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PerkinElmer Inc. Reports Operating Results (10-K)

March 01, 2011 | About:
gurufocus

10qk

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PerkinElmer Inc. (PKI) filed Annual Report for the period ended 2011-01-02.

Perkinelmer Inc. has a market cap of $3.13 billion; its shares were traded at around $26.5 with a P/E ratio of 18.4 and P/S ratio of 1.8. The dividend yield of Perkinelmer Inc. stocks is 1.1%. Perkinelmer Inc. had an annual average earning growth of 1.9% over the past 10 years.Hedge Fund Gurus that owns PKI: Andreas Halvorsen of Viking Global Investors LP, Stanley Druckenmiller of Duquesne Capital Management, LLC, Steven Cohen of SAC Capital Advisors, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC. Mutual Fund and Other Gurus that owns PKI: Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC, Jean-Marie Eveillard of First Eagle Investment Management, LLC, Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

Acquisition of VisEn Medical Inc. In July 2010, we acquired all of the outstanding stock of VisEn Medical Inc. (VisEn). VisEn is an in vivo molecular imaging technology company. We expect this acquisition to enhance our cellular imaging business by expanding our technologies and capabilities into preclinical research undertaken in academic institutes and pharmaceutical companies. We paid the equity holders of VisEn $23.0 million in cash for the stock of VisEn, of which $18.2 million was paid at closing and an additional amount of $4.8 million is held in an escrow account to secure potential adjustments for VisEns indebtedness, working capital as of the closing date, and indemnification obligations of VisEns equity holders. During the fourth quarter of fiscal year 2010, we finalized the purchase price and related allocation resulting in an increase in deferred tax assets, included in long-term liabilities, of $8.5 million and a decrease in goodwill of $8.5 million. We have reported the operations for this acquisition within the results of our Human Health segment from the acquisition date.

Acquisition of Signature Genomic Laboratories, LLC. In May 2010, we acquired all of the outstanding stock of SGL Newco, Inc., the parent company of Signature Genomic Laboratories, LLC (Signature Genomic). Signature Genomic is a provider of diagnostic cytogenetic testing of chromosome abnormalities in individuals with unexplained physical and developmental disabilities. We expect this acquisition to expand our existing genetic testing business and expand our position in early detection of disease, specifically in the molecular diagnostics market. We paid the equity holders of Signature Genomic $90.0 million in cash, of which $77.5 million was paid at closing and an additional amount of $12.5 million is held in an escrow account to secure certain adjustments for Signature Genomics indebtedness, working capital as of the closing date, and indemnification obligations of Signature Genomics equity holders. We have reported the operations for this acquisition within the results of our Human Health segment from the acquisition date.

Acquisition of Remaining Interest in the Inductively Coupled Plasma Mass Spectrometry Joint Venture. In May 2010, we acquired the remaining fifty percent equity interest in our joint venture (the ICPMS Joint Venture) with the company previously known as MDS, Inc. for the development and manufacturing of our Inductively Coupled Plasma Mass Spectrometry (ICPMS) product line and other related tangible assets from DH Technologies Development Pte Ltd., a subsidiary of Danaher Corporation (Danaher). We expect this acquisition will help support the continued success of the premier ICPMS product line by allowing us to direct development with a dedicated and consistent approach. The fair value of the acquisition was $67.7 million, including cash consideration of $35.0 million, non-cash consideration of $2.6 million for certain non-exclusive rights to intangible assets we own, and $30.4 million representing the fair value of our fifty percent equity interest in the ICPMS Joint Venture held prior to the acquisition. We recognized a pre-tax gain of $25.6 million from the re-measurement to fair value of our previously held equity interest in the ICPMS Joint Venture. This pre-tax gain is reported in interest and other (income) expense, net, for fiscal year 2010. We have reported the operations for this acquisition within the results of our Environmental Health segment from the acquisition date.

During fiscal year 2010, we incurred a $12.6 million pre-tax restructuring charge in the Human Health segment related to a workforce reduction from reorganization activities and the closure of excess facility space. We also recognized an $11.6 million pre-tax restructuring charge in the Environmental Health segment related to a workforce reduction from reorganization activities and the closure of excess facility space. Our management approved these plans principally to shift resources to higher growth geographic regions and end markets and to reduce resources in response to the continued economic downturn and its impact on demand in certain other end markets. The restructuring costs for the closure of excess facility space were offset by the recognition of a $3.0 million gain that had been deferred from a previous sales-leaseback transaction on this facility. We also recorded a pre-tax restructuring reversal of $2.3 million relating to our previous restructuring plans due to lower than expected costs associated with workforce reductions in Europe within both the Human Health and Environmental Health segments. The pre-tax restructuring activity associated with these plans has been reported as restructuring

Divestiture of Illumination and Detection Solutions Business. In November 2010, we sold our Illumination and Detection Solutions (IDS) business, which was included in our Environmental Health segment, for approximately $500.0 million, $482.0 million net of payments for acquired cash balances, subject to an adjustment for working capital as of the closing date. We expect the divestiture of our IDS business to reduce the complexity of our product offerings and organizational structure, and to provide capital to reinvest in other Human Health and Environmental Health end markets. The buyer acquired our IDS business through the purchase of all outstanding stock of certain of our subsidiaries located in Germany, Canada, China, Indonesia, the Philippines, the United Kingdom and the United States as well as the purchase of related assets and the assumption of liabilities held by us and certain of our subsidiaries located in Singapore and Germany. We recognized a pre-tax gain of $315.3 million, inclusive of the net working capital adjustment, in the fourth quarter of fiscal year 2010 as a result of the sale of our IDS business. The gain was recognized as a gain on the disposition of discontinued operations.

On October 23, 2008, we announced that our Board of Directors (our Board) authorized us to repurchase up to 10.0 million shares of common stock under a stock repurchase program (the Repurchase Program). On August 31, 2010, we announced that our Board had authorized us to repurchase an additional 5.0 million shares of common stock under the Repurchase Program. The Repurchase Program will expire on October 22, 2012 unless terminated earlier by our Board, and may be suspended or discontinued at any time. During fiscal year 2008, we repurchased approximately 1.0 million shares of common stock in the open market at an aggregate cost of $18.0 million, including commissions, under the Repurchase Program. During fiscal year 2009, we repurchased approximately 1.0 million shares of common stock in the open market at an aggregate cost of $14.2 million, including commissions, under the Repurchase Program. During fiscal year 2010, we repurchased approximately 3.0 million shares of common stock in the open market at an aggregate cost of $71.5 million, including commissions, under the Repurchase Program. As of January 2, 2011, approximately 10.0 million shares of our common stock remained available for repurchase from the 15.0 million shares authorized by our Board under the Repurchase Program. From January 3, 2011 through February 24, 2011, we repurchased approximately 3.0 million shares of common stock in the open market at an aggregate cost of $80.6 million, including commissions, under the Repurchase Program.

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