x
|
Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Quarter Ended September 26,
2009
|
o
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
Delaware
|
04-2209186
|
(State
of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
81
Wyman Street
|
|
Waltham,
Massachusetts
|
02451
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Class
|
Outstanding
at September 26, 2009
|
|
Common
Stock, $1.00 par value
|
408,314,630
|
THERMO
FISHER SCIENTIFIC INC.
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet
|
||||||||||
(Unaudited)
|
|
September
26,
|
December
31,
|
|||||
(In
millions)
|
2009
|
2008
|
|||||
|
|
|
|||||
Assets
|
|
|
|||||
Current
Assets:
|
|
|
|||||
Cash
and cash equivalents
|
$ | 1,745.7 | $ | 1,280.5 | |||
Short-term investments, at quoted market value (amortized cost of $11.4
and $8.5)
|
10.6 | 7.5 | |||||
Accounts receivable, less allowances of $49.4 and $43.1
|
1,482.0 | 1,478.1 | |||||
Inventories:
|
|||||||
Raw materials
|
291.8 | 310.6 | |||||
Work in process
|
123.5 | 120.3 | |||||
Finished goods
|
754.3 | 740.5 | |||||
Deferred tax assets
|
162.3 | 161.7 | |||||
Other current assets
|
227.4 | 246.7 | |||||
|
|||||||
|
4,797.6 | 4,345.9 | |||||
|
|||||||
Property,
Plant and Equipment, at Cost
|
1,976.0 | 1,854.8 | |||||
Less: Accumulated depreciation and amortization
|
(703.7 | ) | (579.5 | ) | |||
|
|||||||
|
1,272.3 | 1,275.3 | |||||
|
|||||||
Acquisition-related
Intangible Assets, net of Accumulated Amortization of
$1,902.3 and $1,433.2
|
6,144.0 | 6,423.2 | |||||
|
|||||||
Other
Assets
|
416.0 | 367.9 | |||||
|
|||||||
Goodwill
|
8,788.6 | 8,677.7 | |||||
|
|||||||
|
$ | 21,418.5 | $ | 21,090.0 |
Consolidated
Balance Sheet (continued)
|
||||||||||
(Unaudited)
|
|
September
26,
|
December
31,
|
|||||
(In
millions except share amounts)
|
2009
|
2008
|
|||||
|
|
|
|||||
Liabilities
and Shareholders' Equity
|
|
|
|||||
Current
Liabilities:
|
|
|
|||||
Short-term obligations and current maturities of long-term
obligations
|
$ | 70.1 | $ | 14.8 | |||
Accounts payable
|
593.5 | 539.5 | |||||
Accrued payroll and employee benefits
|
280.1 | 296.2 | |||||
Accrued income taxes
|
26.1 | 32.9 | |||||
Deferred revenue
|
139.5 | 135.3 | |||||
Other accrued expenses
|
484.5 | 521.5 | |||||
|
|||||||
|
1,593.8 | 1,540.2 | |||||
|
|||||||
Deferred
Income Taxes
|
1,873.8 | 1,994.2 | |||||
|
|||||||
Other
Long-term Liabilities
|
586.9 | 601.7 | |||||
|
|||||||
Long-term
Obligations
|
1,952.2 | 2,003.2 | |||||
|
|||||||
|
|||||||
Incremental
Convertible Debt Obligation
|
12.4 | 24.2 | |||||
|
|||||||
Shareholders'
Equity:
|
|||||||
Preferred stock, $100 par value, 50,000 shares authorized; none
issued
|
|||||||
Common stock, $1 par value, 1,200,000,000 shares
authorized; 422,829,078
and 421,791,009 shares issued
|
422.8 | 421.8 | |||||
Capital in excess of par value
|
11,394.5 | 11,301.3 | |||||
Retained earnings
|
4,077.5 | 3,500.5 | |||||
Treasury stock at cost, 14,514,448 and 3,825,245 shares
|
(574.2 | ) | (151.3 | ) | |||
Accumulated other comprehensive items
|
78.8 | (145.8 | ) | ||||
|
|||||||
|
15,399.4 | 14,926.5 | |||||
|
|||||||
|
$ | 21,418.5 | $ | 21,090.0 |
Consolidated
Statement of Income
|
||||||||||
(Unaudited)
|
|
Three
Months Ended
|
||||||
|
September
26,
|
September
27,
|
|||||
(In
millions except per share amounts)
|
2009
|
2008
|
|||||
|
|
|
|||||
Revenues
|
|
|
|||||
Product revenues
|
$ | 2,140.6 | $ | 2,167.2 | |||
Service revenues
|
390.5 | 420.9 | |||||
|
|||||||
|
2,531.1 | 2,588.1 | |||||
|
|||||||
Costs
and Operating Expenses:
|
|||||||
Cost of product revenues
|
1,285.8 | 1,313.4 | |||||
Cost of service revenues
|
234.1 | 241.9 | |||||
Selling, general and administrative expenses
|
662.1 | 669.3 | |||||
Research and development expenses
|
60.5 | 61.8 | |||||
Restructuring and other costs, net
|
13.1 | 15.4 | |||||
|
|||||||
|
2,255.6 | 2,301.8 | |||||
|
|||||||
Operating
Income
|
275.5 | 286.3 | |||||
Other
Expense, Net
|
(28.6 | ) | (27.7 | ) | |||
|
|||||||
Income
from Continuing Operations Before Provision for Income
Taxes
|
246.9 | 258.6 | |||||
Provision
for Income Taxes
|
(25.7 | ) | (43.7 | ) | |||
|
|||||||
Income
from Continuing Operations
|
221.2 | 214.9 | |||||
Gain
on Disposal of Discontinued Operations (net of income tax
provision of
$1.8 in 2008)
|
— | 3.2 | |||||
|
|||||||
Net
Income
|
$ | 221.2 | $ | 218.1 | |||
|
|||||||
Earnings
per Share from Continuing Operations
|
|||||||
Basic
|
$ | .54 | $ | .51 | |||
|
|||||||
Diluted
|
$ | .53 | $ | .49 | |||
|
|||||||
Earnings
per Share
|
|||||||
Basic
|
$ | .54 | $ | .52 | |||
|
|||||||
Diluted
|
$ | .53 | $ | .50 | |||
|
|||||||
Weighted
Average Shares
|
|||||||
Basic
|
407.9 | 419.0 | |||||
|
|||||||
Diluted
|
420.2 | 438.3 |
Consolidated
Statement of Income
|
||||||||||
(Unaudited)
|
|
Nine
Months Ended
|
||||||
|
September
26,
|
September
27,
|
|||||
(In
millions except per share amounts)
|
2009
|
2008
|
|||||
|
|
|
|||||
Revenues
|
|
|
|||||
Product revenues
|
$ | 6,129.9 | $ | 6,612.7 | |||
Service revenues
|
1,140.4 | 1,239.0 | |||||
|
|||||||
|
7,270.3 | 7,851.7 | |||||
|
|||||||
Costs
and Operating Expenses:
|
|||||||
Cost of product revenues
|
3,717.8 | 3,982.8 | |||||
Cost of service revenues
|
666.1 | 729.7 | |||||
Selling, general and administrative expenses
|
1,948.0 | 2,029.2 | |||||
Research and development expenses
|
176.8 | 188.2 | |||||
Restructuring and other costs, net
|
37.0 | 14.9 | |||||
|
|||||||
|
6,545.7 | 6,944.8 | |||||
|
|||||||
Operating
Income
|
724.6 | 906.9 | |||||
Other
Expense, Net
|
(78.4 | ) | (74.0 | ) | |||
|
|||||||
Income
from Continuing Operations Before Provision for Income
Taxes
|
646.2 | 832.9 | |||||
Provision
for Income Taxes
|
(69.2 | ) | (145.0 | ) | |||
|
|||||||
Income
from Continuing Operations
|
577.0 | 687.9 | |||||
Gain
on Disposal of Discontinued Operations (net of income tax
provision of
$3.7 in 2008)
|
— | 6.0 | |||||
|
|||||||
Net
Income
|
$ | 577.0 | $ | 693.9 | |||
|
|||||||
Earnings
per Share from Continuing Operations
|
|||||||
Basic
|
$ | 1.39 | $ | 1.64 | |||
|
|||||||
Diluted
|
$ | 1.36 | $ | 1.57 | |||
|
|||||||
Earnings
per Share
|
|||||||
Basic
|
$ | 1.39 | $ | 1.66 | |||
|
|||||||
Diluted
|
$ | 1.36 | $ | 1.58 | |||
|
|||||||
Weighted
Average Shares
|
|||||||
Basic
|
413.6 | 418.2 | |||||
|
|||||||
Diluted
|
423.0 | 437.1 |
Consolidated
Statement of Cash Flows
|
||||||||||
(Unaudited)
|
|
Nine
Months Ended
|
||||||
|
September
26,
|
September
27,
|
|||||
(In
millions)
|
2009
|
2008
|
|||||
|
|
|
|||||
Operating
Activities
|
|
|
|||||
Net Income
|
$ | 577.0 | $ | 693.9 | |||
Gain on disposal of discontinued operations
|
— | (6.0 | ) | ||||
|
|||||||
Income from continuing operations
|
577.0 | 687.9 | |||||
|
|||||||
Adjustments to reconcile income from continuing operations to net
cash provided
by operating activities:
|
|||||||
Depreciation and amortization
|
580.1 | 598.3 | |||||
Change in deferred income taxes
|
(182.6 | ) | (118.0 | ) | |||
Non-cash stock-based compensation
|
56.4 | 43.5 | |||||
Non-cash interest expense on convertible debt
|
17.1 | 16.4 | |||||
Tax benefits from stock-based compensation awards
|
(1.7 | ) | (20.1 | ) | |||
Other non-cash expenses, net
|
44.5 | 23.1 | |||||
Changes in assets and liabilities, excluding the effects of acquisitions
and dispositions:
|
|||||||
Accounts receivable
|
47.3 | (73.2 | ) | ||||
Inventories
|
54.5 | (97.6 | ) | ||||
Other assets
|
17.3 | (25.3 | ) | ||||
Accounts payable
|
31.5 | (43.5 | ) | ||||
Other liabilities
|
(82.6 | ) | (14.2 | ) | |||
Contributions to retirement plans
|
(37.3 | ) | (16.3 | ) | |||
|
|||||||
Net cash provided by continuing operations
|
1,121.5 | 961.0 | |||||
Net cash used in discontinued operations
|
(0.9 | ) | (1.1 | ) | |||
|
|||||||
Net cash provided by operating activities
|
1,120.6 | 959.9 | |||||
|
|||||||
Investing
Activities
|
|||||||
Acquisitions, net of cash acquired
|
(155.5 | ) | (153.1 | ) | |||
Purchase of property, plant and equipment
|
(125.8 | ) | (159.8 | ) | |||
Proceeds from sale of property, plant and equipment
|
9.6 | 9.8 | |||||
Purchase of available-for-sale investments
|
— | (0.1 | ) | ||||
Proceeds from sale of available-for-sale investments
|
0.6 | 0.6 | |||||
Proceeds from sale of businesses, net of cash divested
|
2.7 | 3.5 | |||||
Increase in other assets
|
(8.4 | ) | (8.6 | ) | |||
|
|||||||
Net cash used in continuing operations
|
(276.8 | ) | (307.7 | ) | |||
Net cash provided by discontinued operations
|
— | 7.9 | |||||
|
|||||||
Net cash used in investing activities
|
$ | (276.8 | ) | $ | (299.8 | ) |
Consolidated
Statement of Cash Flows (continued)
|
||||||||||
(Unaudited)
|
|
Nine
Months Ended
|
||||||
|
September
26,
|
September
27,
|
|||||
(In
millions)
|
2009
|
2008
|
|||||
|
|
|
|||||
Financing
Activities
|
|
|
|||||
Decrease in short-term notes payable
|
$ | (13.4 | ) | $ | (19.3 | ) | |
Purchases of company common stock
|
(414.6 | ) | (102.0 | ) | |||
Net proceeds from issuance of company common stock
|
17.5 | 81.7 | |||||
Tax benefits from stock-based compensation awards
|
1.7 | 20.1 | |||||
Borrowings (redemption and repayment) of long-term
obligations
|
3.7 | (2.6 | ) | ||||
|
|||||||
Net cash used in financing activities
|
(405.1 | ) | (22.1 | ) | |||
|
|||||||
Exchange
Rate Effect on Cash of Continuing Operations
|
26.5 | (22.8 | ) | ||||
|
|||||||
Increase
in Cash and Cash Equivalents
|
465.2 | 615.2 | |||||
Cash
and Cash Equivalents at Beginning of Period
|
1,280.5 | 625.1 | |||||
|
|||||||
Cash
and Cash Equivalents at End of Period
|
$ | 1,745.7 | $ | 1,240.3 | |||
|
|||||||
|
|||||||
Supplemental
Cash Flow Information
|
|||||||
Fair value of assets of acquired businesses
|
$ | 179.7 | $ | 191.4 | |||
Cash paid for acquired businesses
|
(147.2 | ) | (141.7 | ) | |||
|
|||||||
Liabilities assumed of acquired businesses
|
$ | 32.5 | $ | 49.7 | |||
|
|||||||
Issuance of restricted stock
|
$ | 1.1 | $ | 21.9 | |||
|
|||||||
Issuance of stock upon vesting of restricted stock units
|
$ | 7.0 | $ | 20.0 |
(Dollars
in millions)
|
Before
Adoption
|
Cumulative
Effect
of Adoption
|
As
Adjusted
|
|||||||
|
|
|
|
|||||||
Deferred
Income Taxes
|
$ | 1,978.0 | $ | 16.2 | $ | 1,994.2 | ||||
Long-term
Obligations
|
2,043.5 | (40.3 | ) | 2,003.2 | ||||||
Incremental
Convertible Debt Obligation
|
— | 24.2 | 24.2 | |||||||
Capital
in Excess of Par Value
|
11,273.2 | 28.1 | 11,301.3 | |||||||
Retained
Earnings
|
3,528.7 | (28.2 | ) | 3,500.5 |
|
September
26,
|
December
31,
|
|||||
(In
millions)
|
2009
|
2008
|
|||||
|
|
|
|||||
Principal
Amount of Convertible Debt
|
$ | 969.0 | $ | 969.1 | |||
Unamortized
Discount
|
23.2 | 40.3 | |||||
Net
Carrying Amount
|
945.8 | 928.8 | |||||
Incremental
Convertible Debt Obligation (Temporary Equity)
|
12.4 | 24.2 | |||||
Capital
in Excess of Par Value
|
39.9 | 28.1 |
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
26,
|
September
27,
|
September
26,
|
September
27,
|
|||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
|||||||||
|
|
|
|
|
|||||||||
Contractual
Coupon Interest
|
$ | 4.5 | $ | 5.9 | $ | 14.2 | $ | 19.3 | |||||
Amortization
of Discount on Convertible Debt
|
5.8 | 5.6 | 17.1 | 16.4 | |||||||||
|
|||||||||||||
Interest
Expense
|
$ | 10.3 | $ | 11.5 | $ | 31.3 | $ | 35.7 | |||||
|
|||||||||||||
Effective
Interest Rate
|
4.4% | 5.0% | 4.5% | 5.2% |
(Dollars
in millions except per share amounts)
|
Before
Adoption
|
Effect
of Adoption
|
As
Adjusted
|
|||||||
|
|
|
|
|||||||
Three Months Ended September 27,
2008
|
|
|
|
|||||||
Other
Expense, Net
|
$ | 22.1 | $ | 5.6 | $ | 27.7 | ||||
Provision
for Income Taxes
|
45.9 | (2.2 | ) | 43.7 | ||||||
Income
from Continuing Operations
|
218.3 | (3.4 | ) | 214.9 | ||||||
Net
Income
|
221.5 | (3.4 | ) | 218.1 | ||||||
Earnings
per Share from Continuing Operations
|
||||||||||
Basic
|
$ | .52 | $ | (.01 | ) | $ | .51 | |||
Diluted
|
$ | .50 | $ | (.01 | ) | $ | .49 | |||
Earnings
per Share
|
||||||||||
Basic
|
$ | .53 | $ | (.01 | ) | $ | .52 | |||
Diluted
|
$ | .51 | $ | (.01 | ) | $ | .50 | |||
Diluted
Weighted Average Shares
|
438.5 | (0.2 | ) | 438.3 | ||||||
|
||||||||||
Nine Months Ended September 27,
2008
|
||||||||||
Other
Expense, Net
|
$ | 57.6 | $ | 16.4 | $ | 74.0 | ||||
Provision
for Income Taxes
|
151.3 | (6.3 | ) | 145.0 | ||||||
Income
from Continuing Operations
|
698.0 | (10.1 | ) | 687.9 | ||||||
Net
Income
|
704.0 | (10.1 | ) | 693.9 | ||||||
Earnings
per Share from Continuing Operations
|
||||||||||
Basic
|
$ | 1.67 | $ | (.03 | ) | $ | 1.64 | |||
Diluted
|
$ | 1.60 | $ | (.03 | ) | $ | 1.57 | |||
Earnings
per Share
|
||||||||||
Basic
|
$ | 1.68 | $ | (.02 | ) | $ | 1.66 | |||
Diluted
|
$ | 1.61 | $ | (.03 | ) | $ | 1.58 | |||
Diluted
Weighted Average Shares
|
437.3 | (0.2 | ) | 437.1 |
(In
millions)
|
Biolab
|
Other
|
Total
|
|||||||
|
|
|
|
|||||||
Purchase
Price
|
|
|
|
|||||||
Cash paid
|
$ | 132.9 | $ | 14.3 | $ | 147.2 | ||||
Debt assumed
|
— | 0.9 | 0.9 | |||||||
Purchase price payable
|
— | 1.2 | 1.2 | |||||||
Cash acquired
|
(1.3 | ) | (0.1 | ) | (1.4 | ) | ||||
Other
|
— | 0.9 | 0.9 | |||||||
|
||||||||||
|
$ | 131.6 | $ | 17.2 | $ | 148.8 | ||||
|
||||||||||
Allocation
|
||||||||||
Current assets
|
$ | 38.6 | $ | 5.6 | $ | 44.2 | ||||
Property, plant and equipment
|
3.3 | 0.7 | 4.0 | |||||||
Customer relationships
|
51.4 | 6.0 | 57.4 | |||||||
Product technology
|
0.9 | — | 0.9 | |||||||
Tradenames and other
|
1.3 | 0.3 | 1.6 | |||||||
Goodwill
|
61.9 | 9.2 | 71.1 | |||||||
Liabilities assumed
|
(25.8 | ) | (4.6 | ) | (30.4 | ) | ||||
|
||||||||||
|
$ | 131.6 | $ | 17.2 | $ | 148.8 |
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
26,
|
September
27,
|
September
26,
|
September
27,
|
|||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
|||||||||
|
|
|
|
|
|||||||||
Revenue
|
|
|
|
|
|||||||||
Analytical Technologies
|
$ | 1,018.6 | $ | 1,085.9 | $ | 2,960.7 | $ | 3,332.6 | |||||
Laboratory Products and Services
|
1,631.3 | 1,610.4 | 4,653.6 | 4,836.1 | |||||||||
Eliminations
|
(118.8 | ) | (108.2 | ) | (344.0 | ) | (317.0 | ) | |||||
|
|||||||||||||
Consolidated revenues
|
$ | 2,531.1 | $ | 2,588.1 | $ | 7,270.3 | $ | 7,851.7 | |||||
|
|||||||||||||
Segment
Income
|
|||||||||||||
Analytical
Technologies (a)
|
$ | 202.7 | $ | 228.8 | $ | 577.6 | $ | 701.7 | |||||
Laboratory Products and Services (a)
|
234.8 | 224.9 | 627.5 | 675.7 | |||||||||
|
|||||||||||||
Subtotal reportable segments (a)
|
437.5 | 453.7 | 1,205.1 | 1,377.4 | |||||||||
|
|||||||||||||
Cost of revenues charges
|
(1.0 | ) | — | (1.9 | ) | (0.8 | ) | ||||||
Selling, general and administrative (costs) income,
net
|
0.3 | — | (1.0 | ) | — | ||||||||
Restructuring and other (costs) income, net
|
(13.1 | ) | (15.4 | ) | (37.0 | ) | (14.9 | ) | |||||
Amortization of acquisition-related intangible
assets
|
(148.2 | ) | (152.0 | ) | (440.6 | ) | (454.8 | ) | |||||
|
|||||||||||||
Consolidated operating income
|
275.5 | 286.3 | 724.6 | 906.9 | |||||||||
Other expense, net (b)
|
(28.6 | ) | (27.7 | ) | (78.4 | ) | (74.0 | ) | |||||
|
|||||||||||||
Income from continuing operations before provision
for income taxes
|
$ | 246.9 | $ | 258.6 | $ | 646.2 | $ | 832.9 | |||||
|
|||||||||||||
Depreciation
|
|||||||||||||
Analytical Technologies
|
$ | 21.4 | $ | 21.9 | $ | 63.1 | $ | 66.2 | |||||
Laboratory Products and Services
|
25.9 | 25.8 | 76.4 | 77.3 | |||||||||
|
|||||||||||||
Consolidated depreciation
|
$ | 47.3 | $ | 47.7 | $ | 139.5 | $ | 143.5 | |||||
|
|||||||||||||
(a)
Represents
operating income before certain charges/credits to cost of revenues and
selling, general and administrative expenses; restructuring and other
costs, net and
amortization
of acquisition-related intangibles.
|
|||||||||||||
(b)The company does not allocate other income and expense to its segments. |
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
26,
|
September
27,
|
September
26,
|
September
27,
|
|||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
|||||||||
|
|
|
|
|
|||||||||
Interest
Income
|
$ | 2.5 | $ | 14.9 | $ | 12.5 | $ | 40.1 | |||||
Interest
Expense
|
(29.2 | ) | (39.7 | ) | (89.0 | ) | (117.5 | ) | |||||
Other
Items, Net
|
(1.9 | ) | (2.9 | ) | (1.9 | ) | 3.4 | ||||||
|
|||||||||||||
|
$ | (28.6 | ) | $ | (27.7 | ) | $ | (78.4 | ) | $ | (74.0 | ) |
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
26,
|
September
27,
|
September
26,
|
September
27,
|
|||||||||
(In
millions except per share amounts)
|
2009
|
2008
|
2009
|
2008
|
|||||||||
|
|
|
|
|
|||||||||
Income
from Continuing Operations
|
$ | 221.2 | $ | 214.9 | $ | 577.0 | $ | 687.9 | |||||
Gain
on Disposal of Discontinued Operations
|
— | 3.2 | — | 6.0 | |||||||||
|
|||||||||||||
Net
Income
|
221.2 | 218.1 | 577.0 | 693.9 | |||||||||
|
|||||||||||||
Income
Allocable to Participating Securities
|
(0.1 | ) | (0.3 | ) | (0.4 | ) | (1.1 | ) | |||||
|
|||||||||||||
Net
Income for Earnings per Share
|
$ | 221.1 | $ | 217.8 | $ | 576.6 | $ | 692.8 | |||||
|
|||||||||||||
Basic
Weighted Average Shares
|
407.9 | 419.0 | 413.6 | 418.2 | |||||||||
Effect
of:
|
|||||||||||||
Convertible debentures
|
10.2 | 15.8 | 7.9 | 15.3 | |||||||||
Stock options, restricted stock awards and warrants
|
2.1 | 3.5 | 1.5 | 3.6 | |||||||||
|
|||||||||||||
Diluted
Weighted Average Shares
|
420.2 | 438.3 | 423.0 | 437.1 | |||||||||
|
|||||||||||||
Basic
Earnings per Share:
|
|||||||||||||
Continuing operations
|
$ | .54 | $ | .51 | $ | 1.39 | $ | 1.64 | |||||
Discontinued operations
|
— | .01 | — | .01 | |||||||||
|
|||||||||||||
|
$ | .54 | $ | .52 | $ | 1.39 | $ | 1.66 | |||||
|
|||||||||||||
Diluted
Earnings per Share:
|
|||||||||||||
Continuing operations
|
$ | .53 | $ | .49 | $ | 1.36 | $ | 1.57 | |||||
Discontinued operations
|
— | .01 | — | .01 | |||||||||
|
|||||||||||||
|
$ | .53 | $ | .50 | $ | 1.36 | $ | 1.58 |
|
Three Months Ended |
Nine
Months Ended
|
|||||||||||
|
September
26,
|
September
27,
|
September
26,
|
September
27,
|
|||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
|||||||||
|
|
|
|
|
|||||||||
Stock
Option Awards
|
$ | 13.5 | $ | 9.8 | $ | 36.9 | $ | 25.8 | |||||
Restricted
Share/Unit Awards
|
7.1 | 6.0 | 19.5 | 17.7 | |||||||||
|
|||||||||||||
Total
Stock-based Compensation Expense
|
$ | 20.6 | $ | 15.8 | $ | 56.4 | $ | 43.5 |
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
26,
|
September
27,
|
September
26,
|
September
27,
|
|||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
|||||||||
|
|
|
|
|
|||||||||
Cost
of Revenues
|
$ | 1.3 | $ | 1.0 | $ | 4.7 | $ | 3.0 | |||||
Selling,
General and Administrative Expenses
|
18.8 | 14.4 | 50.0 | 39.3 | |||||||||
Research
and Development Expenses
|
0.5 | 0.4 | 1.7 | 1.2 | |||||||||
|
|||||||||||||
Total
Stock-based Compensation Expense
|
$ | 20.6 | $ | 15.8 | $ | 56.4 | $ | 43.5 |
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
26,
|
September
27,
|
September
26,
|
September
27,
|
|||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
|||||||||
|
|
|
|
|
|||||||||
Service
Cost
|
$ | 2.7 | $ | 3.4 | $ | 7.7 | $ | 11.1 | |||||
Interest
Cost on Benefit Obligation
|
12.6 | 13.9 | 37.0 | 42.7 | |||||||||
Expected
Return on Plan Assets
|
(13.1 | ) | (15.5 | ) | (38.0 | ) | (47.2 | ) | |||||
Amortization
of Net Loss
|
0.4 | 0.4 | 1.2 | 1.2 | |||||||||
Amortization
of Prior Service Benefit
|
— | — | 0.1 | — | |||||||||
Settlement/Curtailment
Gain
|
— | — | (0.2 | ) | (18.5 | ) | |||||||
Special
Termination Benefits
|
— | — | 0.3 | 0.2 | |||||||||
|
|||||||||||||
Net
Periodic Benefit Cost (Income)
|
$ | 2.6 | $ | 2.2 | $ | 8.1 | $ | (10.5 | ) |
|
Three Months Ended |
Nine
Months Ended
|
|||||||||||
|
September
26,
|
September
27,
|
September
26,
|
September
27,
|
|||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
|||||||||
|
|
|
|
|
|||||||||
Service
Cost
|
$ | 0.2 | $ | 0.2 | $ | 0.4 | $ | 0.6 | |||||
Interest
Cost on Benefit Obligation
|
0.4 | 0.5 | 1.2 | 1.5 | |||||||||
|
|||||||||||||
Net
Periodic Benefit Cost
|
$ | 0.6 | $ | 0.7 | $ | 1.6 | $ | 2.1 |
(In
millions)
|
September
26, 2009 |
Quoted
Prices
in
Active
Markets (Level
1) |
Significant
Other
Observable
Inputs (Level
2) |
Significant
Unobservable Inputs (Level 3) |
|||||||||
|
|
|
|
|
|||||||||
Assets
|
|
|
|
|
|||||||||
Cash equivalents
|
$ | 1,066.1 | $ | 1,066.1 | $ | — | $ | — | |||||
Investments in mutual funds, unit trusts and
other similar instruments
|
35.5 | 35.5 | — | — | |||||||||
Cash surrender value of life insurance
|
28.1 | — | 28.1 | — | |||||||||
Auction rate securities
|
5.4 | — | — | 5.4 | |||||||||
Derivative contracts
|
3.3 | — | 3.3 | — | |||||||||
|
|||||||||||||
Total Assets
|
$ | 1,138.4 | $ | 1,101.6 | $ | 31.4 | $ | 5.4 | |||||
|
|||||||||||||
Liabilities
|
|||||||||||||
Derivative contracts
|
$ | 0.2 | $ | — | $ | 0.2 | $ | — | |||||
|
|||||||||||||
Total Liabilities
|
$ | 0.2 | $ | — | $ | 0.2 | $ | — |
(In
millions)
|
December
31, 2008 |
Quoted
Prices
in
Active
Markets (Level
1) |
Significant
Other
Observable
Inputs (Level 2) |
Significant
Unobservable Inputs (Level 3) |
|||||||||
|
|
|
|
|
|||||||||
Assets
|
|
|
|
|
|||||||||
Cash equivalents
|
$ | 560.8 | $ | 560.8 | $ | — | $ | — | |||||
Investments in mutual funds, unit trusts and
other similar instruments
|
24.0 | 24.0 | — | — | |||||||||
Cash surrender value of life insurance
|
21.3 | — | 21.3 | — | |||||||||
Auction rate securities
|
5.7 | — | — | 5.7 | |||||||||
Marketable equity securities
|
1.0 | 1.0 | — | — | |||||||||
Derivative contracts
|
3.3 | — | 3.3 | — | |||||||||
|
|||||||||||||
Total Assets
|
$ | 616.1 | $ | 585.8 | $ | 24.6 | $ | 5.7 | |||||
|
|||||||||||||
Liabilities
|
|||||||||||||
Derivative contracts
|
$ | 4.0 | $ | — | $ | 4.0 | $ | — | |||||
|
|||||||||||||
Total Liabilities
|
$ | 4.0 | $ | — | $ | 4.0 | $ | — |
(In
millions)
|
Three
Months
Ended September
26, |
Nine
Months Ended September 26, |
|||||
|
|
|
|||||
Beginning
Balance
|
$ | 6.0 | $ | 5.7 | |||
Total
impairment losses included in earnings
|
(0.3 | ) | (0.3 | ) | |||
Total
unrealized losses included in other comprehensive income
|
(0.3 | ) | — | ||||
|
|||||||
Balance
at September 26, 2009
|
$ | 5.4 | $ | 5.4 |
|
September
26, 2009
|
December
31, 2008
|
|||||||||||
|
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||
(In
millions)
|
Value
|
Value
|
Value
|
Value
|
|||||||||
|
|
|
|
|
|||||||||
Notes
Receivable
|
$ | 5.6 | $ | 5.6 | $ | 2.7 | $ | 2.7 | |||||
|
|||||||||||||
Debt
Obligations:
|
|||||||||||||
Convertible obligations
|
945.8 | 1,479.8 | 928.8 | 1,227.7 | |||||||||
Senior notes
|
250.0 | 246.2 | 250.0 | 209.3 | |||||||||
Senior subordinated notes
|
805.6 | 815.0 | 806.3 | 675.9 | |||||||||
Other
|
20.9 | 20.9 | 32.9 | 32.9 | |||||||||
|
|||||||||||||
|
$ | 2,022.3 | $ | 2,561.9 | $ | 2,018.0 | $ | 2,145.8 |
|
Nine
Months Ended
|
||||||
|
September
26,
|
September
27,
|
|||||
(In
millions)
|
2009
|
2008
|
|||||
|
|
|
|||||
Beginning
Balance
|
$ | 44.1 | $ | 50.6 | |||
Provision
charged to income
|
25.6 | 25.8 | |||||
Usage
|
(31.3 | ) | (28.8 | ) | |||
Acquisitions/divestitures
|
0.2 | 0.3 | |||||
Adjustments
to previously provided warranties, net
|
1.5 | (1.7 | ) | ||||
Other,
net (a)
|
0.8 | (0.3 | ) | ||||
|
|||||||
Ending
Balance
|
$ | 40.9 | $ | 45.9 |
(In
millions)
|
Analytical
Technologies
|
Laboratory
Products and Services
|
Corporate
|
Total
|
|||||||||
|
|
|
|
|
|||||||||
Cost
of Revenues
|
$ | 0.7 | $ | 0.3 | $ | — | $ | 1.0 | |||||
Selling,
General and Administrative Expenses
|
1.6 | (1.9 | ) | — | (0.3 | ) | |||||||
Restructuring
and Other Costs, Net
|
9.0 | 4.1 | — | 13.1 | |||||||||
|
|||||||||||||
|
$ | 11.3 | $ | 2.5 | $ | — | $ | 13.8 |
(In
millions)
|
Analytical
Technologies
|
Laboratory
Products and Services
|
Corporate
|
Total
|
|||||||||
|
|
|
|
|
|||||||||
Cost
of Revenues
|
$ | 1.2 | $ | 0.7 | $ | — | $ | 1.9 | |||||
Selling,
General and Administrative Expenses
|
1.6 | (0.6 | ) | — | 1.0 | ||||||||
Restructuring
and Other Costs, Net
|
22.1 | 13.1 | 1.8 | 37.0 | |||||||||
|
|||||||||||||
|
$ | 24.9 | $ | 13.2 | $ | 1.8 | $ | 39.9 |
(In
millions)
|
Severance
|
Employee
Retention (a)
|
Abandonment of
Excess Facilities |
Other
|
Total
|
|||||||||||
|
|
|
|
|
|
|||||||||||
Pre-2008
Restructuring Plans
|
|
|
|
|
|
|||||||||||
Balance
At December 31, 2008
|
$ | 5.4 | $ | 0.8 | $ | 4.4 | $ | 0.7 | $ | 11.3 | ||||||
Costs
incurred in 2009 (b)
|
1.4 | 0.2 | 2.2 | 0.6 | 4.4 | |||||||||||
Reserves
reversed
|
— | (0.1 | ) | — | — | (0.1 | ) | |||||||||
Payments
|
(6.5 | ) | (0.9 | ) | (3.4 | ) | (1.1 | ) | (11.9 | ) | ||||||
|
||||||||||||||||
Balance At September 26, 2009
|
$ | 0.3 | $ | — | $ | 3.2 | $ | 0.2 | $ | 3.7 | ||||||
|
||||||||||||||||
2008
Restructuring Plans
|
||||||||||||||||
Balance At December 31, 2008
|
$ | 7.0 | $ | 0.4 | $ | 1.8 | $ | 0.3 | $ | 9.5 | ||||||
Costs incurred in 2009 (b)
|
2.0 | 0.2 | 0.8 | 0.9 | 3.9 | |||||||||||
Reserves reversed
|
(0.3 | ) | — | (0.2 | ) | — | (0.5 | ) | ||||||||
Payments
|
(6.4 | ) | (0.5 | ) | (1.1 | ) | (0.9 | ) | (8.9 | ) | ||||||
|
||||||||||||||||
Balance At September 26, 2009
|
$ | 2.3 | $ | 0.1 | $ | 1.3 | $ | 0.3 | $ | 4.0 | ||||||
|
||||||||||||||||
2009
Restructuring Plans
|
||||||||||||||||
Costs incurred in 2009 (b)
|
$ | 28.1 | $ | 0.9 | $ | 4.4 | $ | 2.4 | $ | 35.8 | ||||||
Reserves reversed
|
(0.2 | ) | — | (1.3 | ) | — | (1.5 | ) | ||||||||
Payments
|
(12.6 | ) | (0.1 | ) | (1.0 | ) | (1.7 | ) | (15.4 | ) | ||||||
Currency translation
|
0.6 | — | 0.1 | — | 0.7 | |||||||||||
|
||||||||||||||||
Balance At September 26, 2009
|
$ | 15.9 | $ | 0.8 | $ | 2.2 | $ | 0.7 | $ | 19.6 |
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||
|
September
26,
|
September
27,
|
September
26,
|
September
27,
|
|||||||||||||||||
(Dollars
in millions)
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|||||||||||||
Analytical
Technologies
|
$ | 1,018.6 | 40.2% | $ | 1,085.9 | 42.0% | $ | 2,960.7 | 40.7% | $ | 3,332.6 | 42.4% | |||||||||
Laboratory
Products and Services
|
1,631.3 | 64.5% | 1,610.4 | 62.2% | 4,653.6 | 64.0% | 4,836.1 | 61.6% | |||||||||||||
Eliminations
|
(118.8 | ) | (4.7)% | (108.2 | ) | (4.2)% | (344.0 | ) | (4.7)% | (317.0 | ) | (4.0)% | |||||||||
|
|||||||||||||||||||||
|
$ | 2,531.1 | 100% | $ | 2,588.1 | 100% | $ | 7,270.3 | 100% | $ | 7,851.7 | 100% |
|
Three
Months Ended
|
||||||||
|
September
26,
|
September
27,
|
|
||||||
(Dollars
in millions)
|
2009
|
2008
|
Change
|
||||||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Analytical Technologies
|
$ | 1,018.6 | $ | 1,085.9 | (6)% | ||||
Laboratory Products and Services
|
1,631.3 | 1,610.4 | 1% | ||||||
Eliminations
|
(118.8 | ) | (108.2 | ) | 10% | ||||
|
|||||||||
Consolidated Revenues
|
$ | 2,531.1 | $ | 2,588.1 | (2)% | ||||
|
|||||||||
Operating
Income
|
|||||||||
Analytical Technologies
|
$ | 202.7 | $ | 228.8 | (11)% | ||||
Laboratory Products and Services
|
234.8 | 224.9 | 4% | ||||||
|
|||||||||
Subtotal Reportable Segments
|
437.5 | 453.7 | (4)% | ||||||
|
|||||||||
Cost of Revenues Charges
|
(1.0 | ) | — | ||||||
Selling, General and Administrative (Costs) Income, Net
|
0.3 | — | |||||||
Restructuring and Other Costs, Net
|
(13.1 | ) | (15.4 | ) | |||||
Amortization of Acquisition-related Intangible Assets
|
(148.2 | ) | (152.0 | ) | |||||
|
|||||||||
Consolidated Operating Income
|
$ | 275.5 | $ | 286.3 | (4)% |
|
Three Months Ended | ||||||||
|
September
26,
|
September
27,
|
|
||||||
(Dollars
in millions)
|
2009
|
2008
|
Change
|
||||||
|
|
|
|
||||||
Revenues
|
$ | 1,018.6 | $ | 1,085.9 | (6)% | ||||
|
|||||||||
Operating
Income Margin
|
19.9% | 21.1% |
(1.2)
pt.
|
|
Three Months Ended | ||||||||
|
September
26,
|
September
27,
|
|
||||||
(Dollars
in millions)
|
2009
|
2008
|
Change
|
||||||
|
|
|
|
||||||
Revenues
|
$ | 1,631.3 | $ | 1,610.4 | 1% | ||||
|
|||||||||
Operating
Income Margin
|
14.4% | 14.0% |
0.4
pt.
|
|
Nine
Months Ended
|
||||||||
|
September
26,
|
September
27,
|
|
||||||
(Dollars
in millions)
|
2009
|
2008
|
Change
|
||||||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Analytical Technologies
|
$ | 2,960.7 | $ | 3,332.6 | (11)% | ||||
Laboratory Products and Services
|
4,653.6 | 4,836.1 | (4)% | ||||||
Eliminations
|
(344.0 | ) | (317.0 | ) | 9% | ||||
|
|||||||||
Consolidated Revenues
|
$ | 7,270.3 | $ | 7,851.7 | (7)% | ||||
|
|||||||||
Operating
Income
|
|||||||||
Analytical Technologies
|
$ | 577.6 | $ | 701.7 | (18)% | ||||
Laboratory Products and Services
|
627.5 | 675.7 | (7)% | ||||||
|
|||||||||
Subtotal Reportable Segments
|
1,205.1 | 1,377.4 | (13)% | ||||||
|
|||||||||
Cost of Revenues Charges
|
(1.9 | ) | (0.8 | ) | |||||
Selling, General and Administrative Costs, Net
|
(1.0 | ) | — | ||||||
Restructuring and Other Costs, Net
|
(37.0 | ) | (14.9 | ) | |||||
Amortization of Acquisition-related Intangible Assets
|
(440.6 | ) | (454.8 | ) | |||||
|
|||||||||
Consolidated Operating Income
|
$ | 724.6 | $ | 906.9 | (20)% |
|
Nine Months Ended | ||||||||
|
September
26,
|
September
27,
|
|
||||||
(Dollars
in millions)
|
2009
|
2008
|
Change
|
||||||
|
|
|
|
||||||
Revenues
|
$ | 2,960.7 | $ | 3,332.6 | (11)% | ||||
|
|||||||||
Operating
Income Margin
|
19.5% | 21.1% |
(1.6)
pt
|
|
Nine Months Ended | ||||||||
|
September
26,
|
September
27,
|
|
||||||
(Dollars
in millions)
|
2009
|
2008
|
Change
|
||||||
|
|
|
|
||||||
Revenues
|
$ | 4,653.6 | $ | 4,836.1 | (4)% | ||||
|
|||||||||
Operating
Income Margin
|
13.5% | 14.0% |
(0.5)
pt
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market
Risk
|
Item
4.
|
Controls
and Procedures
|
Item
1.
|
Legal
Proceedings
|
Item
1.
|
Legal
Proceedings (continued)
|
Item
1A.
|
Risk
Factors
|
|
•
|
finding
new markets for our products;
|
|
•
|
developing
new applications for our
technologies;
|
|
•
|
combining
sales and marketing operations in appropriate markets to compete more
effectively;
|
|
•
|
allocating
research and development funding to products with higher growth
prospects;
|
|
•
|
continuing
key customer initiatives;
|
|
•
|
expanding
our service offerings;
|
|
•
|
strengthening
our presence in selected geographic markets;
and
|
|
•
|
continuing
the development of commercial tools and infrastructure to increase and
support cross-selling opportunities of products and services to take
advantage of our breadth in product
offerings.
|
Item
1A.
|
Risk
Factors (continued)
|
|
•
|
reduced
demand for some of our products;
|
|
•
|
increased
rate of order cancellations or
delays;
|
|
•
|
increased
risk of excess and obsolete
inventories;
|
|
•
|
increased
pressure on the prices for our products and services;
and
|
|
•
|
greater
difficulty in collecting accounts
receivable.
|
Item
1A.
|
Risk
Factors (continued)
|
Item
1A.
|
Risk
Factors (continued)
|
Item
1A.
|
Risk
Factors (continued)
|
Item
1A.
|
Risk
Factors (continued)
|
|
•
|
development
of large and sophisticated groups purchasing medical and surgical
supplies;
|
|
•
|
wider
implementation of managed care;
|
|
•
|
legislative
healthcare reform;
|
|
•
|
consolidation
of pharmaceutical companies;
|
|
•
|
increased
outsourcing of certain activities, including to low-cost offshore
locations; and
|
|
•
|
consolidation
of distributors of pharmaceutical, medical and surgical
supplies.
|
Item
1A.
|
Risk
Factors (continued)
|
Item
6.
|
Exhibits
|
THERMO
FISHER SCIENTIFIC INC.
|
|
/s/
Peter M. Wilver
|
|
Peter
M. Wilver
|
|
Senior
Vice President and Chief Financial Officer
|
|
/s/
Peter E. Hornstra
|
|
Peter
E. Hornstra
|
|
Vice
President and Chief Accounting
Officer
|
Exhibit
Number
|
Description
of Exhibit
|
10.1
|
Supplemental
Retirement Agreement dated July 8, 2009 by and between Thermo Fisher
Scientific Inc. and Marijn Dekkers (filed as Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K filed July 9, 2009 [File No.
1-8002] and incorporated in this document by
reference).
|
|
31.1
|
Certification
of Chief Executive Officer required by Exchange Act Rules 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
31.2
|
Certification
of Chief Financial Officer required by Exchange Act Rules 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
32.1
|
Certification
of Chief Executive Officer required by Exchange Act Rules 13a-14(b) and
15d-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.*
|
|
32.2
|
Certification
of Chief Financial Officer required by Exchange Act Rules 13a-14(b) and
15d-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.*
|
|
101.INS
|
XBRL
Instance Document.
|
|
101.SCH
|
XBRL
Taxonomy Extension Schema Document.
|
|
101.CAL
|
XBRL
Taxonomy Calculation Linkbase Document.
|
|
101.LAB
|
XBRL
Taxonomy Label Linkbase Document.
|
|
101.PRE
|
XBRL
Taxonomy Presentation Linkbase
Document.
|