Revvity(RVTY)2023-05-11 16:00Revenue Performance - Total revenue for Q1 2023 was $674.9 million, a decrease of $288.3 million, or 29.9%, compared to Q1 2022[86] - Diagnostics segment revenue fell to $346.6 million, down $310.6 million, or 47%, primarily due to decreased demand for COVID-19 products[93] - Life Sciences segment revenue increased to $328.4 million, up $22.4 million, or 7%, driven by growth in pharmaceutical and biotechnology markets[101] Margins and Expenses - Consolidated gross margins decreased by 524 basis points to 56.5% in Q1 2023, primarily due to lower COVID-19 revenue[87] - Operating margins dropped from 27% to 11% in Q1 2023, with expectations of approximately 30% for the full fiscal year[87] - Selling, general and administrative expenses decreased by $26.7 million, or 10%, to $248.6 million in Q1 2023[95] - Research and development expenses were $56.7 million, a slight decrease of $0.8 million, or 1%, compared to Q1 2022[97] Income and Taxation - The effective tax rate from continuing operations was 15.6% for Q1 2023, down from 18.2% in Q1 2022[100] - Segment operating income for Life Sciences increased by $19.3 million, or 17%, to $129.5 million in Q1 2023[102] - Segment operating income for the three months ended April 2, 2023, was $74.4 million, a decrease of 75% from $300.9 million for the same period in 2022[104] Cash Flow and Investments - Net cash provided by operating activities for the three months ended April 2, 2023, was $71.7 million, down from $326.1 million for the same period in 2022, a decrease of $254.4 million[120] - Net cash used in investing activities was $215.1 million for the three months ended April 2, 2023, compared to $48.6 million for the same period in 2022, an increase of $166.5 million[121] - Net cash used in financing activities decreased to $113.2 million for the three months ended April 2, 2023, from $164.9 million in the same period in 2022, a decrease of $51.7 million[122] Share Repurchase and Dividends - The company repurchased 450,238 shares of common stock for an aggregate cost of $57.9 million during the three months ended April 2, 2023[116] - A quarterly cash dividend of $0.07 per share was declared for Q1 FY 2023, with $8.8 million accrued for dividends declared on January 26, 2023, to be paid in May 2023[124] - The company may consider reducing or eliminating its common stock dividend in the future to fund growth investments, repurchase shares, or conserve capital resources[124] Cash and Contingent Considerations - As of April 2, 2023, the company had cash and cash equivalents of $2.3 billion, with $1.9 billion held by non-U.S. subsidiaries[113] - The company recorded contingent consideration obligations of $43.8 million related to acquisitions with open contingency periods as of April 2, 2023[117] - The company expects to use proceeds from the sale of the business for debt maturities, share repurchases, and strategic acquisitions[110] Debt Management and Market Risks - The company has repurchased $32.9 million of its 0.550% senior unsecured notes due in September 2023 and $81.9 million of its 0.850% senior unsecured notes due in September 2024 since the beginning of Q3 FY 2022[123] - The company continues to measure foreign currency risk using the Value-at-Risk model, with no material changes in the measures for its Value-at-Risk analysis[128] - The company is exposed to market risks, including changes in interest rates and currency exchange rates, and manages these risks through derivative transactions[127] - The sensitivity measures for the company's interest rate risk have not changed materially, as detailed in its 2022 Form 10-K[130] - No derivative instruments are outstanding as of April 2, 2023, to manage interest rate exposures[129] Accounting and Regulatory Matters - The company has not adopted any new accounting pronouncements during the three months ended April 2, 2023, and no significant impact from recently issued accounting pronouncements is expected[126]