RADNOR, Pa., July 31, 2017 /PRNewswire/ -- VWR Corporation
(NASDAQ: VWR), the leading global independent provider of product
and service solutions to laboratory and production customers, today
reported its financial results for the second quarter ended
June 30, 2017.
Highlights:
- Second quarter record quarterly net sales of $1.18 billion, up 2.2% year-over-year, and up
2.3% on an organic basis.
- 2Q17 EMEA-APAC net sales declined 1.3%, but were up 2.7% on
an organic basis.
- 2Q17 Americas net sales increased 4.5%, up 2.1% on an
organic basis.
- GAAP diluted EPS was $0.28 in
2Q17 compared to $0.32 in 2Q16. 2Q17
quarterly Adjusted EPS of $0.49, up
16.7% compared to $0.42 in the prior
year quarter.
Previously, VWR announced that it entered into a definitive
agreement with Avantor, under which Avantor will acquire VWR for
$33.25 per share in cash. In light of
the agreement, VWR no longer provides or updates financial guidance
and will not hold an investor conference call on second quarter
2017 results. Pending completion of the European Commission review,
we now anticipate the deal to close in the fourth quarter of
2017.
Manuel Brocke-Benz, President and
Chief Executive Officer of VWR, commented: "The second quarter
highlights our ongoing solid execution. Despite the timing of the
Easter holiday, which reduced EMEA-APAC by more than two billing
days in the second quarter, total Company organic revenues still
increased by 2.3%. Our financial results highlight how we have
continued to benefit from ongoing R&D spend, consolidation and
the globalization of our customers."
Second Quarter 2017 – Consolidated Results
Net sales were $1.18 billion, up
$25.8 million, or 2.2% compared to
the prior year. Foreign exchange reduced net sales by $18.3 million, or 1.6%, while recent
acquisitions, net of dispositions, increased net sales by an
additional $17.5 million, or 1.5%. On
an organic basis, net sales increased $26.6
million or 2.3%.
Operating income was $80.7
million, down $3.9 million
compared to the prior year. GAAP diluted EPS was $0.28 compared to $0.32 in the prior year quarter, while Adjusted
EPS increased 16.7% year-over-year to $0.49, up from $0.42 in the prior year quarter.
Second Quarter 2017 – Segment Results
Americas
Net sales were $726.4 million, up
$31.5 million, or 4.5% compared to
prior year, and up 2.1% on an organic basis. The increase in the
Americas net sales was driven by strong sales of equipment and
instrumentation.
Operating income was $42.2
million, down $1.4 million or
3.2% compared to prior year. Second quarter 2017 operating income
includes $0.9 million of
restructuring charges, $9.0 million
of acquisition related costs, $2.5
million earn-out adjustment loss, and $0.5 million of purchase accounting adjustment
charges.
EMEA-APAC
Net sales were $448.9 million,
down $5.7 million, or 1.3%
year-over-year. Foreign currency reduced net sales by $16.4 million, or 3.6%, while acquisitions less
dispositions reduced revenues by $1.4
million, or 0.3%. On an organic basis, net sales increased
2.7%.
Operating income was $38.5
million, down $2.5 million
compared to prior year. Second quarter 2017 operating income
included $1.8 million of
restructuring charges, $1.6 million
earn-out adjustment gain, and $1.3
million of transaction costs.
Greg Cowan, Senior Vice President
and Chief Financial Officer, commented: "The transaction with
Avantor continues to progress. The combined company's suite of
products, services and solutions will enable us to generate a
higher degree of relevance with Biopharma and Industrial customers.
In addition, the move creates a robust product and service offering
for production-scale biopharma and gives VWR access to an expanded
geographic footprint, particularly in the Asia-Pacific region. Finally, the combination
is anticipated to generate significant synergies over the next
three years. We look forward to consummating the transaction, which
we believe will drive significant value for our customers,
shareholders and our employees."
Use of Non-GAAP Financial Measures
As appropriate, we supplement our results of operations
determined in accordance with U.S. generally accepted accounting
principles ("GAAP") with certain non-GAAP financial measurements
that are used by management, and which we believe are useful to
investors, as supplemental operational measurements to evaluate our
financial performance. These measurements should not be considered
in isolation or as a substitute for reported GAAP results because
they may include or exclude certain items as compared to similar
GAAP-based measurements, and such measurements may not be
comparable to similarly-titled measurements reported by other
companies. Rather, these measurements should be considered as an
additional way of viewing aspects of our operations that provide a
more complete understanding of our business. We strongly encourage
investors to review our consolidated financial statements included
in publicly filed reports in their entirety and not rely solely on
any one, single financial measurement or communication.
The non-GAAP measurements used in this press release are
Adjusted EPS and organic net sales:
- Adjusted EPS is a non-GAAP financial measurement that
eliminates the effect of the amortization of acquired intangible
assets, restructuring charges, impairment charges, changes in
foreign currency exchange rates related to financing decisions and
certain other items. We then add or subtract an estimated
incremental income tax effect applicable to those items. We believe
that this measurement is useful to investors as an additional way
to analyze the underlying trends in our business consistently
across the periods presented. This measurement is used by our
management for the same reason.
- Organic net sales is a non-GAAP financial measurement that
eliminates the contribution from recently acquired businesses and
the impact of changes in foreign currency exchange rates from our
reported net sales. We believe that this measurement is useful to
investors as a way to measure and evaluate our underlying
commercial operating performance consistently across the periods
presented. This measurement is used by our management for the same
reason.
Reconciliations of our non-GAAP measurements to their most
directly comparable GAAP-based financial measurements are included
at the end of this press release.
About VWR Corporation
VWR (NASDAQ: VWR), headquartered in Radnor, Pennsylvania, is the leading global
independent provider of product and service solutions to laboratory
and production customers. With sales in excess of $4.5 billion in 2016, VWR enables science for
customers in the pharmaceutical, biotechnology, industrial,
education, government and healthcare industries. With more than 160
years of experience, VWR has cultivated a value proposition
delivering product choice, operational excellence and
differentiated services to improve our customers' productivity from
research to production. VWR's differentiated services provide
innovative, flexible and customized solutions from scientific
research services to custom-manufactured chemical blends. Our
dedicated team of more than 10,200 associates is focused on
supporting scientists, medical professionals and production
engineers to achieve their goals.
Forward-Looking Statements
This press release contains forward-looking statements. All
statements other than statements of historical fact included in
this press release are forward-looking statements. Forward-looking
statements discuss our current expectations and projections
relating to our financial condition, results of operations, plans,
objectives, future performance and business. These statements may
be preceded by, followed by or include the words "aim,"
"anticipate," "believe," "estimate," "expect," "forecast,"
"intend," "likely," "outlook," "plan," "potential," "project,"
"projection," "seek," "can," "could," "may," "should," "would,"
"will," the negatives thereof and other words and terms of similar
meaning.
Forward-looking statements are inherently subject to risks,
uncertainties and assumptions; they are not guarantees of
performance. You should not place undue reliance on these
statements. We have based these forward-looking statements on our
current expectations and projections about future events. Although
we believe that our assumptions made in connection with the
forward-looking statements are reasonable, we cannot assure you
that the assumptions and expectations will prove to be correct.
Factors that could contribute to these risks, uncertainties and
assumptions include, but are not limited to, the factors described
in "Risk Factors" in our most recently filed Annual Report on Form
10-K and our Form 10-Q that will be filed later today.
All forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by
the foregoing cautionary statements. In addition, all
forward-looking statements speak only as of the date of this press
release. We undertake no obligations to update or revise publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise other than as required
under the federal securities laws.
VWR Corporation
and Subsidiaries
|
Condensed
Consolidated Income Statements (Unaudited)
|
|
|
|
|
|
Three months
ended June 30,
|
|
Six months
ended June 30,
|
(in millions,
except per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
$
|
1,175.3
|
|
|
$
|
1,149.5
|
|
|
$
|
2,314.4
|
|
|
$
|
2,247.8
|
|
Cost of goods
sold
|
844.8
|
|
|
826.1
|
|
|
1,664.2
|
|
|
1,613.8
|
|
Gross
profit
|
330.5
|
|
|
323.4
|
|
|
650.2
|
|
|
634.0
|
|
Selling, general and
administrative expenses
|
249.8
|
|
|
238.8
|
|
|
488.0
|
|
|
469.7
|
|
Operating
income
|
80.7
|
|
|
84.6
|
|
|
162.2
|
|
|
164.3
|
|
Interest
expense
|
(20.6)
|
|
|
(20.7)
|
|
|
(39.3)
|
|
|
(39.9)
|
|
Other income
(expense), net
|
(2.8)
|
|
|
0.1
|
|
|
(3.5)
|
|
|
(0.5)
|
|
Income before income
taxes
|
57.3
|
|
|
64.0
|
|
|
119.4
|
|
|
123.9
|
|
Income tax
provision
|
(20.3)
|
|
|
(22.2)
|
|
|
(43.9)
|
|
|
(43.3)
|
|
Net income
|
$
|
37.0
|
|
|
$
|
41.8
|
|
|
$
|
75.5
|
|
|
$
|
80.6
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.28
|
|
|
$
|
0.32
|
|
|
$
|
0.57
|
|
|
$
|
0.61
|
|
Diluted
|
0.28
|
|
|
0.32
|
|
|
0.57
|
|
|
0.61
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
131.7
|
|
|
131.4
|
|
|
131.7
|
|
|
131.4
|
|
Diluted
|
132.6
|
|
|
131.7
|
|
|
132.3
|
|
|
131.6
|
|
VWR Corporation
and Subsidiaries
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
|
|
|
(in millions,
except per share data)
|
June 30,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
112.2
|
|
|
$
|
168.7
|
|
Trade accounts
receivable, net of reserves of $11.2 and $10.5
|
677.6
|
|
|
607.2
|
|
Inventories
|
503.1
|
|
|
483.1
|
|
Other current
assets
|
82.2
|
|
|
93.1
|
|
Total current
assets
|
1,375.1
|
|
|
1,352.1
|
|
Property and
equipment, net of accumulated depreciation of $281.1 and
$248.9
|
325.5
|
|
|
253.8
|
|
Goodwill
|
2,011.2
|
|
|
1,844.0
|
|
Other intangible
assets, net
|
1,492.3
|
|
|
1,407.8
|
|
Other
assets
|
124.4
|
|
|
104.8
|
|
Total
assets
|
$
|
5,328.5
|
|
|
$
|
4,962.5
|
|
Liabilities,
Redeemable Equity and Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
debt
|
$
|
387.5
|
|
|
$
|
250.1
|
|
Accounts
payable
|
505.7
|
|
|
476.3
|
|
Employee-related
liabilities
|
81.7
|
|
|
79.3
|
|
Current amount due to
Varietal — ITRA
|
26.0
|
|
|
27.7
|
|
Other current
liabilities
|
152.4
|
|
|
152.7
|
|
Total current
liabilities
|
1,153.3
|
|
|
986.1
|
|
Debt, net of current
portion
|
1,841.3
|
|
|
1,766.9
|
|
Amount due to
Varietal — ITRA, net of current portion
|
31.3
|
|
|
57.3
|
|
Deferred income tax
liabilities
|
445.0
|
|
|
477.2
|
|
Other
liabilities
|
193.3
|
|
|
159.4
|
|
Total
liabilities
|
3,664.2
|
|
|
3,446.9
|
|
Redeemable equity, at
redemption value
|
35.3
|
|
|
21.2
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.01 par value; 50.0 shares authorized, no shares issued or
outstanding
|
—
|
|
|
—
|
|
Common stock, $0.01
par value; 750.0 shares authorized, 131.8 and 131.6 shares issued
and outstanding
|
1.3
|
|
|
1.3
|
|
Additional paid-in
capital
|
1,762.4
|
|
|
1,766.0
|
|
Retained
earnings
|
230.0
|
|
|
154.5
|
|
Accumulated other
comprehensive loss
|
(364.7)
|
|
|
(427.4)
|
|
Total stockholders'
equity
|
1,629.0
|
|
|
1,494.4
|
|
Total liabilities,
redeemable equity and stockholders' equity
|
$
|
5,328.5
|
|
|
$
|
4,962.5
|
|
VWR Corporation
and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
|
Six months
ended June 30,
|
(in
millions)
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
75.5
|
|
|
$
|
80.6
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
71.2
|
|
|
63.4
|
|
Net foreign currency
remeasurement loss
|
4.2
|
|
|
3.8
|
|
Deferred income tax
(benefit) provision
|
(24.6)
|
|
|
11.9
|
|
Other, net
|
13.5
|
|
|
7.8
|
|
Changes in working
capital, net of business acquisitions:
|
|
|
|
Trade accounts
receivable
|
(34.5)
|
|
|
(40.7)
|
|
Inventories
|
(0.8)
|
|
|
(25.0)
|
|
Accounts
payable
|
(5.6)
|
|
|
22.6
|
|
Other assets and
liabilities
|
(11.9)
|
|
|
(4.8)
|
|
Net cash provided by
operating activities
|
87.0
|
|
|
119.6
|
|
Cash flows from
investing activities:
|
|
|
|
Acquisitions of
businesses, net of cash acquired
|
(194.7)
|
|
|
(45.0)
|
|
Proceeds from
disposition of business, net of cash disposed
|
6.1
|
|
|
—
|
|
Capital
expenditures
|
(25.9)
|
|
|
(29.8)
|
|
Net cash used in
investing activities
|
(214.5)
|
|
|
(74.8)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
debt
|
572.8
|
|
|
363.7
|
|
Repayment of
debt
|
(478.6)
|
|
|
(354.6)
|
|
Payment to Varietal
under ITRA
|
(27.7)
|
|
|
(78.1)
|
|
Payment of contingent
consideration
|
(19.1)
|
|
|
(2.5)
|
|
Net change in bank
overdrafts
|
12.4
|
|
|
(0.5)
|
|
Other financing
activities
|
4.3
|
|
|
1.3
|
|
Net cash provided by
(used in) financing activities
|
64.1
|
|
|
(70.7)
|
|
Effect of exchange
rate changes on cash
|
6.9
|
|
|
2.5
|
|
Net decrease in cash
and cash equivalents
|
(56.5)
|
|
|
(23.4)
|
|
Cash and cash
equivalents at beginning of period
|
168.7
|
|
|
136.3
|
|
Cash and cash
equivalents at end of period
|
$
|
112.2
|
|
|
$
|
112.9
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
Cash paid for
interest
|
$
|
35.9
|
|
|
$
|
41.7
|
|
Cash paid for income
taxes, net
|
53.5
|
|
|
33.5
|
|
VWR Corporation
and Subsidiaries
|
Supplemental
Financial Information (Unaudited)
|
|
|
|
|
|
Three months
ended June 30,
|
|
Reported
change
|
(dollars in
millions)
|
2017
|
|
2016
|
|
Amount
|
|
%
|
Net sales:
|
|
|
|
|
|
|
|
Americas
|
$
|
726.4
|
|
|
$
|
694.9
|
|
|
$
|
31.5
|
|
|
4.5
|
%
|
EMEA-APAC
|
448.9
|
|
|
454.6
|
|
|
(5.7)
|
|
|
(1.3)
|
%
|
Total
|
1,175.3
|
|
|
1,149.5
|
|
|
25.8
|
|
|
2.2
|
%
|
Gross
profit
|
330.5
|
|
|
323.4
|
|
|
7.1
|
|
|
2.2
|
%
|
Gross
margin
|
28.1
|
%
|
|
28.1
|
%
|
|
—
|
|
basis
points
|
SG&A
expenses
|
$
|
249.8
|
|
|
$
|
238.8
|
|
|
$
|
11.0
|
|
|
4.6
|
%
|
% of net
sales
|
21.3
|
%
|
|
20.8
|
%
|
|
50
|
|
basis
points
|
Operating
income:
|
|
|
|
|
|
|
|
Americas
|
$
|
42.2
|
|
|
$
|
43.6
|
|
|
$
|
(1.4)
|
|
|
(3.2)
|
%
|
EMEA-APAC
|
38.5
|
|
|
41.0
|
|
|
(2.5)
|
|
|
(6.1)
|
%
|
Total
|
$
|
80.7
|
|
|
$
|
84.6
|
|
|
$
|
(3.9)
|
|
|
(4.6)
|
%
|
Operating income
margin:
|
|
|
|
|
|
|
|
Americas
|
5.8
|
%
|
|
6.3
|
%
|
|
(50)
|
|
basis
points
|
EMEA-APAC
|
8.6
|
%
|
|
9.0
|
%
|
|
(40)
|
|
basis
points
|
Total
|
6.9
|
%
|
|
7.4
|
%
|
|
(50)
|
|
basis
points
|
VWR Corporation
and Subsidiaries
|
Reconciliation of
Adjusted EPS (Unaudited)
|
|
|
|
Three months
ended June 30,
|
|
2017
|
|
2016
|
|
Adjustments in
millions
|
|
Per
share
|
|
Adjustments in
millions
|
|
Per
share
|
Diluted earnings per
share (GAAP)
|
$
|
0.28
|
|
|
|
|
$
|
0.32
|
|
Adjustments to
reconcile diluted earnings per share to
Adjusted EPS:
|
|
|
|
|
|
|
|
Amortization of
acquired intangible assets
|
$
|
23.1
|
|
|
0.17
|
|
|
$
|
21.3
|
|
|
0.16
|
|
Net foreign currency
remeasurement loss (gain) from
financing activities
|
2.8
|
|
|
0.02
|
|
|
(0.1)
|
|
|
—
|
|
Restructuring
charges
|
2.7
|
|
|
0.02
|
|
|
—
|
|
|
—
|
|
Secondary equity
offering costs
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
Loss from changes to
estimated fair value of contingent
consideration
|
0.9
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
Purchase accounting
adjustment charges
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Avantor transaction
costs
|
10.3
|
|
|
0.08
|
|
|
|
|
—
|
|
Income tax benefit
applicable to adjustments, net*
|
(12.4)
|
|
|
(0.09)
|
|
|
(7.5)
|
|
|
(0.06)
|
|
Adjusted EPS
(non-GAAP)
|
$
|
0.49
|
|
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents the estimated
income tax effect on the reconciling items, using weighted-average
statutory tax rates between 0% and 39%, depending upon the
applicable jurisdiction.
|
VWR Corporation
and Subsidiaries
|
Reconciliation of
Organic Net Sales Growth (Unaudited)
|
|
|
|
|
|
June 30,
|
|
Non-GAAP
reconciliation
|
|
|
Reported
change
|
|
Currency
translation
|
|
Acquisitions, net
of dispositions
|
|
Organic net sales
growth
|
(dollars in
millions)
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|
|
|
Amount
|
|
%
|
Three months
ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
|
726.4
|
|
|
$
|
694.9
|
|
|
$
|
31.5
|
|
|
4.5
|
%
|
|
$
|
(1.9)
|
|
|
$
|
18.9
|
|
|
$
|
14.5
|
|
|
2.1
|
%
|
EMEA-APAC
|
448.9
|
|
|
454.6
|
|
|
(5.7)
|
|
|
(1.3)
|
%
|
|
(16.4)
|
|
|
(1.4)
|
|
|
12.1
|
|
|
2.7
|
%
|
Total
|
$
|
1,175.3
|
|
|
$
|
1,149.5
|
|
|
$
|
25.8
|
|
|
2.2
|
%
|
|
$
|
(18.3)
|
|
|
$
|
17.5
|
|
|
$
|
26.6
|
|
|
2.3
|
%
|
Media Contact:
Valerie
Collado
Director, Corporate Communications
VWR Corporation
Phone: +484.885.9338
valerie_collado@vwr.com
Investor Contact:
John
Sweeney, CFA
VP, Investor Relations
VWR Corporation
Phone: +610.386.1483
ir@vwr.com
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SOURCE VWR Corporation