-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J2m0eg84ilfUp1JD5a2a9zH0z+LDLGEPVnZkv+xA+d8lEs/NRxG8gDW42ap04xAr KNC5i63NMQvDz/y0V/Pkzg== 0000950135-04-005113.txt : 20041104 0000950135-04-005113.hdr.sgml : 20041104 20041103211101 ACCESSION NUMBER: 0000950135-04-005113 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041103 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20041104 DATE AS OF CHANGE: 20041103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FISHER SCIENTIFIC INTERNATIONAL INC CENTRAL INDEX KEY: 0000880430 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PROFESSIONAL & COMMERCIAL EQUIPMENT & SUPPLIES [5040] IRS NUMBER: 020451017 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10920 FILM NUMBER: 041117848 BUSINESS ADDRESS: STREET 1: LIBERTY LANE CITY: HAMPTON STATE: NH ZIP: 03842 BUSINESS PHONE: 6039265911 MAIL ADDRESS: STREET 1: LIBERTY LANE CITY: LIBEHAMPTON STATE: NH ZIP: 03842 8-K 1 b52352fse8vk.txt FISHER SCIENTIFIC INTERNATIONAL INC. ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 3, 2004 ------------------- FISHER SCIENTIFIC INTERNATIONAL INC. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation) 1-10920 02-0451017 (Commission File No.) (IRS Employer Identification No.) ONE LIBERTY LANE, HAMPTON, NEW HAMPSHIRE 03842 (Address of principal executive offices) (Zip Code) (603) 926-5911 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. Attached hereto as Exhibit 99.1 is the registrant's press release dated November 3, 2004 announcing the Company's earnings for the three and nine months ended September 30, 2004. Within the press release, the Company has presented certain financial information that has not been prepared in accordance with accounting principles generally accepted in the United States of America ("Non-GAAP Measures"). The Company has presented Non-GAAP Measures for (i) adjusted diluted net income per share; (ii) adjusted operating income; (iii) free cash flow; and (iv) earnings before interest taxes, depreciation and amortization ("EBITDA"). With respect to all such Non-GAAP Measures, the Company has included (a) a presentation of the most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"); and (b) a quantitative reconciliation of the differences between the Non-GAAP Measures and the most directly comparable measure calculated and presented in accordance with GAAP. The Company defines adjusted diluted net income per share and adjusted operating income as diluted net income per share and income from operations, respectively, each computed in accordance with GAAP, excluding items that the Company considers to be nonrecurring to the Company's operations. The Company calculates and discloses adjusted diluted net income per share and adjusted operating income because the Company believes that these measures may assist investors in evaluating trends of the Company's operating results without regard to transactions that are not considered recurring. The Company defines free cash flow as cash provided by operating activities less capital expenditures, each computed in accordance with GAAP. The Company believes that free cash flow is a useful measure of liquidity. The Company defines EBITDA as net income (loss) computed in accordance with GAAP, excluding items considered nonrecurring to the Company's operations, plus income taxes, interest expense, depreciation and amortization. The Company calculates and discloses EBITDA because the Company believes that it is helpful in assisting investors comparing the Company's performance to that of other companies on a consistent basis without regard to depreciation, amortization and other charges that are not recurring to the operation of the business. Depreciation and amortization may vary significantly among companies depending on accounting methods. The Company believes that EBITDA, as defined, is also useful in helping investors compare the Company's performance before the effect of various items that do not directly affect the Company's operating performance. Further, EBITDA is a measure commonly used by fixed-income investors and commercial lenders, and hence the Company believes that disclosing this calculation may be useful to the holders of the Company's debt instruments. However, investors should recognize that EBITDA is not a substitute for measures of financial performance determined in accordance with GAAP and that the Company's computation of EBITDA may not be comparable to similarly titled measures of other companies. Investors should recognize these measures may not be comparable to similarly titled measures of other companies and that the measures presented are not a substitute or alternatives for measures of financial performance determined in accordance with GAAP, such as net income as a measure of operating results or cash flows as a measure of liquidity. ITEM 7.01 REGULATION FD DISCLOSURE. Attached hereto as Exhibit 99.1, but only furnished pursuant to Item 2.02 of this Report, is the registrant's press release dated November 3, 2004 announcing the Company's earnings for the quarter ended September 30, 2004. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FISHER SCIENTIFIC INTERNATIONAL INC. DATE: November 3, 2004 BY: /s/ Paul M. Meister -------------------------------- NAME: Paul M. Meister TITLE: Vice Chairman EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION Exhibit 99.1 Fisher Scientific International Inc.'s press release dated November 3, 2004 announcing the Company's earnings for the quarter ended September 30, 2004. This Exhibit pertains to Item 2.02 of this report on Form 8-K. EX-99.1 2 b52352fsexv99w1.txt PRESS RELEASE DATED 11/3/04 (FISHER SCIENTIFIC LOGO) NEWS RELEASE Exhibit 99.1 MEDIA CONTACT: INVESTOR CONTACT: Gia L. Oei, 603-929-2489 Carolyn Miller, 603-929-2381 E-mail: Gia.Oei@nh.fishersci.com E-mail: Carolyn.Miller@nh.fishersci.com FISHER SCIENTIFIC REPORTS RECORD THIRD-QUARTER SALES; REITERATES REVENUE GROWTH AND OPERATING MARGIN GUIDANCE; NARROWS 2004 AND 2005 EPS GUIDANCE RANGE HAMPTON, N.H., Nov. 3, 2004 -- Fisher Scientific International Inc. (NYSE: FSH), a world leader in serving science, today reported record third-quarter sales for the three months ended Sept. 30, 2004, reflecting contributions from Apogent -- acquired by Fisher on Aug. 2 -- and continued strong organic growth in the company's scientific products and services business. "We are excited that our merger with Apogent is completed and are optimistic about the prospects of the combined company," said Paul M. Montrone, chairman and chief executive officer. "We also are pleased with our results for the quarter, and the progress we have made on our growth initiatives." THIRD-QUARTER REPORTED RESULTS Sales for the third quarter increased 42 percent to $1,263.0 million compared with $890.0 million in the corresponding period of 2003. Excluding the effect of foreign exchange, sales totaled $1,238.4 million in the third quarter, a 39 percent increase over the same quarter in 2003, with 10 points of this increase from organic growth. Including $68.9 million ($109.0 million pre tax) of nonrecurring inventory step-up costs related to current-year acquisitions, integration costs related to the Apogent transaction and refinancing costs, third-quarter net income was $10.8 million, or 10 cents per diluted share, compared with $27.7 million, or 47 cents per diluted share, in the third quarter of 2003. - more - Fisher Scientific Reports Record Third-Quarter Sales - Page 2 For the nine months ended Sept. 30, 2004, sales totaled $3,331.6 million, a 29 percent increase over sales of $2,587.9 million in the corresponding period last year. Excluding the $68.6 million favorable effect of foreign exchange, sales totaled $3,263.0 million, a 26 percent increase compared with sales for the first nine months of 2003. Net income for the nine months ended Sept. 30, 2004, was $90.1 million, or $1.11 per diluted share. Net income in the corresponding period of 2003 was $59.8 million, or $1.02 per diluted share. For the first nine months of 2004, Fisher generated $242.5 million in cash from operations, resulting from an increase in earnings and continued improvements in working-capital management. Capital expenditures year to date were $57.1 million, reflecting increased investments in Fisher's biochemicals and clinical-services businesses. In the first nine months, free-cash flow, defined as cash from operations less capital expenditures, totaled $185.4 million. PRO FORMA FINANCIAL RESULTS The following discussion excludes inventory step-up amounts, nonrecurring and restructuring charges related to acquisitions, debt refinancing and other one-time costs in 2003 and 2004. In the attached supplementary information tables, these items are reconciled to the most directly comparable financial measures computed in accordance with accounting principles generally accepted in the United States (GAAP). Income from operations for the third quarter more than doubled to $146.4 million compared with $72.6 million in the same quarter of 2003, reflecting the effect of acquisitions and contributions from the base business. - more - Fisher Scientific Reports Record Third-Quarter Sales - Page 3 Third-quarter net income nearly doubled to $79.7 million compared with net income of $40.5 million in the corresponding period of 2003, reflecting an improvement in operating income partially offset by an increase in interest expense and the effective tax rate, both of which are attributable to the Apogent transaction. Diluted earnings per share (EPS) were 75 cents in the third quarter compared with 68 cents in the third quarter of 2003. Income from operations for the nine-month period increased to $317.7 million compared with $200.4 million during the same period in the prior year. Net income for the first nine months of 2004 increased to $171.9 million compared with $103.6 million in the same period of 2003. Year-to-date earnings were $2.12 per diluted share compared with $1.77 per diluted share in the corresponding period of 2003. BUSINESS-SEGMENT RESULTS Excluding the effect of foreign exchange, sales of scientific products and services in the third quarter totaled $922.8 million, a 46 percent increase compared with the same period in 2003, with 15 points of this increase from organic growth. Organic sales growth was driven by robust sales in the United States, including sales of safety-related products, as well as increased growth in international markets. Operating income increased to $112.3 million from $62.5 million in the corresponding period of 2003, primarily reflecting the effect of the Apogent, Oxoid and Dharmacon transactions and contributions from the base business. Year to date, excluding the effect of foreign exchange, sales of scientific products and services increased 34 percent to $2,412.9 million compared with $1,804.4 million in the first nine months of 2003. Operating income grew in the nine-month period to $255.1 million, a 54 percent increase over the same period in 2003. - more - Fisher Scientific Reports Record Third-Quarter Sales - Page 4 Excluding the effect of foreign exchange, sales of healthcare products and services totaled $282.2 million in the third quarter, a 33 percent increase compared with $212.6 million in the prior year's quarter, reflecting contributions from Apogent. Operating income increased to $33.6 million compared with $7.3 million in the third quarter last year, reflecting the effect of the Apogent transaction as well as the benefits of the company's ongoing margin-improvement program. For the first nine months, sales of healthcare products and services, excluding the effect of foreign exchange, totaled $744.5 million compared with $642.2 million in the first nine months of 2003. Year-to-date operating income increased to $61.0 million from $26.1 million in the corresponding period last year. Third-quarter sales in the laboratory-workstations segment decreased to $44.5 million from $50.4 million in the prior year. The segment reported operating income of $0.8 million in the quarter. The decline in sales and operating income was due to slower demand for small projects and an increase in steel prices. Order activity in the laboratory-workstations segment improved during the third quarter with backlog at approximately $129 million at the end of the quarter, compared with $101 million at the corresponding period of 2003. Year-to-date sales in the laboratory-workstations segment were $126.3 million compared with $156.1 million in the prior-year period. Operating income for the nine-month period was $1.9 million compared with $9.3 million in the prior year. RECENT DEVELOPMENTS - On Aug. 2, Fisher Scientific and Apogent Technologies Inc. completed the merger of the two companies. - more - Fisher Scientific Reports Record Third-Quarter Sales - Page 5 - On Sept. 20, Fisher called $299.8 million of Apogent's 2.25 percent convertible notes for redemption on Oct. 20. Holders had the right to convert their notes until Oct. 18. The total cash payment to settle the redeemed and converted notes is approximately $310 million. The majority of these notes will be settled in cash on Nov. 8. COMPANY OUTLOOK Fisher Scientific is narrowing its 2004 and 2005 EPS guidance ranges solely to reflect an increase in the diluted share count associated with Apogent options that were exercised following the merger. Its 2004 and 2005 revenue growth and operating margin guidance remain unchanged. The company is narrowing its 2004 EPS guidance to a range of $2.81 to $2.84 from previously issued guidance of $2.80 to $2.87, and 2005 EPS guidance to $3.45 to $3.60 from previously issued guidance of $3.45 to $3.65. Fisher continues to expect 2004 operating cash flow to be in the range of $350 million to $370 million, reflecting continued improvements in working capital management. The company is reducing its estimates for 2004 capital expenditures to $100 million from previously issued guidance of $125 million, reflecting revised timing of expenditures. Fisher Scientific anticipates that this spending will occur in 2005. The company's detailed guidance for 2004 and 2005 is as follows:
2004 2005 ---- ---- REVENUE GROWTH (EXCLUDING FOREIGN EXCHANGE) 27.5% - 29.5% 20.0% - 22.0% OPERATING MARGINS 10.0% - 10.2% 13.3% - 13.5% EARNINGS PER SHARE $2.81 - $2.84 $3.45 - $3.60 DILUTED SHARE COUNT 92.5 million 127.0 million OPERATING CASH FLOW $350 - $370 million $510 - $540 million CAPITAL EXPENDITURES $100 million $155 million
- more - Fisher Scientific Reports Record Third-Quarter Sales - Page 6 The company's guidance by segment for 2004, excluding foreign exchange, is as follows:
SEGMENT REVENUE GROWTH RATE OPERATING MARGIN ------- ------------------- ---------------- SCIENTIFIC PRODUCTS AND SERVICES 34.0% -37.0% 10.6% - 11.0% HEALTHCARE PRODUCTS AND SERVICES 18.0% - 22.0% 8.6% - 9.1% LAB WORKSTATIONS (16.0%)-(18.0%) 0.0% - 1.0%
Fisher anticipates one-time costs for the Apogent transaction in 2004 and 2005 of $190 million and $60 million respectively, related to inventory step-up amounts, merger expenses, restructuring and other integration costs. These one-time costs include cash charges of approximately $70 million and $40 million for 2004 and 2005, respectively. The 2004 one-time costs have been increased by $10 million for cash charges related to the decision to call for redemption Apogent's 2.25 percent convertible notes. In addition, in 2004, Fisher expects one-time charges of approximately $25 million primarily associated with the Perbio, Oxoid and Dharmacon transactions. The company expects to record a one-time gain of approximately $23 million in the fourth quarter of this year, attributable to an investment in ProcureNet Inc., a subsidiary that was spun off from Fisher in 1999. ProcureNet has signed a definitive agreement to be sold, subject to customary closing conditions. These one-time costs and gain are excluded from the operating margin and EPS guidance for 2004 and 2005. The estimated diluted share count in 2004 and 2005 includes the effect of outstanding convertible notes based on the treasury stock method. Guidance for 2005 continues to include Apogent integration savings of $55 million, which, on a quarterly basis, will increase throughout the year, with roughly $20 million realized in the first half. UPCOMING PRESENTATIONS Fisher Scientific will present at the following events: - Merrill Lynch Health Services Conference, Nov. 30 at 8 a.m. at the Waldorf Astoria Hotel in New York City; - more - Fisher Scientific Reports Record Third-Quarter Sales - Page 7 - Lazard's Life Sciences Conference, Nov. 30 at 3:30 p.m. at The Mandarin Oriental Hotel in New York City; and the - JPMorgan Healthcare Conference, Jan. 10-13 at the Westin St. Francis Hotel in San Francisco. The company expects to webcast these presentations. Details on the webcast will be available on our Web site on the date of the conference. CONFERENCE CALL SCHEDULED Fisher will host a teleconference on Thursday, Nov. 4, to discuss its third-quarter financial results and guidance for 2004 and 2005. Details are provided below: Live conference call - -------------------- Date: Thursday, Nov. 4 Time: 10 a.m. Eastern Standard Time (EST) Within United States: 800-299-8538 International: (+1) 617-786-2902 Audio replay (available for 10 days): - ------------------------------------- Within United States: 888-286-8010 International: (+1) 617-801-6888 Conference replay code: 89500895 The conference call will also be webcast on Fisher's Web site (www.fisherscientific.com) and will be archived until Dec. 3. FISHER SCIENTIFIC: A WORLD LEADER IN SERVING SCIENCE Fisher Scientific International Inc. (NYSE: FSH) is a leading provider of products and services to the scientific community. Fisher facilitates discovery by supplying researchers and clinicians in labs around the world with the tools they need. We serve pharmaceutical and biotech companies; colleges and universities; medical-research institutions; hospitals; reference, quality-control, process-control and R&D labs in various industries; as well as governments and first responders. From biochemicals, cell-culture media and proprietary RNAi technology to rapid-diagnostic tests, safety products and other consumable supplies, Fisher provides more than 600,000 products and services. This broad offering, combined with Fisher's globally integrated supply chain and unmatched sales and marketing presence, help make our 350,000 customers more efficient and effective at what they do. - more - Fisher Scientific Reports Record Third-Quarter Sales - Page 8 Founded in 1902, Fisher Scientific is a FORTUNE 500 company and is a component of the S&P 500 Index. Fisher has approximately 17,000 employees worldwide, and our annual revenues are expected to exceed $5 billion in 2005. Fisher Scientific is a company committed to high standards and delivering on our promises -- to customers, shareholders and employees alike. Additional information about Fisher is available on the company's Web site at www.fisherscientific.com. FORWARD-LOOKING STATEMENTS This announcement includes forward-looking statements. Fisher Scientific has based these forward-looking statements on its current expectations and projections about future events. Although Fisher Scientific believes that its assumptions made in connection with the forward-looking statements are reasonable, no assurances can be given that its assumptions and expectations will prove to have been correct. These forward-looking statements are subject to various risks, uncertainties and assumptions. Fisher Scientific undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this announcement might not occur. # TABLE 1 FISHER SCIENTIFIC INTERNATIONAL INC. STATEMENT OF OPERATIONS (IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, --------------------- --------------------- 2004 2003 2004 2003 ---------- -------- --------- --------- Sales $ 1,263.0 $ 890.0 $ 3,331.6 $ 2,587.9 Cost of sales 900.1 651.0 2,385.0 1,902.6 Selling, general and administrative expense 269.1 170.9 698.9 489.4 Restructuring and other charges 1.6 - 1.6 - ---------- -------- --------- --------- Income from operations 92.2 68.1 246.1 195.9 Interest expense 29.6 23.4 74.6 62.3 Other expense, net 54.1 11.6 54.5 59.2 ---------- -------- --------- --------- Income before income taxes 8.5 33.1 117.0 74.4 Income tax provision (benefit) (2.3) 5.4 26.9 14.6 ---------- -------- --------- --------- Net income $ 10.8 $ 27.7 $ 90.1 $ 59.8 ========== ======== ========= ========= Net income per common share: Basic $ 0.11 $ 0.50 $ 1.19 $ 1.09 ========== ======== ========= ========= Diluted $ 0.10 $ 0.47 $ 1.11 $ 1.02 ========== ======== ========= ========= Weighted average common shares outstanding: Basic 99.2 55.2 75.7 54.9 ========== ======== ========= ========= Diluted 106.0 59.4 81.0 58.5 ========== ======== ========= =========
TABLE 2 FISHER SCIENTIFIC INTERNATIONAL INC. SEGMENT RESULTS (IN MILLIONS) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- GROWTH GROWTH 2004 RATE 2003 2004 RATE 2003 ---- ---- ---- ---- ---- ---- REVENUE Scientific Products and Services $ 945.9 49.5% $ 632.8 $2,478.5 37.4% $1,804.4 Healthcare Products and Services 283.7 33.4% 212.6 747.5 16.4% 642.2 Laboratory Workstations 44.5 -11.7% 50.4 126.3 -19.1% 156.1 Eliminations (11.1) (5.8) (20.7) (14.8) -------- -------- -------- -------- Total $1,263.0 41.9% $ 890.0 $3,331.6 28.7% $2,587.9 ======== ======== ======== ========
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- OPERATING OPERATING OPERATING OPERATING 2004 MARGIN 2003 MARGIN 2004 MARGIN 2003 MARGIN ---- ------ ---- ------ ---- ------ ---- ------ OPERATING INCOME Scientific Products and Services $112.3 11.9% $ 62.5 9.9% $255.1 10.3% $165.3 9.2% Healthcare Products and Services 33.6 11.8% 7.3 3.4% 61.0 8.2% 26.1 4.1% Laboratory Workstations 0.8 1.8% 2.9 5.8% 1.9 1.5% 9.3 6.0% Eliminations (0.3) (0.1) (0.3) (0.3) ------ ------ ------ ------ Segment sub-total 146.4 11.6% 72.6 8.2% 317.7 9.5% 200.4 7.7% ------ ------ ------ ------ Inventory step-up (44.4) (4.5) (60.3) (4.5) Non-recurring integration related costs (8.2) -- (9.7) -- Restructuring charges (1.6) -- (1.6) -- ------ ------ ------ ------ Operating income $ 92.2 $ 68.1 $246.1 $195.9 ====== ====== ====== ======
The information for the three and nine months ended September 30, 2003 has been reclassified to conform with the current presentation of reportable segments. TABLE 3 FISHER SCIENTIFIC INTERNATIONAL INC. CONDENSED BALANCE SHEET (IN MILLIONS)
SEPTEMBER 30, DECEMBER 31, 2004 2003 ---- ---- (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 296.4 $ 83.8 Accounts receivable, net 646.4 432.7 Inventories 651.4 355.4 Other current assets 211.9 138.9 --------- --------- Total current assets 1,806.1 1,010.8 Property, plant and equipment 745.0 440.9 Goodwill 4,193.2 1,006.9 Other assets 1,244.6 400.8 --------- --------- Total assets Total assets $ 7,988.9 $ 2,859.4 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 38.1 $ 12.0 Accounts payable 448.2 377.7 Accrued and other current liabilities 465.4 258.8 --------- --------- Total current liabilities 951.7 648.5 Long-term debt 2,602.5 1,386.1 Other liabilities 560.2 249.4 --------- --------- Total liabilities 4,114.4 2,284.0 --------- --------- Total stockholders' equity 3,874.5 575.4 --------- --------- Total liabilities and stockholders' equity $ 7,988.9 $ 2,859.4 ========= =========
TABLE 4 FISHER SCIENTIFIC INTERNATIONAL INC. CONDENSED STATEMENT OF CASH FLOWS (IN MILLIONS) (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, ------------- 2004 2003 ---- ---- Cash flows from operating activities: Net income $ 90.1 $ 59.8 Depreciation and amortization 93.1 58.2 Other adjustments to reconcile net income to cash provided by operating activities 55.5 62.9 Changes in working capital and other assets and liabilities 3.8 (25.3) ------- ------- Cash provided by operating activities 242.5 155.6 ------- ------- Cash flows from investing activities: Acquisitions, net of cash acquired (326.2) (649.0) Capital expenditures (57.1) (50.1) Other investing activity (2.3) (14.2) ------- ------- Cash used in investing activities (385.6) (713.3) ------- ------- Cash flows from financing activities: Proceeds from sale of common stock -- 261.0 Proceeds from stock options exercised 92.1 11.5 Net change in debt 318.1 563.3 Other financing activity (54.2) (54.4) ------- ------- Cash provided by financing activities 356.0 781.4 ------- ------- Effect of exchange rate changes on cash (0.3) 3.4 Net change in cash and cash equivalents 212.6 227.1 Cash and cash equivalents - beginning of period 83.8 38.8 ------- ------- Cash and cash equivalents - end of period $ 296.4 $ 265.9 ======= =======
TABLE 5 FISHER SCIENTIFIC INTERNATIONAL INC. STATEMENT OF OPERATIONS SUPPLEMENTARY INFORMATION (IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS ENDED ------------------ SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 ------------------ ------------------ AS AS AS AS REPORTED ADJUSTMENTS ADJUSTED REPORTED ADJUSTMENTS ADJUSTED -------- ----------- -------- -------- ----------- -------- Sales $ 1,263.0 $ -- $ 1,263.0 $ 890.0 $ -- $ 890.0 Cost of sales 900.1 (46.0)(a) 854.1 651.0 (4.5)(a) 646.5 Selling, general and administrative expense 269.1 (6.6)(b) 262.5 170.9 -- 170.9 Restructuring and other charges 1.6 (1.6) -- -- -- -- --------- --------- --------- --------- ------- --------- Income from operations 92.2 54.2 146.4 68.1 4.5 72.6 Interest expense 29.6 -- 29.6 23.4 -- 23.4 Other (income) expense, net 54.1 (54.8)(c) (0.7) 11.6 (12.7)(c) (1.1) --------- --------- --------- --------- ------- --------- Income before income taxes 8.5 109.0 117.5 33.1 17.2 50.3 Income tax provision (benefit) (2.3) 40.1(d) 37.8 5.4 4.4(d) 9.8 --------- --------- --------- --------- ------- --------- Net income $ 10.8 $ 68.9 $ 79.7 $ 27.7 $ 12.8 $ 40.5 ========= ========= ========= ========= ========= ========= Diluted net income per common share $ 0.10 $ 0.65 $ 0.75 $ 0.47 $ 0.21 $ 0.68 ========= ========= ========= ========= ========= ========= Diluted weighted average common shares outstanding 106.0 106.0 59.4 59.4 ========= ========= ========= ========= ========= =========
(a) Represents charges associated with the step-up of inventory to fair value at the dates of acquisition and other integration related costs. (b) Represents charges associated with integration related activities. (c) Represents charges associated with call premiums and deferred financing fees. (d) Represents an adjustment for the incremental tax benefit associated with items (a), (b) and (c). RECONCILIATION OF NET INCOME TO EBITDA
THREE MONTHS ENDED SEPTEMBER 30, ------------- 2004 2003 ---- ---- NET INCOME $ 10.8 $ 27.7 ADJUSTMENTS TO RECONCILE NET INCOME TO ADJUSTED EBITDA: Income tax provision (benefit) (2.3) 5.4 Interest expense 29.6 23.4 Depreciation and amortization 41.8 20.0 Amortization of deferred financing fees (1.8) (1.0) Inventory step-up 44.4 4.5 Non-recurring integration related costs 8.2 -- Restructuring charges 1.6 -- Call premiums and deferred financing fees 54.8 12.7 ------ ------ ADJUSTED EBITDA $187.1 $ 92.7 ====== ======
TABLE 6 FISHER SCIENTIFIC INTERNATIONAL INC. STATEMENT OF OPERATIONS SUPPLEMENTARY INFORMATION (IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED)
NINE MONTHS ENDED ----------------- SEPTEMBER 30, 2004 SEPTEMBER 30, 2003 ------------------ ------------------ AS AS AS AS REPORTED ADJUSTMENTS ADJUSTED REPORTED ADJUSTMENTS ADJUSTED -------- ----------- -------- -------- ----------- -------- Sales $ 3,331.6 $ -- $ 3,331.6 $ 2,587.9 $ -- $ 2,587.9 Cost of sales 2,385.0 (61.9)(a) 2,323.1 1,902.6 (4.5) (a) 1,898.1 Selling, general and administrative expense 698.9 (8.1)(b) 690.8 489.4 -- 489.4 Restructuring and other charges 1.6 (1.6) -- -- -- -- --------- --------- --------- --------- --------- --------- Income from operations 246.1 71.6 317.7 195.9 4.5 200.4 Interest expense 74.6 -- 74.6 62.3 -- 62.3 Other (income) expense, net 54.5 (57.0)(c) (2.5) 59.2 (62.0) (e) (2.8) --------- --------- --------- --------- --------- --------- Income before income taxes 117.0 128.6 245.6 74.4 66.5 140.9 Income tax provision 26.9 46.8(d) 73.7 14.6 22.7 (f) 37.3 --------- --------- --------- --------- --------- --------- Net income $ 90.1 $ 81.8 $ 171.9 $ 59.8 $ 43.8 $ 103.6 ========= ========= ========= ========= ========= ========= Diluted net income per common share $ 1.11 $ 1.01 $ 2.12 $ 1.02 $ 0.75 $ 1.77 ========= ========= ========= ========= ========= ========= Diluted weighted average common shares outstanding 81.0 81.0 58.5 58.5 ========= ========= ========= =========
(a) Represents charges associated with the step-up of inventory to fair value at the dates of acquisition and other integration related costs. (b) Represents charges associated with integration related activities. (c) Represents charges associated with call premiums, deferred financing fees, and the termination of a foreign currency contract. (d) Represents an adjustment for the incremental tax benefit associated with items (a), (b) and (c). (e) Represents charges associated with call premiums and deferred financing fees. (f) Represents an adjustment for the incremental tax benefit associated with item (e). RECONCILIATION OF NET INCOME TO EBITDA
NINE MONTHS ENDED SEPTEMBER 30, ------------- 2004 2003 ---- ---- NET INCOME $ 90.1 $ 59.8 ADJUSTMENTS TO RECONCILE NET INCOME TO ADJUSTED EBITDA: Income tax provision 26.9 14.6 Interest expense 74.6 62.3 Depreciation and amortization 93.1 58.2 Amortization of deferred financing fees (3.4) (2.6) Inventory step-up 60.3 4.5 Non-recurring integration related costs 9.7 -- Termination of foreign currency contract 2.2 -- Restructuring charges 1.6 -- Call premiums and deferred financing fees 54.8 62.0 --------- --------- ADJUSTED EBITDA $ 409.9 $ 258.8 ========= =========
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