VWR Corporation (NASDAQ: VWR), the leading global independent provider of product and service solutions to laboratory and production customers, today announced its financial results for the first quarter ended March 31, 2017.
- First quarter record quarterly net sales of $1.14 billion, up 3.7% year-over-year, and up 4.3% on an organic basis.
- 1Q17 EMEA-APAC net sales increased 3.4%, up 8.4% on an organic basis, while the Americas net sales increased 3.9%, up 1.7% on an organic basis.
- GAAP diluted EPS was $0.29 in both 1Q17 and 1Q16. 1Q17 quarterly Adjusted EPS of $0.44, up 10.0% compared to $0.40 in the prior year quarter.
- Cash flow from operating activities of $66.5 million, up 58.3% as compared to $42.0 million in 1Q16.
- Acquired Seastar, a manufacturer of high purity reagents used by global research customers, in January 2017.
- Acquired EPL Archives, a leading global archive and biorepository services company, in March 2017.
- Acquired MESM, a service company providing equipment supply and ancillary consumables for customers engaged in clinical trials, in April 2017.
Information Regarding Today's Announcement of Definitive Agreement with Avantor
In a separate press release issued this morning, VWR announced that it has entered into a definitive agreement with Avantor, Inc. under which Avantor will acquire VWR for $33.25 per common share, in cash, or an enterprise value of $6.4 billion. For further information on the transaction, please visit http://investors.vwr.com to access a copy of the press release.
In light of this announcement, VWR no longer plans to provide or update financial guidance and will not hold its investor conference call on first quarter 2017 results, previously planned for 8 am ET on the morning of May 5, 2017.
Manuel Brocke-Benz, President and Chief Executive Officer of VWR, commented: "The first quarter represents a strong start to the year, bolstered by our solid business momentum in EMEA-APAC and improving performance in the Americas. During the first quarter, organic revenues increased 4.3%, with EMEA-APAC up 8.4%. Our solid revenue momentum, coupled with our adjusted operating income margin expansion, drove strong bottom-line performance."
Mr. Brocke-Benz continued: "We recently acquired EPL Archives and MESM, both of which significantly expand and strengthen our VWRCATALYST services platform. With these acquisitions, we continue to build a significant business that provides a compelling proposition to biopharma customers engaged in clinical trials activities. And earlier in the quarter, we acquired Seastar, a global quality leader in manufacturing ultra-pure acid and base products used for detecting trace elements for environmental, food and semiconductor analysis and testing. These acquisitions are an important part of our strategy to increase customer intimacy and relevance in these key growth areas."
First Quarter 2017 – Consolidated Results
Net sales were $1.14 billion, up $40.8 million, or 3.7% compared to the prior year. Foreign exchange reduced net sales by $19.1 million, or 1.7%, while recent acquisitions, net of dispositions, increased net sales by an additional $12.5 million, or 1.1%. On an organic basis, net sales increased $47.4 million or 4.3%.
Operating income was $81.5 million, up $1.8 million compared to the prior year. GAAP diluted EPS was $0.29 in both the current and prior year quarter, while Adjusted EPS increased 10.0% year-over-year to $0.44, up from $0.40 in the prior year quarter.
First Quarter 2017 – Segment Results
Net sales were $692.8 million, up $26.1 million, or 3.9% compared to prior year, and up 1.7% on an organic basis. The increase in the Americas net sales was driven by strong sales to industrial, healthcare and education customers.
Operating income was $41.9 million, down $1.5 million or 3.5% compared to prior year. First quarter 2017 operating income includes $0.9 million of restructuring expenses and a $1.9 million acquisition related inventory step-up charge. Results for the first quarter of 2016 included $0.4 million of secondary offering expenses and a $0.2 million earn-out adjustment.
Net sales were $446.3 million, up $14.7 million, or 3.4% year-over-year. Foreign currency reduced net sales by $20.9 million, or 4.8%, while acquisitions added $1.7 million, or 0.4%. The disposition of the Australia/New Zealand business reduced revenues by 0.5%. On an organic basis, net sales increased 8.4%.
Operating income was $39.6 million, up $3.3 million compared to prior year. First quarter 2017 operating income included $4.8 million of restructuring expenses and a $1.7 million favorable earn-out adjustment.
Greg Cowan, Senior Vice President and Chief Financial Officer commented: "VWR delivered another strong cash flow quarter, with cash flow from operations of $66.5 million, up $24.5 million, or 58.3% as compared to prior year. Going forward, we will continue to invest our cash flows to fund attractive acquisition opportunities and to delever our balance sheet. We finished 2016 with elevated spending on acquisitions, and in 2017, our M&A efforts are off to a very strong start to the year. The higher level of acquisition spending is a function of the attractive opportunities that came to the market and our decision to deploy capital to strengthen key growth platforms."
Balance Sheet & Cash Flows
At March 31, 2017, total debt was $2.181 billion compared to total debt of $2.017 billion as of December 31, 2016. First quarter 2017 cash generated by operating activities was $66.5 million compared to $42.0 million in the first quarter of 2016. Capital expenditures for the quarter were $13.2 million compared to $14.3 million in the prior year quarter.
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.