In the second quarter of 2009, revenues for IBO’s Laboratory Sales Index fell 7.8% to $4,285.24 million. Operating profit slipped 1.0% to $746.27 million, but operating margin gained 120 basis points to 17.4% of sales. Revenue growth for a majority of the companies in the Index was negatively impacted by currency translation and reduced capital spending.

Harvard Bioscience’s second-quarter revenues declined 21.7%, down 14.8% on a currency-neutral basis, to $18.1 million (see page 12) due to lower demand and a strong second quarter in 2008. Adjusted operating income plunged 44.8% to $1.6 million as the company sustained its sales and marketing and R&D initiatives. Gross profit margin improved 280 basis points to 49.5% of sales due to a shift in product mix and productivity improvements, particularly within the Biochrom group.

During the second quarter, Harvard Bioscience initiated a restructuring plan, which included the consolidation of its Scie-Plas operations and the discontinuation of its fabrication business. As of the end of the second quarter, backlog orders were larger than usual due in part to new microliter spectrophotometer orders, which will ship in the third quarter. In addition, the company confirmed an upturn in orders in June and July, especially at Harvard Apparatus. Harvard Bioscience reduced its full-year revenue guidance by roughly 5% to $77–$80 million. Third-quarter revenues are expected to be $19–$20 million for a decline of 5% to flat growth.

Illumina’s second-quarter revenues climbed 15.3% to $161.6 million. Product revenue grew 19.2% to $153.2 million, including Consumables and Instruments sales growth of 18.1% and 24.5% to $96.5 million and $53.8 million, respectively. Consumables revenue benefited from strong sales of sequencing products, which soared 174% to approximately $29 million, but were partially offset by a $3.7 million decline in microarray revenue. Instruments sales were driven by record shipments of Genome Analyzers and higher selling prices.

Illumina’s Service and Other revenue declined 27.4% to $8.4 million due to lower genome research services and the transfer of services to CSPro-certified providers. Adjusted operating profit rose 26.3% to $38.6 million, while gross profit margins soared 580 basis points to 69.8% of sales due to a shift in product mix, improved efficiency and lower material costs. Illumina reverted back to its original 2009 revenue forecast of $690–$720 million for a growth of 20%–26% (see IBO 7/15/09). Third-quarter revenues are expected to grow 8%–14% to $162–$172 million.

For the second quarter, Luminex’s revenues grew 14.2% to $27.8 million (see page 12) due to strong Assay and Royalty revenues, which climbed 23.8% and 120.3% to account for 22% and 28% of total sales, respectively. Demand for Cystic Fibrosis and Respiratory Viral Panel product lines led Assay revenue growth higher and accounted for 85% of total Assay revenue. Service contracts and Other revenue improved 11.5% and 21.8% to account for 5% and 6% of total sales, respectively.

Offsetting this revenue growth for Luminex was lower sales of Systems and Consumables, which declined 3.3% and 21.4% to make up 22% and 24% of total sales, respectively. For Consumables, the number of bulk orders fell. Systems revenue was adversely affected by lowered capital spending and a 22% decrease in the number of units shipped to 158, including 16 FLEXMAP 3D units. Total operating profit was $1.0 million, compared to a loss of $0.5 million in the previous year, leading gross profit margins up 137 basis points to 69.4% of sales due to a favorable product mix. Sales for the Technology segment declined 3.9% to $19.5 million, while operating profits fell 43.7% to $1.4 million. Sales for the Assay group more than doubled to $8.3 million and operating loss narrowed to $0.4 million, compared to a loss of $3.0 million a year ago. The company lowered its 2009 revenue guidance by an average of 4% to $118–$132 million for growth of 13%–26%.

OI’s second-quarter revenues declined 39.4% to $4.9 million, including a decline of 43.4% and 6.1% in product and service revenues to account for 83% and 17% of total sales, respectively. Laboratory Product sales fell 39.0% to $3.7 million, including a 50% and 38% drop in domestic and international sales, respectively. However, sales to China and Taiwan increased, which helped segment sales climb 14% on a sequential basis. Sales of Air-Monitoring Systems declined 40.5% to $1.2 million due to lower government orders for MINICAMS. Operating profit was marginally in the red compared to a profit of $0.5 million in the previous year. Gross margins improved 30 basis points to 48.6% of sales as a result of lower product costs. For the second-half of the year, the company anticipates that there will be positive revenue growth for both the Laboratory Products and Air Monitoring segments.

For the first half of the year, Tecan’s revenues declined 0.5% to CHF 182.6 million ($161.6 million = CHF 1.13 = $1) from CHF 183.6 million ($174.9 million = CHF 1.05 = $1) (see page 12). In local currency, revenues slipped 0.8%. Orders increased 2.9%, 2.5% in local currency, to CHF 192.4 million ($170.2 million). Revenue growth was adversely affected by lower Liquid Handling & Robotics revenue, which fell 6.2%, 5.6% in local currency, to represent 63% of total revenues. Segment revenue growth declined due to weaker demand from pharmaceutical customers in Europe and diagnostic markets in China, as well as lower OEM revenues, but was partially offset by higher consumables and service revenues. Operating income for the segment declined 29.4% to CHF 19.0 million ($16.8 million). Components & Detection sales improved 1.1%, but declined 1.1% in local currency, to make up 26% of sales , while operating profit climbed 21.3% to CHF 5.5 million ($4.8 million). Sample Management revenue soared 45.4%, 42.9% in local currency, to account for 10.6% of sales. Segment operating profit was CHF 0.3 million ($0.2) million, compared to a loss of CHF 4.0 million ($3.6 million) a year ago

Tecan’s operating profits fell 8.5%, 1.2% in local currency, to CHF 21.1 million ($18.7 million), and gross profit margins slipped 50 basis points to 49.6% of sales. Sales to Europe, North America and Others declined 7.4%, 7.3% and 16.4% to represent 47%, 40% and 4% of total sales, respectively, while sales to Asia climbed 8.6 % to make up 13%. In local currency, sales to Europe and Others fell 2.1% and 13.5%, respectively, while sales to Asia grew 6.2% and sales to North America were flat. The company anticipates that full-year revenues will be flat, down 5% in local currency.

Chart: Quarterly Operating Profit Margins January 2006—June 2009

Year Q1 Q2 Q3 Q4

2006 15.1% 13.6% 15.3% 17.2%

2007 16.2% 15.2% 15.9% 18.1%

2008 16.6% 16.2% 17.4% 18.2%

2009 16.4% 17.4%

Chart: Quarterly Sales Performance January 2006—June 2009

Year Q1 Q2 Q3 Q4

2006 3638 3588 3710 4067

2007 4073 4064 4229 4671

2008 4520 4646 4475 4578

2009 4288 4285

Laboratory Instrument Index, Total % Change

Total Annual Revenues ($M)

2006 2007 2008 2009 06/07 07/08 08/09

15002 17037 18220 —- 13.6 6.9 —–

2nd Quarter Revenues ($M)

3588 4064 4646 4285 13.3 14.3 -7.8

Annual Oper. Profits ($M)

2306 2796 3118 —- 21.3 11.5 —–

Annual Oper. Profits (%)

15.4 16.4 17.1 —- —– —– —–

2nd Quarter Oper. Profits ($M)

489 619 754 746 26.6 21.8 -1.0

2nd Quarter Oper. Profits (%)

13.6 15.2 16.2 17.4 —– —– —–