International sales index: efficiency boosts profit margins.

Total IBO International Instrumentation Sales Index revenues for calendar year 2006 grew 7.1% in converted US dollars to $3,026 million, while operating profits jumped 35.3% to $654 million, leading operating margin to improved 450 basis points to 21.6% of sales.

First-half 2007 Index

sales improved 3.7% over the first half of 2006 to $1,576 million, while operating profits growth slowed, increasing 2.4% to $328 million and operating margins declined 30 basis points to 20.8% of sales. Revenues and operating profit were hurt by second quarter 2007 results, which slipped 2.4% and 9.3% to $669 million and $116 million, respectively, mainly due to a 47% decline in sales from JEOL's Scientific Instrument business. The only change to the Index this year is the addition of Tech-comp. Estimates are only included for Oxford Instruments' second quarter 2007 revenues and profit.

Analytik Jena AG reported third quarter sales ended June 30 of 15.2 million [euro] ($20.5 million = 0.74 [euro] = $1) up from 13.9 million [euro] ($17.4 million = 0.80 [euro] = $1), and operating profit of 0.9 million [euro] ($1.2 million), both climbing 9.3%. Growth was largely attributed to strong sales for the Optical and Analytical Solutions businesses, which rose 36.1% and 14.6% to 1.7 million [euro] ($2.3 million) and 7.8 million [euro] ($10.5 million), respectively. Sales for the Bio and Project Solutions businesses declined 3.6% and 2.7% to 0.7 million [euro] ($1.0 million) and 5.0 million [euro] ($6.7 million), respectively. For the first nine months of the company's fiscal year, instrument sales have climbed 12.5% to 31.9 million [euro] ($43.1 million), while Project Solutions sales slipped 1.4% to 17.3 million [euro] ($23.3 million).

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Biotage AB's second quarter revenue edged 2.2% higher to SEK 131.1 million ($19.1 million = SEK 6.87 = $1) from SEK 128.3 million ($17.3 million = SEK 7.40 = $1). Excluding discontinued operations in Chemical Development and assuming constant exchange rates, sales improved 8.0%. Operating profits totaled SEK 11.1 million ($1.6 million) compared to a loss of SEK 2.2 million ($0.3 million), primarily due to lower operating expenses. Gross margins improved 130 basis points to 61.0% of sales due to production efficiency and changes in product mix. Discovery Chemistry product sales slipped 1.0% to SEK 106.3 million ($15.5 million), but with constant exchange rates and excluding Chemical Development sales, improved 5.0%. Segment revenue growth benefited from sales of new consumables and modified systems for evaporation in Europe and Asia. For the second quarter, European sales accounted for 47% of Discovery Chemistry sales, US sales represented 36% and the rest of the world made up 17%. Biosystems products sales grew 18.7%, or 23.0% at constant exchange rates, to SEK 24.8 million ($3.6 million) due to strong demand for Pyrosequencing technology and products. Sales also benefited from new direct sales forces in Europe and the US. Sales to the US accounted for 49% of segment revenues, European sales made up 44% and rest of the world sales represented 7%.

Genetix reported a 73.3% jump in first-half 2007 sales to 10.4 million [euro] ($20.4 million = 0.51 [pounds sterling] = $1) from 6.0 [pounds sterling] million ($10.7 million = 0.56 [pounds sterling] = $1), including a full six-month contribution from Applied Imaging (see IBO 11/30/06), while adjusted operating profits climbed 59.0% to 1.0 million [pounds sterling] ($2.0 million). Applied Imaging contributed revenue of 4.3 million [pounds sterling] ($8.4 million) and an operating profit of 0.4 million [pounds sterling] ($0.8 million). Revenue growth was primarily driven by sales of new cell biology products, which contributed 2.6 million [pounds sterling] ($5.1 million) to account for 43% of first-half sales, excluding Applied Imaging. Total sales from consumables and services grew 78.0% to 2.8 million [pounds sterling] ($5.5 million), or 8.0% excluding Applied Imaging. Revenues were hurt by the weak US dollar and declining sales of traditional instruments. Sales to the UK and the rest of the world accounted for 76% of sales, while the US made up 24%.

For fiscal year-end March 31, the Life Science division of Hitachi High-Technologies improved 9.3% to [yen] 93,281 million ($797.7 million = [yen] 116.94 = $1) from [yen] 85,331 million ($754.0 million = [yen] 113.17 = $1) to account for 9.8% of total revenues. Sales were up 8.8% in reported US dollars. Operating profit for the segment jumped 39.4% to [yen] 12,300 million ($105.2 million), leading operating margin to climb nearly three full points to 13.2% of sales. Revenue growth was strong for new integrated clinical chemistry and immuno-chemistry analyzers and specimen preparation systems in the US and Europe, as well as for DNA sequencers in the US. The company anticipates a challenging market for Life Science due to strong price competition in medical analysis equipment and declining European and US markets.

Horiba's Analytical sales climbed 0.7% in the second quarter to [yen] 9,421 million ($78.0 million = [yen] 120.72 = $1), while segment operating income grew 56.0% to [yen] 368 million ($3.1 million). For the first half of 2007, the Analytical business reported a 7.7% increase in sales to [yen] 19,539 million ($162.7 million = [yen] 120.1 = $1) from fiscal first-half 2006 sales of [yen] 18,139 million ($152.0 million = [yen] 115.6 = $1), accounting for 29% of company sales (see page 12). Operating profit jumped 51% to [yen] 1,428 million ($11.9 million) and operating margin improved 210 basis points to 7.3% of sales. The increase in sales was attributed to strong sales in analytical and measurement equipment for environmental regulation-related businesses, but was offset by declining sales of X-ray analyzers.

Sales for the fiscal year ended March 31 for the Analytical business segment of Oxford Instruments jumped 24.8% to 100.7 million [pounds sterling] ($190.0 million = 0.53 [pounds sterling] = $1) from 80.7 million [pounds sterling] ($144.1 million = 0.56 [pounds sterling] = $1) to make up 62% of company revenues. Operating profit for the segment improved 65.6% to 10.1 million [pounds sterling] ($19.1 million). Revenue growth was fueled by strong demand in the Industrial Analysis and X-Ray Technology businesses, which benefited from new environmental legislation. NanoAnalysis and Plasma Technology also reported strong growth.

Techcomp's revenues for the first half of the year jumped 22.0% to $25.6 million and operating profit rose 35.5% to $1.3 million. Gross profits and gross margin remained stable at 22.5% and 30.9%, respectively (see page 12). Revenue growth was driven by demand in Asian markets due to recent environmental, food safety and products quality concerns. The company anticipates second-half revenue growth to continue as increasing environmental pollution and quality control issues in China and India should help drive demand. The company also plans to aggressively target US and European markets by offering several new proprietary products to its range every year. In addition, Techcomp will expand its product range to include laboratory consumables in the fourth quarter of 2007.

International Instrument Index, Total
% Change

                                 2003    2004    2005    2006    2007

Total Annual Revenues ($M)       2467    2744    2826    3026     --
2nd Quarter Revenues ($M)         558     598     639     686     669
Annual Oper. Profits ($M)         303     426     484     654     --
Annual Oper. Profits (%)         12.3%   15.5%   17.1%   21.6%    --
2nd Quarter Oper. Profits ($M)    49      76      80      128     116
2nd Quarter Oper. Profits (%)    8.8%    12.7%   12.6%   18.7%   17.4%

                                 03/04   04/05   05/06   06/07

Total Annual Revenues ($M)       11.2%   3.0%    7.1%     --
2nd Quarter Revenues ($M)        7.1%    6.9%    7.2%    -2.4%
Annual Oper. Profits ($M)        40.3%   13.6%   13.6%    --
Annual Oper. Profits (%)          --      --      --      --
2nd Quarter Oper. Profits ($M)   54.7%   5.8%    5.8%    -9.3%
2nd Quarter Oper. Profits (%)     --      --      --      --

IBO International Instrumentation Sales Index companies: Analytik Jena
AG, Biotage AB, Genetix, Hitachi High-Technologies (Life Science),
Horiba (Analytical Instruments and Systems), JEOL (Scientific
Instruments), Oxford Instruments (Analytical), QIAGEN NV, Shimadzu
(Analytical and Measuring Instruments), Tecan and Techcomp.