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Beckman Coulter Q3 Revenues Grow 2 Percent as Income Drops Nearly 40 Percent

NEW YORK, Nov. 2 (GenomeWeb News) - Beckman Coulter today said that its third-quarter sales grew by a 2 percent, while net income fell 38 percent.

 

Total worldwide sales for the three months ended Sept. 30 inched up to $593.4 million from $581.2 million in the same quarter last year. The company reported that $591.7 million of total sales for the quarter were organic, while $1.7 million could be attributed to currency.

 

The Fullerton, Calif.-based company also said that sales in the US remained even compared to last year, but that international sales grew by 3.8 percent.

 

Net income in the third quarter fell to $36.2 million from $57.2 million year over year, the company said, resulting in basing earnings being reduced to $0.58 per share from $0.93 per share.

 

Beckman Coulter said that the company incurred $19.2 million in special charges during the quarter, mostly due to "impaired receivables and leased equipment" related to Hurricane Katrina -- which cost the company $4.9 million -- and "the non-cash write off of intangible assets of discontinued robotic automation product" from the discontinuation of the Bovine Spongiform Encephalopathy testing initiative, which cost Beckman $13.4 million.

 

The company added specifics to a plan to reorganize the company, as was reported by GenomeWeb News on July 22, signaling its intent to "close at least three facilities, sell two parcels of real estate, harvest or discontinue mature product lines," reduce 350 positions, and streamline the company's physical distribution.

 

Beckman Coulter president and CEO Scott Garrett said in a statement that he expects the lay-offs will result in a benefit of up to $2 million in the fourth quarter of this year, as well as "$15 million of annual savings in 2006, growing to $20 million of annual savings in 2007 and beyond."

 

Garrett also offered a preliminary outlook on 2006. Beckman is now expecting total 2006 sales to be $2.5-$2.6 billion. He added that the company's decision to favor operating-type leases over sales-type leases for instrument placements may reduce sales over 2005 and 2006 as the change in policy is implemented.

 

"Our original range for the impact of the leasing policy change on sales through 2006 was $200 to $220 million," Garrett said. "We now expect the change to reduce revenues by $190 to 200 million over the implementation period, which will be split about evenly between 2005 and 2006." 

 

Beckman Coulter spent $51.6 million on R&D in the quarter, compared to $51.5 million in the same quarter last year.

 

As of Sept. 30, the company held cash, cash equivalents, short-term investments, and restricted cash totaling $59.3 million.

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