Apogent Reports Third Quarter and Year-to-Date Results.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. -- 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 third quarter and nine months ended June June: see month. 30, 2004. During the third 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 Research Group, which resulted in special charges. Also in the third quarter, Apogent incurred transaction expenses associated with the pending merger with 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. 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 2 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 third quarter of fiscal 2004 were $37.8 million and $0.41, respectively. This compares to adjusted income and diluted earnings per share from continuing operations, excluding special items, of $36.6 million and $0.36, respectively, for the third 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 third quarter of fiscal 2004 were $34.7 million and $0.36, respectively. These results compare with income and diluted earnings per share from continuing operations for the third quarter of fiscal 2003 of $35.7 million and $0.36, respectively. Excluding special items, adjusted income and diluted earnings per share from continuing operations for the nine months ended June 30, 2004 were $106.0 million and $1.15, respectively. This compares to adjusted income and diluted earnings per share from continuing operations, excluding special items, of $96.5 million and $0.93, respectively, for the nine months ended June 30, 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 nine months ended June 30, 2004 were $97.2 million and $1.05, respectively. These results compare with income and diluted earnings per share from continuing operations for the nine months ended June 30, 2003 of $95.4 million and $0.92, respectively.
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS
Three Months Ended Nine Months Ended
June 30, June 30,
(In Thousands,
Except Per Share Data)
----------------------------------------------------------------------
2004 2003 2004 2003
----------------------------------------------------------------------
U.S GAAP
Income from continuing
operations $34,694 $35,704 $97,216 $95,383
----------------------------------------------------------------------
Diluted earnings per common
share from continuing
operations $0.36 $0.36 $1.05 $0.92
======================================================================
Weighted average diluted shares
outstanding 95,812 100,526 92,884 104,056
======================================================================
Adjusted
Restructuring charges and asset
impairments, net of tax 1,111 915 4,424 1,128
----------------------------------------------------------------------
Transaction expenses 1,953 -- 4,239 --
----------------------------------------------------------------------
Loss on the extinguishment of
debt, net of tax -- -- 106 --
----------------------------------------------------------------------
Adjusted income from continuing
operations $37,758 $36,619 $105,985 $96,511
----------------------------------------------------------------------
Adjusted diluted earnings per
common share from continuing
operations $0.41 $0.36 $1.15 $0.93
----------------------------------------------------------------------
(A) Adjusted weighted average
diluted shares outstanding 92,472 100,526 91,775 104,056
======================================================================
(A) Excludes the impact of convertible debt on weighted average
diluted shares outstanding that became convertible on June 16,
2004 due to the pending merger with Fisher Scientific and will
remain convertible until 15 days after the closing of the
transaction.
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 third quarter were $307.7 million, compared with $278.5 million in the same period last year, an increase of 10.5%. Organic sales growth for the third quarter was 3.9%, composed of 5.1% organic growth in the Clinical Group and 2.8% organic growth in the Research Group. Strong consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: organic sales growth of 3.9% in the third quarter compared favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to 2.5% in the second quarter of fiscal 2004. Net sales for the nine months ended June 30, 2004 were $884.3 million, compared with $812.9 million in the same period last year, an increase of 8.8%. Organic sales growth for the nine months ended June 30, 2004 was 3.4%, composed of 4.6% organic growth in the Clinical Group and 2.4% organic growth in the Research Group.
Quarterly and year-to-date comparisons of net sales by business
segment are as follows:
(in thousands) Three Months Ended % Total %
June 30, Sales Organic
Business Segment 2004 2003 Increase Increase
--------- --------- -------- --------
Clinical Group $141,298 $127,818 10.5% 5.1%
Research Group 166,403 150,660 10.4% 2.8%
--------- ---------
Total $307,701 $278,478 10.5% 3.9%
========= =========
(in thousands) Nine Months Ended % Total %
June 30, Sales Organic
Business Segment 2004 2003 Increase Increase
--------- --------- -------- --------
Clinical Group $409,775 $379,747 7.9% 4.6%
Research Group 474,515 433,167 9.5% 2.4%
--------- ---------
Total $884,290 $812,914 8.8% 3.4%
========= =========
Apogent's net sales by geographic area are as follows:
(in thousands) Three Months Ended
June 30,
Geographic Area 2004 2003
------------- -------------
North America $222,701 $203,894
Europe 58,358 51,416
Asia 19,488 17,327
Other 7,154 5,841
------------- -------------
Total $307,701 $278,478
============= =============
(in thousands) Nine Months Ended
June 30,
Geographic Area 2004 2003
------------- -------------
North America $629,890 $594,604
Europe 174,470 152,486
Asia 59,394 49,413
Other 20,536 16,411
------------- -------------
Total $884,290 $812,914
============= =============
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, some of the information that follows 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 third quarter of fiscal 2004 was $146.7 million, versus $134.6 million for the same period last year. Adjusted gross margin was 47.7% in the third quarter of this year, versus 48.4% in the third quarter of fiscal 2003. The adjustment for special items was $1.4 million for the third quarter of fiscal 2004 and $1.0 million for the third quarter of fiscal 2003. Accordingly, without this adjustment, gross profit and margin were $145.3 and 47.2% for the quarter, compared with gross profit and margin of $133.7 and 48.0% for the third quarter of fiscal 2003. Adjusted gross margin was generally in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with the second quarter of fiscal 2004, but was down year-over-year due primarily to the strategically important acquisitions of QSP QSP Relay (amateur radio Q code) QSP Quality Software Products QSP Quality Samples Program QSP Quiet Supersonic Platform QSP Quick Start Package QSP Quality System Procedure QSP Quality Selection Process QSP Quality Seafood Programme and Pactech, which operate at lower margins. Adjusted gross profit for the nine months ended June 30, 2004 was $419.8 million, versus $390.7 million for the same period last year. Adjusted gross margin was 47.5% for the nine months ended June 30, 2004, versus 48.1% for the nine months ended June 30, 2003. The adjustment for special items was $1.7 million for the nine months ended June 30, 2004 and $1.0 million for the nine months ended June 30, 2003. Accordingly, without this adjustment, gross profit and margin were $418.1 and 47.3% for the nine months ended June 30, 2004, compared with gross profit and margin of $389.8 million and 48.0% for the nine months ended June 30, 2003. Adjusted selling, general and administrative expenses for the third quarter of fiscal 2004 were $79.3 million, versus $69.9 million for the same period last year. The adjustment for special items was $2.4 million for the three months ended June 30, 2004 and $0.5 million for the three months ended June 30, 2003. Accordingly, without these adjustments, selling, general and administrative expenses were $81.7 million for the third quarter of fiscal 2004, compared with $70.4 million for the third quarter of fiscal 2003. Adjusted selling, general and administrative expenses as a percentage of sales were 25.8%, an increase from 25.1% in the third quarter of fiscal 2003, due primarily to the acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. of our Sarbanes-Oxley 404 compliance program, costs associated with our investigation of revenue recognition matters at our MBP (Manchester Bus Powered) A synchronous transmission standard used in industrial networks. It provides 31.25 Kbps over a two-wire connection that delivers power in the bus and intrinsic safety. subsidiary, an increase in subsidiary bonus accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. resulting from improvements in our operational performance, and an increase in medical expenses. Adjusted selling, general and administrative expenses for the nine months ended June 30, 2004 were $227.9 million, versus $209.9 million for the same period last year. The adjustment for special items was $9.6 million for the nine months ended June 30, 2004 and $0.8 million for the nine months ended June 30, 2003. Accordingly, without these adjustments, selling, general and administrative expenses were $237.5 million for the nine months ended June 30, 2004, compared with $210.7 million for the nine months ended June 30, 2003. Adjusted selling, general and administrative expenses as a percentage of sales were 25.8%, unchanged from the nine months ended June 30, 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 third quarter of 2004 were $67.4 million and 21.9% of net sales, compared with $64.7 million and 23.2% of net sales for the same period last year, an increase of 4.1%. Without the adjustments, operating income and margin were $63.6 million and 20.7% of net sales for the third quarter of fiscal 2004, compared with $63.3 million and 22.7% of net sales for the second quarter of fiscal 2003. Adjusted operating income and margin for the nine months ended June 30, 2004 were $191.8 million and 21.7% of net sales, compared with $180.8 million and 22.3% of net sales for the same period last year, an increase of 6.1%. Without these adjustments, operating income and margin were $180.6 million and 20.4% of net sales for the nine months ended June 30, 2004, compared with $179.1 and 22.0% of net sales for the nine months ended June 30, 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 $239.1 million and 27.0% of net sales for the nine months ended June 30, 2004, compared to $225.2 million and 27.7% of net sales for the same period in 2003. Net income and margin for the nine months ended June 30, 2004 were $96.9 million and 11.0% of net sales, compared to $7.9 million and 1.0% of net sales 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 95.8 million for the quarterly period ended June 30, 2004, compared with fully diluted weighted average shares outstanding of 100.5 million for the same period in fiscal 2003. Fully diluted weighted average shares outstanding were 92.9 million for the nine months ended June 30, 2004, compared with fully diluted weighted shares outstanding of 104.1 million for the same period in fiscal 2003. The period-over-period decreases in fully diluted weighted average shares outstanding resulted from repurchases of Company stock between October October: see month. 2002 and December December: see month. 2003. Included in the fully diluted shares outstanding for the three months and nine months ended June 30, 2004 are 3.3 million shares and 1.1 million shares arising from our convertible debt, which became convertible on June 16, 2004 due to the pending merger with Fisher Scientific and will remain convertible until 15 days after the closing of the transaction. For purposes of comparability with our guidance, we have excluded these shares from our adjusted results. No convertible debt was converted as of June 30, 2004. Free cash flow, defined as net cash provided by operating activities less capital expenditures, for the third quarter of fiscal 2004 was $57.8 million. This compares with free cash flow of $43.4 million for the same period in 2003, an increase of 33.2%. The net cash provided by operating activities for the third quarter of fiscal 2004 was $63.5 million, compared to $58.5 million for the same period last year. Free cash flow for the nine months ended June 30, 2004 was $158.3 million. This compares with free cash flow of $77.8 million for the same period in 2003. The net cash provided by operating activities for the nine months ended June 30, 2004 was $176.8 million, compared to $115.4 million for the same period last year. The period-over-period increases in free cash flow resulted from the timing of tax payments and reduced capital expenditures. 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 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 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 $222.3 million at the end of the third quarter. Inventory turns for the quarter were 2.7, compared with 2.6 for the second 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 $191.1 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 third quarter were 54.5 days, compared with 52.0 days for the second quarter of fiscal 2004. SPECIAL ITEMS Restructuring expenses during the three and nine months ended June 30, 2004 were $1.8 million and $7.0 million, respectively. 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 and nine months ended June 30, 2004, the Company incurred transaction expenses of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.0 million and $4.2 million, respectively, associated with the pending merger with Fisher Scientific International Inc.
UPCOMING COMPANY TRADE SHOW EXHIBITS
Show Details
----------------------------------------------------------------------
American Association of Clinical Chemistry July 25 - 29, 2004
Los Angeles, CA
www.aacc.org
----------------------------------------------------------------------
Drug Discovery Technology August 8-13, 2004
Boston, MA
www.drugdisc.com
----------------------------------------------------------------------
Chips to Hits September 20-22, 2004
Boston, MA
www.chipstohits.com
----------------------------------------------------------------------
For further information on industry trade shows that Apogent 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 value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: laboratory and life science products essential for healthcare 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 and scientific research. Apogent's companies are divided into two business segments for financial reporting purposes: Clinical Group and 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), as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. on May 21, 2004. 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 In connection with the proposed merger of Fisher Scientific International Inc. and Apogent Technologies Inc., 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. has filed a registration statement on Form S-4 (SEC File No. 333-114548) on April 16, 2004, which was subsequently amended on May 21, 2004, that contains 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 for Fisher's 2004 Annual Meeting of Stockholders and Apogent's Special Meeting of its Stockholders with respect to the merger. Apogent and Fisher have filed or will file additional relevant materials with the SEC. 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 will contain important information about Fisher, Apogent and the merger. Investors and security holders are urged to read the definitive joint proxy statement/prospectus and the other relevant materials before making any voting or investment decision with respect to the proposed merger. Investors and security holders may obtain these documents (and any other documents filed by Fisher or Apogent with the SEC) free of charge at the SEC's Web site 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 Fisher may be obtained free of charge by directing such request to: Corporate Secretary, 1 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's Web site at www.fisherscientific.com. 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 Web site at www.apogent.com. Fisher, Apogent 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 Fisher and Apogent 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 Fisher and their ownership of Fisher common stock is set forth in the joint proxy statement/prospectus filed on Form S-4, which was declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. effective by the SEC on May 21, 2004. Information about the executive officers and directors of Apogent and their ownership of Apogent common stock is set forth in the 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. for Apogent's 2004 Annual Meeting of Shareholders, which was filed with the SEC on December 23, 2003. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of Fisher, Apogent and their respective executive officers and directors in the merger by reading the joint proxy statement/prospectus regarding the merger.
Exhibit 1
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands except share and per share data)
(unaudited)
June 30, September 30,
2004 2003
-----------------------------
Assets
Current assets:
Cash and cash equivalents $92,872 $18,505
Marketable securites - available for sale 15,166 17,625
Accounts receivable (less allowance for
doubtful accounts of $5,369 and $4,286
respectively) 191,055 179,523
Inventories 222,315 206,549
Deferred income taxes 15,308 15,308
Prepaid expenses and other current assets 19,699 16,518
-----------------------------
Total current assets 556,415 454,028
Property, plant and equipment, net 269,555 282,752
Intangible assets, net 199,833 179,492
Goodwill 1,023,564 999,243
Other assets 39,061 34,476
-----------------------------
Total assets $2,088,428 $1,949,991
=============================
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt and overdrafts $10,889 $12,801
Current portion of long-term debt 2,190 2,281
Accounts payable 47,339 50,220
Income taxes payable 41,584 20,053
Accrued payroll and employee benefits 39,389 34,484
Accrued interest expense 3,780 8,844
Restructuring reserve 3,048 1,758
Other current liabilities 48,851 38,883
-----------------------------
Total current liabilities 197,070 169,324
Long-term debt, less current portion 912,333 891,989
Deferred income taxes 154,827 137,683
Other liabilities 29,350 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 107,120,682
and 107,057,865 shares; outstanding
89,988,443 and 92,013,345 shares,
respectively 1,071 1,071
Additional paid-in capital 287,400 270,119
Retained earnings 833,993 737,045
Accumulated other comprehensive income
(loss) 18,085 (3,127)
Deferred compensation (4,955) -
Treasury common stock, 17,132,239 and
15,044,520 shares at cost (340,746) (281,061)
-----------------------------
Total shareholders' equity 794,848 724,047
-----------------------------
Total liabilities and shareholders'
equity $2,088,428 $1,949,991
=============================
Exhibit 2
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
2004 2003 2004 2003
------------------------------------------
Net sales $307,701 $278,478 $884,290 $812,914
Cost of sales:
Cost of products sold 161,008 143,839 464,529 422,205
Restructuring charges 1,365 955 1,652 955
------------------------------------------
Total cost of sales 162,373 144,794 466,181 423,160
------------------------------------------
Gross profit 145,328 133,684 418,109 389,754
Selling, general and
administrative expenses 79,330 69,923 227,940 209,863
Merger expenses 1,953 - 4,239 -
Restructuring charges and
asset impairments 399 475 5,370 807
------------------------------------------
Total selling, general and
administrative expenses 81,682 70,398 237,549 210,670
------------------------------------------
Operating income 63,646 63,286 180,560 179,084
Other income (expense):
Interest expense, net (6,891) (11,635) (22,707) (32,427)
Amortization of deferred
financing fees (1,681) (1,006) (4,693) (2,809)
Loss on extinguishment of
debt - - (171) -
Other, net 313 163 741 943
------------------------------------------
Income from continuing
operations before income
taxes 55,387 50,808 153,730 144,791
Income taxes 20,693 15,104 56,514 49,408
------------------------------------------
Income from continuing
operations 34,694 35,704 97,216 95,383
Discontinued operations, net
of income tax benefit (413) (188) (267) (87,516)
------------------------------------------
Net income $34,281 $35,516 $96,949 $7,867
==========================================
Basic earnings per common
share from continuing
operations $0.39 $0.36 $1.08 $0.93
Discontinued operations (0.00) (0.00) (0.00) (0.85)
------------------------------------------
Basic earnings per common
share $0.38 $0.36 $1.08 $0.08
==========================================
Diluted earnings per common
share from continuing
operations $0.36 $0.36 $1.05 $0.92
Discontinued operations $(0.00) (0.00) $(0.00) (0.84)
------------------------------------------
Diluted earnings per common
share $0.36 $0.35 $1.05 $0.08
==========================================
Weighted average basic
shares outstanding 89,654 99,486 89,601 103,053
Weighted average diluted
shares outstanding 95,812 100,526 92,884 104,056
Exhibit 3
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
June 30,
2004 2003
--------- ---------
Cash flows from operating activities:
Net income $96,949 $7,867
Adjustments to reconcile net income to
net cash provided by operating activities:
Discontinued operations 267 87,516
Depreciation 34,464 31,819
Amortization of intangible assets and
deferred financing fees 16,754 14,377
Amortization of deferred compensation 991 -
Gain on sale of property plant and
equipment 196 244
Asset impairments 2,693 -
Loss on extinguishment of debt and
settlement of securities lending 171 -
Deferred income taxes 15,370 10,252
Changes in assets and liabilities, net of
effects of businesses acquired:
(Increase) decrease in accounts
receivable (4,518) 2,504
Increase in inventories (8,327) (11,110)
Increase in prepaid expenses and other
current assets (3,111) (3,376)
Decrease in accounts payable (4,892) (6,956)
Increase (decrease) in income taxes
payable 20,735 (6,604)
Increase (decrease) in accrued payroll
and employee benefits 3,933 (1,372)
Decrease in accrued interest expense (5,064) (7,290)
Increase (decrease) in restructuring
reserve 1,290 (298)
Increase in other current
liabilities 6,336 2,842
Net change in other assets and
liabilities 2,532 (4,970)
--------- ---------
Net cash provided by operating
activities 176,769 115,445
--------- ---------
Cash flows from investing activities:
Capital expenditures (18,466) (37,684)
Proceeds from sales of property, plant and
equipment 2,639 1,221
Net payments for businesses acquired (41,983) (21,654)
Other investing activities 696 1,546
--------- ---------
Net cash used in investing
activities (57,114) (56,571)
--------- ---------
Cash flows from financing activities:
Proceeds from revolving credit facility 161,300 469,400
Principal payments on revolving credit
facility (484,406) (469,400)
Proceeds from long-term debt 345,000 250,000
Principal payments on long-term debt - (23,408)
Proceeds from the exercise of stock options 50,770 2,543
Proceeds from employee stock purchase program 1,586 927
Purchase of treasury stock (109,437) (226,348)
Financing fees paid (9,320) (9,168)
Premium paid on extinguishment of debt and
settlement of securities lending (171) -
Other financing activities - 2,510
--------- ---------
Net cash used in financing
activities (44,678) (2,944)
--------- ---------
Effect of exchange rate changes on cash and cash
equivalents (610) 13,893
--------- ---------
Net increase in cash and cash equivalents 74,367 69,823
Cash and cash equivalents at beginning of period 18,505 16,327
--------- ---------
Cash and cash equivalents at end of period $92,872 $86,150
========= =========
Exhibit 4
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Adjusted Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Three months ended June 30, 2004
----------------------------------
Adjusted
US GAAP Adjustments Results
Results (B) (A)
----------------------- ----------
Net sales $ 307,701 $ - $307,701
Cost of sales 161,008 - 161,008
Restructuring charge 1,365 (1,365) -
---------- ------- --------
Total cost of sales 162,373 (1,365) 161,008
---------- ------- --------
Gross profit 145,328 1,365 146,693
Selling, general and administrative
expenses 79,330 - 79,330
Merger expenses 1,953 (1,953) -
Restructuring charges 399 (399) -
---------- ------- --------
Total selling, general and
administrative expenses 81,682 (2,352) 79,330
---------- ------- --------
Operating income 63,646 3,717 67,363
Other income (expense):
Interest expense (6,891) - (6,891)
Amortization of deferred financing
fees (1,681) - (1,681)
Other, net 313 - 313
---------- ------- --------
Income from continuing operations
before income taxes 55,387 3,717 59,104
Income taxes 20,693 653 (C) 21,346
---------- ------- --------
Income from continuing operations 34,694 3,064 37,758
Discontinued operations, net of
income tax benefit (413) - (413)
---------- ------- --------
Net income $ 34,281 $ 3,064 $ 37,345
========== ======= ========
Basic earnings per common share from
continuing operations $ 0.39 $ 0.42
Discontinued operations (0.00) (0.00)
---------- --------
Basic earnings per common share $ 0.38 $ 0.42
========== ========
Diluted earnings per common share
from continuing operations $ 0.36 $ 0.41
Discontinued operations $ (0.00) $ (0.00)
---------- --------
Diluted earnings per common share $ 0.36 $ 0.40
========== ========
Weighted average basic shares
outstanding 89,654 89,654
Weighted average diluted shares
outstanding 95,812 (3,340)(D) 92,472
Three months ended June 30, 2003
-----------------------------------
Adjusted
US GAAP Adjustments Results
Results (B) (A)
------------------------- ---------
Net sales $ 278,478 $ - $278,478
Cost of sales 143,839 - 143,839
Restructuring charge 955 (955) -
----------- ---------- --------
Total cost of sales 144,794 (955) 143,839
----------- ---------- --------
Gross profit 133,684 955 134,639
Selling, general and administrative
expenses 69,923 - 69,923
Merger expenses - - -
Restructuring charges 475 (475) -
----------- ---------- --------
Total selling, general and
administrative expenses 70,398 (475) 69,923
----------- ---------- --------
Operating income 63,286 1,430 64,716
Other income (expense):
Interest expense (11,635) - (11,635)
Amortization of deferred
financing fees (1,006) - (1,006)
Other, net 163 - 163
----------- ---------- --------
Income from continuing operations
before income taxes 50,808 1,430 52,238
Income taxes 15,104 515 15,619
----------- ---------- --------
Income from continuing operations 35,704 915 36,619
Discontinued operations, net of
income tax benefit (188) - (188)
----------- ---------- --------
Net income $ 35,516 $ 915 $ 36,431
=========== ========== ========
Basic earnings per common share
from continuing operations $ 0.36 $ 0.37
Discontinued operations (0.00) (0.00)
----------- --------
Basic earnings per common share $ 0.36 $ 0.37
=========== ========
Diluted earnings per common share
from continuing operations $ 0.36 $ 0.36
Discontinued operations $ (0.00) $ (0.00)
----------- --------
Diluted earnings per common share $ 0.35 $ 0.36
=========== ========
Weighted average basic shares
outstanding 99,486 99,486
Weighted average diluted shares
outstanding 100,526 100,526
(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.
(D) Reflects the impact of convertible debt on weighted average
diluted shares that became convertible on June 16, 2004 due to the
pending merger with Fisher Scientific and will remain convertible
until 15 days after the closing of the transaction.
Exhibit 5
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Adjusted Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Nine months ended June 30, 2004
--------------------------------
Adjusted
US GAAP Adjustments Results
Results (B) (A)
--------------------- ----------
Net sales $884,290 $ - $884,290
Cost of sales 464,529 - 464,529
Restructuring charge 1,652 (1,652) -
-------- ------- --------
Total cost of sales 466,181 (1,652) 464,529
-------- ------- --------
Gross profit 418,109 1,652 419,761
Selling, general and administrative
expenses 227,940 - 227,940
Merger expenses 4,239 (4,239) -
Restructuring charges and asset
impairments 5,370 (5,370) -
-------- ------- --------
Total selling, general and
administrative expenses 237,549 (9,609) 227,940
-------- ------- --------
Operating income 180,560 11,261 191,821
Other income (expense):
Interest expense (22,707) - (22,707)
Amortization of deferred financing
fees (4,693) - (4,693)
Loss on the extinguishment of debt (171) 171 -
Other, net 741 - 741
-------- ------- --------
Income from continuing operations
before income taxes 153,730 11,432 165,162
Income taxes 56,514 2,663 (C) 59,177
-------- ------- --------
Income from continuing operations 97,216 8,769 105,985
Discontinued operations, net of income
tax benefit (267) - (267)
-------- ------- --------
Net income $ 96,949 $ 8,769 $105,718
======== ======= ========
Basic earnings per common share from
continuing operations $ 1.08 $ 1.18
Discontinued operations (0.00) (0.00)
-------- --------
Basic earnings per common share $ 1.08 $ 1.18
======== ========
Diluted earnings per common share from
continuing operations $ 1.05 $ 1.15
Discontinued operations $ (0.00) $ (0.00)
-------- --------
Diluted earnings per common share $ 1.05 $ 1.15
======== ========
Weighted average basic shares
outstanding 89,601 89,601
Weighted average diluted shares
outstanding 92,884 (1,109)(D) 91,775
Nine months ended June 30, 2003
---------------------------------
Adjusted
US GAAP Adjustments Results
Results (B) (A)
----------------------- ---------
Net sales $ 812,914 $ - $812,914
Cost of sales 422,205 - 422,205
Restructuring charge 955 (955) -
---------- --------- --------
Total cost of sales 423,160 (955) 422,205
---------- --------- --------
Gross profit 389,754 955 390,709
Selling, general and administrative
expenses 209,863 - 209,863
Merger expenses - - -
Restructuring charges and asset
impairments 807 (807) -
---------- --------- --------
Total selling, general and
administrative expenses 210,670 (807) 209,863
---------- --------- --------
Operating income 179,084 1,762 180,846
Other income (expense):
Interest expense (32,427) - (32,427)
Amortization of deferred financing
fees (2,809) - (2,809)
Loss on the extinguishment of debt - - -
Other, net 943 - 943
---------- --------- --------
Income from continuing operations
before income taxes 144,791 1,762 146,553
Income taxes 49,408 634 50,042
---------- --------- --------
Income from continuing operations 95,383 1,128 96,511
Discontinued operations, net of
income tax benefit (87,516) - (87,516)
---------- --------- --------
Net income $ 7,867 $ 1,128 $ 8,995
========== ========= ========
Basic earnings per common share from
continuing operations $ 0.93 $ 0.94
Discontinued operations (0.85) (0.85)
---------- --------
Basic earnings per common share $ 0.08 $ 0.09
========== ========
Diluted earnings per common share
from continuing operations $ 0.92 $ 0.93
Discontinued operations $ (0.84) $ (0.84)
---------- --------
Diluted earnings per common share $ 0.08 $ 0.09
========== ========
Weighted average basic shares
outstanding 103,053 103,053
Weighted average diluted shares
outstanding 104,056 104,056
(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.
(D) Reflects the impact of convertible debt on weighted average
diluted shares that became convertible on June 16, 2004 due to the
pending merger with Fisher Scientific and will remain convertible
until 15 days after the closing of the transaction.
Exhibit 6
Calculation of Adjusted EBITDA
(in thousands)
(historical amounts have been restated to
reflect discontinued operations)
(unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
2004 2003 2004 2003
-------- ------- -------- --------
Net income $ 34,281 $35,516 $ 96,949 $ 7,867
Less: Discontinued operations (413) (188) (267) (87,516)
Loss on the
extinguishment of
debt - - (171) -
Merger expenses (1,953) - (4,239) -
Restructuring
charges and asset
impairments (1,764) (1,430) (7,022) (1,762)
Income Taxes 20,693 15,104 56,514 49,408
----------------- ------------------
Adjusted income from continuing
operations before income taxes 59,104 52,238 165,162 146,553
Interest expense 6,891 11,635 22,707 32,427
Depreciation 10,911 10,443 34,464 31,819
Amortization 5,909 4,818 16,754 14,377
---------------- ------------------
Adjusted EBITDA $ 82,815 $79,134 $239,087 $225,176
========= ======= ========= ========
Exhibit 7
Three Nine
Months Months
Ended Ended
June 30, June 30,
Components of Net Sales Growth 2004 2004
(unaudited) -------------- --------------
Organic growth 3.9% 3.4%
Acquisitions and base period
adjustments 4.9% 3.0%
Foreign exchange 1.7% 2.4%
-------------- --------------
Total sales growth 10.5% 8.8%
============== ==============
Exhibit 8
Calculation of Free Cash Flow
(unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
2004 2003 2004 2003
------- -------- -------- --------
Net cash provided by operating
activities $63,527 $ 58,481 $176,769 $115,445
Less: Capital expenditures (5,766) (15,124) (18,466) (37,684)
---------------- ------------------
Free cash flow $57,761 $ 43,357 $158,303 $ 77,761
================= ==================
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