Sigma-Aldrich Corporation develops manufactures and distributes the broadest range of high quality biochemicals organic chemicals chromatography products and diagnostic reagents available in the world. These products are used in high technology research and development in the life sciences at universities and in industry for the diagnosis of disease and as specialty chemicals for pharmaceutical and other manufacturing purposes. SigmaAldrich Corp. has a market cap of $5.51 billion; its shares were traded at around $45.16 with a P/E ratio of 16.7 and P/S ratio of 2.5. The dividend yield of SigmaAldrich Corp. stocks is 1.3%. SigmaAldrich Corp. had an annual average earning growth of 12.6% over the past 10 years. GuruFocus rated SigmaAldrich Corp. the business predictability rank of 4.5-star.
Highlight of Business Operations:Reported diluted net income per share for the first quarter of 2009 increased by 6.3% to $0.68 from $0.64 in the first quarter of 2008. The impact of foreign currency exchange rates lowered diluted earnings per share by $0.13 when compared to the same period last year. The Companys strategic pricing actions, global supply chain activities and efforts to lower selling, general and administrative costs, together with reduced interest expense and a lower effective tax rate contributed $0.18 to diluted earnings per share when compared to the same period last year. Lower fully diluted shares outstanding also added $0.04 to the diluted net income per share in 2009 as compared to the same period in 2008.
Net interest expense was $2.9 and $4.2 for the three months ended March 31, 2009 and 2008, respectively. The decrease in net interest expense is primarily attributable to reduced interest rates on short-term borrowings. The weighted average interest rate for short-term borrowings at March 31, 2009 was 0.5% on borrowings of $434.8 compared to a weighted average interest rate for short-term borrowings of 2.8% on borrowings of $304.4 at March 31, 2008.
Income before income taxes decreased to $122.8 for the three months ended March 31, 2009 from $124.4 achieved in the same period of 2008. The primary factor driving this decrease was the impact of foreign exchange rates, which reduced income before taxes by $23.5. Management was able to offset much of this currency impact with its strategic pricing actions, cost containment actions and supply chain initiatives, which were discussed above.
Cash used in investing activities was $28.8 and $17.8 for the three months ended March 31, 2009 and 2008, respectively. This increase was primarily due to an increase in capital expenditures. Capital expenditures increased to $28.2 during the first three months of 2009 from $18.9 during the same period of 2008 resulting from plant expansions in Wisconsin, California and Israel. During 2009, capital spending is expected to be approximately $110.
For the three months ended March 31, 2009, the Companys financing activities used cash of $103.4 compared to $91.6 for the same period of 2008. This increase is due primarily to repayments on short-term debt net of issuances, of $73.9 in the first three months of 2009 compared to $50.0 in net issuances of short-term debt, during the same period of 2008. Long-term debt of $6.9 was repaid in the first three months of 2009 compared to $90.0 repaid in 2008. Additionally, no long-term debt was issued in 2009 or 2008. During the first quarter of 2009, the Company purchased 0.2 shares of treasury stock totaling $7.2 compared to 0.9 shares totaling $47.3 in the same period last year.
At March 31, 2009, the Company had $343.0 of commercial paper outstanding and other debt of $91.8 with maturities of less than one year. The Company had long-term borrowings of $200.0, for a total decrease in all outstanding debt of $94.1 from December 31, 2008.
Read the The complete ReportSIAL is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., Edward Owens of Vanguard Health Care Fund, Edward Owens of Vanguard Health Care Fund, John Hussman of Hussman Economtrics Advisors, Inc., Kenneth Fisher of Fisher Asset Management, LLC, Kenneth Fisher of Fisher Asset Management, LLC, Chris Davis of Davis Selected Advisers, Dodge & Cox.