NEW YORK (GenomeWeb News) – Life Technologies reported after the close of the market Tuesday that revenues in the fourth quarter rose 8 percent year over year.
For the quarter ended Dec. 31, 2011 the company posted $1.01 billion in revenues, compared to $932.3 million, beating Wall Street estimates of $967.7 million.
On a non-GAAP basis, Life Tech's revenues increased 4 percent to $970.3 million from $933.6 million in the year-ago period. Excluding the impact of currency, non-GAAP revenues inched up 3 percent.
In the quarter, the Genetic Systems division's non-GAAP revenues increased 13 percent year over year to $278 million, or 11 percent excluding the impact from currency, the company said. Increased sales of its Ion Torrent benchtop sequencer and a double-digit spike in Forensics drove the growth, partially offsetting softness in sales of its 5500 sequencer, formerly called the SOLiD.
In a conference call following the release of Life Tech's earnings, company officials said that the Ion Torrent business grew about 50 percent sequentially in the quarter from the third quarter.
Chairman and CEO Greg Lucier added that during 2011 more than 700 Ion Torrent Personal Genome Machines were sold and that he expects "substantial growth" over that level in 2012 both in the PGM as well as the recently announced Ion Torrent Proton system, which is expected to commercially launch in the second half of the year.
Revenues for the Molecular Biology Systems division slid 1 percent year over year on a non-GAAP basis to $441 million, or 2 percent on a currency-neutral basis, due to a 1 percent decline in qPCR royalties and lower spending by academic customers.
The Cell Systems division's revenues increased 3 percent on a non-GAAP basis to $244 million, or 1 percent excluding currency effects, driven by cell culture product sales and improved sales in the BioProduction business.
Life Tech's R&D costs shrank 17 percent year over year to $90.2 million from $108.7 million on a GAAP basis, while SG&A costs decreased 8 percent to $249.5 million from $270 million a year ago.
Profits on a GAAP basis rose to $127.4 million, or $.69 per share, for the quarter, compared to $70.6 million, or $.37 per share, a year ago.
On a non-GAAP basis, Life Tech posted a profit of $195.4 million or $1.06 per share, compared to $172.3 million, or $.90 per share a year ago. Consensus analyst estimates had EPS at $1.04.
For full-year 2011 Life Tech revenues increased to $3.78 billion, up 5 percent from $3.59 billion a year ago, and beating Wall Street estimates of $3.74 billion. On a non-GAAP basis, the company had revenues of $3.74 billion, a 4 percent increase from $3.59 billion a year ago.
Genetic Systems revenues rose 8 percent to $1 billion on a non-GAAP basis, or 7 percent excluding the effect of currency, helped along by Ion Torrent system sales, and growth in forensics and capillary electrophoresis. The firm's 5500 sequencers saw lower growth, it said.
Molecular Biology Systems was flat at $1.7 billion, or down 2 percent on a currency-neutral basis as qPCR royalties were down 1 percent and funding slowed down resulting in softer qPCR sales. A disruption in China sales as Life Tech transitioned to direct sales during the second quarter also affected revenues in the division.
Cell Systems had non-GAAP revenues of $969 million, up 7 percent, or 6 percent excluding the effects of currency. Growth was driven by increased BioProduction sales as well as sales across Life Tech's cell consumables businesses, it said.
The firm's R&D spending rose a fraction of 1 percent to $377.9 million from $375.5 million on a GAAP basis. SG&A costs decreased 1 percent to $1.01 billion from $1.02 billion.
For full-year 2011 Life Tech posted net income of $412.1 million, or $2.23 per share, up from $377.9 million, or $1.99 per share, in 2011.
On a non-GAAP basis, profits were $691.3 million, or $3.73 per share, compared to $676.4 million, or $3.55 per share, in 2010 and beat Wall Street expectations of $3.71.
Life Tech ended 2011 with $882 million in cash and short-term investments.
For full-year 2012, the firm gave guidance of 2 percent to 4 percent organic revenue growth over 2011 levels and non-GAAP EPS of between $3.90 and $4.05. The guidance includes a revenue headwind of $26 million and a benefit to non-GAAP EPS of about $.02 from currency.
On the conference call CFO David Hoffmeister said the guidance includes a reduction of $30 million in qPCR royalties, a $40 million reduction in US stimulus-related sales, and a $60 million reduction in sales of 5500 instruments "as we continue to ramp up sales" of the Ion Torrent platforms.
For the first quarter of 2012 Hoffmeister said that Life Tech expects revenues to fall between $915 million and $925 million, resulting in non-GAAP EPS of between $.91 and $.95.
For Q2, revenues are expected to be slightly down from the second quarter of 2011, which benefited from more $30 million in 5500 instrument sales. The firm recorded $941.1 million in revenues in Q2 2011 on a GAAP basis and $944.8 million on a non-GAAP basis. Non-GAAP EPS for the second quarter of 2012 is expected to be "up slightly" from Q1 2012 levels, Hoffmeister said.
The company also said that it will begin reporting revenues differently in the first quarter of 2012, doing away with its current business divisions and replacing them with three business groups: Research Consumables, Genetic Analysis, and Applied Sciences. The changes, Hoffmeister said, better match Life Tech's markets it serves and better match how its businesses evolved internally.
On the conference call, company officials were also asked about Roche's $5.7 billion hostile takeover bid for Illumina and how that may affect Life Tech's plans to expand into the clinical markets and whether it could spur on M&A activity by Life Tech to advance into that space.
Lucier responded that however the Roche-Illumina drama plays out, it won't impact Life Tech's own plans. The firm recently announced the hiring of Ron Andrews as its president of medical sciences and he will direct the execution of a road map that the company has created, which includes partnering with diagnostic firms in a "very compelling way. … There are other areas and new ideas we have of new business models that we're also carrying out and Ronnie will lead that too," said Lucier.
In early Wednesday trade on the Nasdaq shares of Life Tech were up 2 percent at $50.01.