Thermo Fisher Scientific 2010 revenues increase 7% to $10.79 billion

Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, today reported its financial results for the fourth quarter and full year ended December 31, 2010.

“In 2011, our goal is to build on our strong operating performance and generate solid returns from the investments we are making. This combination puts us in a unique position to create value for our customers, employees and shareholders this year and for the long term.”

Full Year 2010 Highlights

• Adjusted earnings per share (EPS) for full year 2010 grew 17% to a record $3.57.
• Revenues grew 7% to $10.79 billion for the full year.
• Adjusted operating income increased 12% year over year.
• Adjusted operating margin increased 80 basis points to 17.8% for the full year.
• Increased R&D spending by more than $40 million to strengthen leadership position in innovation.
• Continued to make significant investments in Asia-Pac region, including new China Technology Center in Shanghai.
• Deployed $600 million in 2010 on 11 complementary acquisitions; announced acquisition of Dionex for $2.1 billion to create leading chromatography offering.
• Spent $1 billion for the full year to repurchase 20.7 million shares.

Adjusted EPS, adjusted operating income, adjusted operating margin and free cash flow are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."

"We had a great year in 2010," said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. "We achieved our financial goals by successfully executing our plan and reinforced our leading position through continued innovation and commercial expansion.

"We were especially pleased to achieve record adjusted EPS in 2010 on good top-line results. We also delivered 80 basis points of adjusted margin expansion for the year while significantly increasing our investments in new technologies and emerging global markets to further strengthen our depth of capabilities. In addition, we deployed $1.6 billion of capital on share buybacks and complementary acquisitions."

Casper added, "In 2011, our goal is to build on our strong operating performance and generate solid returns from the investments we are making. This combination puts us in a unique position to create value for our customers, employees and shareholders this year and for the long term."

Fourth Quarter 2010

For the fourth quarter of 2010, adjusted EPS grew 10% to a record $1.00, versus $0.91 in the fourth quarter of 2009. Revenues for the fourth quarter of 2010 decreased 2% to $2.78 billion, compared with $2.84 billion in the fourth quarter of 2009. Acquisitions increased revenues by 2%, and the unfavorable effect of currency translation lowered revenues by 1%. Adjusted operating income for the fourth quarter of 2010 was flat compared with the fourth quarter of 2009, and adjusted operating margin expanded 40 basis points to 18.4%, compared with 18.0% in the fourth quarter of 2009. GAAP diluted EPS for the fourth quarter of 2010 was $0.75, versus $0.65 in the fourth quarter of 2009. GAAP operating income for the fourth quarter of 2010 was $341.3 million, compared with $324.3 million in the fourth quarter of 2009, and GAAP operating margin was 12.3%, compared with 11.4% in the fourth quarter of 2009.

Full Year 2010

For full year 2010, adjusted EPS grew 17% to $3.57, versus $3.05 in 2009. Revenues for 2010 grew 7% to $10.79 billion, compared with $10.11 billion in 2009. Acquisitions contributed 3% to the growth, and currency translation had a negligible effect on revenues. Adjusted operating income for 2010 increased 12% over 2009 results, and adjusted operating margin expanded 80 basis points for the year to 17.8%, compared with 17.0% in 2009. GAAP diluted EPS for 2010 was $2.53, versus $2.01 in 2009. GAAP operating income for 2010 was $1.26 billion, compared with $1.05 billion in 2009, and GAAP operating margin was 11.7%, compared with 10.4% in 2009.

Annual Guidance for 2011

Thermo Fisher is also initiating adjusted EPS and revenue guidance for the full year 2011. The company expects to achieve adjusted EPS in the range of $4.00 to $4.10 for 2011, which would result in 12% to 15% EPS growth over 2010. The company expects to achieve 2011 revenues in the range of $11.33 billion to $11.45 billion, for 5% to 6% revenue growth year over year.

The 2011 guidance does not include the acquisition of Dionex, as the transaction has not yet closed, nor does it include any other future acquisitions or divestitures and is based on current foreign exchange rates. In addition, the adjusted EPS estimate excludes amortization expense for acquisition-related intangible assets and certain other items detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."

Management uses adjusted operating results to monitor and evaluate performance of the company's business segments.

Analytical Technologies Segment

In the fourth quarter of 2010, Analytical Technologies Segment revenues increased 4% to $1.24 billion, compared with revenues of $1.19 billion in the fourth quarter of 2009. Segment adjusted operating income increased 6% in the fourth quarter of 2010, and adjusted operating margin increased to 22.2%, versus 21.8% in the fourth quarter of 2009.

For the full year 2010, revenues in the Analytical Technologies Segment increased 11% to $4.61 billion, compared with 2009 full year revenues of $4.15 billion. Segment adjusted operating income increased 18% in 2010, and adjusted operating margin increased to 21.3%, versus 2009 results of 20.2%.

Laboratory Products and Services Segment

In the fourth quarter of 2010, Laboratory Products and Services Segment revenues decreased 6% to $1.67 billion, compared with revenues of $1.77 billion in the fourth quarter of 2009. Segment adjusted operating income decreased 5% in the fourth quarter of 2010, and adjusted operating margin increased to 14.2%, versus 14.1% in the fourth quarter of 2009.

For the full year 2010, revenues in the Laboratory Products and Services Segment increased 4% to $6.69 billion, compared with 2009 full year revenues of $6.43 billion. Segment adjusted operating income increased 6% in 2010, and adjusted operating margin increased to 13.9%, versus 2009 results of 13.7%.