Revenue for the third quarter 2007 was $435.7 million, an increase of 13% versus the third quarter 2006. Revenue growth was 13% in Life and Analytical Sciences and 13% in Optoelectronics, compared to the same period last year. From an end market perspective, third quarter 2007 revenue from Health Sciences, which represented 84% of total revenues for the quarter, increased 13% over the same period of 2006. This increase was driven primarily by strong growth in genetic screening, medical imaging, and service. Changes in foreign exchange rates and acquisitions contributed approximately 4% and 3%, respectively, to overall third quarter 2007 revenue growth.
"We are very pleased with our revenue growth and margin expansion for the quarter. Our investments in new products, services and geographic expansion continue to yield attractive results. Additionally, we announced our pending acquisition of ViaCell, which we believe should further strengthen our genetic screening business by expanding our capabilities in neonatal health," said Gregory L. Summe, Chairman and CEO of PerkinElmer, Inc. "We expect our positive operational and financial momentum to continue through the balance of 2007."
GAAP operating profit was $45.8 million for the third quarter of 2007, compared to $36.5 million for the same period a year ago. On a non-GAAP basis, which includes the adjustments noted in the attached reconciliation, adjusted operating profit in the third quarter 2007 was $58.0 million, or 13.3% as a percentage of GAAP revenue, compared to $48.7 million, or 12.6% as a percentage of GAAP revenue, in the third quarter 2006.
The Company generated cash flow from operations of $23.4 million in the third quarter 2007. Capital expenditures were $10.5 million in the third quarter 2007, an increase of 10% over the same period of 2006. In addition, the Company repurchased 1.1 million shares of its common stock for a cost of approximately $28.9 million in the third quarter 2007. This leaves approximately 2.9 million shares remaining of the Company's stock repurchase program. At September 30, 2007, the Company had cash and cash equivalents of $160.9 million and net debt (defined as long term debt plus short term debt, less cash and cash equivalents) of $86.1 million.
Financial Overview by Reporting Segment
Life and Analytical Sciences reported revenue of $319.3 million for the third quarter 2007, up 13% from revenue of $283.5 million in the third quarter of 2006, driven primarily by growth in the Company's genetic screening, service and environmental businesses, as well as a positive impact from acquisitions, new product introductions, and changes in foreign exchange rates.
The segment's GAAP operating profit for the third quarter 2007 was $29.3 million. On a non-GAAP basis, which includes the adjustments noted in the attached reconciliation, the segment's adjusted operating profit for the third quarter 2007 was $40.7 million, or 12.7% as a percentage of GAAP revenue.
Optoelectronics reported revenue of $116.3 million for the third quarter 2007, up 13% from revenue of $103.4 million in the third quarter 2006, driven primarily by revenue growth in medical imaging and specialty lighting, as well as a positive impact from new product introductions and changes in foreign exchange rates.
The segment's GAAP operating profit for the third quarter 2007 was $24.6 million. On a non-GAAP basis, which includes the adjustments noted in the attached reconciliation, the segment's adjusted operating profit for the third quarter 2007 was $24.2 million, or 20.8% as a percentage of GAAP revenue.
For the fourth quarter 2007, the Company projects revenue to increase in the mid teens with acquisitions and changes in foreign exchange rates contributing approximately 7%. The Company expects to earn GAAP earnings per share of between $0.36 and $0.38, and on a non-GAAP basis, which is expected to include the adjustments noted in the attached reconciliation, adjusted earnings per share in the range of $0.43 and $0.45. In addition, assuming a mid-November closing of the pending ViaCell acquisition, the transaction is expected to contribute in the fourth quarter an incremental 200 basis points to the Company's revenue growth and $0.01 dilution, resulting in non-GAAP adjusted combined earnings per share of between $0.42 and $0.44. The non-GAAP adjusted combined earnings per share is expected to include the adjustments noted in the attached reconciliation.
Conference Call Information
The Company will discuss its third quarter results in a conference call on October 25, 2007, at 5:00 p.m. Eastern Time (ET). To access the call, please dial (617) 597-5343 prior to the scheduled conference call time and provide the access code 90889433. A replay of this conference call will be available approximately two hours after the call. The replay phone number is (617) 801-6888 and the access code is 37041211.
A live audio webcast of the call will be available on the "Investors" section of our Web site, http://www.perkinelmer.com. Please go to the site at least 15 minutes prior to the call in order to register, download, and install any necessary software. An archived version of the webcast will be posted on our Web site approximately two hours after the call and will be available through November 25, 2007.
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings announcement also contains non-GAAP financial measures. The reasons that we use these measures, a reconciliation of these measures to the most directly comparable GAAP measures, and other information relating to these measures are included below following our GAAP financial statements.
PerkinElmer, Inc. is a global technology leader driving growth and innovation in Health Sciences and Photonics markets to improve the quality of life. The Company reported revenues of $1.55 billion in 2006, has 8,500 employees serving customers in more than 125 countries, and is a component of the S&P 500 Index. Additional information is available through http://www.perkinelmer.com or 1-877-PKI-NYSE.