-- Revenue of $437 million, in-line with expectations; End markets stabilizing

WALTHAM, Mass.--(BUSINESS WIRE)--October 29, 2009--PerkinElmer, Inc. (NYSE: PKI), a global leader focused on improving the health and safety of people and the environment, today reported financial results for the third quarter ended October 4, 2009. The Company reported GAAP earnings per share from continuing operations of $0.14, down from the same period a year ago, primarily due to restructuring charges in the third quarter of 2009 and the benefit of tax audit settlements in the same period a year ago. On a non-GAAP basis, which includes the adjustments noted in the attached reconciliation, the Company announced adjusted earnings per share of $0.30, exceeding the Company’s prior guidance of $0.25-$0.27.

Revenue from continuing operations in the third quarter of 2009 was $437.1 million, a decrease of 9% as compared to the same period a year ago. Foreign exchange rates had an unfavorable impact of 2% and acquisitions had a favorable impact of 1%. Organic revenue, which includes the adjustments noted in the attached reconciliation, declined by 8% as compared to the third quarter of 2008. Revenue from continuing operations in the Human Health and Environmental Health segments decreased by 8% and 9%, respectively, as compared to the same period a year ago. As compared to the third quarter of 2008, organic revenue in the Human Health segment declined by 7% and organic revenue in the Environmental Health segment declined by 8%.

GAAP operating profit from continuing operations for the third quarter of 2009 was $26.4 million, as compared to $43.1 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 was $54.6 million, as compared to $64.2 million in the third quarter of 2008.

GAAP earnings per share from continuing operations for the third quarter of 2009 was $0.14, as compared to $0.35 for the same period in 2008. On a non-GAAP basis, which includes the adjustments noted in the attached reconciliation, adjusted earnings per share was $0.30 as compared to $0.34 in the third quarter of 2008. Operating cash flow from continuing operations was $35.7 million in the third quarter of 2009, as compared to $22.3 million in the third quarter of 2008.

Human Health reported revenue of $180.2 million for the third quarter of 2009. The segment’s GAAP operating profit was $18.9 million, compared to $21.4 million for the same period a year ago. On a non-GAAP basis, which includes the adjustments noted in the attached reconciliation, the segment’s adjusted operating profit was $34.2 million, as compared to $35.9 million in the third quarter of 2008. As a percentage of revenue, the segment’s adjusted operating profit was 19.0%, an increase of approximately 80 basis points as compared to the third quarter of 2008.

During the third quarter of 2009, the Company acquired SYM-BIO LifeScience and Surendra Genetic Labs, which expanded the Company's maternal and newborn diagnostics business while increasing access to advanced health screening in China and India. Additionally, the Company purchased certain assets from GE Healthcare, solidifying its leading position in radiochemical research consumables.

Environmental Health reported revenue of $256.9 million for the third quarter of 2009. The segment’s GAAP operating profit was $15.5 million, compared to $30.5 million for the same period a year ago. On a non-GAAP basis, which includes the adjustments noted in the attached reconciliation, the segment’s adjusted operating profit was $28.3 million, as compared to $37.1 million in the third quarter of 2008. As a percentage of revenue, the segment’s adjusted operating profit was 11.0%, a decrease of approximately 210 basis points as compared to the third quarter of 2008.

“The organization continues to perform very well through this difficult environment, improving our operational execution, while building a stronger company through introducing innovative new products and expanding our capabilities in key growth areas,” said Robert Friel, Chairman and CEO of PerkinElmer. “Overall we believe our end markets are stabilizing and we are seeing some encouraging signs of sequential improvement.”

For the full year 2009, the Company forecasts GAAP earnings per share from continuing operations in the range of $0.77 to $0.80 and, on a non-GAAP basis, which includes the adjustments noted in the attached reconciliation, adjusted earnings per share from continuing operations in the range of $1.23 to $1.26.

The Company will discuss its third quarter results and its outlook for business trends in a conference call on October 29, 2009 at 5:00 p.m. Eastern Time (ET). To access the call, please dial (617) 597-5376 prior to the scheduled conference call time and provide the access code 82595541. 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 code number is 33651295.

A live audio webcast of the call will be available on the Investor section of the Company’s Web site, 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 the Company’s Web site for a two week period beginning approximately two hours after the call.

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.

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to estimates and projections of future earnings per share, cash flow and revenue growth and other financial results, developments relating to our customers and end-markets, and plans concerning business development opportunities. Words such as "believes," "intends," "anticipates," "plans," "expects," "projects," "forecasts," "will" and similar expressions, and references to guidance, are intended to identify forward-looking statements. Such statements are based on management's current assumptions and expectations and no assurances can be given that our assumptions or expectations will prove to be correct. A number of important risk factors could cause actual results to differ materially from the results described, implied or projected in any forward-looking statements. These factors include, without limitation: (1) markets into which we sell our products decline or do not grow as anticipated; (2) fluctuations in the global economic and political environments; (3) our failure to introduce new products in a timely manner; (4) our ability to execute acquisitions and license technologies, or to successfully integrate acquired businesses and licensed technologies into our existing business or to make them profitable; (5) our failure to adequately protect our intellectual property; (6) the loss of any of our licenses or licensed rights; (7) our ability to compete effectively; (8) fluctuation in our quarterly operating results and our ability to adjust our operations to address unexpected changes; (9) significant disruption in third-party package delivery and import/export services or significant increases in prices for those services; (10) disruptions in the supply of raw materials and supplies; (11) the manufacture and sale of products may expose us to product liability claims; (12) our failure to maintain compliance with applicable government regulations; (13) regulatory changes; (14) our failure to comply with healthcare industry regulations; (15) economic, political and other risks associated with foreign operations; (16) our ability to retain key personnel; (17) significant disruption in our information technology systems; (18) restrictions in our credit agreements; (19) our ability to realize the full value of our intangible assets; (20) significant fluctuations in our stock price; (21) reduction or elimination of dividends on our common stock; and (22) other factors which we describe under the caption "Risk Factors" in our most recent quarterly report on Form 10-Q and in our other filings with the Securities and Exchange Commission. We disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

PerkinElmer, Inc. is a global leader focused on improving the health and safety of people and the environment. The Company reported revenue of approximately $2 billion in 2008, has around 8,500 employees serving customers in more than 150 countries, and is a component of the S&P 500 Index. Additional information is available through www.perkinelmer.com or 1-877-PKI-NYSE.

PerkinElmer, Inc. and Subsidiaries
CONSOLIDATED INCOME STATEMENTS


	Three Months Ended						Nine Months Ended
(In thousands, except per share data)	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008

Sales	$	437,065		$	478,747		$	1,303,214		$	1,442,432

Cost of sales		249,495			273,124			740,216			829,665
Research and development expenses		27,336			26,192			78,877			82,963
Selling, general and administrative expenses		121,431			129,800			373,807			402,384
Restructuring and lease charges, net		12,383			6,495			20,206			6,190

Operating income from continuing operations		26,420			43,136			90,108			121,230

Interest income		(124	)		(1,064	)		(777	)		(3,249	)
Interest expense		4,147			6,371			12,964			18,435
Gains on dispositions of investments, net		-			-			-			(1,158	)
Other expense, net		798			742			1,652			2,280

Income from continuing operations before income taxes		21,599			37,087			76,269			104,922

Provision for (benefit from) income taxes		5,578			(4,596	)		22,232			12,908

Net income from continuing operations		16,021			41,683			54,037			92,014

(Loss) income from discontinued operations, net of income taxes		(864	)		2,075			(4,828	)		2,747
(Loss) gain on disposition of discontinued operations, net of income taxes		(1,568	)		8,144			(3,556	)		985

Net income	$	13,589		$	51,902		$	45,653		$	95,746


Diluted earnings (loss) per share:
Continuing operations	$	0.14		$	0.35		$	0.46		$	0.77

(Loss) income from discontinued operations, net of income taxes		(0.01	)		0.02			(0.04	)		0.02
(Loss) gain on disposition of discontinued operations, net of income taxes		(0.01	)		0.07			(0.03	)		0.01

Net income	$	0.12		$	0.43		$	0.39		$	0.80


Weighted average diluted shares of common stock outstanding		116,641			119,609			116,487			119,029


ABOVE PREPARED IN ACCORDANCE WITH GAAP


Additional Supplemental Information:
(per share, continuing operations)

GAAP diluted EPS from continuing operations	$	0.14		$	0.35
Amortization of intangible assets, net of income taxes		0.08			0.08
Purchase accounting adjustments, net of income taxes		0.01			0.00
Tax benefit from audit settlements		-			(0.12	)
Restructuring and lease charges, net of income taxes		0.07			0.04
Adjusted EPS	$	0.30		$	0.34

PerkinElmer, Inc. and Subsidiaries
SALES AND OPERATING PROFIT (LOSS)




			Three Months Ended				Nine Months Ended
(In thousands)			October 4, 2009		September 28, 2008		October 4, 2009		September 28, 2008

Human Health	Sales	$	180,197	$	196,697	$	542,311	$	580,699
	OP$ reported		18,890		21,392		55,646		52,854
	OP% reported		10.5%		10.9%		10.3%		9.1%
	Amortization of intangible assets		9,958		10,311		29,964		30,718
	Purchase accounting adjustments		967		482		2,050		2,771
	Restructuring and lease charges, net		4,411		3,682		9,185		3,721
	OP$ adjusted		34,226		35,867		96,845		90,064
	OP% adjusted		19.0%		18.2%		17.9%		15.5%

Environmental Health	Sales		256,868		282,050		760,903		861,733
	OP$ reported		15,505		30,512		58,622		98,468
	OP% reported		6.0%		10.8%		7.7%		11.4%
	Amortization of intangible assets		4,628		3,760		12,046		11,295
	Purchase accounting adjustments		199		-		795		-
	Restructuring and lease charges, net		7,972		2,813		11,021		2,469
	OP$ adjusted		28,304		37,085		82,484		112,232
	OP% adjusted		11.0%		13.1%		10.8%		13.0%

Corporate	OP$ reported		(7,975)		(8,768)		(24,160)		(30,092)


Continuing Operations	Sales	$	437,065	$	478,747	$	1,303,214	$	1,442,432
	OP$ reported		26,420		43,136		90,108		121,230
	OP% reported		6.0%		9.0%		6.9%		8.4%
	Amortization of intangible assets		14,586		14,071		42,010		42,013
	Purchase accounting adjustments		1,166		482		2,845		2,771
	Restructuring and lease charges, net		12,383		6,495		20,206		6,190
	OP$ adjusted	$	54,555	$	64,184	$	155,169	$	172,204
	OP% adjusted		12.5%		13.4%		11.9%		11.9%





SALES AND REPORTED OPERATING PROFIT PREPARED IN ACCORDANCE WITH GAAP

PerkinElmer, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS



(In thousands)	October 4, 2009			December 28, 2008


Current assets:
Cash and cash equivalents	$	150,586		$	179,110
Accounts receivable, net		348,399			327,636
Inventories, net		224,427			197,967
Other current assets		110,489			111,087
Current assets of discontinued operations		17,363			14,947
Total current assets		851,264			830,747

Property, plant and equipment, net:
At cost		608,858			570,257
Accumulated depreciation		(397,503	)		(365,843	)
Property, plant and equipment, net		211,355			204,414
Marketable securities and investments		2,190			3,459
Intangible assets, net		474,614			452,473
Goodwill		1,473,547			1,396,292
Other assets, net		41,370			38,760
Long-term assets of discontinued operations		4,446			5,622
Total assets	$	3,058,786		$	2,931,767

Current liabilities:
Short-term debt	$	146		$	40
Accounts payable		158,957			169,447
Accrued restructuring and integration costs		17,585			5,904
Accrued expenses		318,952			323,815
Current liabilities of discontinued operations		17,288			17,036
Total current liabilities		512,928			516,242

Long-term debt		576,734			509,040
Long-term liabilities		364,267			335,354
Long-term liabilities of discontinued operations		3,099			3,188
Total liabilities		1,457,028			1,363,824

Commitments and contingencies

Total stockholders' equity		1,601,758			1,567,943
Total liabilities and stockholders' equity	$	3,058,786		$	2,931,767



PREPARED IN ACCORDANCE WITH GAAP

PerkinElmer, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended						Nine Months Ended
	October 4, 2009			September 28, 2008			October 4, 2009			September 28, 2008
(In thousands)

Operating activities:
Net income	$	13,589		$	51,902		$	45,653		$	95,746
Add: loss (income) from discontinued operations, net of income taxes		864			(2,075	)		4,828			(2,747	)
Add: loss (gain) on disposition of discontinued operations, net of income taxes		1,568			(8,144	)		3,556			(985	)
Net income from continuing operations		16,021			41,683			54,037			92,014
Adjustments to reconcile net income from continuing operations
to net cash provided by continuing operations:
Stock-based compensation		2,641			5,399			10,806			13,671
Restructuring and lease charges, net		12,383			6,495			20,206			6,190
Amortization of deferred debt issuance costs		635			634			1,905			1,431
Depreciation and amortization		23,196			22,517			67,075			66,433
Amortization of acquired inventory revaluation		285			-			500			-
Gains on dispositions, net		-			-			-			(1,158	)
Changes in operating assets and liabilities:
Accounts receivable, net		(8,973	)		(14,097	)		(11,733	)		(6,898	)
Inventories, net		(2,210	)		(4,352	)		(16,326	)		(16,113	)
Accounts payable		2,180			(7,453	)		(12,543	)		(1,136	)
Accrued expenses and other		(10,504	)		(28,550	)		(20,063	)		(35,412	)
Net cash provided by operating activities of continuing operations		35,654			22,276			93,864			119,022
Net cash (used in) provided by operating activities of discontinued operations		(1,252	)		10,131			(8,242	)		8,247
Net cash provided by operating activities		34,402			32,407			85,622			127,269

Investing activities:
Capital expenditures		(7,792	)		(13,726	)		(20,839	)		(31,622	)
Changes in restricted cash balances		-			334			1,412			334
Payments for business development activity		-			(12	)		-			(160	)
Proceeds from disposition of investments, net		-			-			-			1,158
Payments for acquisitions and investments, net of cash and cash equivalents acquired		(73,468	)		(894	)		(122,690	)		(87,252	)
Net cash used in investing activities of continuing operations		(81,260	)		(14,298	)		(142,117	)		(117,542	)
Net cash used in investing activities of discontinued operations		(840	)		(291	)		(1,015	)		(1,864	)
Net cash used in investing activities		(82,100	)		(14,589	)		(143,132	)		(119,406	)

Financing Activities:
Payments on debt		(92,000	)		(21,000	)		(277,611	)		(531,500	)
Proceeds from borrowings		142,500			44,000			339,500			409,500
Proceeds from the sale of senior subordinated debt		-			-			-			150,000
Payments of debt issuance costs		-			(128	)		(7	)		(1,969	)
Settlement of cash flow hedges		-			-			-			(11,702	)
Proceeds from (payments on) other credit facilities		2			(12	)		(79	)		(511	)
Tax benefit from exercise of common stock options		5			251			30			359
Proceeds from issuance of common stock under stock plans		183			25,067			2,262			43,435
Purchases of common stock		(32	)		(56,731	)		(14,619	)		(57,139	)
Dividends paid		(8,170	)		(8,318	)		(24,528	)		(24,805	)
Net cash provided by (used in) financing activities		42,488			(16,871	)		24,948			(24,332	)

Effect of exchange rate changes on cash and cash equivalents		4,457			(5,590	)		4,038			1,929

Net decrease in cash and cash equivalents		(753	)		(4,643	)		(28,524	)		(14,540	)
Cash and cash equivalents at beginning of period		151,339			193,451			179,110			203,348
Cash and cash equivalents at end of period	$	150,586		$	188,808		$	150,586		$	188,808



PREPARED IN ACCORDANCE WITH GAAP

PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

	PKI
	Three Months Ended
	September 09					September 08
Adjusted gross margin:
GAAP gross margin	$	187.6		42.9	%	$	205.6		43.0	%
Amortization of intangible assets		9.5		2.2	%		9.5		2.0	%
Purchase accounting adjustments		0.5		0.1	%		0.5		0.1	%
Adjusted gross margin	$	197.5		45.2	%	$	215.6		45.0	%

Adjusted SG&A:
GAAP SG&A	$	121.4		27.8	%	$	129.8		27.1	%
Amortization of intangible assets		(4.5	)	-1.0	%		(4.1	)	-0.9	%
Purchase accounting adjustments		(0.7	)	-0.2	%		-		0.0	%
Adjusted SG&A	$	116.2		26.6	%	$	125.7		26.3	%

Adjusted R&D:
GAAP R&D	$	27.3		6.3	%	$	26.2		5.5	%
Amortization of intangible assets		(0.5	)	-0.1	%		(0.5	)	-0.1	%
Adjusted R&D	$	26.8		6.1	%	$	25.7		5.4	%

Adjusted operating profit:
GAAP operating profit	$	26.4		6.0	%	$	43.1		9.0	%
Amortization of intangible assets		14.6		3.3	%		14.1		2.9	%
Purchase accounting adjustments		1.2		0.3	%		0.5		0.1	%
Restructuring and lease charges, net		12.4		2.8	%		6.5		1.4	%
Adjusted operating profit	$	54.6		12.5	%	$	64.2		13.4	%

	PKI
	Three Months Ended
	September 09					September 08
Adjusted EPS:
GAAP EPS	$	0.12				$	0.43
Discontinued operations		(0.02	)				0.09
GAAP EPS from continuing operations	$	0.14				$	0.35
Amortization of intangible assets, net of income taxes		0.08					0.08
Purchase accounting adjustments, net of income taxes		0.01					0.00
Tax benefit from audit settlements		-					(0.12	)
Restructuring and lease charges, net of income taxes		0.07					0.04
Adjusted EPS	$	0.30				$	0.34

	PKI

	FY 09					FY 08

Adjusted EPS:	Projected
GAAP EPS	$	0.70 - $0.73				$	1.07
Discontinued operations		(0.07	)				0.01
GAAP EPS from continuing operations	$	0.77 - $0.80				$	1.06
Amortization of intangible assets, net of income taxes		0.32					0.30
Discontinuance of interest rate contract related to acquisition financing, net of income taxes		-					0.09
Purchase accounting adjustments, net of income taxes		0.02					0.02
Tax benefit from audit settlements		-					(0.12	)
Restructuring and lease charges, net of income taxes		0.12					0.04
Adjusted EPS	$	1.23 - $1.26				$	1.39

	Human Health
	Three Months Ended
	September 09					September 08
Adjusted operating profit:
GAAP operating profit	$	18.9		10.5	%	$	21.4		10.9	%
Amortization of intangible assets		10.0		5.5	%		10.3		5.2	%
Purchase accounting adjustments		1.0		0.5	%		0.5		0.2	%
Restructuring and lease charges, net		4.4		2.4	%		3.7		1.9	%
Adjusted operating profit	$	34.2		19.0	%	$	35.9		18.2	%

	Environmental Health
	Three Months Ended
	September 09					September 08
Adjusted operating profit:
GAAP operating profit	$	15.5		6.0	%	$	30.5		10.8	%
Amortization of intangible assets		4.6		1.8	%		3.8		1.3	%
Purchase accounting adjustments		0.2		0.1	%		-		0.0	%
Restructuring and lease charges, net		8.0		3.1	%		2.8		1.0	%
Adjusted operating profit	$	28.3		11.0	%	$	37.1		13.1	%

We use the term “organic revenue” to refer to GAAP revenue, excluding the effect of foreign currency translation and acquisitions. We use the related term “organic revenue growth” to refer to the measure of comparing current period organic revenue with the corresponding period of the prior year. We believe that these non-GAAP measures, when taken together with our GAAP financial measures, allow us and our investors to better measure the performance of our investments in technology, to evaluate the long-term performance trends and to assess our ability to invest in the business. Organic revenue growth also provides for easier comparisons of our performance with prior and future periods and relative comparisons to our peers. We exclude the effect of foreign currency translation from these measures because foreign currency translation is subject to volatility and can obscure underlying trends. We exclude the effect of acquisitions because acquisition activity can vary dramatically between reporting periods and between us and our peers, which we believe makes comparisons of long-term performance trends difficult for management and investors, and could result in overstating or understating to our investors the performance of our operations.

We use the term “adjusted gross margin” to refer to GAAP gross margin, excluding amortization of intangible assets, and inventory fair value adjustments related to business acquisitions, and including estimated revenue from contracts acquired in the acquisition of ViaCell, Inc., or ViaCell, that will not be fully recognized due to business combination accounting rules. We use the related term “adjusted gross margin percentage” to refer to adjusted gross margin as a percentage of GAAP revenue. We believe that these non-GAAP measures, when taken together with our GAAP financial measures, allow us and our investors to better measure the performance of our investments in technology, to evaluate the long-term profitability trends and to assess our ability to invest in the business. We exclude amortization of intangible assets from these measures because intangibles amortization charges do not represent what our management and what we believe our investors consider to be costs of producing our products and could distort the additional value generated over the cost of producing those products. In addition, inventory fair value adjustments related to business acquisitions charges also do not represent what our management and what we believe our investors consider to be costs used in producing our products. We include estimated revenue from contracts acquired in the ViaCell acquisition that will not be fully recognized because our GAAP revenue for the periods subsequent to our acquisition do not reflect the full amount of storage revenue on these contracts that would have otherwise been recorded by ViaCell. The non-GAAP adjustment is intended to reflect the full amount of such revenue. Our management and we believe our investors will use this adjustment as a measure of the ongoing performance of the ViaCell business because customers have historically renewed these contracts, although there can be no assurance that customers will do so in the future.

Adjusted Selling, General and Administrative (SG&A) Expense and Adjusted SG&A Percentage

We use the term “adjusted SG&A expense” to refer to GAAP SG&A expense, excluding amortization of intangible assets, and contingent consideration and other costs related to business acquisitions. We use the related term “adjusted SG&A percentage” to refer to adjusted SG&A expense as a percentage of GAAP revenue. We believe that these non-GAAP measures, when taken together with our GAAP financial measures, allow us and our investors to better measure the cost of the internal operating structure, our ability to leverage that structure and the level of investment required to grow our business. We exclude amortization of intangible assets and contingent consideration and other costs related to business acquisitions from these measures because intangibles amortization charges and contingent consideration and other costs related to business acquisitions do not represent what our management and what we believe our investors consider to be costs that support our internal operating structure and could distort the efficiencies of that structure.

We use the term “adjusted R&D expense” to refer to GAAP R&D expense, excluding amortization of intangible assets. We use the related term “adjusted R&D percentage” to refer to adjusted R&D expense as a percentage of GAAP revenue. We believe that these non-GAAP measures, when taken together with our GAAP financial measures, allow us and our investors to better understand and evaluate our internal technology investments. We exclude amortization of intangible assets from these measures because intangibles amortization charges do not represent what our management and what we believe our investors consider to be internal investments in R&D activities and could distort our R&D investment level.

We use the term “adjusted operating profit” to refer to GAAP operating profit, excluding amortization of intangible assets, inventory fair value adjustments related to business acquisitions, contingent consideration and other costs related to business acquisitions, and restructuring and lease charges, and including estimated revenue from contracts acquired in the ViaCell acquisition that will not be fully recognized due to business combination accounting rules. Adjusted operating profit is calculated by subtracting adjusted R&D expense, adjusted SG&A expense, and restructuring and lease charges from adjusted gross margin. We use the related term “adjusted operating profit margin” to refer to adjusted operating profit as a percentage of GAAP revenue. We believe that these non-GAAP measures, when taken together with our GAAP financial measures, allow us and our investors to analyze the costs of the different components of producing and selling our products, to better measure the performance of our internal investments in technology and to evaluate the long-term profitability trends of our core operations. Adjusted operating profit also provides for easier comparisons of our performance and profitability with prior and future periods and relative comparisons to our peers. We believe our investors do not consider the items that we exclude from adjusted operating profit to be costs of producing our products, investments in technology and production, and costs to support our internal operating structure, and so we present this non-GAAP measure to avoid overstating or understating to our investors the performance of our operations. We exclude restructuring and lease charges because they tend to occur due to an acquisition, divestiture, repositioning of the business or other unusual event that could distort the performance measures of our internal investments and costs to support our internal operating structure. We include estimated revenue from contracts acquired in the ViaCell acquisition that will not be fully recognized because our GAAP revenue for the periods subsequent to our acquisition do not reflect the full amount of storage revenue on these contracts that would have otherwise been recorded by ViaCell. The non-GAAP adjustment is intended to reflect the full amount of such revenue. Our management and we believe our investors will use this adjustment as a measure of the ongoing performance of the ViaCell business because customers have historically renewed these contracts, although there can be no assurance that customers will do so in the future.

We use the term “adjusted earnings per share,” or “adjusted EPS,” to refer to GAAP earnings per share, excluding discontinued operations, amortization of intangible assets, inventory fair value adjustments related to business acquisitions, contingent consideration and other costs related to business acquisitions, restructuring and lease charges, and income from significant tax audit settlements, and including estimated revenue from contracts acquired in the ViaCell acquisition that will not be fully recognized due to business combination accounting rules. Adjusted earnings per share is calculated by subtracting adjusted R&D expense, adjusted SG&A expense, restructuring and lease charges, other income/expense and provision for taxes from adjusted gross margin. We believe that this non-GAAP measure, when taken together with our GAAP financial measures, allows us and our investors to analyze the costs of producing and selling our products and the performance of our internal investments in technology and our internal operating structure, to evaluate the long-term profitability trends of our core operations and to calculate the underlying value of the core business on a dilutive share basis, which is a key measure of the value of the Company used by our management and we believe used by investors as well. Adjusted earnings per share also facilitates the overall analysis of the value of the Company and the core measure of the success of our operating business model as compared to prior and future periods and relative comparisons to our peers. We exclude discontinued operations, amortization of intangible assets, inventory fair value adjustments related to business acquisitions, contingent consideration and other costs related to business acquisitions, restructuring and lease charges and income from significant tax audit settlements, as these items do not represent what our management and what we believe our investors consider to be costs of producing our products, investments in technology and production, and costs to support our internal operating structure, which could result in overstating or understating to our investors the performance of our operations. We include estimated revenue from contracts acquired in the ViaCell acquisition that will not be fully recognized because our GAAP revenue for the periods subsequent to our acquisition do not reflect the full amount of storage revenue on these contracts that would have otherwise been recorded by ViaCell. The non-GAAP adjustment is intended to reflect the full amount of such revenue. Our management and we believe our investors will use this adjustment as a measure of the ongoing performance of the ViaCell business because customers have historically renewed these contracts, although there can be no assurance that customers will do so in the future.

The non-GAAP financial measures described above are not meant to be considered superior to, or a substitute for, our financial statements prepared in accordance with GAAP. There are material limitations associated with non-GAAP financial measures because they exclude charges that have an effect on our reported results and, therefore, should not be relied upon as the sole financial measures to evaluate our financial results. Management compensates and believes that investors should compensate for these limitations by viewing the non-GAAP financial measures in conjunction with the GAAP financial measures. In addition, the non-GAAP financial measures included in this earnings announcement may be different from, and therefore may not be comparable to, similar measures used by other companies.

Each of the non-GAAP financial measures listed above are also used by our management to evaluate our operating performance, communicate our financial results to our Board of Directors, benchmark our results against our historical performance and the performance of our peers, evaluate investment opportunities including acquisitions and discontinued operations, and determine the bonus payments for senior management and employees.

CONTACT:
Investor Relations:
PerkinElmer, Inc.
David C. Francisco, 781-663-5677
dave.francisco@perkinelmer.com
or
Media Contact:
PerkinElmer, Inc.
Stephanie R. Wasco, 781-663-5701
stephanie.wasco@perkinelmer.com
or
Additional Media Contact:
Porter Novelli
Kate Weiss, 617-897-8255
kweiss@pnlifesciences.com

PerkinElmer, Inc. and Subsidiaries
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

		PKI
		Q309
Organic revenue growth:
Reported revenue growth		-9%
Less: effect of foreign exchange rates		-2%
Less: effect of acquisitions		1%
Organic revenue growth		-8%


		Human Health
		Q309
Organic revenue growth:
Reported revenue growth		-8%
Less: effect of foreign exchange rates		-2%
Less: effect of acquisitions		1%
Organic revenue growth		-7%


		Environmental Health
		Q309
Organic revenue growth:
Reported revenue growth		-9%
Less: effect of foreign exchange rates		-2%
Less: effect of acquisitions		1%
Organic revenue growth		-8%