Apogent Reports Record Second Quarter Results, Strong Cash Flow and Margin Improvement.Business Editors/Health/Medical Writers PORTSMOUTH Portsmouth, city, England Portsmouth, city (1991 pop. 174,218) and district, Hampshire, S England, on Spithead Channel. The district includes Portsea (naval station), Southsea (residential district and resort), and the old town of Portsmouth proper. , N.H.--(BUSINESS WIRE)--April 28, 2004 Apogent Technologies Inc. (NYSE NYSE See: New York Stock Exchange : AOT AOT Agency of Transportation (Vermont, USA) AOT Ahead-of-Time AOT Assisted Outpatient Treatment AOT Aerosol Optical Thickness AOT All of Them (band) AOT As Opposed To AOT Among Other Things ), a leading manufacturer of clinical diagnostic and life science research products, today reported financial results for the second quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. ended March 31, 2004. Apogent and Fisher Scientific Fisher Scientific, formally Fisher Scientific International, Inc. and colloquially Fisher was a biotechnology company that provided products and services to the global scientific research and United States clinical laboratory markets. International Inc. (NYSE: FSH FSH follicle-stimulating hormone. FSH abbr. follicle-stimulating hormone Facioscapulohumeral muscular dystrophy (FSH) ) have entered into a definitive agreement to merge See mail merge and concatenate. the two companies. It is presently anticipated that the merger will close during the third quarter of the calendar year. During the second quarter, Apogent completed certain restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities at businesses within its Clinical and Research Groups, which resulted in special charges. Also in the second quarter, Apogent incurred transaction expenses associated with the pending merger with Fisher Scientific International Inc. To ensure clarity Clarity is the property of being clear or transparent. Clarity can refer to one's ability to clearly visualize an object or concept, as in thought, understanding, and the "mind's eye", as well as the traditional notion of visual perception, that is, with the of understanding, we have presented comparative operating results throughout this release both before and after the effects of these special items. For a reconciliation of the adjusted results to U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , please refer to the table on page 3 of this release and to Exhibits 4, 5, 6, and 8. Excluding special items, adjusted income and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the second quarter of fiscal 2004 were $36.8 million and $0.41, respectively. This compares to adjusted income and diluted earnings per share from continuing operations, excluding special items, of $31.1 million and $0.30, respectively, for the second quarter of fiscal 2003. Including the impact of the special items, on a U.S. GAAP basis, income and diluted earnings per share from continuing operations for the second quarter were $34.1 million and $0.38, respectively. These results compare with income and diluted earnings per share from continuing operations for the second quarter of fiscal 2003 of $30.9 million and $0.29, respectively. Excluding special items, adjusted income and diluted earnings per share from continuing operations for the six months ended March 31, 2004 were $68.2 million and $0.75, respectively. This compares to adjusted income and diluted earnings per share from continuing operations, excluding special items, of $59.9 million and $0.57, respectively, for the six months ended March 31, 2003. Including the impact of the special items, on a U.S. GAAP basis, income and diluted earnings per share from continuing operations for the six months ended March 31, 2004 were $62.5 million and $0.68, respectively. These results compare with income and diluted earnings per share from continuing operations for the six months ended March 31, 2003 of $59.7 million and $0.56, respectively. Commenting on the financial results of the Company, Frank H. Jellinek Jellinek is a surname and may refer to:
A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was up 30 basis points over the second quarter of the prior year. This margin improvement, coupled with strong working capital management, also resulted in a substantial improvement in free cash flow generation during the quarter. Our results for the quarter and the year-to-date are consistent with our expectations."
Reconciliation of Income from Continuing Operations
Three Months Ended Six Months Ended
March 31, March 31,
(In Thousands,
Except Per Share Data)
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2004 2003 2004 2003
----------------------------- --------- --------- --------- ---------
U.S. GAAP
Income from continuing
operations $34,057 $30,864 $62,521 $59,679
----------------------------- --------- --------- --------- ---------
Diluted earnings per common
share from continuing
operations $0.38 $0.29 $0.68 $0.56
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Adjusted
Restructuring charges and
asset impairments, net of
tax 440 211 3,312 211
----------------------------- --------- --------- --------- ---------
Transaction expenses 2,286 -- 2,286 --
----------------------------- --------- --------- --------- ---------
Loss on the extinguishment of
debt, net of tax -- -- 108 --
----------------------------- --------- --------- --------- ---------
Adjusted income from
continuing operations $36,783 $31,075 $68,227 $59,890
----------------------------- --------- --------- --------- ---------
Adjusted diluted earnings per
common share from continuing
operations $0.41 $0.30 $0.75 $0.57
----------------------------- --------- --------- --------- ---------
Weighted average diluted
shares outstanding 90,639 104,817 91,272 105,920
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Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter were $297.9 million, compared with $276.6 million in the same period last year, an increase of 7.7%. Organic sales growth for the second quarter was 2.5%, composed of 2.5% organic growth in the Clinical Group and 2.6% organic growth in the Research Group. Net sales for the six months ended March 31, 2004 were $576.6 million, compared with $534.4 million in the same period last year, an increase of 7.9%. Organic sales growth for the six months ended March 31, 2004 was 3.2%, composed of 4.4% organic growth in the Clinical Group and 2.2% organic growth in the Research Group. Organic sales growth during the quarter within the Clinical Group was driven by strong performance at two of our immunodiagnostic immunodiagnostic pertaining to diagnosis by immune reactions. businesses - Lab Vision and Microgenics. Additionally, certain of our clinical consumable A material that is used up and needs continuous replenishment, such as paper and toner. "The low-tech end of the high-tech field!" businesses, including NERL NERL National Exposure Research Laboratory Diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler , reported double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" year-over-year organic sales growth. Growth resulted from increased sales to OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customers and the introduction of new products, including antibodies Antibodies Specialized cells of the immune system which can recognize organisms that invade the body (such as bacteria, viruses, and fungi). The antibodies are then able to set off a complex chain of events designed to kill these foreign invaders. and immunohistochemistry im·mu·no·his·to·chem·is·try n. Microscopic localization of specific antigens in tissues by staining with antibodies labeled with fluorescent or pigmented material. instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. . Year-to-date organic growth within the Clinical Group was 4.4%, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with expectations. During the second quarter, we saw high single-digit to low double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. organic growth in certain segments of our Research Group, including our life science consumable, general-purpose gen·er·al-pur·pose adj. Designed for or suitable to more than one use; broadly useful: a general-purpose loan. general-purpose Adjective plastic labware, and chromatography chromatography (krō'mətŏg`rəfē), resolution of a chemical mixture into its component compounds by passing it through a system that retards each compound to a varying degree; a system capable of accomplishing this is called a businesses. New product introductions, including Barnstead International's Histo-Center and Nalge Nunc International's N-Gen bottles, contributed favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. during the quarter. For this category of general labware and mid-range
adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. capital equipment businesses during the quarter and year-to-date was weak, reflecting continued softness in the market for this category of products. Quarterly and year-to-date comparisons of net sales by business segment are as follows:
(in thousands) Three Months Ended % Total %
March 31, Sales Organic
Business Segment 2004 2003 Increase Increase
--------- --------- -------- --------
Clinical Group $138,770 $132,516 4.7% 2.5%
Research Group 159,177 144,122 10.4% 2.6%
--------- ---------
Total $297,947 $276,638 7.7% 2.5%
========= =========
(in thousands) Six Months Ended % Total %
March 31, Sales Organic
Business Segment 2004 2003 Increase Increase
--------- --------- -------- --------
Clinical Group $268,476 $251,930 6.6% 4.4%
Research Group 308,113 282,506 9.1% 2.2%
--------- ---------
Total $576,589 $534,436 7.9% 3.2%
========= =========
Apogent's net sales by geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. area are as follows:
(in thousands) Three Months Ended
March 31,
Geographic Area 2004 2003
--------- ---------
North America $208,141 $199,580
Europe 62,251 54,594
Asia 20,916 17,043
Other 6,639 5,421
--------- ---------
Total $297,947 $276,638
========= =========
(in thousands) Six Months Ended
March 31,
Geographic Area 2004 2003
--------- ---------
North America $407,189 $390,710
Europe 116,112 101,070
Asia 39,904 32,086
Other 13,384 10,570
--------- ---------
Total $576,589 $534,436
========= =========
DETAILED FINANCIAL RESULTS Please refer to the financial statements at the end of this press release when reviewing the following financial information. As noted previously, the following has been adjusted for special items. Please refer to Exhibits 4, 5, 6, and 8 for reconciliation to U.S. GAAP. Adjusted gross profit for the second quarter of fiscal 2004 was $142.4 million, versus $131.2 million for the same period last year. Adjusted gross margin was 47.8% in the second quarter of this year, versus 47.4% in the second quarter of fiscal 2003. Gross margins benefited from price increase actions and other margin improvement initiatives commenced in fiscal 2003. The adjustment for special items was $0.1 million for the second quarter. Accordingly, without this adjustment, gross profit and margin were $142.3 million and 47.8% for the quarter, compared with gross profit and margin of $131.2 million and 47.4% for the second quarter of fiscal 2003. Adjusted gross profit for the six months ended March 31, 2004 was $273.1 million, versus $256.1 million for the same period last year. Adjusted gross margin was 47.4% for the six months ended March 31, 2004, versus 47.9% for the six months ended March 31, 2003. The adjustment for special items was $0.3 million for the six months ended March 31, 2004. Accordingly, without this adjustment, gross profit and margin were $272.8 million and 47.3% for the six months ended March 31, 2004, compared with gross profit and margin of $256.1 million and 47.9% for the six months ended March 31, 2003. Adjusted selling, general and administrative expenses for the second quarter of fiscal 2004 were $77.0 million, versus $71.3 million for the same period last year. The adjustment for special items was $2.8 million for the three months ended March 31, 2004 and $0.3 million for the three months ended March 31, 2003. Accordingly, without these adjustments, selling, general and administrative expenses were $79.8 million for the second quarter of fiscal 2004, compared with $71.6 million for the second quarter of fiscal 2003. Adjusted selling, general and administrative expenses as a percentage of sales was 25.8%, unchanged from a year ago. Adjusted selling, general and administrative expenses for the six months ended March 31, 2004 were $148.6 million, versus $139.9 million for the same period last year. The adjustment for special items was $7.3 million for the six months ended March 31, 2004 and $0.3 million for the six months ended March 31, 2003. Accordingly, without these adjustments, selling, general and administrative expenses were $155.9 million for the six months ended March 31, 2004, compared with $140.3 million for the six months ended March 31, 2003. Adjusted operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and margin for the second quarter of 2004 were $65.5 million and 22.0%, compared with $59.9 million and 21.7% for the same period last year, an increase of 9.2%. Without the adjustments, operating income and margin were $62.5 million and 21.0% for the second quarter of fiscal 2004, compared with $59.6 and 21.5% million for the second quarter of fiscal 2003. Adjusted operating income and margin for the six months ended March 31, 2004 were $124.5 million and 21.6%, compared with $116.1 million and 21.7% for the same period last year, an increase of 7.2%. Without the adjustments, operating income and margin were $116.9 million and 20.3% for the six months ended March 31, 2004, compared with $115.8 million and 21.7% for the six months ended March 31, 2003. Adjusted earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Adjusted earnings before interest, taxes, depreciation and amortization from continuing operations (Adjusted EBITDA) and margin were $156.8 million and 27.2% for the six months ended March 31, 2004, compared to $146.0 million and 27.3% for the same period in 2003. Adjusted income from continuing operations was $68.2 million for the six months ended March 31, 2004, compared to $59.9 million for the same period in 2003. Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. weighted average shares outstanding were 90.6 million for the quarterly period ended March 31, 2004, compared with fully diluted weighted average shares outstanding of 104.8 million for the same period in fiscal 2003. Fully diluted weighted average shares outstanding were 91.3 million for the six months ended March 31, 2004, compared with fully diluted weighted shares outstanding of 105.9 million for the same period in fiscal 2003. The period over period decreases in fully weighted average shares outstanding resulted from repurchases of Company stock between October October: see month. 2002 and December December: see month. 2003. Free cash flow, defined as net cash provided by operating activities less capital expenditures, for the second quarter of fiscal 2004 was $64.3 million. This compares with free cash flow of $17.0 million for the same period in 2003, an increase of 277.7%. The net cash provided by operating activities for the second quarter of fiscal 2004 was $71.6 million, compared to $29.7 million for the same period last year. Free cash flow for the six months ended March 31, 2004 was $100.0 million. This compares with free cash flow of $34.4 million for the same period in 2003. The net cash provided by operating activities for the six months ended March 31, 2004 was $112.7 million, compared to $57.0 million for the same period last year. The period over period increases in free cash flow resulted from the timing of tax payments, strong working capital management, and reduced capital expenditure. The Company has included information concerning Adjusted EBITDA and free cash flow because management believes that some investors use Adjusted EBITDA and free cash flow as measures of a company's historical ability to service its debt. Adjusted EBITDA and free cash flow should not be considered as alternatives to, or more meaningful than, net income as an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of Apogent's operating performance, or cash flows from operating activities as a measure of liquidity. Adjusted EBITDA and free cash flow have not been prepared in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP). Adjusted EBITDA and free cash flow, as presented by Apogent, may not be comparable to similarly titled measures reported by other companies. Certain other non-GAAP financial measures (i.e., adjusted gross profit, adjusted gross margin, and adjusted operating income) have been provided in order to provide consistency Consistency can refer to:
Inventory was $217.2 million at the end of the second quarter. Inventory turns for the quarter were 2.6, compared with 2.6 for the first quarter of fiscal 2004. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying at the end of the quarter were $185.8 million. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). in the second quarter were 52 days compared with 55 days for the first quarter of fiscal 2004. SPECIAL ITEMS Restructuring expenses during the three months ended March 31, 2004 were $0.7 million. These charges were primarily related to costs associated with the consolidation of facilities and discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of certain product lines. Additionally, during the three months ended March 31, 2004, the Company incurred transaction expenses of $2.3 million associated with the pending merger with Fisher Scientific International Inc. ACQUISITIONS On February February: see month. 20, 2004, Apogent acquired the operating assets Operating Assets Another term for working capital. of H.A.L. Baggin, Inc. (d/b/a Pactech). Pactech designs, develops, manufactures and sells innovative flexible packaging solutions for a broad range of medical, industrial and consumer applications. Net sales from this acquisition for the first full year are expected to approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $13.0 million. On March 5, 2004, Apogent acquired the operating assets of the manufacturing business of J&S Medical Associates, Inc. J&S develops, manufactures and sells controls, calibrators, and reagents for multiple applications within the clinical diagnostics market. Net sales from this acquisition for the first full year are expected to approximate $4.0 million. On April 2, 2004, Apogent acquired the operating assets of EaglePicher Scientific Products (EPSP EPSP excitatory postsynaptic potential. EPSP Excitatory postsynaptic potential Physiology A graded depolarization of a postsynaptic membrane in response to stimulation by a neurotransmitter; EPSPs can be summated but transmitted only over short ). EPSP's products include glass and plastic bottles, jars, closures, vials, tubes, and test kits that have been cleaned and treated for use in high purity Purity: see Pearl, The. Purity See also Modesty. almond symbol of the Virgin Mary’s innocence. [O.T.: Numbers 17: 1–11; Art: Hall, 14] crystal its transparency symbolizes pureness. applications. Net sales from this acquisition for the first full year are expected to approximate $13.0 million. Commenting on the recent acquisition activity, Frank H. Jellinek, Jr., said: "We completed three very nice transactions since the end of the first quarter. Our acquisition of EaglePicher Scientific Products, Pactech, and J&S Medical will complement our existing environmental bottle, packaging, and reagent reagent /re·a·gent/ (re-a´jent) a substance used to produce a chemical reaction so as to detect, measure, produce, etc., other substances. re·a·gent n. businesses, while providing us with a more diverse range of technical products."
UPCOMING COMPANY TRADE SHOW EXHIBITS
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Show Details
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Analytica May 11-14, 2004
Munich, Germany
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American Society of Microbiology May 24-26, 2004
New Orleans, LA
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For further information on industry trade shows that Apogent's subsidiaries attend, please visit Apogent's website at www.apogent.com. ABOUT APOGENT Apogent is a diversified diversified (di·verˑ·s worldwide leader in the design, manufacture, and sale of laboratory and life science products essential for healthcare diagnostics and scientific research. Apogent's companies are divided into two business segments for financial reporting purposes: the Clinical Group and the Research Group. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements made in this press release regarding future matters are forward-looking statements that involve risks and uncertainties. Forward-looking statements, including those dealing with the pending merger with Fisher Scientific International Inc., competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. , customers, acquisitions, sales, profit margins, product development, financial performance, business strategies, growth opportunities, and other future matters are based on current expectations. Our actual results may differ materially from those presently anticipated. Factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the pending merger with Fisher Scientific that could cause actual results to differ materially include the possibilities that: the companies may be unable to obtain stockholder or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals required for the merger; problems may arise in successfully integrating the businesses of the two companies; the merger may involve unexpected costs; the combined company may be unable to achieve cost-cutting synergies; and the businesses may suffer as a result of uncertainty surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. the merger. Other factors that could cause actual results to differ materially include, among others: increased borrowing rates; financial risks associated with our holding company structure; currency and other risks associated with our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. ; risks from rapid technological change and new product introductions; the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of some of the industries and markets into which we sell our products; changes in customer purchasing patterns; competitive factors; challenges associated with acquisitions; the possibility of future restructuring or impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges against our reported earnings; our dependence upon key distributors and original equipment manufacturers; possible disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. of our manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. from labor unrest labor unrest n (US) → conflictividad f laboral , shortages of critical materials or other causes; timing of product launches and other factors that may impact the success of new product introductions; unanticipated costs or other factors that could adversely impact our cost-cutting efforts; regulatory and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. risks; and the other "Cautionary Factors" contained in Item 7 of the Company's most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and our subsequent reports filed with the Securities and Exchange Commission from time to time; and the other "Risk Factors" contained in the Form S-4 Registration Statement filed by Fisher Scientific on April 16, 2004 (SEC file no. 333-114548). We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT On March 17, 2004 Apogent and Fisher Scientific International Inc. announced the proposed merger of Apogent with and into Fisher Scientific. On April 16, 2004, Fisher Scientific filed a Form S-4 registration statement with the SEC in connection with the merger. On April 20, 2004, the parties filed pre-merger notification forms with the US Federal Trade Commission under the Hart-Scott-Rodino Act Hart-Scott-Rodino Act Often used in risk arbitrage. Antitrust act administered by U.S. Department of Justice and the FTC that requires an investor to file a form with the government before he acquires an economic interest in the lesser amount of $15 million or 15% of the . Consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the announced merger is conditioned upon, among other things, receipt of the approval of the transaction from Apogent's shareholders and from Fisher fisher, name of a large North American marten, Martes pennanti. This carnivorous, largely arboreal mammal is found in hardwood forests of Canada, the extreme N United States, and mountain ranges of the W United States. Scientific's shareholders and receipt of regulatory approvals or determinations not to review the merger. In connection with the proposed merger, Apogent and Fisher Scientific have filed or will file relevant materials with the SEC, including one or more registration statement(s) that contain a prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. and a joint proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. , including, as noted above, one that was filed by Fisher Scientific on April 16, 2004. Investors and security holders are urged to read these documents and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain and will contain important information about Fisher Scientific, Apogent, and the merger. Investors and security holders may obtain these documents (and any other documents filed by Fisher Scientific or Apogent with the SEC) free of charge at the SEC's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . In addition, the documents filed with the SEC by Apogent may be obtained free of charge by directing such request to: Director of Investor Relations Investor relations The process by which the corporation communicates with its investors. , 30 Penhallow Street, Portsmouth, NH 03801 or from Apogent's website at www.apogent.com. The documents filed with the SEC by Fisher Scientific may be obtained free of charge by directing such request to: Corporate Secretary, One Liberty Lane, Hampton Hampton, part of Greater London, England Hampton, since 1965 part of the Greater London outer borough of Richmond upon Thames, SE England, on the Thames River. It is the site of Hampton Court Palace, which occupies about eight acres (3. , NH 03842 or from Fisher Scientific's website at www.fisherscientific.com. Investors and security holders are urged to read the definitive joint proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. statement/prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed merger. Apogent, Fisher Scientific, and their respective executive officers and directors may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies from the stockholders of Apogent and Fisher Scientific in favor of upon the side of; favorable to; for the advantage of. See also: favor the merger. Information about the executive officers and directors of Apogent and their ownership of Apogent common stock is set forth in the proxy statement for Apogent's 2004 Annual Meeting of Shareholders, which was filed with the SEC on December 23, 2003. Information about the executive officers and directors of Fisher Scientific and their ownership of Fisher Scientific common stock is set forth in the preliminary joint proxy statement/prospectus for Fisher Scientific's 2004 Annual Meeting of Stockholders and Apogent's Special Meeting of its Stockholders with respect to the merger, which was included in Fisher Scientific's registration statement on Form S-4 that was filed with the SEC on April 16, 2004 (SEC file no. 333-114548). Investors and security holders may obtain more detailed information regarding the direct and indirect interests of Apogent, Fisher Scientific, and their respective executive officers and directors in the merger by reading the definitive joint proxy statement/prospectus regarding the merger when it becomes available.
Exhibit 1
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands except share and per share data)
(unaudited)
March 31, Sept. 30,
2004 2003
----------- -----------
Assets
Current assets:
Cash and cash equivalents $43,809 $18,505
Marketable securities - available for sale 12,673 17,625
Accounts receivable (less allowance for
doubtful accounts of $4,828 and $4,286
respectively) 185,763 179,523
Inventories 217,219 206,549
Deferred income taxes 15,308 15,308
Prepaid expenses and other current assets 20,229 16,518
----------- -----------
Total current assets 495,001 454,028
Property, plant and equipment, net 275,000 282,752
Intangible assets, net 182,602 179,492
Goodwill 1,022,561 999,243
Other assets 40,174 34,476
----------- -----------
Total assets $2,015,338 $1,949,991
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt and overdrafts $11,455 $12,801
Current portion of long-term debt 2,219 2,281
Accounts payable 48,148 50,220
Income taxes payable 30,843 20,053
Accrued payroll and employee benefits 35,062 34,484
Accrued interest expense 9,534 8,844
Restructuring reserve 2,494 1,758
Other current liabilities 45,048 38,883
----------- -----------
Total current liabilities 184,803 169,324
Long-term debt, less current portion 912,478 891,989
Deferred income taxes 148,683 137,683
Other liabilities 28,712 26,948
Commitments and contingent liabilities - -
Shareholders' equity:
Preferred stock, $0.01 par value;
authorized 20,000,000 shares - -
Common stock, $0.01 par value; authorized
250,000,000 shares; issued 107,093,668 and
107,057,865 shares; outstanding 89,296,357
and 92,013,345 shares, respectively 1,071 1,071
Additional paid-in capital 281,077 270,119
Retained earnings 799,713 737,045
Accumulated other comprehensive income
(loss) 16,415 (3,127)
Deferred compensation (5,451) -
Treasury common stock, 17,797,331 and
15,044,520 shares at cost (352,163) (281,061)
----------- -----------
Total shareholders' equity 740,662 724,047
----------- -----------
Total liabilities and shareholders'
equity $2,015,338 $1,949,991
=========== ===========
Exhibit 2
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
2004 2003 2004 2003
--------- --------- --------- ---------
Net sales $297,947 $276,638 $576,589 $534,436
Cost of sales:
Cost of products sold 155,534 145,409 303,522 278,366
Restructuring charges 142 - 287 -
--------- --------- --------- ---------
Total cost of sales 155,676 145,409 303,809 278,366
--------- --------- --------- ---------
Gross profit 142,271 131,229 272,780 256,070
Selling, general and
administrative expenses 76,955 71,310 148,611 139,940
Merger expenses 2,286 - 2,286 -
Restructuring charges and
asset impairments 556 332 4,971 332
--------- --------- --------- ---------
Total selling, general and
administrative expenses 79,797 71,642 155,868 140,272
--------- --------- --------- ---------
Operating income 62,474 59,587 116,912 115,798
Other income (expense):
Interest expense, net (6,992) (10,381) (15,816) (20,792)
Amortization of deferred
financing fees (1,689) (891) (3,012) (1,803)
Loss on extinguishment of
debt - - (171) -
Other, net 74 289 429 780
--------- --------- --------- ---------
Income from continuing
operations before income taxes 53,867 48,604 98,342 93,983
Income taxes 19,810 17,740 35,821 34,304
--------- --------- --------- ---------
Income from continuing
operations 34,057 30,864 62,521 59,679
Discontinued operations, net
of income tax benefit 106 (87,246) 147 (87,328)
--------- --------- --------- ---------
Net income (loss) $34,163 $(56,382) $62,668 $(27,649)
========= ========= ========= =========
Basic earnings per common share
from continuing operations $0.39 $0.30 $0.70 $0.57
Discontinued operations 0.00 (0.84) 0.00 (0.83)
--------- --------- --------- ---------
Basic earnings (loss) per
common share $0.39 $(0.54) $0.70 $(0.26)
========= ========= ========= =========
Diluted earnings per common
share from continuing
operations $0.38 $0.29 $0.68 $0.56
Discontinued operations $0.00 (0.83) $0.00 (0.82)
--------- --------- --------- ---------
Diluted earnings (loss) per
common share $0.38 $(0.54) $0.69 $(0.26)
========= ========= ========= =========
Weighted average basic shares
outstanding 88,408 103,986 89,575 104,863
Weighted average diluted
shares outstanding 90,639 104,817 91,272 105,920
Exhibit 3
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended
March 31,
2004 2003
--------- ---------
Cash flows from operating activities:
Net income (loss) $62,668 $(27,649)
Adjustments to reconcile net income to net cash
provided by operating activities:
Discontinued operations (147) 87,328
Depreciation 23,553 21,376
Amortization of intangible assets and
deferred financing fees 10,845 9,559
Amortization of deferred compensation 495 -
Gain on sale of property plant and
equipment 48 99
Asset impairments 2,156 -
Loss on extinguishment of debt and settlement
of securities lending 171 -
Deferred income taxes 9,245 (6,667)
Changes in assets and liabilities, net of
effects of businesses acquired:
Increase in accounts receivable (1,333) (1,738)
Increase in inventories (5,016) (7,897)
Increase in prepaid expenses and other
current assets (3,636) (3,365)
Decrease in accounts payable (3,484) (5,453)
Increase (decrease) in income taxes
payable 10,032 (4,055)
Decrease in accrued payroll and employee
benefits (260) (2,667)
Increase (decrease) in accrued interest
expense 689 (448)
Increase (decrease) in restructuring
reserve 736 (674)
Increase in other current liabilities 3,401 3,016
Net change in other assets and
liabilities 2,525 (3,801)
--------- ---------
Net cash provided by operating
activities 112,688 56,964
--------- ---------
Cash flows from investing activities:
Capital expenditures (12,700) (22,560)
Proceeds from sales of property, plant and
equipment 2,345 558
Net payments for businesses acquired (17,502) (21,567)
Other investing activities 1,516 1,546
--------- ---------
Net cash used in investing activities (26,341) (42,023)
--------- ---------
Cash flows from financing activities:
Proceeds from revolving credit facility 161,300 323,100
Principal payments on revolving credit
facility (484,406) (260,400)
Proceeds from long-term debt 345,000 -
Principal payments on long-term debt - (23,408)
Proceeds from the exercise of stock options 36,260 2,345
Proceeds from employee stock purchase program 716 927
Purchase of treasury stock (109,468) (69,328)
Financing fees paid (9,728) -
Premium paid on extinguishment of debt and
settlement of securities lending (171) -
Other financing activities - 1,958
--------- ---------
Net cash used in financing activities (60,497) (24,806)
--------- ---------
Effect of exchange rate changes on cash and cash
equivalents (546) 10,944
--------- ---------
Net increase in cash and cash equivalents 25,304 1,079
Cash and cash equivalents at beginning of
period 18,505 16,327
--------- ---------
Cash and cash equivalents at end of period $43,809 $17,406
========= =========
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Adjusted Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Exhibit 4 Three months ended Three months ended
March 31, 2004 March 31, 2003
------------------------------------------------------
Adjusted Adjust- Adjusted
US GAAP Adjust- Results US GAAP ments Results
Results ments (B) (A) Results (B) (A)
--------------------------------------------------------
Net sales $297,947 $- $297,947 $276,638 $- $276,638
Cost of sales 155,534 - 155,534 145,409 - 145,409
Restructuring
charge 142 (142) - - - -
--------- ------- --------- --------- ----- ---------
Total cost of
sales 155,676 (142) 155,534 145,409 - 145,409
--------- ------- --------- --------- ----- ---------
Gross profit 142,271 142 142,413 131,229 - 131,229
Selling, general
and administrative
expenses 76,955 - 76,955 71,310 - 71,310
Merger expenses 2,286 (2,286) - - - -
Restructuring
charges 556 (556) - 332 (332) -
--------- ------- --------- --------- ----- ---------
Total selling,
general and
administrative
expenses 79,797 (2,842) 76,955 71,642 (332) 71,310
--------- ------- --------- --------- ----- ---------
Operating
income 62,474 2,984 65,458 59,587 332 59,919
Other income
(expense):
Interest
expense (6,992) - (6,992) (10,381) - (10,381)
Amortization of
deferred
financing fees(1,689) - (1,689) (891) - (891)
Other, net 74 - 74 289 - 289
--------- ------- --------- --------- ----- ---------
Income from
continuing
operations
before income
taxes 53,867 2,984 56,851 48,604 332 48,936
Income taxes 19,810 258 (C) 20,068 17,740 121 17,861
--------- ------- --------- --------- ----- ---------
Income from
continuing
operations 34,057 2,726 36,783 30,864 211 31,075
Discontinued
operations, net
of income tax
benefit 106 - 106 (87,246) - (87,246)
--------- ------- --------- --------- ----- ---------
Net income
(loss) $34,163 $2,726 $36,889 $(56,382) $211 $(56,171)
========= ======= ========= ========= ===== =========
Basic earnings
per common
share from
continuing
operations $0.39 $0.42 $0.30 $0.30
Discontinued
operations 0.00 0.00 (0.84) (0.84)
--------- --------- --------- ---------
Basic earnings
(loss) per
common share $0.39 $0.42 $(0.54) $(0.54)
========= ========= ========= =========
Diluted earnings
per common
share from
continuing
operations $0.38 $0.41 $0.29 $0.30
Discontinued
operations $0.00 $0.00 $(0.83) $(0.83)
--------- --------- --------- ---------
Diluted earnings
(loss) per
common share $0.38 $0.41 $(0.54) $(0.54)
========= ========= ========= =========
Weighted average
basic shares
outstanding 88,408 88,408 103,986 103,986
Weighted average
diluted shares
outstanding 90,639 90,639 104,817 104,817
(A) These Adjusted Consolidated Statements of Operations are for
informational purposes only and are not in accordance with U.S.
generally accepted accounting principles (GAAP). These statements
exclude the impact of the special items.
(B) Reflects the impact of restructuring charges and transaction
expenses associated with the pending merger with Fisher
Scientific.
(C) The tax rate used for the restructuring adjustments is based on
the tax rate in the jurisdiction in which the income or expense
arose. No tax benefit has been recorded for the transaction
expenses associated with the pending merger with Fisher
Scientific.
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Adjusted Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Exhibit 5 Six months ended Six months ended
March 31, 2004 March 31, 2003
------------------------------------------------------
Adjusted Adjust- Adjusted
US GAAP Adjust- Results US GAAP ments Results
Results ments (B) (A) Results (B) (A)
--------------------------------------------------------
Net sales $576,589 $- $576,589 $534,436 $- $534,436
Cost of sales 303,522 - 303,522 278,366 - 278,366
Restructuring
charge 287 (287) - - - -
--------- ------- --------- --------- ----- ---------
Total cost of
sales 303,809 (287) 303,522 278,366 - 278,366
--------- ------- --------- --------- ----- ---------
Gross profit 272,780 287 273,067 256,070 - 256,070
Selling, general
and administrative
expenses 148,611 - 148,611 139,940 - 139,940
Merger expenses 2,286 (2,286) - - - -
Restructuring
charges and
asset
impairments 4,971 (4,971) - 332 (332) -
--------- ------- --------- --------- ----- ---------
Total selling,
general and
administrative
expenses 155,868 (7,257) 148,611 140,272 (332) 139,940
--------- ------- --------- --------- ----- ---------
Operating
income 116,912 7,544 124,456 115,798 332 116,130
Other income
(expense):
Interest
expense (15,816) - (15,816) (20,792) - (20,792)
Amortization of
deferred
financing fees(3,012) - (3,012) (1,803) - (1,803)
Loss on the
extinguishment
of debt (171) 171 - - - -
Other, net 429 - 429 780 - 780
--------- ------- --------- --------- ----- ---------
Income from
continuing
operations
before income
taxes 98,342 7,715 106,057 93,983 332 94,315
Income taxes 35,821 2,009 (C) 37,830 34,304 121 34,425
--------- ------- --------- --------- ----- ---------
Income from
continuing
operations 62,521 5,706 68,227 59,679 211 59,890
Discontinued
operations, net
of income tax
benefit 147 - 147 (87,328) - (87,328)
--------- ------- --------- --------- ----- ---------
Net income
(loss) $62,668 $5,706 $68,374 $(27,649) $211 $(27,438)
========= ======= ========= ========= ===== =========
Basic earnings
per common
share from
continuing
operations $0.70 $0.76 $0.57 $0.57
Discontinued
operations 0.00 0.00 (0.83) (0.83)
--------- --------- --------- ---------
Basic earnings
(loss) per
common share $0.70 $0.76 $(0.26) $(0.26)
========= ========= ========= =========
Diluted earnings
per common
share from
continuing
operations $0.68 $0.75 $0.56 $0.57
Discontinued
operations $0.00 $0.00 $(0.82) $(0.82)
--------- --------- --------- ---------
Diluted earnings
(loss) per
common share $0.69 $0.75 $(0.26) $(0.26)
========= ========= ========= =========
Weighted average
basic shares
outstanding 89,575 89,575 104,863 104,863
Weighted average
diluted shares
outstanding 91,272 91,272 105,920 105,920
(A) These Adjusted Consolidated Statements of Operations are for
informational purposes only and are not in accordance with U.S.
generally accepted accounting principles (GAAP). These statements
exclude the impact of the special items.
(B) Reflects the impact of restructuring charges, asset impairments,
loss on extinguishment of debt and transaction expenses associated
with the pending merger with Fisher Scientific.
(C) The tax rate used for the restructuring adjustments is based on
the tax rate in the jurisdiction in which the income or expense
arose. No tax benefit has been recorded for the transaction
expenses associated with the pending merger with Fisher
Scientific.
Exhibit 6
Calculation of Adjusted EBITDA
(in thousands)
(historical amounts have been restated
to reflect discontinued operations)
(unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
2004 2003 2004 2003
-------- --------- --------- ---------
Net income (loss) $34,163 $(56,382) $62,668 $(27,649)
Less: Discontinued operations 106 (87,246) 147 (87,328)
Loss on the
extinguishment of
debt - - (171) -
Merger expenses (2,286) - (2,286) -
Restructuring
charges and asset
impairments (698) (332) (5,258) (332)
Income Taxes 19,810 17,740 35,821 34,304
------------------ -------------------
Adjusted income from continuing
operations before income taxes 56,851 48,936 106,057 94,315
Interest expense 6,992 10,381 15,816 20,792
Depreciation 11,969 10,772 23,553 21,376
Amortization 6,117 4,711 11,340 9,559
------------------ -------------------
Adjusted EBITDA $81,929 $74,800 $156,766 $146,042
================== ===================
Exhibit 7
Three Months Ended Six Months Ended
March 31, March 31,
Components of Net Sales Growth 2004 2004
-------------- --------------
(unaudited)
Organic growth 2.5% 3.2%
Acquisitions and base period adjustments 2.5% 2.3%
Foreign exchange 2.7% 2.6%
-------------- --------------
Total sales growth 7.7% 8.1%
============== ==============
Exhibit 8
Calculation of Free Cash Flow
(unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
2004 2003 2004 2003
----------- --------- --------- --------
Net cash provided by
operating activities $71,560 $29,701 $112,688 $56,964
Less: Capital expenditures (7,214) (12,663) (12,700) (22,560)
--------------------- ------------------
Free cash flow $64,346 $17,038 $99,988 $34,404
===================== ==================
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