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Sigma-Aldrich Reports Record Full Year 2012 Results. Reports Q4 2012 Diluted EPS Of $0.96. Q4 2012 Sales Increased 7%. Full Year

 Sigma-Aldrich Reports Record Full Year 2012 Results. Reports Q4 2012 Diluted
EPS Of $0.96. Q4 2012 Sales Increased 7%. Full Year 2012 Adjusted Diluted EPS
Was $3.85. Expects Full Year 2013 Adjusted Diluted EPS To Increase To $4.10 -
                                    $4.20.

PR Newswire

ST. LOUIS, Feb. 7, 2013

ST. LOUIS, Feb. 7, 2013 /PRNewswire/ --

HIGHLIGHTS:

Q4 2012 Results (all percentages are to comparable periods in 2011)

  oReported sales increased 7% to $655 million. Sales grew organically by 3%
    with Research and Sigma-Aldrich Fine Chemicals ("SAFC") having organic
    sales growth of 2% and 5%, respectively. Acquisitions contributed 6% to
    sales growth. Changes in foreign currency exchange rates reduced
    otherwise reportable sales by 2% in the quarter.
  oQ4 2012 reported diluted EPS was $0.96 compared to $0.89 in Q4 2011, an
    increase of 8%. Adjusted diluted EPS was also $0.96 compared to $0.91 in
    Q4 2011. Changes in foreign currency exchange rates versus the same
    period last year reduced adjusted Q4 2012 EPS by $0.06. Excluding this
    impact, adjusted EPS would have grown by 12% from the same period last
    year.

Full-year 2012 Results (all percentages are to comparable periods in 2011)

  oReported sales increased 5% to $2.6 billion. Sales grew organically by 3%
    with Research and SAFC having organic sales growth of 2% and 5%,
    respectively. Acquisitions contributed 5% to sales growth. Changes in
    foreign currency exchange rates reduced otherwise reportable sales by 3%
    for the full year.
  oFull year 2012 effective tax rate was 30% compared to 29% in 2011.
  oNet income was $460 million, and free cash flow (defined on page 9) was
    $453 million.
  oReported diluted EPS was $3.77, up 1% from 2011. Excluding restructuring
    costs and costs associated with acquisitions completed in 2012, adjusted
    diluted EPS was $3.85. Changes in foreign currency exchange rates versus
    the same period last year reduced adjusted 2012 EPS by $0.22. Excluding
    this impact, 2012 adjusted diluted EPS would have grown by 8% from 2011.

2013 Outlook (all percentages are to comparable periods in 2012)

  oOrganic sales growth for the full-year 2013 is expected to be in the
    low-to-mid single digit range.
  oAdjusted diluted 2013 EPS (excluding restructuring charges and any other
    special charges) is expected to be between $4.10-$4.20. Full-year 2013
    effective tax rate is expected to be 28-29%.
  oNet cash provided by operating activities and free cash flow are expected
    to exceed $560 million and $430 million, respectively, for 2013.

CEO's STATEMENT: 

Commenting on 2012 performance, President and CEO Rakesh Sachdev said, "Our
overall performance for 2012 resulted in another record year for Sigma-Aldrich
in sales and EPS. I am pleased that for the 38^th consecutive year we
delivered EPS growth.

We saw strong growth in sales of our analytical products to research labs in
2012. Our custom manufactured products for the pharma industry grew double
digits and we saw solid growth in our industrial cell culture media for
production of biological drugs. We successfully offset soft demand from
research customers in academia and pharma, as well as SAFC Hitech pricing
headwinds and generated 3% organic sales growth for the full year. We
continued to deliver enhanced productivity in our business through our ongoing
focus on operational excellence and process improvement, and we delivered
record annual EPS despite the impact of significant unfavorable foreign
exchange rates in 2012.

We expect to drive improved growth in 2013 through our enhanced focus on our
customers and faster growing geographies enabled by our recent organizational
realignment into three business units – Research, Applied, and SAFC Commercial
– which should continue to gain momentum as the year progresses. We are also
likely to see more favorable growth comparisons in our Research Pharma and
SAFC Commercial Electronics businesses in the second half of 2013.

While we are cautiously optimistic about our overall business, we believe it
is prudent to be prepared for another year of soft academic spending, as
issues such as possible sequestration in the U.S. remain unresolved.
Considering the current macro-economic environment, we expect to grow this
year's overall sales organically in the low-to-mid single digit range.

We will continue to make investments in 2013 for our long-term growth, while
modestly expanding operating margins. Our adjusted diluted EPS is expected to
increase to a range of $4.10 to $4.20. We expect to generate free cash flow
in excess of $430 million in 2013 and to continue to deploy our capital for
organic growth, acquisitions, dividends and share repurchases."

Q4 2012 RESULTS:

Reported sales for the fourth quarter of 2012 were $655 million, which was a
7% increase from the fourth quarter of 2011. Organic sales growth in the
quarter was 3%. Acquisitions completed in 2012 increased sales by 6%, and
changes in foreign currency exchange rates caused sales to decline by 2%.
Research had organic sales growth of 2%, and SAFC had organic sales growth of
5%.

Excluding restructuring costs, the adjusted operating income margin in the
fourth quarter of 2012 was 25.2%, a modest improvement over the third quarter
of 2012. Compared with the same period last year, adjusted operating income
margin declined by 100 basis points, primarily due to unfavorable changes in
foreign currency exchange rates and the impact of recent acquisitions.
Excluding these impacts, the adjusted operating income margin would have been
26.8%, an improvement of 60 basis points from the same period last year. A
reconciliation of reported to adjusted operating income margin is provided on
page 11.

The effective tax rate for the fourth quarter of 2012 was 29% compared to 32%
in the same period last year. The year-over-year improvement was due to a
favorable mix of profits in lower tax jurisdictions and lower tax
contingencies for certain international locations. This more than offset the
failed extension of the U.S. R&D tax credit previously expected in the
quarter.

Free cash flow for full year 2012 was $453 million compared to $391 million
last year. Lower uses of cash for working capital contributed a majority of
the year-over-year improvement.

Other fourth quarter 2012 highlights include:

  oWorldwide sales of Research products through the Company's e-commerce
    channels grew 6% organically in the fourth quarter of 2012.
  oAsia Pacific and Latin America continued to be the leading geographic
    regions for sales growth with mid-single digit growth. China had strong
    double digit organic sales growth in the quarter, up significantly from
    the prior quarter.
  oEMEA (Europe, Middle East and Africa) approached mid-single digit growth.
    North America was flat.
  oSAFC's booked orders for future delivery at December 31, 2012 grew 2% over
    the level at December 31, 2011. BioReliance ended on a strong note in
    December with its second largest order booking month of 2012.

2013 OUTLOOK:

  oOrganic sales growth is expected to be in the low-to-mid single digit
    range for 2013. The sales outlook for our new business units include:

       oResearch: The realigned Research business unit has a customer focus
         on not-for-profit academic and Government laboratories, for-profit
         pharma and biotech research laboratories, and dealer networks. In
         2012, this business unit generated 53% of overall sales. For 2013,
         Research sales are expected to grow organically in the low-single
         digits.
       oApplied: The Applied business unit has a customer focus on
         diagnostics and testing laboratories and on industrial applications.
         In 2012, this business unit generated 23% of overall sales. For
         2013, Applied sales are expected to grow organically in the
         mid-single digits. 
       oSAFC Commercial: The realigned SAFC Commercial business unit has a
         customer focus on life science products and services and on Hitech
         Electronics. In 2012, this business unit generated 24% of overall
         sales. In 2013, SAFC Commercial sales are expected to grow
         organically in the mid-to-high single digits with lower growth in the
         first half of the year.

  oAdjusted diluted EPS forecast for 2013, excluding any restructuring
    charges or other special charges, is expected to be in a range of $4.10 to
    $4.20.

       oThe effective tax rate for full year 2013 is expected to be in a
         range of 28% to 29%.

  oFree cash flow for 2013 is expected to exceed $430 million.

       oNet cash provided by operating activities is expected to exceed $560
         million.
       oCapital expenditures are expected to be approximately $130 million.

OTHER INFORMATION:

Cash Flow and Debt: Net cash provided by operating activities for full year
2012 was $567 million compared to $495 million for full year 2011. Capital
expenditures were $114 million in 2012 compared to $104 million in 2011. Free
cash flow of $453 million and net debt issuances of $161 million were used to
return $221 million to shareholders through share repurchases and dividends
and fund acquisitions of $391 million. The Company's debt to capital ratio
was 21% at December 31, 2012 and 19% at December 31, 2011.

Share Repurchases: In the fourth quarter of 2012, the Company repurchased 0.4
million shares for $25 million. There were 120 million shares outstanding at
December 31, 2012. The Company expects to continue to offset the dilutive
impact of issuing share-based incentive compensation with future repurchases,
the timing and amount of which will depend upon market conditions and other
factors.

Cautionary Statement: This release contains forward-looking statements. Such
statements involve risk and uncertainty, including financial, business
environment and projections. Such statements are preceded by, followed by or
that include the words "expect," "cautiously optimistic," "prudent," "will
continue," "expanding," "maintain," "will," "exceed," or similar expressions,
and other statements contained herein regarding matters that are not
historical facts. Additionally, this release contains forward-looking
statements relating to future performance, goals, strategic actions and
initiatives and similar intentions and beliefs, including, without limitation,
statements with respect to the Company's expectations, goals, beliefs,
intentions, and the like regarding future sales, earnings, return on equity,
cost savings, process improvements, free cash flow, share repurchases, capital
expenditures, acquisitions and other matters. These statements are based on
assumptions regarding the Company operations, investments, acquisitions and
conditions in the markets the Company serves. The Company believes these
statements are reasonable and well founded. Such statements in this release
are subject to risks and uncertainties, including, among others, certain
economic, political and technological factors. Actual results could differ
materially from those stated or implied in this release, due to, but not
limited to, such factors as (1) global economic conditions, particularly the
uncertainties in the Eurozone and other factors affecting the creditworthiness
of our Eurozone customers, (2) changes in pricing and the competitive
environment and the global demand for the Company's products, (3) changes in
foreign currency exchange rates, (4) changes in research funding and the
success of research and development activities, (5) failure of planned sales
initiatives in our Research, Applied and SAFC Commercial business units, (6)
dependence on uninterrupted manufacturing operations, global supply chain and
security of our information systems, (7) changes in the regulatory environment
in which the Company operates, (8) changes in worldwide tax rates or tax
benefits from domestic and international operations, including the matters
described in Note 11 – Income Taxes, to the Company's consolidated financial
statements included in Item 8, Part II of the Company's Annual Report on Form
10-K for the year ended December 31, 2012 (the "10-K"), (9) exposure to
litigation including product liability claims, (10) the ability to maintain
adequate quality standards, (11) reliance on third party package delivery
services, (12) an unanticipated increase in interest rates, (13) other changes
in the business environment in which the Company operates, (14) acquisitions
or divestitures of businesses, and (15) the outcome of the outstanding matters
described in Note 12 – Contingent Liabilities and Commitments, to the
Company's consolidated financial statements included in Item 8, Part II of the
10-K. A further discussion of the Company's risk factors can be found in Item
1A of Part I of the 10-K. The Company does not undertake any obligation to
update these forward-looking statements.

About Sigma-Aldrich: Sigma-Aldrich (Nasdaq: SIAL)is a leading Life Science
and High Technology company whose biochemical and organic chemical products,
kits and services are used in scientific research, including genomic and
proteomic research, biotechnology, pharmaceutical development, the diagnosis
of disease and as key components in pharmaceutical, diagnostics and high
technology manufacturing. Sigma-Aldrich customers include more than one
million scientists and technologists in life science companies, university and
government institutions, hospitals and industry. The Company operates in 37
countries and has approximately 9,000 employees whose objective is to provide
excellent service worldwide. Sigma-Aldrich is committed to accelerating
customer success through innovation and leadership in Life Science, High
Technology and Service. For more information about Sigma-Aldrich, please
visit the website at www.sigma-aldrich.com.

Non-GAAP Financial Measures: The Company supplements its disclosures made in
accordance with accounting principles generally accepted in the United States
(U.S. GAAP) with certain non-GAAP financial measures. The Company does not,
and does not suggest investors should, consider such non-GAAP financial
measures in isolation from, or as a substitute for, GAAP financial
information. These non-GAAP measures may not be consistent with the
presentation by other companies inside or outside of the Company's industry.
Whenever the Company uses such non-GAAP measures, it provides a reconciliation
of such measures to the most closely applicable GAAP measure. See the
Supplemental Financial Information on pages 10 and 11 for these
reconciliations.

With over 60% of sales denominated in currencies other than the U.S. dollar,
management uses currency adjusted sales growth when analyzing Company
performance, and believes it is useful as well to investors to judge the
Company's performance. Organic sales growth data presented in this release
excludes currency and acquisitions impacts. The Company calculates the impact
of changes in foreign currency exchange rates by multiplying current period
activity by the difference between current period exchange rates and prior
period exchange rates. The result is the defined impact of "changes in
foreign currency exchange rates." While we are able to report past currency
impacts, we are unable to estimate changes that may occur later in 2013 to
applicable exchange rates. Any significant changes in currency exchange rates
would likely have a significant impact on reported growth rates due to the
volume of sales denominated in foreign currencies.

Management also uses the following non-GAAP measures to judge its performance
and ability topursue opportunities that enhance shareholder value: adjusted
net income and EPS; adjusted operating income margin (reconciled on page 11);
and free cash flow (defined on page 9). Due to the uncertain timing of future
restructuring and other special charges we are unable to include these charges
in the 2012 diluted adjusted EPS forecast or provide reconciliation to the
corresponding GAAP measures. Management believes this non-GAAP information is
useful to investors as well.

SIGMA-ALDRICH CORPORATION
Consolidated Statements of Income (Unaudited)
(in millions except per share amounts)
                            Three Months Ended        Twelve Months Ended
                            December 31,              December 31,
                            2012         2011         2012         2011
Net sales                   $       $       $       $     
                            655           610        2,623        2,505
Cost of products and        327          286          1,276        1,181
services sold
Gross profit                328          324          1,347        1,324
Selling, general and        147          146          605          597
administrative expenses
Research and development    16           18           69           72
expenses
Restructuring costs         1            -            9            8
Acquisition transaction     -            -            5            -
costs
Operating income            164          160          659          647
Interest, net               1            1            4            7
Income before income taxes  163          159          655          640
Provision for income taxes  47           51           195          183
Net income                  $       $       $       $     
                            116           108         460        457
Net income per share -      $        $       $       $     
Basic                       0.97        0.89         3.80        3.78
Net income per share -      $        $       $       $     
Diluted                     0.96        0.89         3.77        3.72
Weighted average number of  120          121          121          121
shares outstanding - Basic
Weighted average number of
shares outstanding -        121          122          122          123
Diluted

SIGMA-ALDRICH CORPORATION
Consolidated Balance Sheets (Unaudited)
(in millions)
                                        (Unaudited)
                                        December 31,        December 31,
                                        2012                2011
ASSETS
Current assets:
Cash and cash equivalents               $       724  $       665
Accounts receivable, net                356                 319
Inventories                             722                 668
Deferred taxes                          32                  55
Other                                  95                  86
Total current assets                    1,929               1,793
Property, plant and equipment:
Land                                    57                  51
Buildings and improvements              843                 764
Machinery and equipment                1,050               888
Construction in progress                61                  120
Less - accumulated depreciation         (1,182)             (1,060)
Property, plant and equipment, net      829                 763
Goodwill, net                           691                 466
Intangibles, net                        282                 159
Other                                   89                  100
Total assets                            $      3,820   $      3,281
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current maturities    $       383  $       221
of long-term debt
Accounts payable                        160                 143
Payroll                                55                  67
Income taxes                           26                  34
Other                                   77                  73
Total current liabilities               701                 538
Long-term debt                          300                 300
Pension and post-retirement benefits    135                 143
Deferred taxes                          64                  22
Other                                   74                  79
Total liabilities                       1,274               1,082
Stockholders' equity:
Common stock                            202                 202
Capital in excess of par value          276                 225
Common stock in treasury                (2,271)             (2,165)
Retained earnings                       4,270               3,907
Accumulated other comprehensive income  69                  30
Total stockholders' equity              2,546               2,199
Total liabilities and stockholders'     $      3,820   $      3,281
equity

SIGMA-ALDRICH CORPORATION
Consolidated Statements of Cash Flows (Unaudited)
(in millions)
                                             Twelve Months Ended
                                             December 31,
                                             2012                2011
Cash flows from operating activities:
Net income                                   $       460  $      
                                                                 457
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                136                 106
Deferred income taxes                        34                  6
Stock-based compensation expense             17                  18
Other                                        (5)                 (1)
Changes in operating assets and liabilities:
Accounts receivable                          (15)                (35)
Inventories                                  (44)                (63)
Accounts payable                             10                  23
Income taxes                                 (10)                5
Other, net                                   (16)                (21)
Net cash provided by operating activities    567                 495
Cash flows from investing activities:
Capital expenditures                         (114)               (104)
Purchases of short-term investments          (97)                (65)
Proceeds from sales of short-term            97                  55
investments
Acquisitions of businesses, net of cash      (391)               (75)
acquired
Other, net                                   (6)                 (2)
Net cash used in investing activities        (511)               (191)
Cash flows from financing activities:
Net issuance of short-term debt              161                 81
Repayment of long-term debt                  -                   (100)
Dividends                                    (97)                (86)
Share repurchases                            (124)               (134)
Proceeds from exercise of stock options      41                  34
Excess tax benefits from stock-based         13                  5
payments
Net cash used in financing activities        (6)                 (200)
Effect of exchange rate changes on cash      9                   (8)
Net change in cash and cash equivalents      59                  96
Cash and cash equivalents at January 1       665                 569
Cash and cash equivalents at December 31     $       724  $      
                                                                 665
Free cash flow^(1)                           $       453  $      
                                                                 391
^(1) Net cash provided by operating activities less capital expenditures.

SIGMA-ALDRICH CORPORATION
Supplemental Financial Information - (Unaudited)
Sales Growth by
Business Unit
                     Three Months Ended
                     December 31, 2012
                                           Acquisition    Adjusted
                     Reported   Currency   Benefit        (Organic)
 Research        1 %        (2)%       1 %            2 %
 SAFC            21 %       (1)%       17 %           5 %
 Total Customer    7 %        (2)%       6 %            3 %
Sales
                     Twelve Months Ended
                     December 31, 2012
                                           Acquisition    Adjusted
                     Reported   Currency   Benefit        (Organic)
 Research        (1)%       (4)%       1 %            2 %
 SAFC            17 %       (3)%       15 %           5 %
 Total Customer    5 %        (3)%       5 %            3 %
Sales
Business Unit
Sales
(in millions)
                     First      Second     Third          Fourth       Total
                     Quarter    Quarter    Quarter 2012   Quarter      2012
                     2012       2012                      2012
                     $      $      $        $       $   
 Research          468      441    428             431         
                                                                       1,768
 SAFC            197        223        211            224          855
 Total Customer    $      $      $        $       $   
Sales                  665      664    639             655         
                                                                       2,623
                     First      Second     Third          Fourth       Total
                     Quarter    Quarter    Quarter 2011   Quarter      2011
                     2011       2011                      2011
                     $      $      $        $       $   
 Research          452      454    446             425         
                                                                       1,777
 SAFC            180        183        180            185          728
 Total Customer    $      $      $        $       $   
Sales                  632      637    626             610         
                                                                       2,505
Income Statement
Ratios
                     Three Months Ended    Twelve Months Ended
                     December 31,          December 31,
                     2012       2011       2012           2011
Gross profit         50.1%      53.1%      51.4%          52.9%
S,G&A expenses       22.4%      23.9%      23.1%          23.8%
Acquisition          - %        - %        0.2%           - %
transaction costs
Operating income     25.0%      26.2%      25.1%          25.8%
Net income           17.7%      17.7%      17.5%          18.2%
Effective tax rate   28.8%      32.1%      29.8%          28.6%

SIGMA-ALDRICH CORPORATION
Supplemental Financial Information - (Unaudited)
Reconciliation of Reported
Net Income to Adjusted Net
Income
                              Net Income              Diluted Earnings
                              (in millions)           Per Share
                              Three Months Ended      Three Months Ended
                              December 31,            December 31,
                              2012         2011       2012         2011
Reported net income           $       $      $       $     
                              116            108     0.96        0.89
Extraordinary tax charge      -            2          -            0.02
Adjusted net income           $       $      $       $     
                              116            110     0.96        0.91
                              Net Income              Diluted Earnings
                              (in millions)           Per Share
                              Twelve Months Ended     Twelve Months Ended
                              December 31,            December 31,
                              2012         2011       2012         2011
Reported net income           $       $      $       $     
                              460            457     3.77        3.72
Acquisition transaction costs 4            -          0.03         -
Restructuring costs           6            5          0.05         0.04
Adjusted net income           $       $      $       $     
                              470            462     3.85        3.76
Reconciliation of Reported
Operating Income to Adjusted
Operating Income
(in millions)
                              Three Months Ended      Twelve Months Ended
                              December 31,            December 31,
                              2012         2011       2012         2011
Reported operating income     $       $      $       $     
                              164            160     659        647
Acquisition transaction costs -            -          5            -
Restructuring costs           1            -          9            8
Adjusted operating income     $       $      $       $     
                              165            160     673        655
Reconciliation of Reported
Operating Income Margin to
Adjusted Operating Income
Margin
                              Three Months Ended      Twelve Months Ended
                              December 31,            December 31,
                              2012         2011       2012         2011
Reported operating income     25.0%        26.2%      25.1%        25.8%
margin
Acquisition transaction costs - %          - %        0.2%         - %
Restructuring costs           0.2%         - %        0.4%         0.3%
Adjusted operating income     25.2%        26.2%      25.7%        26.1%
margin
Currency                      1.2%         n/a        0.6%         n/a
Incremental amortization from 0.4%         n/a        0.5%         n/a
recent acquisitions
Adjusted operating income
margin before currency and    26.8%        26.2%      26.8%        26.1%
incremental amortization
Reconciliation of Free Cash
Flow
(in millions)
                                                      Twelve Months Ended
                                                      December 31,
                                                      2012         2011
Net cash provided by                                  $       $     
operating activities                                   567        495
Less: Capital expenditures                            (114)        (104)
Free cash flow                                        $       $     
                                                       453        391





SOURCE Sigma-Aldrich

Website: http://www.sigma-aldrich.com
Contact: Quintin Lai, Vice President, Investor Relations, (314) 898-4643
 
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