Sigma-Aldrich Earnings Call Nuggets: Current Guidance and Leverage Expectations

Sigma-Aldrich Corporation (NASDAQ:SIAL) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Current Guidance

Amit Bhalla – Citigroup: Rakesh, I just wanted to ask you first question on guidance. I’m just trying to reconcile your organic guidance versus the 6% to 7% we’ve heard you talk about in the past. I think you’ve said that, if you grow the 3% organic that you did ’12, 1% of price, no longer headwind, the Applied markets could give you a point and emerging markets could give you another point. That’s how you laid out in the past getting up to 6% to 7%. Can just walk us through that versus what your current guidance is for 2013?

Rakesh Sachdev – President and CEO: As I said, we bridged 6% to 7%. I think there are couple of fundamental things that have to change for us to get to that 6% to 7%. Our Research business right now is growing in the very low-single-digits. So, I think, we have got our game plan. That’s half of our Company. And as we lay our plans, I think, that growth is going to move up by 1% or 2%, it’s a combination of what we’re doing in the emerging markets. I think as we’re adding more content into our pipeline, into the Research business, that’s going to add more sales growth. But that’s going to give us an additional growth. We are cautiously optimistic of driving up our Applied market growth as our Applied markets are right now growing mid-single-digits. I think our own internal plans are obviously to grow much faster than that and I’m pretty confident with the plans that Frank and his team and all of us are putting together that’s going to give us some additional growth. The SAFC business has been subdued. We grew only 5% in 2012. We expect this business to grow in the high single digits and I know that we had a setback because of some pricing issues in the Hitech business, but with the orders that we’ve begun to see in our custom Pharma business and the SAFC business, the high single-digit growth that we’ve been consistently seeing in our media business, there is no reason why we won’t get return back to the high single digits in our commercial business. So, when you look at the slightly improved growth in Research that we should get, going back to the high single digits in our commercial business and then getting increasingly better in the Applied markets, we get back to the growth rates that we have talked about, the 6%, 7%.

Amit Bhalla – Citigroup: Rakesh, just a follow-up on the SAFC, here I’m just trying to reconcile getting to that high single digits, your order book this quarter grew 2% and quarter-to-quarter it looks like it has been slowing. So, if your order book is in the low to mid-single digits how are you reconciling getting to that high single digits for 2013?