BEC » Topics » Operating Income

This excerpt taken from the BEC 10-Q filed May 7, 2009.

Operating Income

Management evaluates business segment performance based on revenue and operating income exclusive of certain adjustments, which are not allocated to our segments for performance assessment by our chief operating decision maker.

 

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The following table presents operating income for each reportable segment for the quarters ended March 31, 2009 and 2008 and a reconciliation of our segment operating income to consolidated earnings before income taxes (dollar amounts in millions):

 

     Quarter Ended
March 31,
     2009    2008

Operating income:

     

Clinical Diagnostics

   $ 62.0       $   52.9   

Life Science

     4.0         10.6   
             

Total segment operating income

     66.0         63.5   

Restructuring expenses

     (16.6)        (0.7)  

Acquisition related costs for Clinical Diagnostics

     (9.8)        —  

Fair market value inventory adjustment

     -          (1.0)  
             

Total operating income

   $ 39.6       $ 61.8   
             

Non-operating (income) expense:

     

Interest income

   $ (1.3)      $ (2.6)  

Interest expense

     10.9         12.3   

Other

     11.8         (1.3)  
             

Total non-operating expense

     21.4         8.4   
             

Earnings before income taxes

   $ 18.2       $ 53.4   
             

Despite the 3.7% decrease in revenue, operating income from our Clinical Diagnostics segment improved by about $9.1 million. Improved gross margins due to a product mix favoring recurring revenue coupled with a 5% decrease in overall operating expenses contributed to this growth.

The 14.7% decrease in Life Science revenue was partially offset by lower operating expenses, resulting in a $6.6 million decrease to overall Life Science operating income.

These excerpts taken from the BEC 10-K filed Feb 23, 2009.

Operating Income

Management evaluates business segment performance based on revenue and operating income exclusive of certain adjustments, which are not allocated to our segments for performance assessment by our chief operating decision maker.

The following table presents operating income for each reportable segment for the years ended December 31, 2008 and 2007 and a reconciliation of our segment operating income to consolidated earnings before income taxes (dollar amounts in millions):

 

     2008     2007  

Operating income:

    

Clinical Diagnostics

   $ 286.5     $ 265.4  

Life Science

     77.2       61.7  
                

Total segment operating income

     363.7       327.1  
                

Restructuring expenses

     (21.4 )     (17.7 )

Environmental remediation

     (19.0 )     —    

Technology acquired for use in R&D for Clinical Diagnostics

     (23.7 )     (35.4 )

Fair market value inventory adjustment

     (1.0 )     —    

Rental tax dispute

     —         (1.6 )
                

Total operating income

     298.6       272.4  
                

Non-operating (income) expense:

    

Interest income

     (10.0 )     (14.4 )

Interest expense

     47.6       49.3  

Other

     9.1       (55.2 )
                

Total non-operating expense (income)

     46.7       (20.3 )
                

Earnings from continuing operations before income taxes

   $ 251.9     $ 292.7  
                

The increase in operating income from our Clinical Diagnostics segment in 2008 was primarily due to double digit growth in all three product areas as a result of robust instrument sales and strong recurring revenue growth.

 

 

BEC 2008 FORM 10-K    33


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The increase in operating income from our Life Science segment in 2008 was primarily due to an overall increase in revenue of 6.1% for the year ended December 31, 2008 as a result of increased instrument sales. We do not, however, believe that this level of growth is sustainable and expect a flat to negative change in 2009.

Operating Income

Management evaluates business segment performance based on revenue and operating income exclusive of certain adjustments, which are not allocated to our segments for performance assessment by our chief operating decision maker.

 

 

BEC 2008 FORM 10-K    37


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The following table presents operating income for each reportable segment for the years ended December 31, 2007 and 2006 and a reconciliation of our segment operating income to consolidated earnings before income taxes (dollar amounts in millions):

 

     2007     2006  

Operating income:

    

Clinical Diagnostics

   $ 265.4     $ 232.5  

Life Science

     61.7       64.2  
                

Total segment operating income

     327.1       296.7  
                

Restructuring expenses

     (17.7 )     (15.5 )

Technology acquired for use in R&D for Clinical Diagnostics

     (35.4 )     (27.5 )

Rental tax dispute

     (1.6 )     —    

Settlement and license fee

     —         16.1  

Curtailment charges

     —         (4.0 )

Investigation charges

     —         (2.9 )
                

Total operating income

     272.4       262.9  
                

Non-operating (income) expense:

    

Interest income

     (14.4 )     (14.0 )

Interest expense

     49.3       48.0  

Debt extinguishment loss

     —         7.7  

Other

     (55.2 )     6.0  
                

Total non-operating expense (income)

     (20.3 )     47.7  
                

Earnings from continuing operations before income taxes

   $ 292.7     $ 215.2  
                

The increase in operating income from our Clinical Diagnostics segment in 2007 was primarily due to strong growth in immunoassay and molecular diagnostics as a result of strong recurring revenue growth.

The decrease in operating income from our Life Science segment in 2007 was primarily due to a decrease in instrument sales of 3.8% for the year ended December 31, 2007 as a result of softness in the academic research market for some of our more mature life science products.

This excerpt taken from the BEC 10-Q filed May 7, 2008.

Operating Income

Management evaluates business segment performance on a revenue and operating income basis exclusive of certain adjustments, which are not allocated to our segments for performance assessment by our chief operating decision maker.

The following table presents operating income for each reportable segment for the three month periods ended March 31, 2008 and March 31, 2007 and a reconciliation of our segment’s operating income to consolidated earnings before income taxes:

 

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     Three Months Ended
March 31,
     2008    2007

Operating income:

     

Clinical Diagnostics

   $   58.0      $   63.1  

Life Sciences

     12.0        1.1  
             

Total segment operating income

     70.0        64.2  

Restructuring expenses

     (0.7)       (6.9) 

Fair market value inventory adjustment

     (1.0)       -  
             

Total operating income

     68.3        57.3  
             

Non-operating (income) expense:

     

Interest income

     (2.6)        (4.6) 

Interest expense

     9.0        12.4  

Other

     5.2        2.2  
             

Total non-operating expense

     11.6        10.0  
             

Earnings before income taxes

   $ 56.7      $ 47.3  
             

The $5.1 million decrease in operating income from our Clinical Diagnostics segment in the first quarter of 2008 was primarily due to the funding of investments we are making in growing this segment, including an increase in hardware sales mix to support our growing installed base, coupled with higher selling and marketing activities to support our revenue growth and higher research and development expenses.

The $10.9 million increase in operating income from our Life Science’s segment in 2008 was primarily due to an overall increase in revenue of 18.3% (12.8% in constant currency) combined with lower operating expenses, partly due to lower R&D spending.

 

     Three Months Ended
March 31,
     2008    2007    Percent
Change

(in millions)

        

Restructuring

   $  0.7    $  6.9    (89.9)%

In connection with our previously announced restructuring plan, in the first quarter 2008, we recorded a gain of $2.6 million (net of expenses), attributed to the sale of building and land in Hialeah, Florida. Additionally, as a result of our supply chain optimization initiatives, during the first three months of 2008, we recorded charges of $3.3 million compared to $6.9 million during the same period a year ago, related to severance and relocation costs.

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