Biotage Benefits from Currency

Biotage fourth quarter 2015 sales grew 22.4%, 6.4% excluding currency, to SEK 168.5 million ($19.8 million = SEK 8.50 = $1). Gross margin improved 157 basis points to 56.0% of sales. Adjusted for a one-time write-down in the previous year, operating profit advanced 200 basis points to 12.0%. Currency also appreciably enhanced full-year 2015 results, as roughly half of the company’s sales were invoiced in US dollars. Revenues grew 24.5%, 8.4% excluding currency, to SEK 610.5 million ($72.3 million = SEK 8.44 = $1). Organic results were ahead of company expectations due to growth across all product areas. Industrial product sales jumped 33% on a reported basis due to timing of orders. Purification and sample preparation products sales grew, led by strong demand for the Isolera Flash system from contract research customers in China and increased Extrahera placements.

Biotage highlighted demand in China, as organic 2015 revenues in this region grew by at least 34%. Overall, system and aftermarket product sales accounted for 45% and 55% of revenues, which were just below the company’s target of 60% aftermarket sales. Gross margin improved 168 basis points to 56.1%. In spite of currency headwinds and increased headcount, adjusted operating margin jumped 220 basis points to 12.2%.

Fluidigm Sees Progression

Fourth quarter 2015 Fluidigm sales contracted 8.3%, down 3.9% organically, to $30.7 million. However, demand stabilized compared to the first half of the year and advanced 7.3% sequentially. The decline was prompted by lower demand for core genomic systems, including the BioMark HD and C1 Single-Cell Auto Prep systems, but was partially offset by demand for the new Helios and Juno systems. Overall, the single-cell research market continued to drive sales and accounted for roughly 75% of BioMark HD systems sold. As expected, consumables sales declined due to lower demand from production genomic customers. However, on a sequential basis, consumables sales advanced 16%. Sales in the US and Asia-Pacific each declined by roughly 20% excluding currency to account for 45% and 8% of revenues, respectively. Excluding currency, European sales advanced 7% to make up 35%. Sales in Japan and Other countries climbed roughly 60% and more than 131% excluding currency to account for 7% and 6% of sales, respectively. Product gross margin fell 390 basis points to 58.1% of sales, and adjusted operating loss widened 39.2% to $13.7 million.

For 2015, Fluidigm sales slipped 1.5% to $114.7 million but grew 3.5% excluding currency. Full-year results were well below the company’s original forecast due to lower demand for production genomic consumables. Overall, consumables sales fell 1.9% excluding currency to account for 38% of revenues. Instruments revenue improved 3.0% excluding currency to make up 51%. This growth was supported by demand for the new Helios system, which helped deliver new customers, especially in the immunology and oncology markets. The cumulative installed instrument base expanded 23% to 1,630 units, including a 33% unit increase in systems for single-cell biology research to 805. Service revenue jumped 39.2% to account for 11% of revenues, led by increased warranty contracts and installation services for the Helios system.

Geographically, growth was driven by Europe, for which sales climbed 26% excluding currency to account for 32% of revenues. Conversely, sales in the US, Asia-Pacific and Japan fell 6.7%, 15.2% and 12.8% but included currency headwinds to make up 48%, 10% and 5%, respectively. Sales in Other regions grew 41.8% to account for 5%. Product gross margin fell 523 basis points to 57.9% of sales as a result of increased Integrated Fluidic Circuits inventory, lower consumables volume and weaker pricing. Adjusted operating loss widened 31.6% to $54.1 million. The company projected 2016 sales to grow 10% at the midpoint, 12% excluding currency, to $124–$128 million.

Pac. Bio. Provides Restrained View

Fourth quarter 2015 Pacific Biosciences sales soared 114.6% to $36.3 million but included a final development milestone payment of $20 million from Roche. Excluding Contractual revenue, sales fell 16.6% to $12.7 million. Given the company’s transition from the RS II to the Sequel system, which began shipping toward the end of 2015, instrument revenue slumped 39.4% to make up 53% of Product revenue. While orders for Sequel systems amounted to 49 units, which were above company expectations, only 10 units were shipped, of which 6 were installed, due to ongoing software-related testing and development, and a limited supply of SMRT Cell kits. More than 40% of Sequel orders were from new customers, as well as from a broad range of geographic regions and end-markets. The company also received three orders for the RS II. Consumables revenue advanced 6.3% to account for 47% of Product sales. Service and Other revenue jumped 26.3% as a result of increased maintenance agreements. Operating loss narrowed 94.1% to $1.1 million due to milestone payments.

Full-year 2015 Pacific Biosciences sales rose 53.1% to $92.8 million. Excluding Contractual revenue, sales advanced 10.5% to $48.4 million. Consumables sales grew 42.5%, while instrument sales fell 15.4% to each account for 50% of Product revenue. Service and Other revenue climbed 28.0%. Adjusted operating loss narrowed 17.0% to $52.2 million. With a projected $33 million reduction in Contractual revenue, total 2016 sales are expected to be flat. As such, combined Product and Service revenues are estimated to climb 70%, led by strong Sequel shipments in the second half of the year as chemistry supplies increase.

Spectris Rebounds

Following lower demand in 2014, full-year 2015 sales for Spectris Materials Analysis (MA) grew 4.5%, 3% organically, to £364.4 million ($560.6 million = £0.65 = $1), accounting for 31% of sales. Acquisitions contributed 4% to revenue growth but were partially offset by currency headwinds of 3%. Sales to pharmaceutical and fine chemical markets advanced due to increased QC activity from biopharmaceutical and generic drug manufacturers, especially in India. Semiconductor sales were strong due to new products, demand in North America, and acquisitions of distributors in Taiwan and South Korea. Demand from metals, minerals and mining sectors grew but varied by product and geography. Growth for these industries was limited to North America, China, India and Brazil. Sales to the metals and minerals sector were driven by new systems, while demand from mining customers was primarily for aftermarket products. Sales in North America and Europe each grew double digits excluding currency to account for 26% and 29% of segment sales, respectively. Currency-neutral sales in Asia were marginally higher, while sales in Rest of the World declined roughly double digits to represent 37% and 9%, respectively. Adjusted MA operating margin slipped 54 basis points to 14.7%.

New Product Cycle Lifts Tecan

For the second half of 2015, Tecan sales grew 5.6%, 7.0% organically, to CHF 240.3 million ($245.2 million = CHF 0.98 = $1). Currency reduced revenue growth by 3.1%, and acquisitions added 1.7%. Orders grew 12.3% organically to CHF 244.9 million ($249.9 million). Operating margin expanded 200 basis points to 17.3% due to increased sales volume and reduced operating expenditures.

Half-year 2015 sales for the Life Sciences Business (LSB) grew 7.5%, 11.3% organically, to make up 61% of revenues. The acquisition of IBL International (see IBO 7/31/14) contributed 1.4% to LS revenue growth, while currency lowered sales by 5.2%. Segment growth was driven by recent product launches. LS operating profit jumped 470 basis points to 23.4%. Sales for the Partnering Business (PB) grew 2.9%, 1.0% organically, to account for 39% of revenues. The acquisition of Sias (see IBO 10/31/15) added 2.1% to revenue growth, while currency reduced growth by 0.2%. Segment operating margin fell 128 basis points to 13.5%.

Full-year 2015 Tecan sales improved 10.2%, 9.6% organically, to CHF 440.3 million ($458.6 million = CHF 0.96 = $1). Acquisitions contributed 3.5% but were partially offset by currency headwinds of 2.9%. Orders expanded 10.9% organically to CHF 465.0 ($484.4 million). All sales figures below are expressed in local currency. Benefiting from the IBL acquisition, recurring revenues, which include services, consumables and reagents, climbed 19.1% to account for 38% of total sales. Sales in Europe, North America and Asia grew 14.7%, 13.2% and 12.3% to make up 43%, 41% and 14% of revenues, respectively. Asia was led by double-digit growth in China. Sales to Other regions declined 10.1% to account for 2%. Operating margin increased 89 basis points to 15.2%.

Tecan 2015 LSB sales grew 7.1%, 6.7% organically, to make up 57% of sales. The IBL acquisition added 5.1% to sales growth but was partially offset by currency headwinds of 4.7%. Organic order growth surpassed revenue growth for the year. LS operating margin expanded 95 basis points to 18.0% due to strong sales volume and lower R&D expenses.

Full-year 2015 PB revenue climbed 14.7%, 13.7% organically, to make up 43% of sales. Sias added 1.2% to sales growth. Currency headwinds were marginal. Instrument sales were particularly strong, led by product launches from its customer Ortho Clinical Diagnostics. Orders jumped double digits organically. Despite lower margins from the new systems, operating margin improved 85 basis points to 16.1% as a result of sales volume. For 2016, Tecan projected double-digit revenue growth in local currencies, led by new products and acquisitions.