Second-quarter revenues for IBO’s Lab Equipment/Consumables Sales Index grew 4.6%, 4.7% excluding currency, to $4,183.68 million. While most companies reported increased revenue growth due to the general economic recovery, certain businesses were still negatively impacted by capital restrains. Operating profits for the Index climbed 13.7% to $709.32 million, and adjusted operating margins improved 140 basis points to 17.0% of sales.

Biohit’s second-quarter sales improved 13.7% to €9.9 million ($12.5 million = €0.79 = $1) (see page 12). However, the company recorded an operating loss of €0.1 million ($0.1 million), compared to a profit of €0.2 million ($0.3 million = €0.73 = $1) due to higher costs for the launch of its Acetium product. Liquid Handling sales grew 13.7 % to account for 95% of sales due to strong demand for pipettes and disposable tips in Asia and North America. Sales also benefited from a weak year-over-year comparison. Liquid Handling operating profits slipped 1.0% to €0.6 million ($0.8 million) because of the higher raw material costs. Diagnostics sales, which are comprised mainly of kits, grew 15.2% to €0.6 million ($0.8 million). The segment’s operating loss widened by 54.1% to €0.7 million ($0.9 million) due to higher sales and marketing expenditures for Acetium capsules.

For the fiscal third quarter ending August 31, revenue for Gerresheimer Life Science Research grew 18.3%, 8.0% on currency-neutral basis, to €25.8 million ($28.7 million = €0.79 = $1) (see page 12) to account for 9% of company sales. The increase in demand was attributed to the general economic recovery and higher customer inventory for laboratory glassware in the US. Adjusted operating profits jumped 76.9% to €2.3 million ($2.9 million) following the transfer of production from the US to China and Mexico.

Kewaunee Scientific’s fiscal first-quarter sales ending July 31 contracted 5.3% to $24.9 million (see page 12) due to lower capital spending and delayed backlog shipments. Back orders climbed 10.2% to $66.9 million. Domestic sales fell 10.3% to account for 84% of revenues due to lower spending for small and mid-sized laboratory projects. However, the company reported stable demand for larger lab-furniture projects. International sales jumped 35.2% to make up 16% of sales, as a result of new products and increased manufacturing capabilities. Operating profit slumped 38.9% to $1.1 million, and gross margins declined 185 basis points due to lower sales volume and competitive pricing.

For the fiscal fourth quarter ending July 31, revenue for Pall’s BioPharmaceuticals segment improved 7.2%, 10.0% on a currency-neutral basis, to $167.5 million. Segment sales were driven by 8.7% and 10.1% growth for consumables and systems, respectively.

Pall’s full-year BioPharmaceuticals revenue, which included the Pharmaceuticals and Laboratory subsegments, climbed 12.7%, 10.2% excluding currency, to $620.3 million to account for 50% of Life Sciences revenues. Back orders jumped 29.5% to $129.9 million. In local currency, Pharmaceuticals revenue grew 8.7% to represent 84% of segment sales, including consumable sales growth of 12.8% and a 17.9% decline in systems revenue. Consumable sales were driven by increased demand for vaccine and single-use processing technologies, as well as direct marketing efforts and strong growth in India, Korea and China. Systems revenues were negatively impacted by lower capital spending. Sales for the Laboratory subsegment recorded growth across all geographies to account for roughly 16% of BioPharmaceuticals sales.

For the fiscal fourth quarter ending June 30, revenue for Techne’s Biotechnology segment grew 7.0% to $45.3 million to account for 68% of company sales. Segment sales to industrial pharmaceutical/ biotech and academic customers grew 11.7% and 4.0%, respectively, and sales to Pacific Rim distributors and China climbed 10.0% and 24.8%, respectively. Earnings before taxes (EBT) for the segment expanded 8.4% to $32.5 million. Revenues for the R&D Europe segment declined 5.7%, but improved 3.8% on a currency-neutral basis to $17.0 million to make up 25% of sales. R&D Europe EBT fell 21.5% to $5.8 million.

For the year, Techne’s Biotechnology sales grew 2.3% to $177.9 million to account for 66% of sales. Demand from pharmaceutical/biotech customers was flat, but revenues from academic customers, Pacific Rim distributors and China expanded 4.0%, 10.5% and 21.8%, respectively. Segment EBT gained 2.1% to $126.4 million, and gross margins improved 80 basis points to 80.1% of sales. Revenue for the R&D Europe segment edged higher by 0.3% to $72.8 million to make up 27% of sales. Excluding currency, segment sales slipped 0.9%. R&D Europe EBT declined 8.3% to $29.6 million, while gross margins improved 70 basis points to 52.4% of sales.

Second-quarter sales for Thermo Fisher Scientific’s Laboratory Products and Services (LPS) grew 5.1% to $1,680.5 million to account for 63% of company revenues. Acquisitions contributed 0.5% to revenue growth, while currency reduced sales by 0.4%. Revenue growth benefited from higher sales of laboratory equipment and consumables, but was reduced 1.6% due to a cancelled supply contract and lower H1N1-related revenues. LPS adjusted operating income improved 9.9% to $238.7 million. Operating margin expanded 60 basis points to 14.2% of sales due to cost-savings initiatives.

VWR’s second-quarter revenues improved 0.7%, 1.6% organically, to $881.8 million. Currency transactions, net of acquisitions, reduced sales by 0.9%. Within the laboratory distribution businesses, consumables sales were flat, while sales of capital goods declined in the low to mid-single digits. From a market standpoint, pharmaceutical sales declined in the low single digits. Industrial sales grew in the mid-single digits due to customer restocking of consumables and replacements of instruments. Sales to education and governmental entities each grew in the low to mid-single digits. Adjusted operating profits grew 10.0% to $48.0 million, and gross profit margins improved 60 basis points to 28.5% of sales. North American Lab sales grew 1.9%, 0.7% on a currency-neutral basis, to account for 59% of total sales. European Lab sales declined 1.0%, but grew 3.4% organically, to make up 37% of revenues. Currency, net of acquisitions, reduced segment revenue by 4.4%. Science Education revenue fell 2.0%, down 3.4% organically, due to lower discretionary spending by schools. Adjusted operating income for North American Lab and European Lab grew 4.6% and 21.2% to $29.6 million and $20.0 million, respectively. Science Education’s operating loss widened by 50% to $1.2 million.

Bar Graph: Quarterly Sales Performance, January 2007–June 2010

Q1 Q2 Q3 Q4

2007 3618.9 3723.8 3822.0 4078.4

2008 4017.7 4214.5 4117.1 3941.0

2009 3742.7 4001.1 4048.8 4276.2

2010 4187.4 4183.7

Bar Graph: Quarterly Operating Profit Margins, January 2007–June 2010

Q1 Q2 Q3 Q4

2007 15.2% 14.6% 15.2% 14.4%

2008 15.8% 15.3% 16.0% 15.7%

2009 16.1% 15.6% 16.2% 15.7%

2010 18.1% 17.0%

IBO Laboratory Equipment/Consumables Sales Index companies: Biohit Oyj, Diploma (Life Sciences), Gerresheimer (Life Science), Kewaunee Scientific, Life Technologies, Pall (BioPharmaceuticals), Sigma-Aldrich* (Research Essentials, Research Specialties, Research Biotech), Techne (Biotechnology, R&D Europe), Thermo Fisher Scientific (Laboratory Products and Services), and VWR Funding. *Segment operating profit based on company operating margin.