Thermo Fisher Scientific Reports Second Quarter 2022 Results – Investors


Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, today reported its financial results for the second quarter ended July 2, 2022.
Second Quarter 2022 Highlights
“We delivered another quarter of outstanding financial performance,” said Marc N. Casper, chairman, president and chief executive officer of Thermo Fisher Scientific. “Our proven growth strategy and PPI Business System enabled us to deliver exceptional results across our business and we continue to see the benefit of our strategic investments to enhance our unique customer value proposition. The integration of our clinical research business is going very well, the business is performing at a high level and the outlook for long-term synergies is very compelling.”
Casper added, “Our team continues to execute well and we’re in a very strong position at the halfway point of the year and on track to deliver another outstanding year for Thermo Fisher.”
Second Quarter 2022
Revenue for the quarter grew 18% to $10.97 billion in 2022. Organic revenue growth was 3%; acquisitions increased revenue by 19% and currency translation decreased revenue by 4%. Core organic revenue growth was 13%. COVID-19 testing revenue was $0.63 billion.
GAAP Earnings Results
GAAP diluted EPS in the second quarter of 2022 was $4.22, versus $4.61 in the same quarter last year. GAAP operating income for the second quarter of 2022 was $2.00 billion, compared with $2.16 billion in the year-ago quarter. GAAP operating margin was 18.2%, compared with 23.3% in the second quarter of 2021.
Non-GAAP Earnings Results
Adjusted EPS in the second quarter of 2022 was $5.51, versus $5.60 in the second quarter of 2021. Adjusted operating income for the second quarter of 2022 was $2.61 billion, compared with $2.69 billion in the year-ago quarter. Adjusted operating margin was 23.7%, compared with 29.0% in the second quarter of 2021.
Annual Guidance for 2022
The company will provide updated 2022 financial guidance during its earnings conference call this morning at 8:30 a.m. Eastern Daylight Time.
Use of Non-GAAP Financial Measures
Adjusted EPS, adjusted net income, adjusted operating income, adjusted operating margin, free cash flow, organic revenue growth and Core organic revenue growth are non-GAAP measures that exclude certain items detailed after the tables that accompany this press release, under the heading “Supplemental Information Regarding Non-GAAP Financial Measures.” The reconciliations of GAAP to non-GAAP financial measures are provided in the tables that accompany this press release.
Conference Call
Thermo Fisher Scientific will hold its earnings conference call today, July 28, 2022, at 8:30 a.m. Eastern Daylight Time. To listen, dial (844) 200-6205 within the U.S. or (929) 526-1599 outside the U.S. The conference ID is 512129. You may also listen to the call live on our website, www.thermofisher.com, by clicking on “Investors.” You will find this press release, including the accompanying reconciliation of non-GAAP financial measures and related information, in that section of our website under “Financials.” An audio archive of the call will be available under “News & Events” through Friday, August 12, 2022.
About Thermo Fisher Scientific
Thermo Fisher Scientific Inc. is the world leader in serving science, with annual revenue of approximately $40 billion. Our Mission is to enable our customers to make the world healthier, cleaner and safer. Whether our customers are accelerating life sciences research, solving complex analytical challenges, increasing productivity in their laboratories, improving patient health through diagnostics or the development and manufacture of life-changing therapies, we are here to support them. Our global team delivers an unrivaled combination of innovative technologies, purchasing convenience and pharmaceutical services through our industry-leading brands, including Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific, Unity Lab Services, Patheon and PPD. For more information, please visit www.thermofisher.com.
Safe Harbor Statement
The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties. Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: the duration and severity of the COVID-19 pandemic; the need to develop new products and adapt to significant technological change; implementation of strategies for improving growth; general economic conditions and related uncertainties; dependence on customers’ capital spending policies and government funding policies; the effect of economic and political conditions and exchange rate fluctuations on international operations; use and protection of intellectual property; the effect of changes in governmental regulations; any natural disaster, public health crisis or other catastrophic event; and the effect of laws and regulations governing government contracts, as well as the possibility that expected benefits related to recent or pending acquisitions may not materialize as expected. Additional important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in our most recent annual report on Form 10-K and subsequent quarterly report on Form 10-Q, which are on file with the SEC and available in the “Investors” section of our website under the heading “SEC Filings.” While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if estimates change and, therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.
 
 
Three Months Ended
 
 
July 2,
 
% of
 
July 3,
 
% of
(In millions except per share amounts)
 
 
2022
 
 
Revenues
 
 
2021
 
 
Revenues
Revenues
 
$
10,970
 
 
 
 
$
9,273
 
 
 
Costs and operating expenses:
 
 
 
 
 
 
 
 
Cost of revenues (a)
 
 
6,240
 
 
56.9
%
 
 
4,585
 
 
49.4
%
Selling, general and administrative expenses (b)
 
 
1,740
 
 
15.9
%
 
 
1,614
 
 
17.4
%
Amortization of acquisition-related intangible assets
 
 
600
 
 
5.5
%
 
 
449
 
 
4.8
%
Research and development expenses
 
 
365
 
 
3.3
%
 
 
343
 
 
3.7
%
Restructuring and other costs (c)
 
 
24
 
 
0.2
%
 
 
119
 
 
1.3
%
 
 
 
8,969
 
 
81.8
%
 
 
7,110
 
 
76.7
%
Operating income
 
 
2,001
 
 
18.2
%
 
 
2,163
 
 
23.3
%
Interest income
 
 
36
 
 
 
 
 
11
 
 
 
Interest expense
 
 
(148
)
 
 
 
 
(122
)
 
 
Other income/(expense) (d)
 
 
28
 
 
 
 
 
(3
)
 
 
Income before income taxes
 
 
1,917
 
 
 
 
 
2,049
 
 
 
Provision for income taxes (e)
 
 
(198
)
 
 
 
 
(219
)
 
 
Equity in earnings/(losses) of unconsolidated entities
 
 
(51
)
 
 
 
 
(1
)
 
 
Net income
 
 
1,668
 
 
 
 
 
1,829
 
 
 
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interest
 
 
4
 
 
 
 
 
1
 
 
 
Net income attributable to Thermo Fisher Scientific Inc.
 
$
1,664
 
 
15.2
%
 
$
1,828
 
 
19.7
%
 
 
 
 
 
 
 
 
 
Earnings per share attributable to Thermo Fisher Scientific Inc.:
 
 
 
 
 
 
 
 
Basic
 
$
4.25
 
 
 
 
$
4.65
 
 
 
Diluted
 
$
4.22
 
 
 
 
$
4.61
 
 
 
Weighted average shares:
 
 
 
 
 
 
 
 
Basic
 
 
392
 
 
 
 
 
393
 
 
 
Diluted
 
 
394
 
 
 
 
 
396
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of adjusted operating income and adjusted operating margin
 
 
 
 
 
 
 
 
GAAP operating income
 
$
2,001
 
 
18.2
%
 
$
2,163
 
 
23.3
%
Cost of revenues adjustments (a)
 
 
8
 
 
0.1
%
 
 

 
 
0.0
%
Selling, general and administrative expenses adjustments (b)
 
 
(28
)
 
-0.3
%
 
 
(42
)
 
-0.4
%
Restructuring and other costs (c)
 
 
24
 
 
0.2
%
 
 
119
 
 
1.3
%
Amortization of acquisition-related intangible assets
 
 
600
 
 
5.5
%
 
 
449
 
 
4.8
%
Adjusted operating income (non-GAAP measure)
 
$
2,605
 
 
23.7
%
 
$
2,689
 
 
29.0
%
 
 
 
 
 
 
 
 
 
Reconciliation of adjusted net income
 
 
 
 
 
 
 
 
GAAP net income attributable to Thermo Fisher Scientific Inc.
 
$
1,664
 
 
 
 
$
1,828
 
 
 
Cost of revenues adjustments (a)
 
 
8
 
 
 
 
 

 
 
 
Selling, general and administrative expenses adjustments (b)
 
 
(28
)
 
 
 
 
(42
)
 
 
Restructuring and other costs (c)
 
 
24
 
 
 
 
 
119
 
 
 
Amortization of acquisition-related intangible assets
 
 
600
 
 
 
 
 
449
 
 
 
Other income/expense adjustments (d)
 
 
(18
)
 
 
 
 
8
 
 
 
Provision for income taxes adjustments (e)
 
 
(127
)
 
 
 
 
(142
)
 
 
Equity in earnings/losses of unconsolidated entities
 
 
51
 
 
 
 
 
1
 
 
 
Adjusted net income (non-GAAP measure)
 
$
2,174
 
 
 
 
$
2,221
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of adjusted earnings per share
 
 
 
 
 
 
 
 
GAAP diluted EPS attributable to Thermo Fisher Scientific Inc.
 
$
4.22
 
 
 
 
$
4.61
 
 
 
Cost of revenues adjustments (a)
 
 
0.02
 
 
 
 
 
0.00
 
 
 
Selling, general and administrative expenses adjustments (b)
 
 
(0.07
)
 
 
 
 
(0.10
)
 
 
Restructuring and other costs (c)
 
 
0.06
 
 
 
 
 
0.30
 
 
 
Amortization of acquisition-related intangible assets
 
 
1.52
 
 
 
 
 
1.13
 
 
 
Other income/expense adjustments (d)
 
 
(0.05
)
 
 
 
 
0.02
 
 
 
Provision for income taxes adjustments (e)
 
 
(0.32
)
 
 
 
 
(0.36
)
 
 
Equity in earnings/losses of unconsolidated entities
 
 
0.13
 
 
 
 
 
0.00
 
 
 
Adjusted EPS (non-GAAP measure)
 
$
5.51
 
 
 
 
$
5.60
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of free cash flow
 
 
 
 
 
 
 
 
GAAP net cash provided by operating activities
 
$
1,528
 
 
 
 
$
2,227
 
 
 
Purchases of property, plant and equipment
 
 
(506
)
 
 
 
 
(540
)
 
 
Proceeds from sale of property, plant and equipment
 
 
12
 
 
 
 
 

 
 
 
Free cash flow (non-GAAP measure)
 
$
1,034
 
 
 
 
$
1,687
 
 
 
Segment data
 
Three Months Ended
 
 
July 2,
 
% of
 
July 3,
 
% of
(In millions)
 
 
2022
 
 
Revenues
 
 
2021
 
 
Revenues
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
Life Sciences Solutions
 
$
3,292
 
 
30.0
%
 
$
3,557
 
 
38.4
%
Analytical Instruments
 
 
1,607
 
 
14.6
%
 
 
1,481
 
 
16.0
%
Specialty Diagnostics
 
 
1,101
 
 
10.0
%
 
 
1,235
 
 
13.3
%
Laboratory Products and Biopharma Services
 
 
5,537
 
 
50.5
%
 
 
3,583
 
 
38.6
%
Eliminations
 
 
(567
)
 
-5.1
%
 
 
(583
)
 
-6.3
%
Consolidated revenues
 
$
10,970
 
 
100.0
%
 
$
9,273
 
 
100.0
%
 
 
 
 
 
 
 
 
 
Operating income and operating margin
 
 
 
 
 
 
 
 
Life Sciences Solutions
 
$
1,327
 
 
40.3
%
 
$
1,718
 
 
48.3
%
Analytical Instruments
 
 
344
 
 
21.4
%
 
 
280
 
 
18.9
%
Specialty Diagnostics
 
 
243
 
 
22.1
%
 
 
245
 
 
19.9
%
Laboratory Products and Biopharma Services
 
 
691
 
 
12.5
%
 
 
446
 
 
12.4
%
Subtotal reportable segments
 
 
2,605
 
 
23.7
%
 
 
2,689
 
 
29.0
%
 
 
 
 
 
 
 
 
 
Cost of revenues adjustments (a)
 
 
(8
)
 
-0.1
%
 
 

 
 
0.0
%
Selling, general and administrative expenses adjustments (b)
 
 
28
 
 
0.3
%
 
 
42
 
 
0.4
%
Restructuring and other costs (c)
 
 
(24
)
 
-0.2
%
 
 
(119
)
 
-1.3
%
Amortization of acquisition-related intangible assets
 
 
(600
)
 
-5.5
%
 
 
(449
)
 
-4.8
%
GAAP operating income
 
$
2,001
 
 
18.2
%
 
$
2,163
 
 
23.3
%
(a) Adjusted results in 2022 exclude charges for the sale of inventories revalued at the date of acquisition.
(b) Adjusted results in 2022 and 2021 exclude certain third-party expenses, principally transaction/integration costs related to recent acquisitions and charges/credits for changes in estimates of contingent acquisition consideration.
(c) Adjusted results in 2022 and 2021 exclude restructuring and other costs consisting principally of severance, abandoned facility and other expenses of headcount reductions within several businesses and real estate consolidations. Adjusted results in 2021 also exclude $110 of charges for impairment of technology.
(d) Adjusted results in 2022 and 2021 exclude net gains/losses on investments. Adjusted results in 2021 also exclude amortization of bridge loan commitment fees related to a pending acquisition.
(e) Adjusted provision for income taxes in 2022 and 2021 excludes incremental tax impacts for the reconciling items between GAAP and adjusted net income, and incremental tax impacts as a result of tax rate/law changes. Adjusted results in 2022 also exclude incremental tax impacts from audit settlements.
Note:
Consolidated depreciation expense is $236 and $211 in 2022 and 2021, respectively.
 
Three months ended
 
July 2, 2022
Revenue growth
 
18 %
Acquisitions
 
19 %
Currency translation
 
-4 %
Organic revenue growth
 
3 %
COVID-19 testing revenue
 
-11 %
Contribution of PPD to Core organic revenue growth (a)
 
-1 %
Core organic revenue growth
 
13 %
(a) Adjustment to include the contribution of PPD to Core organic revenue growth as though the acquisition had occurred on January 1, 2021.
 
Note:
For more information related to non-GAAP financial measures, refer to the section titled “Supplemental Information Regarding Non-GAAP Financial Measures” of this release.
 
 
 
 
 
 
 
 
 
 
Six months ended
 
 
July 2,
 
% of
 
July 3,
 
% of
(In millions except per share amounts)
 
 
2022
 
 
Revenues
 
 
2021
 
 
Revenues
Revenues
 
$
22,788
 
 
 
 
$
19,179
 
 
 
Costs and operating expenses:
 
 
 
 
 
 
 
 
Cost of revenues (a)
 
 
12,454
 
 
54.7
%
 
 
9,142
 
 
47.7
%
Selling, general and administrative expenses (b)
 
 
3,548
 
 
15.6
%
 
 
3,157
 
 
16.5
%
Amortization of acquisition-related intangible assets
 
 
1,209
 
 
5.3
%
 
 
872
 
 
4.5
%
Research and development expenses
 
 
729
 
 
3.2
%
 
 
663
 
 
3.5
%
Restructuring and other costs (c)
 
 
26
 
 
0.1
%
 
 
133
 
 
0.7
%
 
 
 
17,966
 
 
78.8
%
 
 
13,967
 
 
72.8
%
Operating income
 
 
4,822
 
 
21.2
%
 
 
5,212
 
 
27.2
%
Interest income
 
 
54
 
 
 
 
 
23
 
 
 
Interest expense
 
 
(284
)
 
 
 
 
(247
)
 
 
Other income/(expense) (d)
 
 
(135
)
 
 
 
 
(186
)
 
 
Income before income taxes
 
 
4,457
 
 
 
 
 
4,802
 
 
 
Provision for income taxes (e)
 
 
(499
)
 
 
 
 
(635
)
 
 
Equity in earnings/(losses) of unconsolidated entities
 
 
(70
)
 
 
 
 
(1
)
 
 
Net income
 
 
3,888
 
 
 
 
 
4,166
 
 
 
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interest
 
 
9
 
 
 
 
 
1
 
 
 
Net income attributable to Thermo Fisher Scientific Inc.
 
$
3,879
 
 
17.0
%
 
$
4,165
 
 
21.7
%
 
 
 
 
 
 
 
 
 
Earnings per share attributable to Thermo Fisher Scientific Inc.:
 
 
 
 
 
 
 
 
Basic
 
$
9.90
 
 
 
 
$
10.58
 
 
 
Diluted
 
$
9.83
 
 
 
 
$
10.50
 
 
 
Weighted average shares:
 
 
 
 
 
 
 
 
Basic
 
 
392
 
 
 
 
 
394
 
 
 
Diluted
 
 
394
 
 
 
 
 
397
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of adjusted operating income and adjusted operating margin
 
 
 
 
 
 
 
 
GAAP operating income
 
$
4,822
 
 
21.2
%
 
$
5,212
 
 
27.2
%
Cost of revenues adjustments (a)
 
 
19
 
 
0.1
%
 
 
8
 
 
0.0
%
Selling, general and administrative expenses adjustments (b)
 
 
(21
)
 
-0.1
%
 
 
(26
)
 
-0.1
%
Restructuring and other costs (c)
 
 
26
 
 
0.1
%
 
 
133
 
 
0.7
%
Amortization of acquisition-related intangible assets
 
 
1,209
 
 
5.3
%
 
 
872
 
 
4.5
%
Adjusted operating income (non-GAAP measure)
 
$
6,055
 
 
26.6
%
 
$
6,199
 
 
32.3
%
 
 
 
 
 
 
 
 
 
Reconciliation of adjusted net income
 
 
 
 
 
 
 
 
GAAP net income attributable to Thermo Fisher Scientific Inc.
 
$
3,879
 
 
 
 
$
4,165
 
 
 
Cost of revenues adjustments (a)
 
 
19
 
 
 
 
 
8
 
 
 
Selling, general and administrative expenses adjustments (b)
 
 
(21
)
 
 
 
 
(26
)
 
 
Restructuring and other costs (c)
 
 
26
 
 
 
 
 
133
 
 
 
Amortization of acquisition-related intangible assets
 
 
1,209
 
 
 
 
 
872
 
 
 
Other income/expense adjustments (d)
 
 
149
 
 
 
 
 
205
 
 
 
Provision for income taxes adjustments (e)
 
 
(296
)
 
 
 
 
(272
)
 
 
Equity in earnings/losses of unconsolidated entities
 
 
70
 
 
 
 
 
1
 
 
 
Adjusted net income (non-GAAP measure)
 
$
5,035
 
 
 
 
$
5,086
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of adjusted earnings per share
 
 
 
 
 
 
 
 
GAAP diluted EPS attributable to Thermo Fisher Scientific Inc.
 
$
9.83
 
 
 
 
$
10.50
 
 
 
Cost of revenues adjustments (a)
 
 
0.05
 
 
 
 
 
0.02
 
 
 
Selling, general and administrative expenses adjustments (b)
 
 
(0.05
)
 
 
 
 
(0.07
)
 
 
Restructuring and other costs (c)
 
 
0.06
 
 
 
 
 
0.34
 
 
 
Amortization of acquisition-related intangible assets
 
 
3.06
 
 
 
 
 
2.20
 
 
 
Other income/expense adjustments (d)
 
 
0.38
 
 
 
 
 
0.51
 
 
 
Provision for income taxes adjustments (e)
 
 
(0.75
)
 
 
 
 
(0.69
)
 
 
Equity in earnings/losses of unconsolidated entities
 
 
0.18
 
 
 
 
 
0.00
 
 
 
Adjusted EPS (non-GAAP measure)
 
$
12.76
 
 
 
 
$
12.81
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of free cash flow
 
 
 
 
 
 
 
 
GAAP net cash provided by operating activities
 
$
3,730
 
 
 
 
$
4,205
 
 
 
Purchases of property, plant and equipment
 
 
(1,146
)
 
 
 
 
(1,168
)
 
 
Proceeds from sale of property, plant and equipment
 
 
14
 
 
 
 
 
5
 
 
 
Free cash flow (non-GAAP measure)
 
$
2,598
 
 
 
 
$
3,042
 
 
 
Segment data
 
Six months ended
 
 
July 2,
 
% of
 
July 3,
 
% of
(In millions)
 
 
2022
 
 
Revenues
 
 
2021
 
 
Revenues
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
Life Sciences Solutions
 
$
7,523
 
 
33.0
%
 
$
7,760
 
 
40.5
%
Analytical Instruments
 
 
3,125
 
 
13.7
%
 
 
2,868
 
 
15.0
%
Specialty Diagnostics
 
 
2,583
 
 
11.3
%
 
 
2,850
 
 
14.9
%
Laboratory Products and Biopharma Services
 
 
10,979
 
 
48.2
%
 
 
7,180
 
 
37.4
%
Eliminations
 
 
(1,422
)
 
-6.2
%
 
 
(1,479
)
 
-7.8
%
Consolidated revenues
 
$
22,788
 
 
100.0
%
 
$
19,179
 
 
100.0
%
 
 
 
 
 
 
 
 
 
Operating income and operating margin
 
 
 
 
 
 
 
 
Life Sciences Solutions
 
$
3,503
 
 
46.6
%
 
$
3,997
 
 
51.5
%
Analytical Instruments
 
 
645
 
 
20.6
%
 
 
552
 
 
19.3
%
Specialty Diagnostics
 
 
596
 
 
23.1
%
 
 
673
 
 
23.6
%
Laboratory Products and Biopharma Services
 
 
1,311
 
 
11.9
%
 
 
977
 
 
13.6
%
Subtotal reportable segments
 
 
6,055
 
 
26.6
%
 
 
6,199
 
 
32.3
%
 
 
 
 
 
 
 
 
 
Cost of revenues adjustments (a)
 
 
(19
)
 
-0.1
%
 
 
(8
)
 
0.0
%
Selling, general and administrative expenses adjustments (b)
 
 
21
 
 
0.1
%
 
 
26
 
 
0.1
%
Restructuring and other costs (c)
 
 
(26
)
 
-0.1
%
 
 
(133
)
 
-0.7
%
Amortization of acquisition-related intangible assets
 
 
(1,209
)
 
-5.3
%
 
 
(872
)
 
-4.5
%
GAAP operating income
 
$
4,822
 
 
21.2
%
 
$
5,212
 
 
27.2
%
(a) Adjusted results in 2022 and 2021 exclude charges for the sale of inventories revalued at the date of acquisition.
(b) Adjusted results in 2022 and 2021 exclude certain third-party expenses, principally transaction/integration costs related to recent acquisitions and charges/credits for changes in estimates of contingent acquisition consideration.
(c) Adjusted results in 2022 and 2021 exclude restructuring and other costs consisting principally of severance, abandoned facility and other expenses of headcount reductions within several businesses and real estate consolidations. Adjusted results in 2021 also exclude $110 of charges for impairment of acquired technology and $13 of charges for compensation due to employees at recently acquired businesses at the date of acquisition.
(d) Adjusted results in 2022 and 2021 exclude net gains/losses on investments and losses on the early extinguishment of debt. Adjusted results in 2021 also exclude amortization of bridge loan commitment fees related to a pending acquisition.
(e) Adjusted provision for income taxes in 2022 and 2021 excludes incremental tax impacts for the reconciling items between GAAP and adjusted net income, and incremental tax impacts as a result of tax rate/law changes. Adjusted results in 2022 also exclude incremental tax impacts from audit settlements.
Notes:
Consolidated depreciation expense is $486 and $409 in 2022 and 2021, respectively.
For more information related to non-GAAP financial measures, refer to the section titled “Supplemental Information Regarding Non-GAAP Financial Measures” of this release.
 
 
 
 
 
 
 
 
 
 
 
July 2,
 
December 31,
(In millions)
 
 
2022
 
 
 
2021
 
 
 
 
 
 
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
1,888
 
 
$
4,477
 
Accounts receivable, net
 
 
7,745
 
 
7,977
Inventories
 
 
5,668
 
 
 
5,051
 
Other current assets
 
 
2,799
 
 
 
2,608
 
Total current assets
 
 
18,100
 
 
 
20,113
 
Property, plant and equipment, net
 
 
8,529
 
 
 
8,333
 
Acquisition-related intangible assets, net
 
 
18,578
 
 
 
20,113
 
Other assets
 
 
4,306
 
 
 
4,640
 
Goodwill
 
 
41,066
 
 
 
41,924
 
Total assets
 
$
90,579
 
 
$
95,123
 
 
 
 
 
 
Liabilities, redeemable noncontrolling interest and equity
 
 
 
 
Current liabilities:
 
 
 
 
Short-term obligations and current maturities of long-term obligations
 
$
1,010
 
 
$
2,537
 
Other current liabilities
 
 
9,987
 
 
 
10,899
 
Total current liabilities
 
 
10,997
 
 
 
13,436
 
Other long-term liabilities
 
 
7,861
 
 
 
8,377
 
Long-term obligations
 
 
29,250
 
 
 
32,333
 
Redeemable noncontrolling interest
 
 
117
 
 
 
122
 
Total equity
 
 
42,354
 
 
 
40,855
 
Total liabilities, redeemable noncontrolling interest and equity
 
$
90,579
 
 
$
95,123
 
Condensed Consolidated Statement of Cash Flows (unaudited)
 
 
 
 
 
 
 
 
 
 
 
Six months ended
 
 
July 2,
 
July 3,
(In millions)
 
 
2022
 
 
 
2021
 
 
 
 
 
 
Operating activities
 
 
 
 
Net income
 
$
3,888
 
 
$
4,166
 
 
 
 
 
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
 
1,695
 
 
 
1,281
 
Change in deferred income taxes
 
 
(601
)
 
 
(307
)
Other non-cash expenses, net
 
 
472
 
 
 
512
 
Changes in assets and liabilities, excluding the effects of acquisitions
 
 
(1,724
)
 
 
(1,447
)
Net cash provided by operating activities
 
 
3,730
 
 
 
4,205
 
 
 
 
 
 
Investing activities
 
 
 
 
Acquisitions, net of cash acquired
 
 
(40
)
 
 
(1,425
)
Purchases of property, plant and equipment
 
 
(1,146
)
 
 
(1,168
)
Proceeds from sale of property, plant and equipment
 
 
14
 
 
 
5
 
Other investing activities, net
 
 
83
 
 
 
(36
)
Net cash used in investing activities
 
 
(1,089
)
 
 
(2,624
)
 
 
 
 
 
Financing activities
 
 
 
 
Repayment of debt
 
 
(375
)
 
 
(2,803
)
Net proceeds from issuance of commercial paper
 
 
1,032
 
 
 

 
Repayment of commercial paper
 
 
(3,490
)
 
 

 
Purchases of company common stock
 
 
(2,000
)
 
 
(2,000
)
Dividends paid
 
 
(220
)
 
 
(190
)
Net proceeds from issuance of company common stock under employee stock plans
 
 
51
 
 
 
72
 
Other financing activities, net
 
 
(48
)
 
 
(5
)
Net cash used in financing activities
 
 
(5,050
)
 
 
(4,926
)
 
 
 
 
 
Exchange rate effect on cash
 
 
(177
)
 
 
44
 
Decrease in cash, cash equivalents and restricted cash
 
 
(2,586
)
 
 
(3,301
)
Cash, cash equivalents and restricted cash at beginning of period
 
 
4,491
 
 
 
10,336
 
Cash, cash equivalents and restricted cash at end of period
 
$
1,905
 
 
$
7,035
 
 
 
 
 
 
 
 
 
 
 
Free cash flow (non-GAAP measure)
 
$
2,598
 
 
$
3,042
 
Note:
For more information related to non-GAAP financial measures, refer to the section titled “Supplemental Information Regarding Non-GAAP Financial Measures” of this release.
Supplemental Information Regarding Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures such as organic revenue growth, which is reported revenue growth, excluding the impacts of revenues from acquired businesses and the effects of currency translation. We also report Core organic revenue growth, which is reported revenue growth including the impact of PPD revenue, excluding the impacts of COVID-19 testing revenue, and excluding the impacts of acquisitions other than PPD and currency translation. We calculate period-to-period Core organic revenue growth by adding to the baseline period PPD’s pre-acquisition revenues from such period. We report these measures because Thermo Fisher management believes that in order to understand the company’s short-term and long-term financial trends, investors may wish to consider the impact of acquisitions, foreign currency translation and/or COVID-19 testing on revenues. In particular, given PPD’s significance relative to our existing businesses, management believes it is appropriate to also present information on a basis that includes PPD pre-acquisition revenues in order to demonstrate the impact PPD has on our current growth profile. Core organic revenue growth amounts are not necessarily indicative of the combined results of operations that would have been realized had the PPD acquisition occurred on January 1, 2021. Thermo Fisher management uses these measures to forecast and evaluate the operational performance of the company as well as to compare revenues of current periods to prior periods.
We report adjusted operating income, adjusted operating income margin, adjusted net income, and adjusted EPS. We believe that the use of these non-GAAP financial measures, in addition to GAAP financial measures, helps investors to gain a better understanding of our core operating results and future prospects, consistent with how management measures and forecasts the company’s core operating performance, especially when comparing such results to previous periods, forecasts, and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes. To calculate these measures we exclude, as applicable:
We report free cash flow, which is operating cash flow excluding net capital expenditures, to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities. The company also uses this measure as an indication of the strength of the company. Free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations such as debt service that are not deducted from the measure.
Thermo Fisher Scientific does not provide GAAP financial measures on a forward-looking basis because we are unable to predict with reasonable certainty and without unreasonable effort items such as the timing and amount of future restructuring actions and acquisition-related charges as well as gains or losses from sales of real estate and businesses, the early retirement of debt and the outcome of legal proceedings. The timing and amount of these items are uncertain and could be material to Thermo Fisher Scientific’s results computed in accordance with GAAP.
The non-GAAP financial measures of Thermo Fisher Scientific’s results of operations and cash flows included in this press release are not meant to be considered superior to or a substitute for Thermo Fisher Scientific’s results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the tables above.

Media Contact Information:
Ron O’Brien
Phone: 781-622-1242
E-mail: ron.obrien@thermofisher.com
Investor Contact Information:
Rafael Tejada
Phone: 781-622-1356
E-mail: rafael.tejada@thermofisher.com
Multimedia Files:
Rafael Tejada
Vice President, Investor Relations
Thermo Fisher Scientific
168 Third Avenue
Waltham, MA USA 02451
781.622.1111
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Thermo Fisher Scientific Inc. is the world leader in serving science, with annual revenue of approximately $40 billion. Our Mission is to enable our customers to make the world healthier, cleaner and safer. Whether our customers are accelerating life sciences research, solving complex analytical challenges, increasing productivity in their laboratories, improving patient health through diagnostics or the development and manufacture of life-changing therapies, we are here to support them. Our global team delivers an unrivaled combination of innovative technologies, purchasing convenience and pharmaceutical services through our industry-leading brands, including Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific, Unity Lab Services, Patheon and PPD. For more information, please visit www.thermofisher.com.
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