Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in
serving science, today reported its financial results for the third
quarter ended September 28, 2024.
Third Quarter 2024 Highlights
- Third quarter revenue was $10.60 billion.
- Third quarter GAAP diluted earnings per share (EPS) was
$4.25.
- Third quarter adjusted EPS was $5.28.
- Advanced our proven growth strategy, launching a range of
high-impact, innovative new products during the quarter. To enable
the development of advanced materials, we launched the
groundbreaking Thermo Scientific Iliad scanning transmission
electron microscope, which integrates a number of our advanced
technologies into a user-friendly workflow to enable research of
the most sophisticated modern materials down to the atomic level.
To advance life sciences research, we launched the Applied
Biosystems MagMAX Sequential DNA/RNA kit, which maximizes the
isolation of DNA and RNA from blood cancer samples helping
researchers identify unique insights into cancer-causing genetic
alterations; and the Invitrogen Vivofectamine Delivery Solutions, a
novel method for delivering nucleic acids into multiple targets
with therapeutic effect, paving the way for groundbreaking new
medicines.
- Continued to deepen our trusted partner status with customers
to accelerate their innovation and enhance their productivity. In
the quarter, we announced a partnership with the National Cancer
Institute on the myeloMATCH precision medicine umbrella trial,
which will leverage our next-generation sequencing technology to
test patients for specific genetic biomarkers to match them more
quickly with optimal treatments based on their unique cancer
profile. In our pharma services business, we announced the
expansion of our Cincinnati, Ohio, and Bend, Oregon, sites to
further enhance our solid dose formulation capabilities for our
pharma and biotech customers. In our clinical research business, we
also announced the expansion of our global laboratory services
network with a new bioanalytical lab in Gothenburg, Sweden, which
will provide pharma and biotech customers with advanced laboratory
services to support all phases of development.
“We are pleased to deliver strong financial results in the third
quarter, reflecting another quarter of sequential improvement in
growth,” said Marc N. Casper, chairman, president and chief
executive officer of Thermo Fisher Scientific. “We continue to
deliver differentiated performance through our proven growth
strategy and PPI Business System. Our trusted partner status is
resonating strongly with customers, and this is translating into
meaningful commercial wins.”
Casper added, “Looking ahead, we’re in a great position to
deliver on our 2024 objectives, as we continue to create value for
all of our stakeholders and build an even brighter future for our
company.”
Third Quarter 2024
Revenue for the quarter was $10.60 billion in 2024 versus $10.57
billion in 2023. Growth in revenue, organic revenue and Core
organic revenue all improved sequentially from Q2 and were flat
versus the prior-year quarter.
GAAP Earnings Results
GAAP diluted EPS in the third quarter of 2024 was $4.25, versus
$4.42 in the same quarter last year. GAAP operating income for the
third quarter of 2024 was $1.84 billion, compared with $1.86
billion in the year-ago quarter. GAAP operating margin was 17.3%,
compared with 17.6% in the third quarter of 2023.
Non-GAAP Earnings Results
Adjusted EPS in the third quarter of 2024 was $5.28, versus
$5.69 in the third quarter of 2023. Adjusted operating income for
the third quarter of 2024 was $2.36 billion, compared with $2.56
billion in the year-ago quarter. Adjusted operating margin was
22.3%, compared with 24.2% in the third quarter of 2023.
Annual Guidance for 2024
Thermo Fisher is raising its full-year adjusted EPS guidance to
a new range of $21.35 to $22.07 versus its previous guidance of
$21.29 to $22.07. Revenue guidance continues to be in the range of
$42.4 to $43.3 billion.
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.
Note on Presentation
Certain amounts and percentages reported within this press
release are presented and calculated based on underlying unrounded
amounts. As a result, the sum of components may not equal
corresponding totals due to rounding.
Conference Call
Thermo Fisher Scientific will hold its earnings conference call
today, October 23, at 8:30 a.m. Eastern Daylight Time. During the
call, the company will discuss its financial performance, as well
as future expectations. To listen, call (833) 470-1428 within the
U.S. or (404) 975-4839 outside the U.S. The access code is 296868.
You may also listen to the call live on the “Investors” section of
our website, www.thermofisher.com. The earnings press release and
related information can also be found in that section of our
website under the heading “Financials”. A replay of the call will
be available under “News, Events & Presentations” through
November 6, 2024.
About Thermo Fisher Scientific
Thermo Fisher Scientific Inc. is the world leader in serving
science, with annual revenue over $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 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 reports 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.
Condensed Consolidated Statements of
Income (unaudited)
Three months ended
September 28,
% of
September 30,
% of
(Dollars in millions except per share
amounts)
2024
Revenues
2023
Revenues
Revenues
$
10,598
$
10,574
Costs and operating expenses:
Cost of revenues (a)
6,180
58.3
%
6,145
58.1
%
Selling, general and administrative
expenses (b)
1,739
16.4
%
1,578
14.9
%
Amortization of acquisition-related
intangible assets
450
4.2
%
584
5.6
%
Research and development expenses
346
3.3
%
319
3.0
%
Restructuring and other costs (c)
45
0.4
%
84
0.8
%
Total costs and operating expenses
8,759
82.7
%
8,710
82.4
%
Operating income
1,838
17.3
%
1,864
17.6
%
Interest income
277
246
Interest expense
(356
)
(359
)
Other income/(expense) (d)
(16
)
14
Income before income taxes
1,742
1,765
Provision for income taxes (e)
(99
)
(53
)
Equity in earnings/(losses) of
unconsolidated entities
(14
)
(17
)
Net income
1,629
1,695
Less: net income/(losses) attributable to
noncontrolling interests and redeemable noncontrolling interest
(f)
—
(20
)
Net income attributable to Thermo Fisher
Scientific Inc.
$
1,630
15.4
%
$
1,715
16.2
%
Earnings per share attributable to Thermo
Fisher Scientific Inc.:
Basic
$
4.26
$
4.44
Diluted
$
4.25
$
4.42
Weighted average shares:
Basic
382
386
Diluted
384
388
Reconciliation of adjusted operating
income and adjusted operating margin
GAAP operating income
$
1,838
17.3
%
$
1,864
17.6
%
Cost of revenues adjustments (a)
9
0.1
%
14
0.1
%
Selling, general and administrative
expenses adjustments (b)
21
0.2
%
14
0.1
%
Restructuring and other costs (c)
45
0.4
%
84
0.8
%
Amortization of acquisition-related
intangible assets
450
4.2
%
584
5.6
%
Adjusted operating income (non-GAAP
measure)
$
2,362
22.3
%
$
2,560
24.2
%
Reconciliation of adjusted net
income
GAAP net income attributable to Thermo
Fisher Scientific Inc.
$
1,630
$
1,715
Cost of revenues adjustments (a)
9
14
Selling, general and administrative
expenses adjustments (b)
21
14
Restructuring and other costs (c)
45
84
Amortization of acquisition-related
intangible assets
450
584
Other income/expense adjustments (d)
3
(9
)
Provision for income taxes adjustments
(e)
(139
)
(192
)
Equity in earnings/losses of
unconsolidated entities
14
17
Noncontrolling interests adjustments
(f)
(6
)
(19
)
Adjusted net income (non-GAAP measure)
$
2,026
$
2,208
Reconciliation of adjusted earnings per
share
GAAP diluted EPS attributable to Thermo
Fisher Scientific Inc.
$
4.25
$
4.42
Cost of revenues adjustments (a)
0.02
0.04
Selling, general and administrative
expenses adjustments (b)
0.05
0.03
Restructuring and other costs (c)
0.12
0.22
Amortization of acquisition-related
intangible assets
1.17
1.50
Other income/expense adjustments (d)
0.01
(0.02
)
Provision for income taxes adjustments
(e)
(0.36
)
(0.49
)
Equity in earnings/losses of
unconsolidated entities
0.04
0.04
Noncontrolling interests adjustments
(f)
(0.02
)
(0.05
)
Adjusted EPS (non-GAAP measure)
$
5.28
$
5.69
Reconciliation of free cash
flow
GAAP net cash provided by operating
activities
$
2,167
$
2,414
Purchases of property, plant and
equipment
(271
)
(332
)
Proceeds from sale of property, plant and
equipment
20
66
Free cash flow (non-GAAP measure)
$
1,915
$
2,148
Business Segment Information
Three months ended
September 28,
% of
September 30,
% of
(Dollars in millions)
2024
Revenues
2023
Revenues
Revenues
Life Sciences Solutions
$
2,387
22.5
%
$
2,433
23.0
%
Analytical Instruments
1,808
17.1
%
1,754
16.6
%
Specialty Diagnostics
1,129
10.7
%
1,083
10.2
%
Laboratory Products and Biopharma
Services
5,740
54.2
%
5,728
54.2
%
Eliminations
(467
)
-4.4
%
(424
)
-4.0
%
Consolidated revenues
$
10,598
100.0
%
$
10,574
100.0
%
Segment income and segment income
margin
Life Sciences Solutions
$
845
35.4
%
$
872
35.9
%
Analytical Instruments
451
24.9
%
468
26.7
%
Specialty Diagnostics
293
25.9
%
283
26.1
%
Laboratory Products and Biopharma
Services
773
13.5
%
937
16.4
%
Subtotal reportable segments
2,362
22.3
%
2,560
24.2
%
Cost of revenues adjustments (a)
(9
)
-0.1
%
(14
)
-0.1
%
Selling, general and administrative
expenses adjustments (b)
(21
)
-0.2
%
(14
)
-0.1
%
Restructuring and other costs (c)
(45
)
-0.4
%
(84
)
-0.8
%
Amortization of acquisition-related
intangible assets
(450
)
-4.2
%
(584
)
-5.6
%
Consolidated GAAP operating income
$
1,838
17.3
%
$
1,864
17.6
%
(a) Adjusted results in 2024 and 2023
exclude charges for the sale of inventory revalued at the date of
acquisition and accelerated depreciation on manufacturing assets to
be abandoned due to facility consolidations.
(b) Adjusted results in 2024 and 2023
exclude certain third-party expenses, principally
transaction/integration costs related to recent acquisitions,
charges/credits for changes in estimates of contingent acquisition
consideration, and charges associated with product liability
litigation. Adjusted results in 2024 also exclude $5 of accelerated
depreciation on fixed assets to be abandoned due to facility
consolidations.
(c) Adjusted results in 2024 and 2023
exclude restructuring and other costs consisting principally of
severance, impairments of long-lived assets, net charges/credits
for pre-acquisition litigation and other matters, net gains on the
sale of real estate, and abandoned facility and other expenses of
headcount reductions and real estate consolidations.
(d) Adjusted results in 2024 and 2023
exclude net gains/losses on investments.
(e) Adjusted results in 2024 and 2023
exclude incremental tax impacts for the reconciling items between
GAAP and adjusted net income, incremental tax impacts as a result
of tax rate/law changes, and the tax impacts from audit
settlements.
(f) Adjusted results exclude the
incremental impacts for the reconciling items between GAAP and
adjusted net income attributable to noncontrolling interests.
Note:
Consolidated depreciation expense is $291
and $269 in 2024 and 2023, respectively.
Organic and Core organic revenue
growth
Three months ended
September 28, 2024
Revenue growth
0%
Acquisitions
1%
Currency translation
0%
Organic revenue growth (non-GAAP
measure)
0%
COVID-19 testing revenue
0%
Core organic revenue growth (non-GAAP
measure)
0%
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.
Condensed Consolidated Statements of
Income (unaudited)
Nine months ended
September 28,
% of
September 30,
% of
(Dollars in millions except per share
amounts)
2024
Revenues
2023
Revenues
Revenues
$
31,484
$
31,971
Costs and operating expenses:
Cost of revenues (a)
18,326
58.2
%
18,905
59.1
%
Selling, general and administrative
expenses (b)
5,156
16.4
%
4,897
15.3
%
Amortization of acquisition-related
intangible assets
1,514
4.8
%
1,775
5.5
%
Research and development expenses
1,016
3.2
%
1,010
3.2
%
Restructuring and other costs (c)
151
0.5
%
379
1.2
%
Total costs and operating expenses
26,163
83.1
%
26,966
84.3
%
Operating income
5,321
16.9
%
5,005
15.7
%
Interest income
851
570
Interest expense
(1,073
)
(985
)
Other income/(expense) (d)
(2
)
(32
)
Income before income taxes
5,096
4,558
Provision for income taxes (e)
(507
)
(151
)
Equity in earnings/(losses) of
unconsolidated entities
(75
)
(58
)
Net income
4,514
4,349
Less: net income/(losses) attributable to
noncontrolling interests and redeemable noncontrolling interest
(f)
9
(16
)
Net income attributable to Thermo Fisher
Scientific Inc.
$
4,505
14.3
%
$
4,365
13.7
%
Earnings per share attributable to Thermo
Fisher Scientific Inc.:
Basic
$
11.79
$
11.31
Diluted
$
11.75
$
11.25
Weighted average shares:
Basic
382
386
Diluted
383
388
Reconciliation of adjusted operating
income and adjusted operating margin
GAAP operating income
$
5,321
16.9
%
$
5,005
15.7
%
Cost of revenues adjustments (a)
25
0.1
%
73
0.2
%
Selling, general and administrative
expenses adjustments (b)
(24
)
-0.1
%
28
0.1
%
Restructuring and other costs (c)
151
0.5
%
379
1.2
%
Amortization of acquisition-related
intangible assets
1,514
4.8
%
1,775
5.5
%
Adjusted operating income (non-GAAP
measure)
$
6,987
22.2
%
$
7,260
22.7
%
Reconciliation of adjusted net
income
GAAP net income attributable to Thermo
Fisher Scientific Inc.
$
4,505
$
4,365
Cost of revenues adjustments (a)
25
73
Selling, general and administrative
expenses adjustments (b)
(24
)
28
Restructuring and other costs (c)
151
379
Amortization of acquisition-related
intangible assets
1,514
1,775
Other income/expense adjustments (d)
(8
)
36
Provision for income taxes adjustments
(e)
(190
)
(534
)
Equity in earnings/losses of
unconsolidated entities
75
58
Noncontrolling interests adjustments
(f)
(6
)
(19
)
Adjusted net income (non-GAAP measure)
$
6,042
$
6,161
Reconciliation of adjusted earnings per
share
GAAP diluted EPS attributable to Thermo
Fisher Scientific Inc.
$
11.75
$
11.25
Cost of revenues adjustments (a)
0.07
0.19
Selling, general and administrative
expenses adjustments (b)
(0.06
)
0.07
Restructuring and other costs (c)
0.39
0.98
Amortization of acquisition-related
intangible assets
3.95
4.57
Other income/expense adjustments (d)
(0.02
)
0.09
Provision for income taxes adjustments
(e)
(0.50
)
(1.38
)
Equity in earnings/losses of
unconsolidated entities
0.20
0.15
Noncontrolling interests adjustments
(f)
(0.02
)
(0.05
)
Adjusted EPS (non-GAAP measure)
$
15.76
$
15.87
Reconciliation of free cash
flow
GAAP net cash provided by operating
activities
$
5,377
$
4,683
Purchases of property, plant and
equipment
(920
)
(1,074
)
Proceeds from sale of property, plant and
equipment
40
76
Free cash flow (non-GAAP measure)
$
4,498
$
3,685
Business Segment Information
Nine months ended
September 28,
% of
September 30,
% of
(Dollars in millions)
2024
Revenues
2023
Revenues
Revenues
Life Sciences Solutions
$
7,027
22.3
%
$
7,508
23.5
%
Analytical Instruments
5,277
16.8
%
5,226
16.3
%
Specialty Diagnostics
3,355
10.7
%
3,300
10.3
%
Laboratory Products and Biopharma
Services
17,221
54.7
%
17,322
54.2
%
Eliminations
(1,397
)
-4.4
%
(1,385
)
-4.3
%
Consolidated revenues
$
31,484
100.0
%
$
31,971
100.0
%
Segment income and segment income
margin
Life Sciences Solutions
$
2,551
36.3
%
$
2,525
33.6
%
Analytical Instruments
1,289
24.4
%
1,321
25.3
%
Specialty Diagnostics
886
26.4
%
860
26.1
%
Laboratory Products and Biopharma
Services
2,262
13.1
%
2,554
14.7
%
Subtotal reportable segments
6,987
22.2
%
7,260
22.7
%
Cost of revenues adjustments (a)
(25
)
-0.1
%
(73
)
-0.2
%
Selling, general and administrative
expenses adjustments (b)
24
0.1
%
(28
)
-0.1
%
Restructuring and other costs (c)
(151
)
-0.5
%
(379
)
-1.2
%
Amortization of acquisition-related
intangible assets
(1,514
)
-4.8
%
(1,775
)
-5.5
%
Consolidated GAAP operating income
$
5,321
16.9
%
$
5,005
15.7
%
(a) Adjusted results in 2024 and 2023
exclude charges for inventory write-downs associated with
large-scale abandonment of product lines, accelerated depreciation
on manufacturing assets to be abandoned due to facility
consolidations, and charges for the sale of inventory revalued at
the date of acquisition.
(b) Adjusted results in 2024 and 2023
exclude certain third-party expenses, principally
transaction/integration costs related to recent acquisitions,
charges/credits for changes in estimates of contingent acquisition
consideration, and charges associated with product liability
litigation. Adjusted results in 2024 also exclude $5 of accelerated
depreciation on fixed assets to be abandoned due to facility
consolidations.
(c) Adjusted results in 2024 and 2023
exclude restructuring and other costs consisting principally of
severance, impairments of long-lived assets, net charges for
pre-acquisition litigation and other matters, net gains on the sale
of real estate, and abandoned facility and other expenses of
headcount reductions and real estate consolidations. Adjusted
results in 2023 also exclude $26 of contract termination costs
associated with facility closures.
(d) Adjusted results in 2024 and 2023
exclude net gains/losses on investments.
(e) Adjusted results in 2024 and 2023
exclude incremental tax impacts for the reconciling items between
GAAP and adjusted net income, incremental tax impacts as a result
of tax rate/law changes and the tax impacts from audit
settlements.
(f) Adjusted results exclude the
incremental impacts for the reconciling items between GAAP and
adjusted net income attributable to noncontrolling interests.
Notes:
Consolidated depreciation expense is $852
and $792 in 2024 and 2023, 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.
Condensed Consolidated Balance Sheets
(unaudited)
September 28,
December 31,
(In millions)
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
4,645
$
8,077
Short-term investments
2,000
3
Accounts receivable, net
8,255
8,221
Inventories
5,430
5,088
Other current assets
3,453
3,200
Total current assets
23,783
24,589
Property, plant and equipment, net
9,412
9,448
Acquisition-related intangible assets,
net
16,262
16,670
Other assets
4,180
3,999
Goodwill
46,726
44,020
Total assets
$
100,364
$
98,726
Liabilities, redeemable noncontrolling
interest and equity
Current liabilities:
Short-term obligations and current
maturities of long-term obligations
$
4,116
$
3,609
Other current liabilities
10,485
10,403
Total current liabilities
14,601
14,012
Other long-term liabilities
5,466
6,564
Long-term obligations
31,197
31,308
Redeemable noncontrolling interest
127
118
Total equity
48,972
46,724
Total liabilities, redeemable
noncontrolling interest and equity
$
100,364
$
98,726
Condensed Consolidated Statements of
Cash Flows (unaudited)
Nine months ended
September 28,
September 30,
(In millions)
2024
2023
Operating activities
Net income
$
4,514
$
4,349
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
2,367
2,567
Change in deferred income taxes
(1,007
)
(631
)
Other non-cash expenses, net
477
658
Changes in assets and liabilities,
excluding the effects of acquisitions
(973
)
(2,260
)
Net cash provided by operating
activities
5,377
4,683
Investing activities
Purchases of property, plant and
equipment
(920
)
(1,074
)
Proceeds from sale of property, plant and
equipment
40
76
Proceeds from cross-currency interest rate
swap interest settlements
203
36
Acquisitions, net of cash acquired
(3,132
)
(3,660
)
Purchases of investments
(2,065
)
(200
)
Other investing activities, net
14
56
Net cash used in investing activities
(5,861
)
(4,766
)
Financing activities
Net proceeds from issuance of debt
1,204
3,466
Repayment of debt
(1,107
)
(2,000
)
Net proceeds from issuance of commercial
paper
—
1,620
Repayment of commercial paper
—
(1,935
)
Purchases of company common stock
(3,000
)
(3,000
)
Dividends paid
(434
)
(387
)
Other financing activities, net
212
42
Net cash used in financing activities
(3,126
)
(2,194
)
Exchange rate effect on cash
182
(92
)
Decrease in cash, cash equivalents and
restricted cash
(3,427
)
(2,369
)
Cash, cash equivalents and restricted cash
at beginning of period
8,097
8,537
Cash, cash equivalents and restricted cash
at end of period
$
4,670
$
6,168
Free cash flow (non-GAAP measure)
$
4,498
$
3,685
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
acquisitions/divestitures and the effects of currency translation.
We also report Core organic revenue growth, which is reported
revenue growth, excluding the impacts of COVID-19 testing revenue,
and excluding the impacts of acquisitions/divestitures and the
effects of currency translation. 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/divestitures, foreign
currency translation and/or COVID-19 testing on revenues. 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 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:
- Certain acquisition-related costs, including charges for the
sale of inventories revalued at the date of acquisition,
significant transaction/acquisition-related costs, including
changes in estimates of contingent acquisition-related
consideration, and other costs associated with obtaining short-term
financing commitments for pending/recent acquisitions. We exclude
these costs because we do not believe they are indicative of our
normal operating costs.
- Costs/income associated with restructuring activities and
large-scale abandonments of product lines, such as reducing
overhead and consolidating facilities. We exclude these costs
because we believe that the costs related to restructuring
activities are not indicative of our normal operating costs.
- Equity in earnings/losses of unconsolidated entities;
impairments of long-lived assets; and certain other gains and
losses that are either isolated or cannot be expected to occur
again with any predictability, including gains/losses on
investments, the sale of businesses, product lines, and real
estate, significant litigation-related matters,
curtailments/settlements of pension plans, and the early retirement
of debt. We exclude these items because they are outside of our
normal operations and/or, in certain cases, are difficult to
forecast accurately for future periods.
- The expense associated with the amortization of
acquisition-related intangible assets because a significant portion
of the purchase price for acquisitions may be allocated to
intangible assets that have lives of up to 20 years. Exclusion of
the amortization expense allows comparisons of operating results
that are consistent over time for both our newly acquired and
long-held businesses and with both acquisitive and non-acquisitive
peer companies.
- The noncontrolling interest and tax impacts of the above items
and the impact of significant tax audits or events (such as changes
in deferred taxes from enacted tax rate/law changes), the latter of
which we exclude because they are outside of our normal operations
and difficult to forecast accurately for future periods.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241023525601/en/
Media Contact Information: Sandy Pound Thermo Fisher Scientific
Phone: 781-622-1223 E-mail: sandy.pound@thermofisher.com
Investor Contact Information: Rafael Tejada Thermo Fisher
Scientific Phone: 781-622-1356 E-mail:
rafael.tejada@thermofisher.com
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