WALTHAM, Mass., Feb. 2 /PRNewswire-FirstCall/ -- Thermo Electron Corporation today reported revenue growth of 21% to $741 million in the fourth quarter of 2005, compared with $613 million in the 2004 quarter. Acquisitions contributed 19% of the growth (net of divestitures) and currency translation reduced revenues by 4%. GAAP diluted earnings per share (EPS) were $.34 in the 2005 quarter, compared with $.74 in the year-ago period (which included tax benefits related to divested businesses). GAAP operating income in the fourth quarter of 2005 rose 34%, and GAAP operating margin for the period was 11.9%, versus 10.8% in the 2004 quarter.

Adjusted EPS grew 29% to $.49 in the fourth quarter of 2005, compared with $.38 in the 2004 quarter. Adjusted operating income increased 48% in the 2005 quarter, and adjusted operating margin rose 290 basis points to 16.0%, versus 13.1% in the period last year.

For the full year 2005, Thermo Electron reported 19% revenue growth to $2.63 billion, compared with $2.21 billion in 2004. Acquisitions contributed 15% of the growth (net of divestitures) and currency translation did not have a material impact. GAAP diluted EPS was $1.36 in 2005, versus $2.17 in 2004 (which included tax benefits and large gains from the sale of discontinued operations). GAAP operating income in 2005 grew 11%, and GAAP operating margin was 10.0% in 2005, versus 10.8% in 2004.

Full-year adjusted EPS grew 24% to $1.55 in 2005, compared with $1.25 in 2004. Adjusted operating income increased 33% in 2005, and adjusted operating margin rose 140 basis points year over year, to 14.1% from 12.7% in 2004.

Adjusted EPS, adjusted operating income and adjusted operating margin are non-GAAP measures that exclude certain items detailed at the end of this press release under the heading "Use of Non-GAAP Financial Measures."

"We were able to cap 2005 with a terrific fourth quarter that furthered our trend of improving revenues, adjusted EPS and cash flow," said Marijn E. Dekkers, Thermo Electron president and chief executive officer. "We experienced very strong growth from our industrial markets, especially in commodity materials and environmental monitoring. In addition, growth from our life sciences customers continued at a good pace. We are also very pleased that we significantly expanded our adjusted operating margin, which is being driven by new products, pricing initiatives, productivity programs and acquisition synergies.

"Our aggressive growth investments were key contributors to our excellent performance in 2005. We introduced a number of important new products for a range of applications -- most notably in mass spectrometry. We spent nearly $1 billion on strategic acquisitions that are now well-integrated and contributing to growth. We also continued to extend our global reach with the recent opening of customer demonstration centers in China and India. All of this led to Thermo's success in 2005, and gives us great momentum going into 2006.

"Our outlook for the year is excellent, as we recently announced. To reiterate, our goal is to achieve adjusted EPS of $1.75 to $1.80 in 2006 (excluding $.10 per share of stock option expensing that will take effect during the year), leading to a 13 to 16% increase over our strong 2005 results. We expect to generate revenues in the range of $2.78 to $2.83 billion in 2006, for a 6 to 8% increase over last year."

The Life and Laboratory Sciences segment reported that revenues grew 24% in the fourth quarter of 2005 to $563 million, compared with $455 million in 2004. GAAP operating income for the segment increased 16% in the quarter, and GAAP operating margin was 14.3%, versus 15.3% in the year-ago period. Adjusted operating income grew 30% in the 2005 quarter, and adjusted operating margin increased to 18.7%, compared with 17.8% in 2004.

Revenues in the Measurement and Control segment increased 12% to $177 million in the fourth quarter of 2005, compared with $158 million in the 2004 quarter. GAAP operating income for the segment rose 57% in the 2005 period, and GAAP operating margin was 10.8%, compared with 7.7% a year ago. Adjusted operating income rose 64% in the 2005 quarter, and adjusted operating margin increased to 13.6%, from 9.3% in 2004.

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including adjusted EPS, adjusted operating income and adjusted operating margin, which exclude restructuring and other costs/income and amortization of acquisition-related intangible assets. Adjusted EPS and adjusted operating income also exclude certain other gains and losses, tax provisions/benefits related to the previous items, benefits from tax credit carryforwards and the impact of significant tax audits or events. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. We believe that the inclusion of such 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 performance, especially when comparing such results to previous periods or forecasts.

We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities in connection with our Kendro acquisition. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.

We exclude charges and tax effects related to the sale of inventories revalued at the date of acquisition, as we believe these charges are not indicative of our normal operating costs.

We exclude the expense and tax effects 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 5 to 10 years. Our adjusted EPS estimate for 2006 excludes approximately $.40 of expense for the amortization of acquisition-related intangible assets for acquisitions completed to date. 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.

Thermo's management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the company's core operating performance and comparing such performance to that of prior periods 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.

The non-GAAP financial measures of Thermo's results of operations included in this press release are not meant to be considered superior to or a substitute for Thermo'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 accompanying tables. Thermo's earnings guidance, however, is only provided on an adjusted basis. It is not feasible to provide GAAP EPS guidance because the items excluded, other than the amortization expense, are difficult to predict and estimate and are primarily dependent on future events, such as the impact of accounting principles not yet adopted and decisions concerning the location and timing of facility consolidations.

Thermo Electron will hold its earnings conference call today, February 2, at 9:00 a.m. Eastern time. To listen, dial 888-872-9028 within the U.S. or 973-633-6740 outside the U.S., and use passcode 6449364. You may also listen to the call live on the Web by visiting http://www.thermo.com/. Click on "About Thermo," then "Investors." An audio archive of the call will be available in that section of our Website until Monday, March 6, 2006. You will also find this press release, including the accompanying reconciliation of non-GAAP financial measures, under the heading "Press Releases," and related information under the heading "Financial Reports," in the Investors section of our Website.

Thermo Electron Corporation is the world leader in analytical instruments. Our instrument solutions enable our customers to make the world a healthier, cleaner and safer place. Thermo's Life and Laboratory Sciences segment provides analytical instruments, scientific equipment, services and software solutions for life science, drug discovery, clinical, environmental and industrial laboratories. Thermo's Measurement and Control segment is dedicated to providing analytical instruments used in a variety of manufacturing processes and in-the-field applications, including those associated with safety and homeland security. For more information, visit http://www.thermo.com/.

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 such forward-looking statements are set forth under the heading "Forward-Looking Statements" in the company's Quarterly Report on Form 10-Q for the fiscal quarter ended October 1, 2005. These include risks and uncertainties relating to: the need to develop new products and adapt to significant technological change; dependence on customers that operate in cyclical industries; general worldwide economic conditions and related uncertainties; the effect of changes in governmental regulations; dependence on customers' capital spending policies and government funding policies; use and protection of intellectual property; exposure to product liability claims in excess of insurance coverage; retention of contingent liabilities from businesses we sold; realization of potential future savings from new productivity initiatives; implementation of our branding strategy; implementation of strategies for improving internal growth; the effect of exchange rate fluctuations on international operations; identification, completion and integration of new acquisitions and potential impairment of goodwill from previous acquisitions. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

This is cache, read story here