First-quarter revenues for the IBO Lab Equipment/Consumables Index grew 3.0%, 2.5% organically, to $4,088 million. Sales growth was hampered by lower capital spending in the US and Europe, including weak government and academic markets. Adjusted operating profit improved 5.0% to $743 million. Operating margin for the Index added 100 basis points to 19.2% of sales, but advanced only 10 basis points based on continuing operations for the current list of companies. The newly reported Sartorius Lab Products & Services (LPS) segment was added to the Index. The segment consists of the lab products portfolio of the former Biotechnology and Mechatronics divisions and the acquired Biohit business (see IBO 10/31/11).

For the fiscal second quarter ending May 31, revenue for Gerresheimer’s Life Science Research segment rose 13.3%, 3.4% on a currency-neutral basis, to €26.6 million ($34.6 million = €0.77 = $1) (see page 12) to make up 8% of company sales. Adjusted EBITA grew 13.3% to €2.6 million ($3.4 million).

Kewaunee Scientific’s fiscal fourth-quarter sales ending April 30 climbed 7.6% to $29.0 million. International sales jumped 82.0% to account for 32% of sales due to the timing of backlog orders. Domestic sales declined 10.0% to make up 68%. Order backlog grew 31.2% to $86.2 million as a result of a large order valued at more than $11 million. Operating profit soared 438.4% to $2.9 million as the result of the shipment of back orders and lower operating expenses. Profit margin climbed nearly eight percentage points to 25.4% of sales due to improved pricing and lower raw material costs.

Kewaunee Scientific’s fiscal year-end revenues grew 2.8% to $102.8 million. Domestic sales slipped 0.2% to account for 82%, as demand from publicly funded projects declined. Despite pricing pressure, activity for privately funded domestic projects was stable. International sales expanded 18.9% to make up 18% of sales. Full-year operating income contracted 14.1% to $2.7 million, and gross profit dropped 65 basis points to 18.6% of sales due to higher raw material costs.

Fiscal third-quarter sales ending April 30 for Pall’s BioPharmaceuticals (BP) unit grew 2.3%, 1.4% organically, to $201.7 million to account for 31% of company sales. The acquisition of ForteBio (see IBO 12/31/11) contributed 3.0% to revenue growth, while currency lowered sales growth by 2.1%. BP sales were driven by higher demand from biotechnology customers, but were partially offset by supply chain disruptions and slower sales to distributors. Excluding currency, Pharmaceuticals revenue improved 9.0% to make up roughly 87% of BP sales, including 8.8% growth in systems revenue. Consumable sales increased 9.0%, primarily due to the acquisition. Sales for the Laboratory submarket slumped 22.5% to make up roughly 13% of BP sales due to lower demand in the Americas and Europe.

First-quarter sales for Sartorius’s LPS segment grew 20.1%, but declined 0.7% organically, to €66.5 million ($87.5 million = €0.76 = $1) to account for 32% of company sales. The acquisition of Biohit’s liquid handling business and currency contributed 18% and 3% to sales growth, respectively. Laboratory instruments, and consumables and services accounted for roughly 67% and 33% of LPS sales, respectively. Orders grew 23.1%, roughly 2% organically, to €70.9 million ($93.2 million). Organic sales to Asia/Pacific and North America grew 2% and 3% to account for 28% and 15% of segment sales, respectively. European organic sales declined slightly to make up 51%. LPS adjusted EBITA rose 19.3% to €8.2 million ($10.8 million) primarily due to the acquisition. Including the acquisition, full-year LPS sales are projected to grow 16%–20% on a currency-neutral basis.

Fiscal third-quarter revenue ending March 31 for Techne’s Biotechnology segment grew 9.9%, 1.5% organically, to $78.2 million to account for 93% of sales. Acquisitions contributed 9.3% to revenue growth, while currency lowered sales growth by 0.9%. Within the US, organic Biotechnology revenues to industrial, pharmaceutical and biotechnology markets grew 5.6%, but declined 5.4% to academic customers. US sales accounted for roughly 55% of segment revenue. Organic sales to China and Pacific Rim distributors climbed 19.9% and 7.8% to represent roughly 4% and 9% of segment sales, respectively. European organic sales slipped 0.4% to make up 30%. Adjusted segment operating profit improved 10.2% to $48.7 million primarily due to acquisitions. Adjusted segment gross margin slipped 60 basis points to 80.9% of sales.

First-quarter organic sales for Thermo Fisher Scientific Laboratory Products and Services (LPS) improved 4.4% to $1,506.7 million to account for 49% of company sales. Acquisitions contributed 0.8% to revenue growth but were offset by currency. The Biopharma Services business, which accounted for roughly 12% of LPS sales, grew in the double digits due to increased outsourcing for clinical trials. Consumables sales were also strong but were partially offset by lower demand for routine laboratory equipment, including workstations to academic and government customers. Adjusted operating profit advanced 1.2% to $201.7 million, but adjusted operating margin slipped 40 basis points to 13.4% of sales due to unfavorable product mix. The company projected LPS sales to grow in the low single digits for the remainder of the year.

VWR’s first-quarter revenues grew 4.2%, 1.0% organically, to $1,033.3 million. Acquisitions added 4.8% to revenue growth, while currency reduced sales growth by 1.5%. Sales for the laboratory distribution business improved due to higher demand from industrial and education customers. Sales of consumable products grew in the low single digits, and capital goods sales were flat to slightly negative. From a market perspective, pharmaceutical and biotechnology revenues were flat, industrial and educational sales grew in the low to mid-single digits, and sales to government entities declined in the low single digits. North American Lab sales improved 5.1%, but declined 1.6% organically, to represent 58% of company sales. European Lab sales rose 3.4%, 4.9% organically, to account for 40% of sales. Science Education revenue fell 3.1% to make up 2% of sales due to the reduced spending of schools. Adjusted operating income for the North American Lab and European Lab segments grew 3.4% and 15.6% to $36.9 and $38.6 million, respectively. Adjusted operating loss for the Science Education segment widened 4.5% to $4.6 million. Total operating profits climbed 9.6%, 7.6% excluding acquisitions and currency, to $70.9 million. Gross profit margin advanced 60 basis points to 29.3% of sales primarily due to acquisitions.

 Column Chart: Quarterly Organic Sales Change

 January 2009–March 2012

 Year       Q1       Q2     Q3     Q4

 2007      9.8%    8.6%   8.4%   12.0%

 2008      4.6%    7.0%   5.6%   4.1%

 2009     -0.5%    0.8%   0.6%   6.1%

 2010      8.4%    4.7%   3.6%   1.0%

 2011      2.8%    3.9%   4.2%   3.9%

 2012      2.5%

 Column Chart: Quarterly Operating Profit Margins

 January 2009–March 2012

 Year      Q1    Q2    Q3    Q4

 2007    14.5% 14.5% 14.9% 14.6%

 2008    15.9% 15.7% 15.9% 15.4%

 2009    16.3% 16.7% 17.2% 16.8%

 2010    17.9% 17.9% 17.2% 17.2%

 2011    18.2% 17.1% 17.7% 18.1%

 2012    19.2%

 Laboratory Equipment/Distribution Index       

                                                                                         % Change  

                                  2009      2010       2011      2012          2009–10      2010–11      2011–12

 Total Annual Revenues ($M)      $14,719   $15,378    16218.4    -----          4.5%          5.5%         -----

 Annual Oper. Profits ($M)       $2,420    $2,681     $2,814     -----         10.8%          5.0%         -----

 1st Quarter Revenues ($M)       $3,416    $3,823     $3,969     $4,088        11.9%          3.8%         3.0%

 1st Quarter Oper. Profits ($M)  $542      $680       $708       $743          25.6%          4.0%         5.0%