PerkinElmer Earnings Call Nuggets: Acquisition Total and Lab Services Subsegments

PerkinElmer Inc (NYSE:PKI) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Acquisition Total

Paul Knight – CLSA: Was the acquisition total in the cash flow statement related to the Chinese transaction?

Robert F. Friel – Chairman and CEO: Yes.

Frank A. Wilson – SVP and CFO: It was.

Paul Knight – CLSA: And then the follow-up would be on the geographical growth that was a high-single digit decline in both Europe and U.S. and what was behind it, pharma?

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Robert F. Friel – Chairman and CEO: No, I would say in Europe it was high-single. And U.S. actually was up mid-to-high single and in of course the Asia portion was also up high single. And I would say the European decline was not restricted to pharma. We also shown it on the industrial side as well.

Lab Services Subsegments

Vijay Kumar – ISI: This is Vijay in for Ross. So, my first question was – actually I want to dig a little bit on the subsegments. I mean if you look at lab services you did comment OneSource has been – have seen tremendous update from BioPharma. I mean we have seen strong growth in that subsegment. What sort of the outlook as you look forward – how long can we expect I guess this strong performance.

Robert F. Friel – Chairman and CEO: I think we can continue to see good growth in OneSource because what we’ve been trying to do particularly over the last probably six or nine months is we look to expand that beyond pharma. So, I think we see some opportunities particularly as we combine it with our informatics offerings to go into chemical industries and maybe some of the food and beverage opportunities. So, I think we’re continuing to believe that we can see mid-single growth maybe even little bit better than that in the OneSource area.

Vijay Kumar – ISI: And my second question was on the guidance, so what’s baked in the guidance in terms of assumptions around sequestration and do you have anything baked in from the Verinata marketing agreement?

Robert F. Friel – Chairman and CEO: So, with regard to sequestration as you probably know that’s not the NIH funding, is not a significant exposure for us. We think it’s probably in the in the mid-single-digit range from the perspective of revenue exposure. And for purposes of our ‘13 market assumptions were, assuming that it will look very similar to what we saw in 2012. And the way I’d describe it is sequestration clearly had an impact on slowing some of the grants and funding down but probably not as strong a decline as you would expect under record of full sequestration. So I guess to sort of give you some kind of sense of impact it was about 5% of our revenue exposure, if there was a 10% decline it would be about a 50 basis points headwind on our organic growth. We are probably assuming something like half of that, which is probably what we saw in 2012. Just to give you some kind of calibration. With regard to the Verinata arrangement and again as I mentioned before one we’re quite excited about from a long-term implication. However, with regard to 2013, we have a de minimis impact on both the top and bottom line.