Sigma-Aldrich (Nasdaq: SIAL) Q3 2007 Sales Increase 14.0%, Yielding Diluted EP... (08 that reduced deferred taxes. The Q320...)

Sigma-Aldrich (Nasdaq: SIAL) Q3 2007 Sales Increase 14.0%, Yielding Diluted EPS of $.54.

Date:10/23/2007

08 that reduced deferred taxes. The Q3 2007 diluted EPS comparison also reflects a $.03 per share tax audit benefit in Q3 2006, with the combined effect of these differences adversely impacting the third quarter EPS comparison by $.06.

Gross profit, S,G&A expenses and operating and pretax income, all expressed as a percentage of sales, and the effective tax rate, expressed as a percentage of pretax income, for the third quarters and first nine months of 2007 and 2006, were as follows:

Third Quarter Year-To-Date

2007 2006 2007 2006

Gross profit 50.9% 50.5% 51.2% 51.5%

S,G&A expenses 25.5% 25.6% 25.6% 25.7%

Operating income 22.4% 21.9% 22.7% 22.8%

Pretax income 21.2% 20.4% 21.5% 21.4%

Effective tax rate 33.0% 24.1% 30.2% 28.1%

The higher gross profit margins in Q3 2007 versus levels achieved in Q3 2006 came largely from increased currency benefits and lower inventory write-offs, partially offset by the impact of the February 2007 acquisition of Epichem and its higher cost levels relative to our base business and costs to ramp up production levels to support higher current and expected sales growth levels. S,G&A expense levels, which include new sales positions added throughout the first nine months of 2007 to stimulate growth, particularly for Research Biotech, were almost exactly offset by slower growth or modest declines in certain other operating expense levels which were individually insignificant. Overall, efforts to more fully integrate Epichem produced a modest contribution to third quarter results after being mildly dilutive during the first half of 2007, with the expectation that the acquisition will be about neutral to full year 2007 earnings.

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Sigma-Aldrich (Nasdaq: SIAL) Q3 2007 Sales Increase 14.0%, Yielding Diluted EP...(08 that reduced deferred taxes. The Q320...)