In the first quarter of 2007, revenues for IBO’s Laboratory Sales Index grew an impressive 11.6% to $4,101 million. Operation profit jumped 14.0% to $654 million and operating margin climbed 50 basis points to 16% of sales. More than half of the companies realized significant improvements in operating profits, but those were offset by declining results from Affymetrix, Bio-Rad, Luminex and OI. For the first quarter of 2007, 18 of the 22 companies in the Index reported earnings before this issue’s publication. For the remaining four companies (Horiba, Oxford Instruments, Shimadzu and Tecan), estimated modest growth rates are included. The only notable change to the Index was the removal of Molecular Devices as a result of its acquisition by MDS (see IBO 1/31/07). Harvard Bioscience reported sales growth of 10.1% to $19.1 million (see page 12). Excluding a 5% favorable exchange rate and the acquisition of Anthos (see IBO 6/30/06), organic revenues declined 3%. Adjusted operating income climbed a modest 1.9% to $2.7 million. Sales growth was due primarily to Anthos product lines and core physiology and cell biology equipment. Order growth was strong at 18%, but was partially offset by a backlog increase. Vendor delays resulted in declining sales for spectrophotometers. Going forward ,the company estimates second quarter revenues of $19.5–$20.5 million and year-end revenues of $80.0–$83.0 million. The company has signed a letter of intent to acquire an undisclosed $8 million business that will complement Harvard Apparatus. It also expects to divest its capital equipment business by the end of the second quarter, pending the purchaser obtaining financing. Illumina’s first quarter sales jumped 147.9% to $72.2 million and adjusted operating profit soared 187.3% to $7.4 million. On a GAAP basis, the company reported an operating loss of $296.4 million attributed to a one-time acquired in-process R&D charge of $303.4 million from the acquisition of Solexa (see IBO 11/15/06). Both R&D and selling, general and administrative expenses nearly doubled, pushing gross margins down 2.3 percentage points to 65.1%. Product revenue grew 163.4% to account for 85% of total revenues. Product revenue growth was primarily driven by higher consumables sales and sales of the Illumina Genome Analyzer. Revenue from genotyping consumables increased 130%. Service and other revenue more than doubled to represent 15% of total revenues and benefited from increasing sales of genotyping services. The company anticipates second quarter revenues of $74–$78 million and year-end sales of $305–$315 million. Invitrogen announced sales of $309 million, an increase of 10.2%, or 7.2% on a currency-neutral basis (see page 12). Adjusted operating profit edged only slightly higher to $74.7 million. Following the sales of its BioReliance and BioSource Europe operations earlier this year (see IBO 2/15/07), these segments have been moved to discontinued operations. BioDiscovery sales improved 9.1%, or 5.7% on a currency-neutral basis, to $220 million, and Cell Culture Systems sales rose 13.2%, or 9.1% on a currency-neutral basis, to $88.6 million. Sales for the Cell Culture Systems division benefited from double-digit growth for both stem cell–related products and Cell Culture Production products, while sera revenue improved in low single digits. Orders through Invitrogen’s website accounted for more than half of sales in the Americas. Sales in Europe, the Americas and Asia Pacific grew 12%, 10% and 8%, respectively. The company reported double-digit growth in emerging markets, as well as good growth in Japan. For 2007, the company reiterated its guidance of revenue growth from continued operations in the low to mid-single digits and earnings per share growth of two to three times revenue growth. Following the acquisition of Tm Biosciences (see IBO 12/15/06), Luminex reported a 27.8% jump in consolidated first quarter sales to $16.6 million and a 20.4% increase in adjusted operating profit to $0.14 million (see page 12). The results include one month of Tm Bioscience’s sales; the company is now known as Luminex Molecular Diagnostics (LMD). Beginning with the first quarter, Luminex now reports as two segments: Technology Group and Assay Group. Technology segment sales climbed 21.1% to a record $15.7 million and operating profits more than doubled to $1.1 million. Segment growth was primarily attributed to strong system sales and royalty revenue, which climbed 43% and 41% to $5.7 million and $2.5 million, respectively. Consumables sales, comprised of microspheres and sheath fluid, decreased 13% to $4.8 million. Service contracts and other revenue represented $2.3 million of segment sales. The Assay segment accounted for 7.2% of total sales and its operating loss increased to $1.46 million. The addition of the LMD division accounted for a $1.4 million increase in operating expenses. OI’s sales declined 6.0% in the first quarter to $7.3 million, with product sales edging slightly higher to $6.5 million and service revenue declining 36.3% to $0.85 million (see page 12). Operating profit slipped from a gain of $0.77 million to a loss of $0.86 million. The sales decline resulted from lower service revenue from Wyle Laboratories. The company anticipates billing under its US Army contract to significantly contribute to second quarter service revenue. While product revenue grew just 0.3%, sales of Minicams remained robust and more than offset lower sales of TOC Analyzers. Domestic and European sales declined, but Asian sales and sales in Singapore and Taiwan increased. Strategic Diagnostics experienced a 6.0% gain in first quarter revenues to $6.6 million, while operating profit surged more than tenfold to $0.71 million as a result of lower manufacturing expenses (see page 12). Antibody sales improved 32.0% to $3.3 million largely on account of strong orders for bulk antibodies, including antibodies for Strep A and Troponin I. Food safety revenue declined 14.4% to $2.2 million due to a 26% slide in sales of agriculture products. Finally, revenue from water and environmental products dropped 4.7% to $1.1 million due to lower sales of RapidAssay kits for pesticides and other environmental pollutants. Operating profit slipped due to the reduction in sales and a 4.8-point drop in gross margin to 53.0% of sales, despite virtually flat operating expenses.