Life Technologies Corporation (Life Technologies) has announced its fourth quarter and full year 2008 results. Non-GAAP revenues for the fourth quarter of 2008 were $545 million, including $4 million of non-GAAP revenue adjustments, resulting in full year non-GAAP revenues of $1,625 million, an increase of 27%over the $1,282 million reported for 2007.
This includes $191 million of revenue from its recent acquisition of Applied Biosystems (AB), which closed on November 21, 2008. The closing date of the transaction resulted in approximately five weeks of revenue recognition.
“We ended the year very strong, with our legacy Invitrogen business having more than 7% organic growth in the quarter,” said Greg Lucier, chairman and chief executive officer of Life Technologies. “I’m proud of what our team has accomplished, especially given the current economic environment and the significant energy we are putting into effectively integrating the Applied Biosystems and Invitrogen businesses. Our focus on controlling costs while still keeping our eye on the levers that drive growth have paid off, and we are in a very strong position as we enter 2009.”
Fourth quarter diluted loss per share was $0.89 on a GAAP basis compared to earnings per share of $0.41 in the same period of the prior year. The year over year decrease was associated with the one-time costs related to the AB merger. The following analysis of diluted earnings per share identifies specific items that affect the comparability of results between periods.
Analysis of Fourth Quarter and Fiscal Year 2008 Results
Fourth quarter 2008 non-GAAP revenues increased 62% over the previous year, including acquisition revenue. The AB acquisition contributed $191 million of revenue in the quarter, resulting in 57 points of growth. Organic revenue growth, without the impact from acquisitions or currency was 7%, and was a result of improved price and new product introductions. Revenue from foreign exchange had a negative affect on reported revenue, resulting in a 4 point impact to growth rates.
Full year 2008 revenues on a non-GAAP basis increased 27%, including acquisition and foreign exchange affect. Without the impact of acquisitions or currency, organic revenue growth for the year was 7.5%.
Gross margin, on a non-GAAP basis, was 63.9% in the fourth quarter. This represents an increase of 80 basis points from the same period in the prior year, mostly attributable to the AB acquisition and price optimization within the legacy Invitrogen product lines. Full year non-GAAP gross margin was 65.7%, an increase of 170 basis points over prior year levels, mostly attributable to currency benefit and price optimization within the legacy Invitrogen product lines.
Non-GAAP operating margin was 29.3% in the fourth quarter, representing an increase of approximately 520 basis points over the same period in 2007. Full year operating margin was 28.1%, an increase of 320 basis points. The increase in operating margin was a result of the AB acquisition, currency exchange benefits, and improved pricing on legacy Invitrogen products.
Fourth quarter non-GAAP tax rate was 28.5%, a decrease of 160 basis points over the same period in 2007.
Weighted shares outstanding were 120 million in the fourth quarter as a result of the AB acquisition.
Cash flow from operating activities for the fourth quarter was $122 million. Fourth quarter capital expenditures were $29 million and resulting free cash flow was $93 million. Full year cash flow from operating activities was $357 million, capital expenditures were $82 million and free cash flow was $275 million. The company ended the year with $448 million in cash & short-term investments, including $112 million held as restricted cash.