenue 579.3 618.7 1,198.0
Total
revenue $730.5 $798.3 $1,528.8
2007
Qtr 1 Qtr 2 Qtr 3 Qtr 4 YTD
Cash instrument
sales $100.3 $143.7 $130.3 $208.5 $582.9
Recurring
revenue 513.3 546.0 538.6 580.5 2,178.4
Total
revenue $613.6 $689.7 $669.0 $789.0 $2,761.3
2006
Qtr 1 Qtr 2 Qtr 3 Qtr 4 YTD
Cash instrument
sales $116.2 $123.4 $144.4 $197.6 $581.6
Recurring
revenue 452.8 492.9 486.8 514.3 1,946.8
Total
revenue $569.0 $616.3 $631.2 $711.9 $2,528.5
Note: Amounts may not foot due to rounding.
BECKMAN COULTER, INC.
RECONCILIATION OF GAAP OPERATING INCOME AND MARGIN TO
ADJUSTED OPERATING INCOME AND MARGIN
(in millions)
(unaudited)
Three Months Ended
June 30,
2008 2007
GAAP operating income $74.0 $73.0
Reconciling items*:
Restructuring expenses (a) 4.7 3.6
HCV sublicense (b) 12.0 -
Rental tax dispute (e) - 1.6
Adjusted operating income $90.7 $78.2
GAAP operating margin 9.3% 10.6%
Impact of adjustments 2.1% 0.7%
Adjusted operating margin 11.4% 11.3%
Six Months Ended
June 30,
2008 2007
GAAP operating income $142.3 $130.3
Reconciling items*:
Restructuring expenses (a) 5.4 10.5
HCV sublicense (b) 12.0 -
Fair market value inventory adjustment (d) 1.0 -
Rental tax dispute (e) - 1.6
Adjusted operating income $160.7 $142.4
GAAP operating margin 9.3% 10.0%
Impact of adjustments 1.2% 0.9%
Adjusted operating margin 10.5% 10.9%
*See accompanying Non-GAAP Financial Measures section for description of Non-GAAP adjustments
BECKMAN COULTER, INC.
RECONCILIATION OF GAAP NET EARNINGS TO ADJUSTED NET EARNINGS
(in millions, except amounts per share)
(unaudited)
Three Months Ended June 30,
2008 2007
Per Diluted Per Diluted
Amount Share Amount Share
GAAP net earnings $47.8 $0.74 $69.4 $1.09
Reconciling items*:
Restructuring expenses (a) 4.7 0.07 3.6 0.06
HCV sublicense (b) 12.0 0.19 - -
Miami vacant land sale (c) (1.2) (0.02) - -
Rental tax dispute (e) - - 2.4 0.04
Biosite break-up fee (f) - - (40.6) (0.64)
Adjustment for income taxes (5.9) (0.09) 13.0 0.20
Adjusted net earnings $57.4 $0.89 $47.8 $0.75
Six Months Ended June 30,
2008 2007
Per Diluted Per Diluted
Amount Share Amount Share
GAAP net earnings $90.7 $1.41 $106.5 $1.67
Reconciling items*:
Restructuring expenses (a) 5.4 0.08 10.5 0.16
HCV sublicense (b) 12.0 0.18 - -
Miami vacant land sale (c) (1.2) (0.02) - -
Rental tax dispute (e) - - 2.4 0.04
Fair market value inventory
adjustment (d) 1.0 0.02 - -
Biosite break-up fee (f) - - (40.6) (0.63)
Adjustment for income taxes (6.5) (0.10) 10.4 0.16
Adjusted net earnings $101.4 $1.57 $89.2 $1.40
*See accompanying Non-GAAP Financial Measures section for description of Non-GAAP adjustments
BECKMAN COULTER, INC.
RECONCILIATION OF GAAP NET EARNINGS TO ADJUSTED EBITDA
(in millions)
(unaudited)
Six Months Ended
June 30,
2008 2007
GAAP net earnings $90.7 $106.5
Income taxes 31.3 43.6
Interest expense 21.2 26.7
Depreciation and amortization 122.4 95.7
EBITDA 265.6 272.5
Reconciling items*:
Restructuring expenses (a) 5.4 10.5
HCV sublicense (b) 12.0 -
Miami vacant land sale (c) (1.2) -
Fair market value inventory adjustment (d) 1.0 -
Rental tax dispute (e) - 1.6
Biosite break-up fee (f) - (40.6)
Adjusted EBITDA $282.8 $244.0
*See accompanying Non-GAAP Financial Measures section for description of Non-GAAP adjustments
BECKMAN COULTER, INC.
RECONCILIATION OF GAAP TAX RATE TO ADJUSTED TAX RATE
(in millions)
(unaudited)
Three Months Ended
June 30,
2008 2007
GAAP tax rate 26.8% 32.5%
Reconciling items*:
Restructuring expenses (a) 0.7% 0.3%
HCV sublicense(b) 1.7% -
Miami vacant land sale (c) (0.2%) -
Rental tax dispute (e) - 0.1%
Biosite break-up fee (f) - (3.0%)
Adjusted tax rate 29.0% 29.9%
Six Months Ended
June 30,
2008 2007
GAAP tax rate 25.6% 29.0%
Reconciling items*:
Restructuring expenses (a) 0.5% 0.7%
HCV sublicense (b) 1.1% -
Miami vacant land sale (c) (0.1%) -
Fair market value inventory adjustments (d) 0.1% -
Rental tax dispute (e) - 0.1%
Biosite break-up fee (f) - (2.7%)
Adjusted tax rate 27.2% 27.1%
*See accompanying Non-GAAP Financial Measures section for description of Non-GAAP adjustments
Contact: Cynthia Skoglund (714) 773-7620
Manager, Investor Relations
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