SIGMA-ALDRICH (NASDAQ: SIAL) REPORTS 14.3% GAIN IN Q2 2006 DILUTED EPS ON
RECORD SALES. 2006 DILUTED EPS FORECAST INCREASED $0.10 TO $3.90-$4.00 DUE
TO IMPROVED TAX AND CURRENCY EXPECTATIONS.
ST. LOUIS, MO, 26th July 2006
HIGHLIGHTS:
Sales, Income and EPS Results:
Q2 2006 sales grew to a record level of $448.5 million. Second
quarter and first half 2006 organic sales growth of 1.2% and 5.5%,
respectively, were in-line with expectations.
Q2 2006 operating and pretax income margins remained strong at 23.1% and
21.6%, respectively.
Reported and proforma increases in diluted EPS were 14.3% and 11.8%,
respectively, for Q2 2006. Q2 2006 diluted EPS of $1.04 includes $.06 from
a favorable tax rate (relative to earlier guidance). Comparable proforma
diluted EPS for Q2 2005 was $.93. A reconciliation of proforma to reported
diluted EPS can be found on page 10 of this release.
Outlook
Full year 2006 organic sales growth expectations remain at 7%, reaffirming
the Company's previously announced annual goal. An approximate 1%
carryover benefit from the February 2005 acquisition of the JRH industrial
cell culture business will augment organic growth, resulting in an
expected 8% overall increase in reported sales for full year 2006. At June
30, 2006 rates, currency is expected to benefit second half sales and to
be neutral for the full calendar year. Management is raising its full year
2006 diluted EPS forecast to $3.90 to $4.00, reflecting a lower than
previously expected tax rate and improved currency benefits. This range
also includes an expected impact of about $.16 per share from stock-based
compensation expense under Statement of Financial Accounting Standards No.
123 (R) (SFAS 123(R)). Diluted EPS of $3.76 for 2005 did not include a
$.14 per share impact that would have reduced reported diluted EPS had the
provisions of SFAS 123(R) been applied to that year's diluted EPS.
CEO's STATEMENT:
Commenting on second quarter performance and expectations for the year,
President and CEO Jai Nagarkatti said: "We are pleased with our sales
growth in the first half of 2006 while maintaining operating income
margins and enjoying a boost from a favorable tax rate. This performance
renews our confidence in meeting our organic sales growth expectations for
all of 2006 and enables us to increase our annual diluted EPS guidance to
$3.90 to $4.00."
Nagarkatti continued, "Our new customer centric business unit structure is
meeting or exceeding both our expectations and those of the many customers
with whom I've visited this year. And our fundamental focus remains the
same: to be a leader in life science, high technology and service. We
continue to make progress on each of the five key growth initiatives in
the evolutionary strategic plan we launched roughly a year ago and fully
implemented at the beginning of this year, as follows:
-
Customer
relationships continue to improve as we work with them to meet their
changing needs with new and innovative products and services,
-
Our
ongoing commitment to process improvement allows us to help our
customers, provide challenging work for our employees, maintain margins
that are among the best in our industry and achieve targeted superior
returns for our shareholders, all while investing simultaneously in
future growth opportunities,
-
Our
second quarter acquisitions of Beijing Superior in China and Iropharm in
Ireland support two goals-to expand in international markets and to
reinvest in growth through attractive acquisitions,
-
And, we
continued to increase sales contributions from web-based ordering
through our industry-leading http://www.sigma-aldrich.com web site."
"Based on results to date, we remain confident that these five growth
initiatives will enable us to achieve our targeted organic sales growth of
7% for 2006 and continue our pattern of annual improvements in EPS by
beating our previously shared estimates and reporting full year 2006
diluted EPS of $3.90 to $4.00."
Further details on the results can be obtained on the website at
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=SIAL&script=410&layout=-6&item_id=887349.
About Sigma-Aldrich:
Sigma-Aldrich is a leading Life Science
and High Technology company. Our biochemical and organic
chemical products and kits are used in scientific and genomic research,
biotechnology, pharmaceutical development, the diagnosis of disease and as
key components in pharmaceutical and other high technology manufacturing.
We have customers in life science companies, university and government
institutions, hospitals and in industry. Over one million scientists and
technologists use our products. Sigma-Aldrich operates in 35 countries and
has 7,200 employees providing excellent service worldwide. We are
committed to accelerating our Customers' success through leadership in
Life Science, High Technology and Service.
For more information about Sigma-Aldrich, please visit our award-winning
web site at
http://www.sigma-aldrich.com.
Cautionary Statement:
This release contains forward-looking statements relating to future
performance, goals, strategic actions and initiatives and similar
intentions and beliefs, including the "Highlights", "CEO's Statement",
"Sales Results", "Outlook", and "Other Information-Share Repurchase"
sections contained above and other statements regarding the Company's
expectations, goals, beliefs, intentions and the like regarding future
sales, earnings, share repurchases, acquisitions and other matters. These
statements involve assumptions regarding Company operations, investments
and acquisitions and conditions in the markets the Company serves.
Although the Company believes its expectations are based on reasonable
assumptions, such statements are subject to risks and uncertainties,
including, among others, certain economic, political and technological
factors. Actual results could differ materially from those stated or
implied in this news release, due to, but not limited to, such factors as
(1) changes in pricing and the competitive environment, (2) fluctuations
in foreign currency exchange rates, (3) the impact of acquisitions and
success in integrating and obtaining projected results from the
acquisitions, (4) other changes in the business environment in which the
Company operates, (5) changes in research funding, (6) uncertainties
surrounding government healthcare reform, (7) government regulations
applicable to the business, (8) the impact of fluctuations in interest
rates, (9) the effectiveness of the Company's further implementation of
its global software systems, (10) the ability to retain customers,
suppliers and employees, (11) the success of research and development
activities, (12) changes in worldwide tax rates or tax benefits from
domestic and international operations, and (13) the outcome of the matters
described in Note 12- Contingent Liabilities and Commitments-in the
Company's Form 10-Q report for the quarter ended March 31, 2006. The
Company does not undertake any obligation to update these forward-looking
statements.
At Sigma-Aldrich:
Kirk A.
Richter, Treasurer of Sigma-Aldrich, +1-314-286-8004
Media enquiries to Northbank Communications:
Marc
Egelhofer, Tel: +44 (0)1260 296505
