Twelve of the 19 companies in the IBO Laboratory Sales Index reported fourth-quarter earnings before this issue’s publication. Including estimates for companies yet to report, fourth-quarter revenue for the IBO Laboratory Sales Index grew 7.2%, including a loss of 6.9% excluding currency. Operating profit for the Index climbed 16.7%, and operating margin improved 90 basis points to 20.8% of sales. Full-year revenue is expected to grow 9%, 7% excluding currency, and operating profit is projected to grow 13%.

Affymetrix’s fourth-quarter revenues fell 23.3% to $65.1 million (see page 12), or 19% excluding a one-time $5 million licensing payment in the previous fourth quarter. Product revenue slumped 18.4% to account for 90% of sales, including a decline of 13.6% and 55.3% in Consumables and Instruments revenues to $54.8 million and $3.8 million, respectively. Within the Consumables business, RNA and DNA sales fell 13.7% and 14.4% to $31.5 million and $18.4 million, respectively, while other consumables sales declined 9.1% to $5.0 million. Service revenue, and Royalties and Other sales fell 20.2% and 80.0% to represent 8% and 2% of sales, respectively. As of the fourth quarter, the company reorganized into three business units. The Gene Expression business unit, which accounted for 45% of revenues, declined the most due to weak demand for in vitro transcription (IVT) arrays. Sales for the Genetic Analysis and Clinical Diagnostics business unit accounted for 35% of sales, and Life Science Reagent sales grew in the mid- to high single digits to account for 12%. Sales to North America were weak and declined from the third quarter. International sales, including Europe, Asia and Japan, performed better. European sales grew sequentially. Adjusted operating loss was $10.8 million, compared with a profit of $5.2 million a year ago. Gross margin dropped five percentage points to 53.3% of sales, and product gross margin fell 200 basis points to 54.1% of sales.

For the year, Affymetrix’s revenues fell 13.9% to $267.5 million, or 13% excluding the one-time licensing payment. Product sales contracted 13.1% to make up 90% of sales, including a 10.8% and 36.3% decline in Consumables and Instruments revenues, respectively. Within the Consumables business, RNA revenue sank 12.5% to $126.3 million due to a decline of 15% to 20% in IVT sales. DNA and other revenue fell 8.0% to $98.7 million. Service, and Royalty and Other revenue declined 2.0% and 51.4% to account for 8% and 2% of sales, respectively. Adjusted operating loss widened by 187.1% to $14.2 million. Gross margin improved 140 basis points to 58.5% of sales, and product gross margin rose 180 basis points to 59.5% of sales. Despite a projected 5% to 10% decline in Expression sales, total 2012 revenues are projected to be flat to low single-digit growth with a gross profit margin range of 54%–56%. The Genetic Analysis and Clinical Diagnostics unit is expected to grow 20% or more in 2012, led by strong demand for the Axiom genotyping system and cytogenetics products. The Cytogenetics business is expected to account for roughly 10% of 2012 sales. The Life Science Reagents business is projected to sustain growth in the 5%–7% range.

Analytik Jena’s fiscal first-quarter sales ending December 31, 2011, declined 2.3% to €23.2 million ($31.3 million = €0.74 = $1) (see page 12). Operating profit tumbled 15.9% to €1.9 million ($2.6 million). Gross margin fell 274 basis points to 49.8% of sales. Sales in Germany and other European countries dropped 14.2% and 11.7% to account for 30% and 25% of revenues, respectively. Sales to America and Asia improved 23.0% and 15.4% to make up 9% and 34%, respectively. Sales to Rest of World slipped 9.4% to represent 3%. Analytical Solutions (AI) sales declined 2.7% to account for 61% of sales. Segment sales growth was negatively impacted by several large-scale orders placed in the previous year. AI operating profit slumped 22.9% to €1.5 million ($2.0 million), and gross profit margin declined 460 basis points to 50.7% of segment sales. Life Science (LS) revenue slipped 0.9% to account for 34% of sales due to slower sales from CyBio. LS operating profit jumped nearly fivefold to €0.3 million ($0.5 million), and gross profit margin climbed 90 basis points to 49.9% of segment sales. The company does not expect revenue growth until the fiscal third quarter. XRF product sales are expected to generate revenues of €2.5–€3.0 million ($3–$4 million) in fiscal 2012.

Luminex’s fourth-quarter revenues climbed 16.2%, 8% organically, to $47.9 million (see page 12) due to Assay sales, which jumped 77.5% to account for 34% of sales. Assay sales included roughly 40% revenue growth from the acquisition of EraGen and 37% organic growth from higher sales of Cystic Fibrosis and Respiratory Viral Panel products. Royalty and Systems revenue expanded 17.3% and 1.4% to represent 15% and 22% of sales, respectively. The total number of analyzers sold grew 7% to 307 systems, including 114 MAGPIX, whose unit sales jumped 235%. Consumables sales declined 15.6% to make up 21% of sales, and All Other revenue grew 5.3% to account for 8%. Adjusted operating profit improved 8.7% to $5.5 million. Gross profit margin declined 163 basis points to 71.0% of sales due to acquired inventory costs. Technology and Strategic Partnerships segment revenue slipped 2.7% to $29.7 million. Segment operating income fell 27.8% to $4.2 million due to lower Consumables sales. Revenues for the Assays and Related Products segment improved 70.6% to $18.2 million, and adjusted operating loss narrowed by 61.1% to $0.3 million.

Full-year revenues for Luminex grew 30.2%, 25% excluding the acquisition of EraGen (see IBO 6/30/11), to $184.3 million. Assay and Consumable sales advanced 51.1% and 38.3% to make up 26% and 30% of sales, respectively. Royalty and System revenue rose 30.3% and 8.8% to represent 16% and 19% of sales, respectively. All Other revenue grew 9.1% to make up 8%. Overall, life science research sales accounted for 31% of sales and clinical diagnostics made up 69%. Adjusted operating profit climbed 160.3% to $29.3 million. Gross margin was flat at 68.1% of sales. Technology and Strategic Partnerships revenue grew 21.0% to $127.8 million, and operating income jumped 87.1% to $29.9 million. Revenues for the Assays and Related Products segment increased 57.2% to $56.6 million, but operating loss widened by 28.1% to $6.1 million. The company projected full-year 2012 revenue to grow 11%–17% to $205–$215 million.

 Bar Graph: Quarterly Organic Sales Change

 January 2008–December 2011

 Year   Q1     Q2     Q3     Q4

 2008  5.6%   8.2%   4.3%   1.1%

 2009 -2.2%  -5.7%  -4.5%   0.5%

 2010  8.0%   9.1%  10.5%   7.1%

 2011  7.1%   8.3%   5.6%   6.9%

 Bar Graph: Quarterly Operating Profit Margins

 January 2008–December 2011

 Year   Q1       Q2      Q3     Q4

 2007  16.6%   15.7%   16.5%   19.2%

 2008  17.6%   17.2%   18.1%   19.1%

 2009  17.4%   17.9%   18.3%   19.9%

 2010  19.8%   18.9%   19.8%   19.9%

 2011  19.2%   18.9%   18.9%   20.8%

 Laboratory Instrument Index, Total                                               % Change    

                                   2008      2009      2010       2011     08/09    09/10    10/11

 Total Annual Revenues ($M)     $20,660   $19,756   $21,505    $23,410     -4.4%     8.9%     8.9%

 Annual Oper. Profits ($M)       $3,719    $3,676    $4,308     $4,885     -1.2%    17.2%    13.4%

 Annual Oper. Profits (%)         18.0%     18.4%     19.6%      19.5%     -----    -----    -----

 4th Quarter Revenues ($M)       $5,319    $5,567    $5,912     $6,338      4.7%     6.2%     7.2%

 4th Quarter Oper. Profits ($M)  $1,024    $1,139    $1,242     $1,449     11.2%     9.0%    16.7%

 4th Quarter Oper. Profits (%)    19.1%     19.9%     19.9%      20.8%     -----    -----    -----