First-quarter revenues for IBO’s Laboratory Instrument Sales Index declined 2.4% to $4,863 million. Operating profit improved 2.0% to $849 million, and operating margin climbed 80 basis points to 17.5% of sales. Revenues were adversely affected by the economic slowdown and, for US firms, by the higher valuation of the US dollar. A majority of companies initiated restructuring and cost saving initiatives to help boost operating profits. The only significant modification to the Index this quarter was the integration of PerkinElmer’s total revenues, following the implementation of new reporting segments by the company. In addition, financial estimates were provided for Oxford Instruments, Shimadzu and Tecan, which have yet to report first-quarter financial data.

Harvard Bioscience’s first-quarter revenues declined 13.1% to $19.1 million (see page 12), but were flat on a currency-neutral basis, as 58% of sales were in British pounds or euros. The Apparatus business recorded increased revenue growth, which was offset by lower sales from Biochrom. Direct sales through the catalog and Internet businesses accounted for 33% of revenues. Roughly 84% of sales were derived from self-manufactured products. Adjusted operating income slipped 5.5% to $2.8 million. Gross profit margins improved 330 basis points to 49.3% of sales due to restructuring charges in the previous year and improved operating efficiency. Harvard Bioscience repurchased roughly 434,000 shares for a total of $1.2 million and increased its short-term cash position by 15% to $15.9 million, in preparation for possible acquisitions. Second-quarter revenues are anticipated to decline 15%–20% to $18.5–$19.5 million, while full-year revenues are projected to fall 3%–9% to $80–$85 million.

First-quarter sales for Illumina grew 36.0% to $165.8 million, including 41.1% growth in product revenue to $156.2 million. Consumable sales jumped 63.1% to $103.1 million due to $22.7 million and $17.3 million in Infinium and sequencing revenues, respectively. Infinium revenue benefited from higher selling prices, despite lower BeadChips sales volumes. Instrument sales grew 13.3% to $50.4 million, driven by sales of the Genome Analyzer II. Sequencing system revenue grew by $11.2 million, but was partially offset by a $5.2 million decline in sales of microarray systems. Service and other revenues declined 14.5% to $9.6 million, as the company continues to shift services toward CSPro-certified customers. Including stock compensation expenses, operating income jumped 69.1% to $36.2 million. Compensation expenses were $14.9 million and $10.9 million for the first quarters in 2008 and 2007, respectively. Gross profit margins soared 4.9 percentage points to 67.1% of sales. The company raised the lower end of its annual guidance by $10 million to $700–$720 million for growth of 22%–26%. Second quarter-revenue is anticipated to grow 20%–23% to $168–$173 million.

On a pro forma basis, Life Technologies’ first-quarter adjusted revenues grew of 1.3% (see page 12), 5% on a currency-neutral basis, to $784.9 million. Reported GAAP revenues were $775.7 million. Molecular Biology Systems revenue was flat at $366.5 million, but grew 4% excluding currency, due to higher sales of transcription enzymes and genomic assays. Cell Systems revenue improved 2%, 7% on a currency-neutral basis, to $191.7 million, despite weaker revenues from sera product sales and services to the pharmaceutical market. Genetic Systems revenue grew 3%, 6% on a currency-neutral basis, to $219.2 million due to strong demand for sequencing instruments and consumables, particularly from the forensic market, which grew in double digits. The Mass Spectrometry (MS) business contributed $10.3 million in other income. Revenue for this business, which is a joint venture, declined 1%, 5% excluding currency, to $123 million due to weak demand from the pharmaceutical market. However, demand for the triple quad and QTRAP 5500 systems improved, as did service revenue. The company has achieved 75% of the $80 million synergies targeted for 2009. Adjusted operating profit climbed 9.2% to $205.6 million. Gross profit margins improved 30 basis points to 66.7% of sales. The company anticipates full-year organic revenue growth in the low single digits.

Luminex’s first-quarter revenue grew 11.1% to $25.6 million and operating profit was $1.6 million (see page 12), compared to a loss of $1.3 million a year ago. Gross profit margins jumped 244 basis points to 68.7% of sales. Technology segment sales climbed 13.1% to $21.1 million, led by consumables and royalty revenues, which grew 16.0% and 28.7% to make up 36% and 22% of segment sales, respectively. Service contracts and other revenue improved 12.6% and 32.0% to account for 7% and 8% of segment sales, respectively, while system revenue declined 2.5% to make up 29% of segment sales. The Technology segment’s operating profit soared 291.1% to $3.5 million, primarily due to a shift in product mix. Sales for the Assay segment, which predominantly sells diagnostic kits, grew 2.4% to $4.5 million. The Assay segment recorded an operating loss of $1.9 million, compared to a loss of $2.2 million a year ago. Luminex lowered its 2009 revenue guidance by $5 million to $125–$135 million for growth of 20%–29%.

OI’s sales declined 36.9% in the first quarter to $4.6 million (see page 12). Operating loss was $0.7 million, compared to a profit of $0.3 million last year. Gross profit margin was marginally lower at 47.0% of sales. Laboratory product sales fell 41.8% to account for 70% of sales, led by lower GC and TOC sales. US Laboratory product sales declined 48%, while international Laboratory product sales fell 38%. The primary area of growth was US sales of Automated Chemistry Analyzers. Sales of Air-Monitoring Systems fell 21.7% to $1.4 million. Service revenue fell 21.7% to make up 30% of sales.

Strategic Diagnostics’ first-quarter revenues fell 3.5% to $6.9 million due to declining sales of antibody and Ag-GMO products. Antibody revenue declined 4% to $3.7 million, following a 38% and 6% decline in demand for monoclonal and polyclonal products, respectively. Segment sales were boosted by a 47% climb in Genomic Antibody Technology-related products and a 20% rise in bulk antibody orders. Despite a 7% climb in food pathogen revenue, sales of Food Safety Products fell 9% to $2.0 million due to a 31% decline in Ag-GMO product sales. Water and Environmental product sales were flat at $1.1 million. The company reported an operating loss of $0.6 million, compared to a loss of $0.1 million last year, primarily due to increased SG&A spending. Gross margins fell 125 basis points to 55.1% of sales due to lower manufacturing efficiencies.

Chart: Quarterly Sales Performance January 2006—March 2009

Year Q1 Q2 Q3 Q4

2006 3638 3588 3710 4067

2007 4073 4064 4229 4671

2008 4984 4736 4657 4744

2009 4863

Chart: Quarterly Operating Profit Margins January 2006—March 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 16.7% 15.9% 16.8% 18.0%

2009 17.5%