Apogent Technologies Inc. Announces Fourth Quarter and Year-end Results.Business/Technology Editors 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)--Nov. 12, 2001 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 laboratory and life science products, announced today its financial results for the fourth quarter and year ended September September: see month. 30, 2001. In addition, Apogent announced a number of small acquisitions. FOURTH QUARTER 2001 RESULTS 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 fourth quarter were $258.2 million, an increase of $29.6 million or 13.0% over the fourth quarter of fiscal 2000. Excluding the unfavorable impact of foreign currency translation of approximately $1.2 million, reported net sales would have increased $30.8 million or 13.5% for the fourth quarter. Internal or organic sales growth was a record 7.5% versus 1.2% in the fourth quarter of 2000. Quarterly comparisons of net sales revenue by line of business are as follows:
Quarter Ended 9/30
(in 000's) Growth at Growth
Actual FX
2001 2000 Rates Neutral
Clinical Diagnostics $122,217 $106,400 14.9% 17.0%
Labware and Life Sciences 109,531 94,906 15.4% 18.8%
Laboratory Equipment 26,459 27,283 (3.0%) (2.5)
TOTAL $258,207 $228,589 13.0% 15.1%
With this press release, as noted in the table above, Apogent has changed its reporting lines of business. The major change is the combination of the former Clinical and Industrial line of business with the former 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 Microbiology microbiology: see biology. microbiology Scientific study of microorganisms, a diverse group of simple life-forms including protozoans, algae, molds, bacteria, and viruses. line of business. Historical data in this new line of business format will be reported in Apogent's upcoming 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. filing with the Securities and Exchange Commission. Quarterly comparisons of geographic net sales revenue are as follows:
Quarter Ended 9/30
Growth at Actual
(in 000's) 2001 2000 Rates
United States $188,399 $169,324 11.3%
Europe 42,554 36,271 17.3%
Japan 9,940 7,867 26.4%
Other 17,314 15,127 14.5%
TOTAL $258,207 $228,589 13.0%
Gross margin for the quarter was 48.9%. Adjusting gross margin for the unfavorable impact of foreign currency of $1.0 million, reported gross margin would have been 49.3% versus 49.8% in the fourth quarter of last year, after adding back last year's restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . 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.
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. of $59.4 million was 12.0% or $6.4 million higher than the $53.0 reported last year after adjusting last year for restructuring. Net interest expense for the quarter was $11.6 million versus $13.1mm for the comparable quarter last year. This reduction occurred due to aggressive debt, working capital and cash management at Apogent and due to a significantly reduced interest rate environment year-to-year. The effective tax rate for the quarter was 37.9%, which was 1.1%, lower than forecast. This decrease was primarily due to tax planning Tax planning Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax filing status that is most beneficial to the taxpayer. . More specifically, the company has increased the tax efficiency of the structure of its 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. and has developed programs to increase domestic tax credits. These timely, proactive tax programs helped to offset the unfavorable impact of foreign currencies this year and will provide ongoing benefits for the company and its shareholders. Net income 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 was $29.4 million for the fourth quarter versus comparable net income of $23.8 million for the fourth quarter last year after adjusting for restructuring, an increase of $5.6 million or 23.5%. 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 (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) from continuing operations for the quarter were 27 cents versus 22 cents for the fourth quarter of last year excluding a restructuring charge, an increase of 22.7%. Depreciation and amortization were $8.2 million and $12.5 million, respectively, for the quarter versus $8.0 million and $11.0 million, respectively, for the comparable quarter last year. Capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. for the quarter was $17.4 million versus $15.0 million in the comparable period last year. 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 were $183.3 million and inventories were $167.4 million at the end of the quarter. 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). were 62 days compared with 63 days for the comparable quarter last year. Inventory turnover was 2.6 times versus 2.8 times for the comparable period last year. As of September 30, 2001, Apogent had $657 million of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. obligations composed as follows: Senior Notes $324 million Revolving Line of Credit $209 million Sale/Leaseback $ 12 million Purchase Notes/Leases $112 million Total Long-Term Debt $657 million Apogent's President and Chief Executive Officer, Frank H. Jellinek, Jr., stated "This was another very strong quarter for the company, generating a record internal revenue growth of 7.5% versus 4.1% for the comparable period last year. Apogent utilized its scale, key customer relationships, new product introductions, and broad market diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. to drive successful operating results for the quarter." Mr. Jellinek continued, "The acquisition program has been active and the pipeline remains healthy as we continue to evaluate and close exciting opportunities. This past quarter, Apogent completed six acquisitions and one joint venture. In October, Apogent purchased three companies including Chromacol/Epsom, Barden Engineering and Cosmotec. With these strategic acquisitions, we have continued to find product line extensions Product line Extensions and Patient safety In a world of product line extensions, there are many different products with similar names. Examples of these include oxycodone versus oxycontin (oycodone CR), buproprion vs buprion SR vs bruproprion XL, codeine versus codeine contin for existing production facilities and enhancements to our technical and manufacturing capabilities." FISCAL YEAR 2001 RESULTS Net sales for fiscal year 2001 were $984.5 million, an increase of $120.9 million or 14.0% over fiscal year 2000. Excluding the unfavorable impact of foreign currency translation of approximately $10.1 million, reported net sales would have increased $131.0 million or 15.2% for fiscal year 2001. Internal or organic sales growth for the year was a record 7.1% versus 4.1% for fiscal year 2000. Annual comparisons of net sales revenue by line of business are as follows:
Year Ended 9/30
(in 000's) Growth at
Actual Growth
2001 2000 Rates FX Neutral
Clinical Diagnostics $477,233 $413,565 15.4% 18.3%
Labware and Life Sciences 400,823 347,437 15.4% 20.4%
Laboratory Equipment 106,409 102,573 3.7% 4.5%
TOTAL $984,465 $863,575 14.0% 17.3%
Annual comparisons of geographic net sales revenue are as follows:
Year Ended 9/30
Growth at Actual
(in 000's) 2001 2000 Rates
United States $726,322 $644,171 12.8%
Europe 159,962 132,453 20.8%
Japan 35,530 31,513 12.7%
Other 62,651 55,438 13.0%
TOTAL $984,465 $863,575 14.0%
Gross margin for fiscal year 2001 was 48.6%. Adjusting gross margin for the unfavorable impact of foreign currency of $5.0 million, reported gross margin would have been 49.1% versus 49.4% for fiscal year 2000, excluding restructuring charges. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 14.2% to $308.1 million compared with $269.8 million, adjusted for restructuring charges. Operating income of $225.3 million versus $203.2 million last year, an increase of 10.9% or $22.1 million after adjusting for restructuring. Adjusting operating income for the unfavorable impact of foreign currency of $7.8 million, reported operating income would have been $29.9 million higher than last year representing an increase of 14.7%. Net income from continuing operations, excluding restructuring, was $110.5 million for the year versus comparable income of $93.5 million for last year, an increase of $17 million or 18.2%. Depreciation and amortization were $33.4 million and $44.7 million, respectively, for the year versus $29.3 million and $37.3 million, respectively, for last year. Capital spending for the year was $52.9 million versus $42.4 million last year. During the fourth quarter, Apogent developed and executed a financing in the convertible bond capital market. The financing closed on October 10, 2001 with favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms including: $300 million of new funds acquired, contingent convertibility clauses, 2.25% cash coupon, 32% premium, and no call/no put 3 year provisions. Apogent accomplished all of its objectives with this financing including: reducing its debt cost of capital, strengthening its balance sheet, continuing to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. its funding sources, creating additional liquidity in these uncertain financial markets, and adding new, qualified institutional investors qualified institutional investor An institutional investor that is permitted by the Securities and Exchange Commission to trade private placement securities without registering the securities with the SEC. to the Apogent story. Proceeds from the financing were used to repay outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and general corporate purposes. The following tables represent Apogent's 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. cash earnings and fully diluted reported (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) earnings per share from continuing operations adjusted for restructuring charges for fiscal years 2000 and 2001. Cash earnings per share is calculated by adding back to net earnings the after-tax impact of amortization. The company believes that both reported earnings and cash earnings are pertinent PERTINENT, evidence. Those facts which tend to prove the allegations of the party offering them, are called pertinent; those which have no such tendency are called impertinent, 8 Toull. n. 22. By pertinent is also meant that which belongs. Willes, 319. measures of its operating performance.
FULLY DILUTED CASH EARNINGS FROM CONTINUING OPERATIONS
(in dollars and cents per share)
1Q 2Q 3Q 4Q YEAR
Fiscal Year 2000 .25 .30 .29 .30 $1.14
Fiscal Year 2001 .28 .35 .34 .35 $1.32
Percent Change 12.0% 16.7% 17.2% 16.7% 15.8%
FULLY DILUTED REPORTED (GAAP) EARNINGS FROM CONTINUING OPERATIONS
(in dollar and cents per share)
1Q 2Q 3Q 4Q YEAR
Fiscal Year 2000 .19 .24 .22 .23 $0.88
Fiscal Year 2001 .21 .28 .26 .27 $1.02
Percent Change 10.5% 16.7% 18.2% 17.4% 15.9%
ACQUISITIONS On July 25, 2001 Apogent's Murex mu·rex n. pl. mu·ri·ces or mu·rex·es Any of various marine gastropods of the genus Murex common in tropical seas and having rough spiny shells, especially M. trunculus, the source of Tyrian purple. division in the United Kingdom purchased a latex latex, emulsion of a polymer (e.g., rubber) in water (see colloid). Natural latexes are produced by a number of plants, are usually white in color, and often contain, in addition to rubber, various gums, oils, and waxes. agglutination agglutination, in biochemistry agglutination, in biochemistry: see immunity. agglutination, in linguistics agglutination, in linguistics: see inflection. product line from its supplier, Medtek Diagnostics LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . On September 11, 2001 Apogent's Naugatuck Glass division purchased the Daniel Mirror Company, a manufacturer of mirrors. On October 19, 2001 Apogent's ABgene division purchased Barden Engineering in the United Kingdom, its primary manufacturer of industrial tooling. On October 31, 2001 Apogent's Matrix Technologies division purchased Cosmotec Company, LTD LTD 1 Laron-type dwarfism 2 Leukotriene D 3 Long-term depression, see there 4. Long-term disability in Tokyo, Japan, its primary manufacturer of high-throughput liquid dispensing dispensing provision of drugs or medicines as set out properly on a lawful prescription. A prescription can only be filled, the drugs supplied, by a registered pharmacist, veterinarian, dentist or member of the medical profession. instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. . COMPANY OUTLOOK As of October 1, 2001, Apogent adopted Statement of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 141") and Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " ("SFAS 142"). These statements require that goodwill and certain intangible assets not be amortized. Instead, the company is required to review them periodically and write them down if they are determined to be impaired. Apogent is currently in the process of evaluating the effect that the adoption of these statements will have on its financial statements. The following guidance for fiscal year 2002 reflects Apogent's best estimate of the effect of implementation of these statements. For fiscal year 2002, management expects that the operating advantages Apogent exhibited in this last year will continue--namely, benefit of scale, diversification, internal growth, new product development, key customer relationships, strategic acquisitions and its liquid, investment grade balance sheet. However, management is also more cautious in its outlook for instrumentation and equipment sales in fiscal 2002 than it was for 2001. Many instrumentation and equipment companies have seen and reported softness in the ordering pattern, principally from large pharmaceutical and biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. companies, in the past quarter or so. Apogent is not immune from this potential for softness as approximately 6% of its revenues are related to instrumentation and 2-3% of its revenues are related to lab equipment for industrial purposes. Given these demonstrated operating advantages, tempered by potential softness in approximately 8-9% of its core business, Apogent's overall revenue is expected to increase by 10-15% for fiscal year 2002. Internal or organic revenue growth is expected to be 6-7% for the year. Gross margin is expected to be consistent with fiscal year 2001 at 48-50% and operating income return on sales Return on sales A measurement of operational efficiency equalingnet pre-tax profits divided by net sales expressed as a percentage. return on sales The portion of each dollar of sales that a firm is able to turn into income. , on the new basis of accounting for goodwill, will likely be between 24% and 26%. The new basis of accounting is expected to result in an improvement in fiscal year 2002 operating income of approximately $27 to $32 million. Apogent estimates that fully diluted earnings per share (EPS) will increase 12% to 15% for fiscal year 2002. Based on a fully diluted, weighted average number of shares of approximately 109,000,000 combined with the new basis of accounting for goodwill, EPS is expected to range from $1.30 to $1.40 next year. Assuming an EPS target of $1.33 for the year, management expects the quarterly pacing to be similar to fiscal year 2001. For example, at an annual EPS outlook of $1.33, a quarterly expectation of $0.27, $0.33, $0.36 and $0.37 appears reasonable based on the information available to management at this time. This EPS outlook excludes any transitional 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. related write-offs that may need to be recorded once the Financial Accounting Standards Board's implementation guidance for SFAS 141 and 142 is finalized See finalization. . The EPS estimate is based on an approximately 37% overall tax rate compared with 39.2% recorded in fiscal year 2001. This 2.2% decrease in Apogent's expected tax rate is entirely due to the elimination of goodwill amortization per SFAS 142. UPCOMING EVENTS Company Conference Call On Tuesday, November 13 at 11 A.M. EST EST electroshock therapy. EST abbr. electroshock therapy , Apogent will host a conference call to discuss its fourth quarter and year-end financial results for the period ended September 30, 2001. The dial-in numbers for the teleconference are:
Domestic Callers (800) 582-6982
International Callers (212) 748-2711
The conference call will be simultaneously audio webcast on Apogent's website in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section at www.apogent.com. An archive of the webcast will be available on Apogent's website until December 14, 2001. A telephone replay of the call will also be available until 12:00 P.M. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on November 15, 2001. The telephone replay numbers are (800) 633-8284 (Domestic Callers) or (858) 812-6440 (International Callers), reservation number 17509278#. Company Presentations Apogent Technologies will present at the following upcoming investor conferences:
Conference Details
Credit Suisse First Boston Healthcare November 16, 2001 at 8:00 am
Conference MST Arizona Biltmore
Scottsdale, AZ
JP Morgan H&Q Healthcare Conference January 7-10, 2002
Westin St. Francis
San Francisco, CA
Lehman Brothers Global Healthcare February 25-28, 2002
Conference Disney Grand Floridian
Orlando, FL
Bank of America Healthcare Conference April 2-4, 2002
Four Seasons
Las Vegas, NV
For further information on upcoming investor events, including copies of the written presentation materials from investor conferences, please visit the Investor Relations section of Apogent's website at www.apogent.com. Company Trade Show Exhibits Apogent companies will exhibit at the following upcoming industry trade shows:
Show Details Apogent Companies
Attending
Association for January 26-30, 2002 ABgene
LabAutomation Palm Springs, CA Genevac
www.labautomation.org Molecular BioProducts
Robbins Scientific
Seradyn
For further information on industry trade shows that Apogent companies attend, please visit Apogent's website. BUSINESS DESCRIPTION Apogent Technologies Inc. is a diversified diversified (di·verˑ·s , worldwide leader in the design, manufacture, and sale of value-added laboratory and life science products essential for healthcare diagnostics and scientific research. Apogent's three business segments include Clinical Diagnostics, Labware and Life Sciences, and Laboratory Equipment. NOTE REGARDING 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. This press release contains forward-looking statements as defined under Federal securities laws, including statements concerning the Company's strategic and financial goals and market growth that involve risks and uncertainties. These and other statements that relate to future results and events are based on the Company's current expectations. Actual results may differ materially from those presently anticipated. Factors that could cause actual results to differ materially include: interest rate fluctuations, foreign currency fluctuations, levels of inventory held by OEM's and distributors, the intensity of competition, the availability, cost and timing of acquisitions, and other "Cautionary Factors" contained in the Company's periodic filings with the Securities and Exchange Commission. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. The Company's financial results are summarized below: (all amounts stated in thousands except per share data in cents)
Fourth Quarter Ended September 30
%
2001 2000 Change
Net sales $258,207 $228,589 13.0
Gross profit 126,309 109,465 15.4
Selling, general & administrative 66,944 66,708 0.4
Operating income 59,365 42,757 38.8
Income before income taxes,
discontinued operations
and extraordinary items 47,373 30,029 57.8
Income taxes 17,982 13,049 37.8
Income from continuing operations
before extraordinary items 29,391 16,980 73.1
Discontinued operations - 6,724 NM
Income before extraordinary item 29,391 23,704 24.0
Extraordinary item - - NM
Net income 29,391 23,704 24.0
Basic earnings per common share
from continuing operations $0.28 $0.16 73.8
Discontinued operations - 0.07 NM
Extraordinary items - - NM
Basic earnings per common share 0.28 0.23 20.8
Diluted earnings per common share
from continuing operations 0.27 0.16 69.2
Discontinued operations - 0.06 NM
Extraordinary items - - NM
Diluted earnings per common share 0.27 0.22 23.0
Average basic shares outstanding 105,759 105,184 0.6
Average diluted shares outstanding 108,627 106,747 1.9
NM - Not meaningful
Year-Ended September 30
%
2001 2000 Change
Net sales $984,465 $863,575 14.0
Gross profit 478,276 422,130 13.3
Selling, general & administrative 253,560 229,141 10.7
Operating income 224,716 192,989 16.4
Income before income taxes,
discontinued operations
and extraordinary items 180,739 144,325 25.2
Income taxes 70,868 57,601 23.0
Income from continuing operations
before extraordinary items 109,871 86,724 26.7
Discontinued operations (11,824) 41,597 NM
Income before extraordinary items 98,047 128,321 (23.6)
Extraordinary items (2,106) - NM
Net income 95,941 128,321 (25.2)
Basic earnings per common share
from continuing operations $1.04 $0.83 25.5
Discontinued operations (0.11) 0.40 NM
Extraordinary items (0.02) - NM
Basic earnings per common share 0.91 1.23 (26.1)
Diluted earnings per common share
from continuing operations 1.02 0.81 25.5
Discontinued operations (0.11) 0.39 NM
Extraordinary items (0.02) - NM
Diluted earnings per common share 0.89 1.20 (26.0)
Average basic shares outstanding 105,517 104,570 0.9
Average diluted shares outstanding 108,072 106,803 1.3
NM - Not meaningful
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