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SigmaAldrich Corp. Reports Operating Results (10-Q)

July 22, 2010 | About:
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10qk

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SigmaAldrich Corp. (SIAL) filed Quarterly Report for the period ended 2010-06-30.

Sigmaaldrich Corp. has a market cap of $6.49 billion; its shares were traded at around $53.43 with a P/E ratio of 18 and P/S ratio of 3. The dividend yield of Sigmaaldrich Corp. stocks is 1.2%. Sigmaaldrich Corp. had an annual average earning growth of 13.5% over the past 10 years. GuruFocus rated Sigmaaldrich Corp. the business predictability rank of 5-star.SIAL is in the portfolios of Edward Owens of Vanguard Health Care Fund, Stanley Druckenmiller of Duquesne Capital Management, LLC, Chris Shumway of Shumway Capital Partners LLC, Murray Stahl of Horizon Asset Management, Chris Davis of Davis Selected Advisers, Jeremy Grantham of GMO LLC, Bill Frels of Mairs & Power Inc. , Kenneth Fisher of Fisher Asset Management, LLC, First Pacific Advisors of First Pacific Advisors, LLC, Dodge & Cox, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Sales were $554 in the second quarter of 2010, up 6.1 percent from the second quarter of 2009. The effect of changes in foreign currency exchange rates decreased sales by $2. Excluding the effects of changes in foreign currency exchange rates, sales increased organically by $34 or 6.5 percent. Factors contributing to the organic growth included pricing which added 0.4 percent and volume which added 6.1 percent.

Sales were $1,126 in the six months ended June 30, 2010, up 8.2 percent from the prior year 2009. The effect of changes in foreign currency exchange rates increased sales by $28. Excluding the effects of changes in foreign currency exchange rates, sales increased organically by $57 or 5.5 percent. Factors contributing to the organic growth included pricing which added 0.4 percent and volume which added 5.1 percent.

Research Specialties total sales were $207 for the second quarter of 2010 compared to $193 during the same period last year. Organic sales increased by $14 or 7.3 percent. The increase was largely driven by higher demand for our analytical products amounting to $6 of the organic increase and higher demand in our chemistry and biochemistry products increasing by $5 and $2, respectively. The increase in sales largely came from markets outside of the U.S. Research Specialties total sales were $424 for the first half of 2010 compared to $390 during the same period last year. Excluding the effects of changes in foreign currency exchange rates, sales increased by $22 or 5.6 percent. The increase was largely driven by higher demand for our analytical products amounting to $9 of the organic increase and higher demand in our chemistry and biochemistry products increasing by $8 and $4, respectively.

Research Biotech total sales were $83 for the first quarter of 2010 compared to $80 during the same period last year. Organic sales increased by $3 or 3.8 percent. This increase was largely driven by higher demand for our biomolecule products amounting to $2 of the organic increase. Research Biotech total sales were $174 for the first half of 2010 compared to $162 during the same period last year. Excluding the effects of changes in foreign currency exchange rates, sales increased by $7 or 4.3 percent. This increase was largely driven by higher demand for our biomolecule products amounting to $3 of the organic increase and higher demand in our functional genomics, protein assays and transgenics each contributing $1. All regions experienced improved demand over the prior year.

SAFC total sales were $157 for the second quarter of 2010 compared to $143 during the same period last year. Excluding the effects of changes in foreign currency exchange rates, sales increased by $16 or 11.2 percent. The primary drivers for this increase were increased demand for our biopharmaceutical, supply solution and hitech products. Hitech and supply solution products each improved by $7 and biopharmaceutical products added $5 as compared to the second quarter of 2009. SAFC total sales were $309 for the first half of 2010 compared to $276 during the same period last year. Excluding the effects of changes in foreign currency exchange rates sales increased by $28 or 10.2 percent. The primary drivers for this increase were increased demand for our hitech, biopharmaceutical and pharmaceutical products. This increase was largely driven by our hitech products amounting to $14 of the organic increase as the markets for metal organics associated with the semiconductor and LED lighting industries continue to grow. Biopharmaceutical and supply solutions products each added $7 as compared to the first half of 2009.

Cost of sales primarily represents materials, labor, distribution and overhead costs associated with the Companys products, services and facilities. Cost of sales for the three and six months ended June 30, 2010 were $260 and $529 compared to $252 and $503 for the same periods in the prior year, respectively, and represented an increase of 3.2 percent and 5.2 percent for the three and six months ended June 30, 2010, respectively. The increase in costs of sales is primarily due to higher volume of products sold. Total cost of sales were 46.9 percent of sales for the three months ended June 30, 2010 compared to 48.3 percent for the same three months of the prior year, producing a gross profit as a percentage of sales (Gross Margin) of 53.1 percent and 51.7 percent, respectively. Total cost of sales were 47.0 percent of sales for the six months ended June 30, 2010 compared to 48.3 percent for the first six months of the prior year, producing a gross profit as a percentage of sales (Gross Margin) of 53.0 percent and 51.7 percent, respectively. The following table reflects the significant contributing factors to the net change in gross profit margin for the three and six months ended June 30, 2010 compared to the same period in 2009:

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