- Revenue of $684 million; 2% reported growth; 2% organic
growth
- GAAP EPS of $0.77; Adjusted EPS from continuing operations
of $1.28
- Raises full year 2024 adjusted EPS guidance
- Authorizes new $1 billion share repurchase program
- To host Investor Day on November 21st
Revvity, Inc. (NYSE: RVTY), today reported financial results for
the third quarter ended September 29, 2024.
The Company reported GAAP earnings per share of $0.77, as
compared to $0.08 in the same period a year ago. GAAP revenue for
the quarter was $684 million, as compared to $671 million in the
same period a year ago. GAAP operating income from continuing
operations for the quarter was $98 million, as compared to $69
million for the same period a year ago. GAAP operating profit
margin from continuing operations was 14.3% as a percentage of
revenue, as compared to 10.3% in the same period a year ago.
Adjusted earnings per share from continuing operations for the
quarter was $1.28, as compared to $1.18 in the same period a year
ago. Adjusted revenue for the quarter was $684 million, as compared
to $671 million in the same period a year ago. Adjusted operating
income was $193 million, as compared to $185 million for the same
period a year ago. Adjusted operating profit margin was 28.3% as a
percentage of adjusted revenue, as compared to 27.5% in the same
period a year ago.
Adjustments for the Company's non-GAAP financial measures have
been noted in the attached reconciliations.
“We performed well during the third quarter with a return to
positive revenue growth, strong margins, and another period of
excellent cash flow,” said Prahlad Singh, president and chief
executive officer of Revvity. “The impact we are having on our
customers every day to help to advance science and healthcare is
profound, and we are optimistic that we can increasingly make a
meaningful difference around the world as we continue to innovate
and partner with purpose.”
Share Repurchase Authorization
The Company’s Board of Directors has authorized a new two-year
$1 billion share repurchase program which replaces the remainder of
the existing program which was announced in May 2023.
Investor Day
The Company will host an Investor Day on Thursday, November 21st
beginning at 9:00 a.m. PT. To access the event, a live audio
webcast will be available on the Investors section of the Company’s
website.
Financial Overview by Reporting Segment
Life Sciences
- Third quarter 2024 revenue was $301 million, as compared to
$308 million in the same period a year ago. Reported revenue
decreased 2% and organic revenue decreased 3% as compared to the
same period a year ago.
- Third quarter 2024 adjusted operating income was $103 million,
as compared to $114 million in the same period a year ago. Adjusted
operating profit margin was 34.2% as a percentage of adjusted
revenue, as compared to 37.1% in the same period a year ago.
Diagnostics
- Third quarter 2024 revenue was $383 million, as compared to
$363 million in the same period a year ago. Reported revenue
increased 6% and organic revenue increased 5% as compared to the
same period a year ago.
- Third quarter 2024 adjusted operating income was $101 million,
as compared to $82 million in the same period a year ago. Adjusted
operating profit margin was 26.5% as a percentage of adjusted
revenue, as compared to 22.5% in the same period a year ago.
Full Year 2024 Guidance
For the full year 2024, the Company is updating its full year
revenue guidance to $2.75-$2.77 billion to reflect recent changes
in foreign currency exchange rates and assumes 0% to 1% organic
growth. The Company is also raising its adjusted EPS guidance to a
range of $4.83 to $4.87.
Guidance for the full year 2024 for organic growth and adjusted
EPS is provided on a non-GAAP basis and cannot be reconciled to the
closest GAAP measures without unreasonable effort due to the
unpredictability of the amounts and timing of events affecting the
items the Company excludes from these non-GAAP measures. The timing
and amounts of such events and items could be material to the
Company’s results prepared in accordance with GAAP.
Webcast Information
The Company will discuss its third quarter 2024 results and its
outlook for business trends during a webcast on November 4, 2024,
at 8:00 a.m. Eastern Time. A live audio webcast and presentation
will be available on the Investors section of the Company’s
website, ir.revvity.com.
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with
generally accepted accounting principles (GAAP), this earnings
announcement also contains non-GAAP financial measures. The reasons
that we use these measures, a reconciliation of these measures to
the most directly comparable GAAP measures, and other information
relating to these measures are included below following our GAAP
financial statements.
Factors Affecting Future Performance
This press release contains "forward-looking" statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including, but not limited to, statements relating to
estimates and projections of future earnings per share, cash flow
and revenue growth and other financial results, developments
relating to our customers and end-markets, and plans concerning
business development opportunities, acquisitions and divestitures.
Words such as "believes," "intends," "anticipates," "plans,"
"expects," "estimates," "projects," "forecasts," "will" and similar
expressions, and references to guidance, are intended to identify
forward-looking statements. Such statements are based on
management's current assumptions and expectations and no assurances
can be given that our assumptions or expectations will prove to be
correct. A number of important risk factors could cause actual
results to differ materially from the results described, implied or
projected in any forward-looking statements. These factors include,
without limitation: (1) markets into which we sell our products
declining or not growing as anticipated; (2) fluctuations in the
global economic and political environments; (3) our failure to
introduce new products in a timely manner; (4) our ability to
execute acquisitions and divestitures, license technologies, or to
successfully integrate acquired businesses or licensed technologies
into our existing businesses or to make them profitable; (5) our
ability to compete effectively; (6) fluctuation in our quarterly
operating results and our ability to adjust our operations to
address unexpected changes; (7) significant disruption in
third-party package delivery and import/export services or
significant increases in prices for those services; (8) disruptions
in the supply of raw materials and supplies; (9) our ability to
retain key personnel; (10) significant disruption in our
information technology systems, or cybercrime; (11) our ability to
realize the full value of our intangible assets; (12) our failure
to adequately protect our intellectual property; (13) the loss of
any of our licenses or licensed rights; (14) the manufacture and
sale of products exposing us to product liability claims; (15) our
failure to maintain compliance with applicable government
regulations; (16) our failure to comply with data privacy and
information security laws and regulations; (17) regulatory changes;
(18) our failure to comply with healthcare industry regulations;
(19) economic, political and other risks associated with foreign
operations; (20) our ability to obtain future financing; (21)
restrictions in our credit agreements; (22) significant
fluctuations in our stock price; (23) reduction or elimination of
dividends on our common stock; and (24) other factors which we
describe under the caption "Risk Factors" in our most recent
quarterly report on Form 10-Q and in our other filings with the
Securities and Exchange Commission. We disclaim any intention or
obligation to update any forward-looking statements as a result of
developments occurring after the date of this press release.
About Revvity
At Revvity, “impossible” is inspiration, and “can’t be done” is
a call to action. Revvity provides health science solutions,
technologies, expertise and services that deliver complete
workflows from discovery to development, and diagnosis to cure.
Revvity is revolutionizing what’s possible in healthcare, with
specialized focus areas in translational multi-omics technologies,
biomarker identification, imaging, prediction, screening, detection
and diagnosis, informatics and more.
With 2023 revenue of more than $2.7 billion and over 11,000
employees, Revvity serves customers across pharmaceutical and
biotech, diagnostic labs, academia and governments. It is part of
the S&P 500 index and has customers in more than 190
countries.
Stay updated by following our Newsroom, LinkedIn, X, YouTube,
Facebook and Instagram.
Revvity, Inc. and
Subsidiaries
CONDENSED CONSOLIDATED INCOME
STATEMENTS
Three Months Ended
Nine Months Ended
(In thousands, except per share
data)
September 29,
2024
October 1, 2023
September 29,
2024
October 1, 2023
Revenue
$
684,049
$
670,739
$
2,025,654
$
2,054,670
Cost of revenue
299,233
298,223
900,285
898,457
Selling, general and administrative
expenses
237,521
250,249
749,742
765,828
Research and development expenses
49,144
53,039
147,636
166,982
Operating income from continuing
operations
98,151
69,228
227,991
223,403
Interest income
(22,764
)
(23,450
)
(63,362
)
(53,768
)
Interest expense
24,383
25,486
73,497
74,231
Change in fair value of financial
securities
(7,004
)
13,587
(13,975
)
12,842
Other expense, net
3,179
3,002
10,263
38,501
Income from continuing operations, before
income taxes
100,357
50,603
221,568
151,597
Provision for income taxes
6,971
18,134
26,880
35,661
Income from continuing
operations
93,386
32,469
194,688
115,936
Income (loss) from discontinued
operations
981
(22,972
)
(18,948
)
498,595
Net income
$
94,367
$
9,497
$
175,740
$
614,531
Diluted earnings per share:
Income from continuing operations
$
0.76
$
0.26
$
1.58
$
0.93
Income (loss) from discontinued
operations
0.01
(0.18
)
(0.15
)
3.98
Net income
$
0.77
$
0.08
$
1.42
$
4.90
Weighted average diluted shares of common
stock outstanding
123,026
124,203
123,336
125,335
ABOVE PREPARED IN ACCORDANCE WITH
GAAP
Additional supplemental
information(1):
(per share, continuing operations)
GAAP EPS from continuing operations
$
0.76
$
0.26
$
1.58
$
0.93
Amortization of intangible assets
0.73
0.73
2.20
2.20
Debt extinguishment costs
-
(0.00
)
-
(0.03
)
Purchase accounting adjustments
0.00
0.01
0.06
0.02
Acquisition and divestiture-related
costs
0.02
0.09
0.13
0.63
Change in fair value of financial
securities
(0.06
)
0.11
(0.11
)
0.10
Significant litigation matters and
settlements
0.01
-
0.06
-
Significant environmental matters
-
-
-
0.01
Restructuring and other, net
(0.00
)
0.09
0.18
0.13
Tax on above items
(0.18
)
(0.25
)
(0.62
)
(0.73
)
Significant tax items
-
0.14
-
0.13
Adjusted EPS from continuing
operations
$
1.28
$
1.18
$
3.47
$
3.39
(1) amounts may not sum due to
rounding
Revvity, Inc. and
Subsidiaries
REVENUE AND OPERATING INCOME
(LOSS)
Three Months Ended
Nine Months Ended
(In thousands, except
percentages)
September 29,
2024
October 1, 2023
September 29,
2024
October 1, 2023
Adjusted revenue and operating
income
Reported revenue
$
684,049
$
670,739
$
2,025,654
$
2,054,670
Revenue purchase accounting
adjustments
205
206
621
618
Adjusted revenue
$
684,254
$
670,945
$
2,026,275
$
2,055,288
Reported operating income from continuing
operations
$
98,151
$
69,228
$
227,991
$
223,403
OP%
14.3
%
10.3
%
11.3
%
10.9
%
Amortization of intangible assets
89,642
90,920
271,500
275,489
Purchase accounting adjustments
103
1,080
7,348
3,057
Acquisition and divestiture-related
costs
4,874
12,550
22,115
59,080
Significant litigation matters and
settlements
810
—
7,086
—
Significant environmental matters
—
—
—
1,132
Restructuring and other, net
(82
)
10,832
22,119
15,936
Adjusted operating income
$
193,498
$
184,610
$
558,159
$
578,097
OP%
28.3
%
27.5
%
27.5
%
28.1
%
Segment revenue and segment operating
income
Life Sciences
$
300,921
$
307,855
$
917,805
$
972,649
Diagnostics
383,333
363,090
1,108,470
1,082,639
Revenue purchase accounting
adjustments
(205
)
(206
)
(621
)
(618
)
Reported revenue
$
684,049
$
670,739
$
2,025,654
$
2,054,670
Life Sciences
$
102,979
$
114,192
$
317,105
$
371,410
34.2
%
37.1
%
34.6
%
38.2
%
Diagnostics
101,434
81,741
274,779
241,414
26.5
%
22.5
%
24.8
%
22.3
%
Corporate
(10,915
)
(11,323
)
(33,725
)
(34,727
)
Subtotal reportable segments operating
income
193,498
184,610
558,159
578,097
Amortization of intangible assets
(89,642
)
(90,920
)
(271,500
)
(275,489
)
Purchase accounting adjustments
(103
)
(1,080
)
(7,348
)
(3,057
)
Acquisition and divestiture-related
costs
(4,874
)
(12,550
)
(22,115
)
(59,080
)
Significant litigation matters and
settlements
(810
)
—
(7,086
)
—
Significant environmental matters
—
—
—
(1,132
)
Restructuring and other, net
82
(10,832
)
(22,119
)
(15,936
)
Reported operating income from continuing
operations
$
98,151
$
69,228
$
227,991
$
223,403
REPORTED REVENUE AND REPORTED
OPERATING INCOME (LOSS) PREPARED IN ACCORDANCE WITH GAAP
Revvity, Inc. and
Subsidiaries
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
September 29,
2024
December 31,
2023
Current assets:
Cash and cash equivalents
$
1,229,778
$
913,163
Marketable securities
—
689,916
Accounts receivable, net
602,141
632,811
Inventories, net
404,570
428,062
Other current assets
211,917
337,139
Total current assets
2,448,406
3,001,091
Property, plant and equipment, net
517,932
509,654
Operating lease right-of-use assets,
net
149,305
155,083
Intangible assets, net
2,763,211
3,022,321
Goodwill
6,558,660
6,533,550
Other assets, net
332,223
342,966
Total assets
$
12,769,737
$
13,564,665
Current liabilities:
Current portion of long-term debt
$
1,045
$
721,872
Accounts payable
176,407
204,121
Accrued expenses and other current
liabilities
510,488
524,470
Total current liabilities
687,940
1,450,463
Long-term debt
3,185,699
3,177,770
Long-term liabilities
845,998
930,946
Operating lease liabilities
128,399
132,747
Total liabilities
4,848,036
5,691,926
Total stockholders' equity
7,921,701
7,872,739
Total liabilities and stockholders'
equity
$
12,769,737
$
13,564,665
PREPARED IN ACCORDANCE WITH
GAAP
Revvity, Inc. and
Subsidiaries
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Three Months Ended
Nine Months Ended
(In thousands)
September 29,
2024
October 1, 2023
September 29,
2024
October 1, 2023
Operating activities:
Net income
$
94,367
$
9,497
$
175,740
$
614,531
(Income) loss from discontinued
operations, net of income taxes
(981
)
22,972
18,948
(498,595
)
Income from continuing operations
93,386
32,469
194,688
115,936
Adjustments to reconcile income from
continuing operations to net cash provided by (used in) continuing
operations:
Stock-based compensation
10,538
10,703
32,756
34,229
Restructuring and other, net
(82
)
10,832
22,119
15,936
Depreciation and amortization
107,670
108,263
322,816
326,201
Change in fair value of contingent
consideration
(343
)
633
6,006
1,718
Amortization of deferred debt financing
costs and accretion of discounts
1,542
1,982
5,051
5,800
Change in fair value of financial
securities
(7,004
)
13,587
(13,975
)
12,842
Debt extinguishment gain
—
(77
)
—
(3,422
)
Unrealized foreign exchange (gain)
loss
(206
)
—
(1,063
)
23,679
Changes in assets and liabilities which
provided (used) cash, excluding effects from companies
acquired:
Accounts receivable, net
5,097
(20,697
)
33,291
(30,913
)
Inventories, net
9,566
(8,059
)
26,817
(34,834
)
Accounts payable
(1,808
)
(36,169
)
(24,782
)
(85,394
)
Accrued expenses and other
(61,342
)
(82,710
)
(114,236
)
(322,995
)
Net cash provided by operating
activities of continuing operations
157,014
30,757
489,488
58,783
Net cash used in operating activities
of discontinued operations
(9,129
)
(64,242
)
(35,419
)
(164,124
)
Net cash provided by (used in)
operating activities
147,885
(33,485
)
454,069
(105,341
)
Investing activities:
Capital expenditures
(22,319
)
(22,357
)
(62,194
)
(57,252
)
Purchases of investments and notes
receivables
—
(1,000
)
(4,337
)
(6,000
)
Proceeds from notes receivables
2,500
—
2,500
—
Purchases of U.S. Treasury Securities
—
—
—
(831,219
)
Proceeds from U.S. Treasury Securities
710,000
450,000
710,000
550,000
Proceeds from disposition of businesses
and assets
—
153
—
153
Cash paid for acquisitions, net of cash
acquired
—
(1,400
)
—
(2,086
)
Net cash provided by (used in)
investing activities of continuing operations
690,181
425,396
645,969
(346,404
)
Net cash provided by investing
activities of discontinued operations
—
9,473
147,522
2,074,734
Net cash provided by investing
activities
690,181
434,869
793,491
1,728,330
Financing Activities:
Payments of debt financing costs
—
—
—
(15
)
Payments of senior unsecured notes
(711,479
)
(467,138
)
(711,479
)
(517,973
)
Net proceeds (payments) on other credit
facilities
429
(13
)
(10,771
)
7,218
Payments for acquisition-related
contingent consideration
(83
)
—
(8,832
)
(10,117
)
Proceeds from issuance of common stock
under stock
plans
141
506
6,173
3,721
Purchases of common stock
(154,112
)
(110,715
)
(184,421
)
(384,014
)
Dividends paid
(8,633
)
(8,689
)
(25,915
)
(26,327
)
Net cash used in financing
activities
(873,737
)
(586,049
)
(935,245
)
(927,507
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
17,051
(10,699
)
4,120
(28,270
)
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(18,620
)
(195,364
)
316,435
667,212
Cash, cash equivalents, and restricted
cash at beginning of period
1,249,428
1,333,322
914,373
470,746
Cash, cash equivalents, and restricted
cash at end of period
$
1,230,808
$
1,137,958
$
1,230,808
$
1,137,958
Supplemental disclosure of cash flow
information:
Reconciliation of cash, cash equivalents
and restricted cash reported within the consolidated balance sheets
that sum to the total shown in the consolidated statements of cash
flows:
Cash and cash equivalents
$
1,229,778
$
1,136,721
$
1,229,778
$
1,136,721
Restricted cash included in other current
assets
1,030
1,237
1,030
1,237
Total cash, cash equivalents and
restricted cash
$
1,230,808
$
1,137,958
$
1,230,808
$
1,137,958
PREPARED IN ACCORDANCE WITH
GAAP
Revvity, Inc. and
Subsidiaries
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES (1)
Continuing Operations
Three Months Ended
September 29, 2024
Organic revenue growth:
Reported revenue growth from continuing
operations
2%
Less: effect of foreign exchange rates
0%
Less: effect of acquisitions including
purchase accounting adjustments and impact of divested
businesses
0%
Organic revenue growth from continuing
operations
2%
Life Sciences
Three Months Ended
September 29, 2024
Organic revenue growth:
Reported revenue growth from continuing
operations
-2%
Less: effect of foreign exchange rates
0%
Less: effect of acquisitions including
purchase accounting adjustments and impact of divested
businesses
0%
Organic revenue growth from continuing
operations
-3%
Diagnostics
Three Months Ended
September 29, 2024
Organic revenue growth:
Reported revenue growth from continuing
operations
6%
Less: effect of foreign exchange rates
0%
Less: effect of acquisitions including
purchase accounting adjustments and impact of divested
businesses
0%
Organic revenue growth from continuing
operations
5%
(1) amounts may not sum due to
rounding
Revvity, Inc. and
Subsidiaries
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES (1)
Continuing Operations
Twelve Months Ended
December 29, 2024
Projected
Organic revenue growth:
Reported revenue growth from continuing
operations
0% - 1%
Less: effect of foreign exchange rates
0%
Less: effect of acquisitions including
purchase accounting adjustments and impact of divested
businesses
0%
Organic revenue growth from continuing
operations
0% - 1%
(1) amounts may not sum due to
rounding
Explanation of Non-GAAP Financial Measures
We report our financial results in accordance with GAAP.
However, management believes that, in order to more fully
understand our short-term and long-term financial and operational
trends, investors may wish to consider the impact of certain
non-cash, non-recurring or other items, which result from facts and
circumstances that vary in frequency and impact on continuing
operations. Accordingly, we present non-GAAP financial measures as
a supplement to the financial measures we present in accordance
with GAAP. These non-GAAP financial measures provide management
with additional means to understand and evaluate the operating
results and trends in our ongoing business by adjusting for certain
non-cash expenses and other items that management believes might
otherwise make comparisons of our ongoing business with prior
periods more difficult, obscure trends in ongoing operations, or
reduce management's ability to make useful forecasts. Management
believes these non-GAAP financial measures provide additional means
of evaluating period-over-period operating performance. In
addition, management understands that some investors and financial
analysts find this information helpful in analyzing our financial
and operational performance and comparing this performance to our
peers and competitors.
We use the term “adjusted revenue” to refer to GAAP revenue,
including purchase accounting adjustments for revenue from
contracts acquired in acquisitions that will not be fully
recognized due to accounting rules. We use the related term
“adjusted revenue growth” to refer to the measure of comparing
current period adjusted revenue with the corresponding period of
the prior year.
We use the term “organic revenue” to refer to GAAP revenue,
excluding the effect of foreign currency changes and revenue from
recent acquisitions and divestitures and including purchase
accounting adjustments for revenue from contracts acquired in
acquisitions that will not be fully recognized due to accounting
rules. We use the related term “organic revenue growth” or “organic
growth” to refer to the measure of comparing current period organic
revenue with the corresponding period of the prior year.
We use the term “adjusted gross margin” to refer to GAAP gross
margin, excluding amortization of intangible assets and inventory
fair value adjustments related to business acquisitions, asset
impairments, and including purchase accounting adjustments for
revenue from contracts acquired in acquisitions that will not be
fully recognized due to business combination accounting rules. We
use the related term “adjusted gross margin percentage” to refer to
adjusted gross margin as a percentage of adjusted revenue.
We use the term “adjusted SG&A expense” to refer to GAAP
SG&A expense, excluding amortization of intangible assets,
purchase accounting adjustments, acquisition and
divestiture-related expenses, significant litigation matters and
settlements, asset impairments, significant environmental charges,
and restructuring and other charges. We use the related term
“adjusted SG&A percentage” to refer to adjusted SG&A
expense as a percentage of adjusted revenue.
We use the term “adjusted R&D expense” to refer to GAAP
R&D expense, excluding amortization of intangible assets and
purchase accounting adjustments. We use the related term “adjusted
R&D percentage” to refer to adjusted R&D expense as a
percentage of adjusted revenue.
We use the term “adjusted net interest and other expense” to
refer to GAAP net interest and other expense, excluding adjustments
for mark-to-market accounting on post-retirement benefits, changes
in foreign exchange and interest associated with acquisitions and
divestitures, changes in the value of financial securities and debt
extinguishment costs.
We use the term “adjusted operating income” to refer to GAAP
operating income, including revenue from contracts acquired in
acquisitions that will not be fully recognized due to accounting
rules, and excluding amortization of intangible assets, other
purchase accounting adjustments, acquisition and
divestiture-related expenses, significant litigation matters and
settlements, significant environmental charges, asset impairments,
and restructuring and other charges. We use the related terms
“adjusted operating profit percentage,” “adjusted operating profit
margin,” and “adjusted operating margin” to refer to adjusted
operating income as a percentage of adjusted revenue.
We use the term “free cash flow” to refer net cash provided by
(used in) operating activities of continuing operations, less
payments for additions to property, plant and equipment from
continuing operations (“capital expenditures”) plus the proceeds
from sales of plant, property and equipment from continuing
operations (“capital disposals”).
We use the term “adjusted net income,” to refer to GAAP income
from continuing operations, including revenue from contracts
acquired in acquisitions that will not be fully recognized due to
accounting rules, and excluding amortization of intangible assets,
debt extinguishment costs, other purchase accounting adjustments,
acquisition and divestiture-related expenses, significant
litigation matters and settlements, significant environmental
charges, changes in the value of financial securities, disposition
of businesses and assets, net, changes in foreign exchange and
interest associated with acquisitions and divestitures, asset
impairments and restructuring and other charges. We also exclude
adjustments for mark-to-market accounting on post-retirement
benefits, therefore only our projected costs have been used to
calculate this non-GAAP measure. We also adjust for any tax impact
related to the above items and exclude the impact of significant
tax events.
We use the term “adjusted earnings per share from continuing
operations” or “adjusted earnings per share,” or “adjusted EPS," to
refer to GAAP earnings per share from continuing operations,
including revenue from contracts acquired in acquisitions that will
not be fully recognized due to accounting rules, and excluding
amortization of intangible assets, debt extinguishment costs, other
purchase accounting adjustments, acquisition and
divestiture-related expenses, significant litigation matters and
settlements, significant environmental charges, changes in the
value of financial securities, disposition of businesses and
assets, net, changes in foreign exchange and interest associated
with acquisitions and divestitures, asset impairments and
restructuring and other charges. We also exclude adjustments for
mark-to-market accounting on post-retirement benefits, therefore
only our projected costs have been used to calculate this non-GAAP
measure. We also adjust for any tax impact related to the above
items and exclude the impact of significant tax events.
Management includes or excludes the effect of each of the items
identified below in the applicable non-GAAP financial measure
referenced above for the reasons set forth below with respect to
that item:
- Amortization of intangible
assets—purchased intangible assets are amortized over their
estimated useful lives and generally cannot be changed or
influenced by management after the acquisition. Accordingly, this
item is not considered by management in making operating decisions.
Management does not believe such charges accurately reflect the
performance of our ongoing operations for the period in which such
charges are incurred.
- Debt extinguishment costs—we incur
costs and income related to the extinguishment of debt; including
make-whole payments to debt holders, accelerated amortization of
debt fees and discounts, and expense or income from hedges to lock
in make-whole payments. We exclude the impact of these items from
our non-GAAP measures because we believe they do not reflect the
performance of our ongoing operations.
- Revenue from contracts acquired in
acquisitions that will not be fully recognized due to accounting
rules—accounting rules require us to account for the fair
value of revenue from contracts assumed in connection with our
acquisitions. As a result, our GAAP results reflect the fair value
of those revenues, which is not the same as the revenue that
otherwise would have been recorded by the acquired entity. We
include such revenue in our non-GAAP measures because we believe
the fair value of such revenue does not accurately reflect the
performance of our ongoing operations for the period in which such
revenue is recorded.
- Other purchase accounting
adjustments—accounting rules require us to adjust various
balance sheet accounts, including inventory, fixed assets and
deferred rent balances to fair value at the time of the
acquisition. As a result, the expenses for these items in our GAAP
results are not the same as what would have been recorded by the
acquired entity. Accounting rules also require us to estimate the
fair value of contingent consideration at the time of the
acquisition, and any subsequent changes to the estimate or payment
of the contingent consideration and purchase accounting adjustments
are charged to expense or income. We exclude the impact of any
changes to contingent consideration from our non-GAAP measures
because we believe these expenses or benefits do not accurately
reflect the performance of our ongoing operations for the period in
which such expenses or benefits are recorded.
- Acquisition and divestiture-related
expenses—we incur legal, due diligence, stay bonuses,
incentive awards, stock-based compensation, interest, foreign
exchange gains and losses, integration expenses, rebranding
expenses, and other costs related to acquisitions and divestitures.
We exclude these expenses from our non-GAAP measures because we
believe they do not reflect the performance of our ongoing
operations.
- Asset impairments—we incur expense
related to asset impairments. Management does not believe such
charges accurately reflect the performance of our ongoing
operations for the periods in which such charges were
incurred.
- Restructuring and other
charges—restructuring and other charges consist of employee
severance, other exit costs as well as the cost of terminating
certain lease agreements or contracts as well as costs associated
with relocating facilities. Management does not believe such costs
accurately reflect the performance of our ongoing operations for
the period in which such costs are reported.
- Adjustments for mark-to-market accounting
on post-retirement benefits—we exclude adjustments for
mark-to-market accounting on post-retirement benefits, and
therefore only our projected costs are used to calculate our
non-GAAP measures. We exclude these adjustments because they do not
represent what we believe our investors consider to be costs of
producing our products, investments in technology and production,
and costs to support our internal operating structure.
- Significant litigation matters and
settlements—we incur expenses related to significant
litigation matters, including the costs to settle or resolve
various claims and legal proceedings. Management does not believe
such charges accurately reflect the performance of our ongoing
operations for the periods in which such charges were
incurred.
- Significant environmental
charges—we incur expenses related to significant
environmental charges. Management does not believe such charges
accurately reflect the performance of our ongoing operations for
the periods in which such charges were incurred.
- Disposition of businesses and assets,
net—we exclude the impact of gains or losses from the
disposition of businesses and assets from our adjusted earnings per
share. Management does not believe such gains or losses accurately
reflect the performance of our ongoing operations for the period in
which such gains or losses are reported.
- Impact of foreign currency changes on the
current period—we exclude the impact of foreign currency
associated with acquisitions and divestitures from these measures
by using the prior period’s foreign currency exchange rates for the
current period because foreign currency exchange rates are subject
to volatility and can obscure underlying trends.
- Impact of significant tax
events—we exclude the impact of significant tax events.
Management does not believe the impact of significant tax events
accurately reflects the performance of our ongoing operations for
the periods in which the impact of such events was recorded.
- Changes in value of financial
securities—we exclude the impact of changes in the value of
financial securities. Management does not believe such gains or
losses accurately reflect the performance of our ongoing operations
for the period in which such gains or losses are reported.
The tax effect for discontinued operations is calculated based
on the authoritative guidance in the Financial Accounting Standards
Board’s Accounting Standards Codification 740, Income Taxes. The
tax effect for amortization of intangible assets, inventory fair
value adjustments related to business acquisitions, changes to the
fair values assigned to contingent consideration, debt
extinguishment costs, other costs related to business acquisitions
and divestitures, significant litigation matters and settlements,
significant environmental charges, changes in the fair value of
financial securities, adjustments for mark-to-market accounting on
post-retirement benefits, disposition of businesses and assets,
net, restructuring and other charges, and the revenue from
contracts acquired with various acquisitions is calculated based on
operational results and applicable jurisdictional law, which
contemplates tax rates currently in effect to determine our tax
provision. The tax effect for the impact from foreign currency
exchange rates on the current period is calculated based on the
average rate currently in effect to determine our tax
provision.
The non-GAAP financial measures described above are not meant to
be considered superior to, or a substitute for, our financial
statements prepared in accordance with GAAP. There are material
limitations associated with non-GAAP financial measures because
they exclude charges that have an effect on our reported results
and, therefore, should not be relied upon as the sole financial
measures by which to evaluate our financial results. Management
compensates and believes that investors should compensate for these
limitations by viewing the non-GAAP financial measures in
conjunction with the GAAP financial measures. In addition, the
non-GAAP financial measures included in this earnings announcement
may be different from, and therefore may not be comparable to,
similar measures used by other companies.
Each of the non-GAAP financial measures listed above is also
used by our management to evaluate our operating performance,
communicate our financial results to our Board of Directors,
benchmark our results against our historical performance and the
performance of our peers, evaluate investment opportunities
including acquisitions and discontinued operations, and determine
the bonus payments for senior management and employees.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241104029574/en/
Investor Relations: Steve Willoughby
steve.willoughby@revvity.com Media Contact: Fara Goldberg (781)
663-5699 fara.goldberg@revvity.com
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