Exhibit (a)(5)(D)
April 22, 2003
Page 1 of 15
Reaching Every Lab. Everyday.™ | | |
NEWS RELEASE
30 Penhallow Street
Portsmouth, NH 03801
(603) 433-6131
(800) 327-9970
Contact: | | Adam Taich Director of Investor Relations |
Phone: | | (603) 433-6131 Ext. 415 |
(For Immediate Release)
Apogent Reports Second Quarter and Year-to-Date Results and
Initiation of 15 Million Share Issuer Tender Offer
PORTSMOUTH, N.H (April 22, 2003): Apogent Technologies Inc. (NYSE: AOT), a leading manufacturer of clinical diagnostic and life science research products, today reported financial results for the second quarter and year-to-date ended March 31, 2003. As part of its second quarter results, the Company reported that two of its subsidiaries, Applied Biotech, Inc. and BioRobotics Group Limited, have been classified as discontinued operations. The Company also announced that its Board of Directors has approved the initiation of a new stock repurchase program, including a “modified Dutch Auction” tender offer by the Company to purchase up to 15,000,000 shares or approximately 15% of its outstanding common stock at a price per share of not less than $15.00 or more than $17.50 per share.
Commenting on the financial results and actions taken by the Company, Frank H. Jellinek, Jr., President and Chief Executive Officer of Apogent, said: “During the second quarter, sales for many of our consumable products, which represent over 80% of Apogent net sales, continued to be strong. However, the second quarter also was challenging for Apogent. Sales of capital equipment, specifically our higher-priced life science instrumentation, continued to be soft as a result of the weak spending environment for equipment of this nature. Our overall results reflect the cautious spending from our customers in the life science market, particularly the pharmaceutical sector. We do not anticipate spending levels in this market to increase during the balance of the year, and, as a result, have adjusted our full-year guidance downward. Also, during the second quarter, we made the decision to discontinue two businesses that neither meet Apogent’s long-term growth and profitability expectations nor fit properly within our portfolio of companies.”
April 22, 2003
Page 2 of 15
With regard to the Company’s share buyback program, Mr. Jellinek commented: “We believe that our current share price does not adequately reflect Apogent’s value in the market. As a result, we believe that now is an opportune time to repurchase Apogent stock. Our repurchase of our stock is consistent with our goal of maximizing shareholder value. Among other things, the tender offer provides those who wish to sell shares an opportunity to do so at a premium over recent trading prices without incurring transaction fees.”
Net sales for the second quarter were $276.6 million compared with $255.1 million in the same period last year, an increase of 8.4%. Net sales year-to-date were $534.4 million compared to $489.1 million for the prior year, an increase of 9.3%.
Income and diluted earnings per share from continuing operations for the second quarter were $30.9 million and $0.29, respectively. These results compare with income and diluted earnings per share for the second quarter of fiscal 2002 of $31.5 million and $0.29, respectively. After excluding restructuring, income and diluted earnings per share from continuing operations for the second quarter were $31.1 million and $0.30, respectively. For the second quarter of fiscal 2002, income and diluted earnings per share, after excluding restructuring, were $34.9 million and $0.32, respectively.
Net loss for the second quarter was $56.4 million compared to net income of $19.0 million for the same period last year. Net loss year-to-date was $27.6 million, compared to net income of $48.9 million for the same period last year. Fully diluted losses per share were $0.54 and $0.26 for the three and six months ended March 31, 2003, respectively.
Reflected in the net losses for the second quarter and year-to-date are losses from discontinued operations of $87.2 million and $87.3 million, respectively. These losses include after-tax charges of $88.7 million for the write-down of assets to fair market value, offset in part by income from operations of these discontinued businesses of approximately $1.5 million for the second quarter, and $1.4 million year-to-date.
REALIGNMENT OF BUSINESS SEGMENTS
The Company recently realigned its lines of business for financial reporting purposes. The three business groups (Clinical Diagnostics, Labware and Life Sciences, and Laboratory Equipment) have been reclassified into two business segments: Clinical Group and Research Group. The Clinical Group is the former Clinical Diagnostics segment. The Research Group is composed of the former Labware and Life Sciences and Laboratory Equipment segments. The financial data in this press release are presented in this new format. Historical data in this new format will be reported in Apogent’s forthcoming Form 10-Q filing with the Securities and Exchange Commission.
SECOND QUARTER AND YEAR-TO-DATE FINANCIAL RESULTS
Quarterly and year-to-date comparisons of net sales by business segment are as follows:
April 22, 2003
Page 3 of 15
| | | Three Months Ended March 31, (in thousands)
| | Growth
| | | Internal Growth
| |
Business Segment
| | 2003
| | 2002
| | |
Clinical Group | | $ | 132,516 | | $ | 118,659 | | 11.7 | % | | 5.4 | % |
Research Group | | | 144,122 | | | 136,429 | | 5.6 | % | | 0.5 | % |
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Total | | $ | 276,638 | | $ | 255,088 | | 8.4 | % | | 2.8 | % |
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| | | Six Months Ended March 31, (in thousands)
| | Growth
| | | Internal Growth
| |
Business Segment
| | 2003
| | 2002
| | |
Clinical Group | | $ | 251,930 | | $ | 228,383 | | 10.3 | % | | 2.9 | % |
Research Group | | | 282,506 | | | 260,679 | | 8.4 | % | | 2.9 | % |
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Total | | $ | 534,436 | | $ | 489,062 | | 9.3 | % | | 2.9 | % |
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Apogent’s sales for the quarter and year-to-date periods by geographic area were as follows:
| | | Three Months Ended March 31, (in thousands)
|
Geographic Area
| | 2003
| | 2002
|
North America | | $ | 199,580 | | $ | 189,748 |
Europe | | | 54,594 | | | 44,706 |
Asia | | | 17,043 | | | 14,242 |
Other | | | 5,421 | | | 6,392 |
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Total | | $ | 276,638 | | $ | 255,088 |
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|
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|
|
| | | Six Months Ended March 31, (in thousands)
|
Geographic Area
| | 2003
| | 2002
|
North America | | $ | 390,710 | | $ | 359,679 |
Europe | | | 101,070 | | | 87,371 |
Asia | | | 32,086 | | | 28,556 |
Other | | | 10,570 | | | 13,456 |
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|
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Total | | $ | 534,436 | | $ | 489,062 |
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April 22, 2003
Page 4 of 15
DETAILED FINANCIAL RESULTS
Please refer to the financial statements at the end of this press release when reviewing the following financial information.
Gross profit for the second quarter of fiscal 2003 was $131.2 million, an increase of 5.3% from $124.7 million for the same period last year. Gross margin fell from 48.9% in the second quarter of last year to 47.4% in the second quarter of this year. Year-to-date gross margin was 47.9%, or $256.1 million versus 48.9% or $238.9 million last year.
Selling, general and administrative expenses for the quarter were $71.6 million, an increase of 10.8% from $64.6 million for the same period last year. Selling, general and administrative expenses were $140.3 million for the first six months of the fiscal year versus $123.5 million for the same period last year.
Operating income for the second quarter of 2003 was $59.6 million, a decrease of 0.7%, from $60.0 million for the same period last year. Operating income year-to-date was $115.8 million compared to $115.4 million for the same period last year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $74.4 million for the three months ended March 31, 2003, an increase of 2.0% from $73.0 million for the same period in 2002. EBITDA was $145.7 million and $141.5 million for the six months ended March 31, 2003 and 2002, respectively. Net cash provided by operating activities was $55.8 million for the six months ended March 31, 2003 compared to $83.5 million for the same period in 2002.
The Company has included information concerning EBITDA because management believes that EBITDA is used by certain investors as one measure of a company’s historical ability to service its debt. EBITDA should not be considered as an alternative to, or more meaningful than, net income as an indicator of Apogent’s operating performance or cash flows as a measure of liquidity. EBITDA has not been prepared in accordance with generally accepted accounting principles (GAAP). EBITDA, as presented by Apogent, may not be comparable to similarly titled measures reported by other companies. Certain other non-GAAP financial measures (i.e., income excluding restructuring) have been provided in order to provide consistency with the format of presentation previously made to the investing public. Pursuant to new SEC rules, we intend to phase out the use of non-GAAP financial measures over the course of the next several months.
Accounts receivable were $176.9 million and inventory was $207.3 million at the end of the second quarter. Outstanding days of sales in the second quarter were 54.6 days compared with 59.7 days for the same period last year, restated for the discontinued operations. Inventory turns at the end of the quarter were 2.6, compared with 2.5 at the end of the last quarter, and 2.6 at the end of the second quarter of last year.
DISCONTINUED OPERATIONS
During the second quarter, Apogent made the decision to exit two of its businesses: the rapid diagnostic test business (on-site rapid tests used in the detection of pregnancy, drugs of abuse and infectious diseases) as conducted by its Applied Biotech, Inc.
April 22, 2003
Page 5 of 15
subsidiary; and the manufacture and sale of automated instrumentation for the genomics market as conducted by its BioRobotics Group Limited subsidiary. This decision was based in part on the Company’s ongoing strategy of strengthening the market positions of our leading brands and focusing on sales of our consumable laboratory products that have solid growth expectations. As a result of this decision, Apogent recorded an after-tax charge totaling $85.9 million for the estimated losses on sales of the discontinued operations. Applied Biotech, Inc. was included in the Clinical Group and BioRobotics Group Limited was included in the Research Group. Also in the quarter, Apogent completed the sale of its previously discontinued subsidiary, Vacuum Process Technology (VPT), and recorded an after-tax charge of $2.8 million. Please refer to the table below for detailed financial information regarding the discontinued operations.
SHARE REPURCHASES
Pursuant to our previously announced repurchase program, Apogent repurchased 3.1 million shares during the second quarter, leaving 1.9 million shares remaining under the Board of Directors authorization announced on January 28, 2003. Under an earlier share repurchase program, Apogent repurchased 1.0 million shares in the fourth quarter of fiscal 2002 and 1.0 million shares in the first quarter of fiscal 2003.
As of the end of the second quarter, the number of shares outstanding was 102.2 million.
The Company intends to launch its tender offer for up to 15 million shares on April 23, 2003. The tender offer will expire at midnight, New York City time, on May 21, 2003, unless extended. Tenders of shares must be made on or prior to the expiration of the tender offer and shares may be withdrawn at any time on or prior to the expiration of the tender offer. Details of the tender offer can be found in the tender offer materials that will be sent to shareholders as well as filed with the Securities and Exchange Commission.
Upon the terms and subject to the conditions of the tender offer, shareholders will have the opportunity to tender some or all of their shares at prices within the $15.00 to $17.50 price range. Based on the number of shares tendered and the prices specified by the tendering shareholders, Apogent will determine the lowest per share price within the range that will enable it to buy 15 million shares, or such lesser number of shares that are validly tendered within the price range. If shareholders validly tender more than 15 million shares at or below the determined price per share, Apogent will purchase shares tendered by such shareholders at the determined price per share; first, from those shareholders who own less than 100 shares of Apogent common stock; second, from shares tendered by shareholders, at the purchase price determined by Apogent, on a pro rata basis; and third, only if necessary to permit Apogent to purchase 15,000,000 shares, from holders who have tendered shares conditionally (for which the condition was not initially satisfied) by random lot, to the extent feasible. All shares that are acquired in the tender offer will be acquired at the same purchase price. Shareholders whose shares are purchased in the offer will be paid the determined purchase price per share net in cash, without interest, after the expiration of the offer period. Shareholders whose shares are not purchased in the tender offer will have their shares returned to them, free of charge, promptly after the expiration of the tender offer. The offer is not contingent upon any minimum number of shares being tendered. The offer is subject to
April 22, 2003
Page 6 of 15
a number of other terms and conditions specified in the offer to purchase and other documents that will be distributed to shareholders.
Apogent’s principal financial advisor for the tender offer is Lehman Brothers Inc.
The dealer-manager for the tender offer is Lehman Brothers Inc., and any questions regarding the tender offer may be directed to Lehman Brothers Inc. at (800) 524-4462 (toll free). Georgeson Shareholder Services, Inc. is the information agent for the tender offer and any questions concerning the tender offer or requests for copies of the tender offer materials can be directed to Georgeson Shareholder Services, Inc. by calling (212) 440-9800 (banks and brokerage firms) or (800) 786-4881 (all others toll free). The tender offer materials are being mailed to registered shareholders as of April 21, 2003 and will also be made available for distribution to beneficial owners of Apogent common stock.
None of Apogent, its Board of Directors, Lehman Brothers, or Georgeson is making any recommendation to shareholders as to whether to tender or refrain from tendering their shares. Apogent’s directors and executive officers have advised the Company that they do not intend to tender any shares in the tender offer.
Apogent will incur debt in order to pay for the stock purchased in the tender offer, which will result in increased indebtedness and interest expense, and reduced net income and shareholders’ equity.
The Board has also authorized the repurchase of 5 million shares (in addition to the 1.9 million shares referenced above) in an open market purchase program over the course of the period ending September 30, 2005. The Company does not expect to make any open market purchases until after the completion of its third fiscal quarter and then only at such times, prices and amounts as are deemed prudent by the Company.
OUTLOOK FOR THE BALANCE OF THE YEAR AND FISCAL 2004
As a result of the aforementioned, the Company is revising its guidance for the full fiscal year of 2003 to a range of $1.26 to $1.30 diluted earnings per share from continuing operations, before restructuring ($1.21 to $1.26 diluted earnings per share after restructuring charges of approximately $7 million). Although the Company has not commenced its detailed budgeting process for fiscal year 2004, assuming the successful completion of the tender offer for 15 million shares, the Company’s preliminary estimate of diluted earnings per share for fiscal 2004 falls within a range of $1.50 to $1.65.
CONFERENCE CALL
On Wednesday, April 23, 2003, at 11:00 a.m. EST, Apogent will host a conference call to discuss its second quarter financial results for the period ended March 31, 2003. The dial-in numbers for the teleconference are:
Domestic Callers (877) 679-9049
International Callers (952) 556-2803
April 22, 2003
Page 7 of 15
The conference call will be simultaneously audio web cast in the Investor Relations section of Apogent’s website atwww.apogent.com and will be available there until May 21, 2003.
A telephone replay of the call will also be available until 1:00 p.m. EST on Thursday, April 24, 2003. The telephone replay numbers are (800) 615-3210 (Domestic Callers) or (703) 326-3020. (International Callers), passcode 6400826.
CONCERNING THE PROPOSED TENDER OFFER
This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any shares of Apogent common stock. The solicitation of offers to buy Apogent’s common stock is only being made pursuant to the tender offer documents, including the offer to purchase and the related letter of transmittal that Apogent will be distributing to its shareholders and filing with the Securities and Exchange Commission. Shareholders and investors should read carefully the offer to purchase and related materials when they are available because they contain important information. Shareholders and investors may obtain a free copy (when available) of the offer to purchase and other documents that will be filed with the Securities and Exchange Commission at the Securities and Exchange Commission’s web site at www.sec.gov or from the information agent, Georgeson Shareholder Services, Inc., at (800) 786-4881. Shareholders are urged to carefully read these materials before making any decision with respect to the tender offer.
UPCOMING COMPANY TRADE SHOW EXHIBITS
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| | Details
|
American Society for Microbiology | | May 19 – 21, 2003 Washington Convention Center Washington, DC www.asm.org |
ABOUT APOGENT
Apogent is a diversified 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 companies are divided into two business segments for financial reporting purposes: Clinical Group and Research Group.
FORWARD-LOOKING STATEMENTS
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 competitors, customers, acquisitions, sales, profit margins, earnings, product development, financial performance, stock repurchase intentions, and growth strategies, are based on current expectations. Our actual results may differ materially from those presently anticipated. Factors that could cause actual results to differ
April 22, 2003
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materially include, among others: financial risks associated with our holding company structure; currency and other risks associated with our international operations; risks from rapid technological change and new product introductions; the cyclical nature of some of the industries and markets into which we sell our products; changes in customer purchasing patterns; competitive factors; transitional challenges associated with acquisitions; the possibility of future restructuring or impairment charges against our reported earnings; our dependence upon key distributors and original equipment manufacturers; possible disruption of our manufacturing operations from labor unrest, shortages of critical materials or other causes; the success or failure of the proposed issuer tender offer and related transactions; regulatory and litigation risks; and the other “Cautionary Factors” contained in Item 7 of the Company’s most recent Form 10-K and our subsequent reports filed with the Securities and Exchange Commission from time to time. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
* * * * *
April 22, 2003
Page 9 of 15
Exhibit 1
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands except share and per share data)
(unaudited)
| | | March 31, 2003
| | | September 30, 2002
| |
Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 17,406 | | | $ | 16,327 | |
Accounts receivable (less allowance for doubtful accounts of $4,288 and $5,723 respectively) | | | 176,941 | | | | 186,950 | |
Inventories | | | 207,308 | | | | 203,997 | |
Deferred income taxes | | | 14,127 | | | | 14,127 | |
Prepaid expenses and other current assets | | | 18,442 | | | | 19,689 | |
Assets of discontinued operations—avail. for sale | | | 52,404 | | | | 5,436 | |
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|
| |
|
|
|
Total current assets | | | 486,628 | | | | 446,526 | |
Available for sale security | | | 58,579 | | | | 60,183 | |
Property, plant and equipment, net | | | 266,289 | | | | 270,893 | |
Intangible assets | | | 1,154,949 | | | | 1,243,113 | |
Other assets | | | 18,285 | | | | 15,370 | |
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| |
|
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|
Total assets | | $ | 1,984,730 | | | $ | 2,036,085 | |
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|
Liabilities and Shareholders’ Equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Short-term debt and overdrafts | | $ | 14,026 | | | $ | 10,640 | |
Accounts payable | | | 46,281 | | | | 53,779 | |
Current portion of long-term debt | | | 2,207 | | | | 25,352 | |
Income taxes payable | | | 49,332 | | | | 53,064 | |
Accrued payroll and employee benefits | | | 29,243 | | | | 32,009 | |
Accrued interest expense | | | 16,183 | | | | 16,630 | |
Restructuring reserve | | | 874 | | | | 1,548 | |
Other current liabilities | | | 29,452 | | | | 23,074 | |
Liabilities of discontinued operations | | | 5,338 | | | | 305 | |
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Total current liabilities | | | 192,936 | | | | 216,401 | |
Long-term debt | | | 697,520 | | | | 635,020 | |
Securities lending agreement | | | 58,579 | | | | 60,183 | |
Deferred income taxes | | | 123,400 | | | | 132,100 | |
Other liabilities | | | 17,028 | | | | 17,243 | |
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 107,019,535 and 106,976,877 shares respectively; outstanding 102,194,940 and 105,967,853 shares respectively | | | 1,067 | | | | 1,070 | |
Equity rights, 50 rights at $1.09 per right | | | — | | | | — | |
Additional paid-in capital | | | 270,627 | | | | 271,682 | |
Retained earnings | | | 721,142 | | | | 748,791 | |
Accumulated other comprehensive loss | | | (13,574 | ) | | | (26,419 | ) |
Treasury common stock, 4,824,595 and 1,009,024 shares at cost | | | (83,995 | ) | | | (19,986 | ) |
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Total shareholders’ equity | | | 895,267 | | | | 975,138 | |
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Total liabilities and shareholders’ equity | | $ | 1,984,730 | | | $ | 2,036,085 | |
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April 22, 2003
Page 10 of 15
Exhibit 2
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)
(unaudited)
| | | Three Months Ended March 31,
| | | Six Months Ended March 31,
| |
| | | 2003
| | | 2002
| | | 2003
| | | 2002
| |
Net sales | | $ | 276,638 | | | $ | 255,088 | | | $ | 534,436 | | | $ | 489,062 | |
|
Cost of sales | | | 145,409 | | | | 126,757 | | | | 278,366 | | | | 246,446 | |
Restructuring charge | | | — | | | | 3,673 | | | | — | | | | 3,673 | |
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Total cost of sales | | | 145,409 | | | | 130,430 | | | | 278,366 | | | | 250,119 | |
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Gross profit | | | 131,229 | | | | 124,658 | | | | 256,070 | | | | 238,943 | |
|
Selling, general and administrative expenses | | | 71,310 | | | | 63,029 | | | | 139,940 | | | | 121,922 | |
Restructuring charge | | | 332 | | | | 1,614 | | | | 332 | | | | 1,614 | |
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Total selling, general and administrative expenses | | | 71,642 | | | | 64,643 | | | | 140,272 | | | | 123,536 | |
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Operating income | | | 59,587 | | | | 60,015 | | | | 115,798 | | | | 115,407 | |
Other income (expense): | | | | | | | | | | | | | | | | |
Interest expense | | | (10,381 | ) | | | (10,344 | ) | | | (20,792 | ) | | | (20,578 | ) |
Amortization of deferred financing fees | | | (891 | ) | | | (914 | ) | | | (1,803 | ) | | | (1,741 | ) |
Other, net | | | 289 | | | | 800 | | | | 780 | | | | 2,309 | |
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Income from continuing operations before income taxes | | | 48,604 | | | | 49,557 | | | | 93,983 | | | | 95,397 | |
Income taxes | | | 17,740 | | | | 18,138 | | | | 34,304 | | | | 34,915 | |
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Income from continuing operations | | | 30,864 | | | | 31,419 | | | | 59,679 | | | | 60,482 | |
Discontinued operations, net of income tax benefit | | | (87,246 | ) | | | (12,470 | ) | | | (87,328 | ) | | | (11,562 | ) |
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Net income (loss) | | $ | (56,382 | ) | | $ | 18,949 | | | $ | (27,649 | ) | | $ | 48,920 | |
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Basic earnings per common share from continuing operations | | $ | 0.30 | | | $ | 0.30 | | | $ | 0.57 | | | $ | 0.57 | |
Discontinued operations | | | (0.84 | ) | | | (0.12 | ) | | | (0.83 | ) | | | (0.11 | ) |
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Basic earnings per common share | | $ | (0.54 | ) | | $ | 0.18 | | | $ | (0.26 | ) | | $ | 0.46 | |
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Diluted earnings per common share from continuing operations | | $ | 0.29 | | | $ | 0.29 | | | $ | 0.56 | | | $ | 0.55 | |
Discontinued operations | | | (0.83 | ) | | | (0.11 | ) | | | (0.82 | ) | | | (0.11 | ) |
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Diluted earnings per common share | | $ | (0.54 | ) | | $ | 0.17 | | | $ | (0.26 | ) | | $ | 0.45 | |
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Weighted average basic shares outstanding | | | 103,986 | | | | 106,412 | | | | 104,863 | | | | 106,270 | |
Weighted average diluted shares outstanding | | | 104,817 | | | | 109,043 | | | | 105,920 | | | | 108,996 | |
April 22, 2003
Page 11 of 15
Exhibit 3
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| | | Six Months Ended March 31,
| |
| | | 2003
| | | 2002
| |
Cash flows from operating activities: | | | | | | | | |
Net income | | $ | (27,649 | ) | | $ | 48,920 | |
Adjustments to reconcile net income to net cash provided by operating activities | | | | | | | | |
Discontinued operations | | | 87,328 | | | | 11,742 | |
Depreciation | | | 21,376 | | | | 18,472 | |
Amortization | | | 9,559 | | | | 7,099 | |
Gain (loss) on sale of property, plant and equipment | | | 99 | | | | 111 | |
Provision for losses on doubtful accounts | | | (525 | ) | | | 48 | |
Inventory provisions | | | 1,044 | | | | (2,352 | ) |
Deferred income taxes | | | (6,667 | ) | | | 7,300 | |
Changes in assets and liabilities, net of effects of businesses acquired: | | | | | | | — | |
Increase in accounts receivable | | | (1,213 | ) | | | (888 | ) |
Increase in inventories | | | (8,941 | ) | | | (14,420 | ) |
(Increase) decrease in prepaid expenses and other current assets | | | (3,365 | ) | | | 3,158 | |
Decrease in accounts payable | | | (5,453 | ) | | | (6,938 | ) |
Increase (decrease) in income taxes payable | | | (4,055 | ) | | | 12,148 | |
Decrease in accrued payroll and employee benefits | | | (2,667 | ) | | | (4,288 | ) |
Increase (decrease) in accrued interest expense | | | (448 | ) | | | 2,138 | |
Increase (decrease) in restructuring reserve | | | (674 | ) | | | 3,183 | |
Increase in other current liabilities | | | 3,016 | | | | 547 | |
Net change in other assets and liabilities | | | (4,933 | ) | | | (2,502 | ) |
| | |
|
|
| |
|
|
|
Net cash provided by operating activities | | | 55,832 | | | | 83,478 | |
| | |
|
|
| |
|
|
|
Cash flows from investing activities: | | | | | | | | |
Capital expenditures | | | (22,560 | ) | | | (17,099 | ) |
Proceeds from sales of property, plant and equipment | | | 558 | | | | 267 | |
Net payment for businesses acquired | | | (21,567 | ) | | | (113,780 | ) |
Other investing activities | | | 2,678 | | | | — | |
| | |
|
|
| |
|
|
|
Net cash used in investing activities | | | (40,891 | ) | | | (130,611 | ) |
| | |
|
|
| |
|
|
|
Cash flows from financing activities: | | | | | | | | |
Proceeds from revolving credit facility | | | 323,100 | | | | 179,500 | |
Principal payments on revolving credit facility | | | (260,400 | ) | | | (388,000 | ) |
Proceeds from long-term debt | | | — | | | | 300,000 | |
Principal payments on long-term debt | | | (23,408 | ) | | | — | |
Proceeds from the exercise of stock options | | | 2,345 | | | | 4,790 | |
Proceeds from stock purchase program | | | 927 | | | | — | |
Purchase of treasury stock | | | (69,325 | ) | | | — | |
Financing fees paid | | | — | | | | (8,017 | ) |
Other financing activities | | | 1,955 | | | | (560 | ) |
| | |
|
|
| |
|
|
|
Net cash provided by (used in) financing activities | | | (24,806 | ) | | | 87,713 | |
| | |
|
|
| |
|
|
|
Effect of exchange rate changes on cash and cash equivalents | | | 10,944 | | | | (7,499 | ) |
| | |
|
|
| |
|
|
|
Net increase (decrease) in cash and cash equivalents | | | 1,079 | | | | 33,081 | |
Cash and cash equivalents at beginning of period | | | 16,327 | | | | 9,335 | |
| | |
|
|
| |
|
|
|
Cash and cash equivalents at end of period | | $ | 17,406 | | | $ | 42,416 | |
| | |
|
|
| |
|
|
|
April 22, 2003
Page 12 of 15
Exhibit 4
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Adjusted Consolidated Statements of Income
(In thousands, except per share data)
(unaudited)
| | | Three months ended March 31, 2003
| | | Three months ended March 31, 2002
| |
| | | US GAAP Results
| | | Adjustments (D)
| | | Adjusted Results (A)
| | | As Previously Reported US GAAP Results (B)
| | | Discontinued Operations (C)
| | | Adjustments (D)
| | | Adjusted Results (A)
| |
Net sales | | $ | 276,638 | | | $ | — | | | $ | 276,638 | | | $ | 266,238 | | | $ | (11,150 | ) | | $ | — | | | $ | 255,088 | |
|
Cost of sales | | | 145,409 | | | | — | | | | 145,409 | | | | 132,632 | | | | (5,875 | ) | | | — | | | | 126,757 | |
Restructuring charge | | | — | | | | — | | | | — | | | | 3,673 | | | | — | | | | (3,673 | ) | | | — | |
| | |
|
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|
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|
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|
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| |
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|
|
Total cost of sales | | | 145,409 | | | | — | | | | 145,409 | | | | 136,305 | | | | (5,875 | ) | | | (3,673 | ) | | | 126,757 | |
| | �� |
|
|
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|
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|
|
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|
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|
Gross profit | | | 131,229 | | | | — | | | | 131,229 | | | | 129,933 | | | | (5,275 | ) | | | 3,673 | | | | 128,331 | |
|
Selling, general and administrative expenses | | | 71,310 | | | | — | | | | 71,310 | | | | 66,447 | | | | (3,418 | ) | | | — | | | | 63,029 | |
Restructuring charge | | | 332 | | | | (332 | ) | | | — | | | | 1,614 | | | | — | | | | (1,614 | ) | | | — | |
| | |
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| |
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| |
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| |
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|
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|
Total selling, general and administrative expenses | | | 71,642 | | | | (332 | ) | | | 71,310 | | | | 68,061 | | | | (3,418 | ) | | | (1,614 | ) | | | 63,029 | |
| | |
|
|
| |
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| |
|
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| |
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|
|
Operating income | | | 59,587 | | | | 332 | | | | 59,919 | | | | 61,872 | | | | (1,857 | ) | | | 5,287 | | | | 65,302 | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (10,381 | ) | | | — | | | | (10,381 | ) | | | (10,300 | ) | | | (44 | ) | | | — | | | | (10,344 | ) |
Amortization of deferred financing fees | | | (891 | ) | | | — | | | | (891 | ) | | | (914 | ) | | | — | | | | — | | | | (914 | ) |
Other, net | | | 289 | | | | — | | | | 289 | | | | 797 | | | | 3 | | | | — | | | | 800 | |
| | |
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|
Income from continuing operations before income taxes | | | 48,604 | | | | 332 | | | | 48,936 | | | | 51,455 | | | | (1,898 | ) | | | 5,287 | | | | 54,844 | |
Income taxes | | | 17,740 | | | | 121 | | | | 17,861 | | | | 18,849 | | | | (711 | ) | | | 1,930 | | | | 20,068 | |
| | |
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Income from continuing operations | | | 30,864 | | | | 211 | | | | 31,075 | | | | 32,606 | | | | (1,187 | ) | | | 3,357 | | | | 34,776 | |
Discontinued operations, net of income tax benefit | | | (87,246 | ) | | | — | | | | (87,246 | ) | | | (13,657 | ) | | | 1,187 | | | | — | | | | (12,470 | ) |
| | |
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Net income (loss) | | $ | (56,382 | ) | | $ | 211 | | | $ | (56,171 | ) | | $ | 18,949 | | | $ | — | | | $ | 3,357 | | | $ | 22,306 | |
| | |
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Basic earnings per common share from continuing operations | | $ | 0.30 | | | | | | | $ | 0.30 | | | $ | 0.31 | | | | | | | | | | | $ | 0.33 | |
Discontinued operations | | | (0.84 | ) | | | | | | | (0.84 | ) | | | (0.13 | ) | | | | | | | | | | | (0.12 | ) |
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| | | | | |
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| | | | | | | | | |
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|
Basic earnings per common share | | $ | (0.54 | ) | | | | | | $ | (0.54 | ) | | $ | 0.18 | | | | | | | | | | | $ | 0.21 | |
| | |
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| | | | | |
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| | | | | | | | | |
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|
Diluted earnings per common share from continuing operations | | $ | 0.29 | | | | | | | $ | 0.30 | | | $ | 0.30 | | | | | | | | | | | $ | 0.32 | |
Discontinued operations | | $ | (0.83 | ) | | | | | | $ | (0.83 | ) | | $ | (0.13 | ) | | | | | | | | | | $ | (0.11 | ) |
| | |
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| | | | | |
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| | | | | | | | | |
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Diluted earnings per common share | | $ | (0.54 | ) | | | | | | $ | (0.54 | ) | | $ | 0.17 | | | | | | | | | | | $ | 0.20 | |
| | |
|
|
| | | | | |
|
|
| |
|
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| | | | | | | | | |
|
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|
|
Weighted average basic shares outstanding | | | 103,986 | | | | | | | | 103,986 | | | | 106,412 | | | | | | | | | | | | 106,412 | |
Weighted average diluted shares outstanding | | | 104,817 | | | | | | | | 104,817 | | | | 109,043 | | | | | | | | | | | | 109,043 | |
| (A) | | These Adjusted Consolidated Statements of Income are for informational purposes only and are not in accordance with US generally accepted accounting principles (GAAP). These statements exclude the impact of the restructuring charges. |
| (B) | | Amounts previously reported in our audited financial statements for the year ended September 30, 2002. Includes the results of Vacuum Process Technology, Inc. (VPT) which was discontinued during FY2002. |
| (C) | | Reflects the impact of the discontinuance of Applied Biotech, Inc. (ABI) and BioRobotics Group Limited (BioRobtics) on historical financial results. |
| (D) | | Reflects the impact of restructuring charges. |
April 22, 2003
Page 13 of 15
Exhibit 5
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Adjusted Consolidated Statements of Income
(In thousands, except per share data)
(unaudited)
| | | Six months ended March 31, 2003
| | | Six months ended March 31, 2002
| |
| | | US GAAP Results
| | | Adjustments (D)
| | | Adjusted Results (A)
| | | As Previously Reported US GAAP Results (B)
| | | Discontinued Operations (C)
| | | Adjustments (D)
| | | Adjusted Results (A)
| |
Net sales | | $ | 534,436 | | | $ | — | | | $ | 534,436 | | | $ | 509,428 | | | $ | (20,366 | ) | | $ | — | | | $ | 489,062 | |
|
Cost of sales | | | 278,366 | | | | — | | | | 278,366 | | | | 257,087 | | | | (10,641 | ) | | | — | | | | 246,446 | |
Restructuring charge | | | — | | | | — | | | | — | | | | 3,673 | | | | — | | | | (3,673 | ) | | | — | |
| | |
|
|
| |
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|
| |
|
|
| |
|
|
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| |
|
|
| |
|
|
|
Total cost of sales | | | 278,366 | | | | — | | | | 278,366 | | | | 260,760 | | | | (10,641 | ) | | | (3,673 | ) | | | 246,446 | |
| | |
|
|
| |
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|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
Gross profit | | | 256,070 | | | | — | | | | 256,070 | | | | 248,668 | | | | (9,725 | ) | | | 3,673 | | | | 242,616 | |
|
Selling, general and administrative expenses | | | 139,940 | | | | — | | | | 139,940 | | | | 128,130 | | | | (6,208 | ) | | | — | | | | 121,922 | |
Restructuring charge | | | 332 | | | | (332 | ) | | | — | | | | 1,614 | | | | — | | | | (1,614 | ) | | | — | |
| | |
|
|
| |
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|
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|
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|
| |
|
|
|
|
Total selling, general and administrative expenses | | | 140,272 | | | | (332 | ) | | | 139,940 | | | | 129,744 | | | | (6,208 | ) | | | (1,614 | ) | | | 121,922 | |
| | |
|
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| |
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| |
|
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| |
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|
| |
|
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| |
|
|
| |
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|
|
|
Operating income | | | 115,798 | | | | 332 | | | | 116,130 | | | | 118,924 | | | | (3,517 | ) | | | 5,287 | | | | 120,694 | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (20,792 | ) | | | — | | | | (20,792 | ) | | | (20,531 | ) | | | (47 | ) | | | — | | | | (20,578 | ) |
Amortization of deferred financing fees | | | (1,803 | ) | | | — | | | | (1,803 | ) | | | (1,741 | ) | | | — | | | | — | | | | (1,741 | ) |
Other, net | | | 780 | | | | — | | | | 780 | | | | 2,273 | | | | 35 | | | | — | | | | 2,308 | |
| | |
|
|
| |
|
|
| |
|
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| |
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| |
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|
| |
|
|
| |
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|
|
Income from continuing operations before income taxes | | | 93,983 | | | | 332 | | | | 94,315 | | | | 98,925 | | | | (3,529 | ) | | | 5,287 | | | | 100,683 | |
Income taxes | | | 34,304 | | | | 121 | | | | 34,425 | | | | 36,230 | | | | (1,315 | ) | | | 1,930 | | | | 36,845 | |
| | |
|
|
| |
|
|
| |
|
|
| |
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|
| |
|
|
| |
|
|
| |
|
|
|
Income from continuing operations | | | 59,679 | | | | 211 | | | | 59,890 | | | | 62,695 | | | | (2,214 | ) | | | 3,357 | | | | 63,838 | |
Discontinued operations, net of income tax benefit | | | (87,328 | ) | | | — | | | | (87,328 | ) | | | (13,776 | ) | | | 2,214 | | | | — | | | | (11,562 | ) |
| | |
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| |
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| |
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| |
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| |
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| |
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|
|
Net income (loss) | | $ | (27,649 | ) | | $ | 211 | | | $ | (27,438 | ) | | $ | 48,919 | | | $ | — | | | $ | 3,357 | | | $ | 52,276 | |
| | |
|
|
| |
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|
| |
|
|
| |
|
|
| |
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|
| |
|
|
| |
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|
Basic earnings per common share from continuing operations | | $ | 0.57 | | | | | | | $ | 0.57 | | | $ | 0.59 | | | | | | | | | | | $ | 0.60 | |
Discontinued operations | | | (0.83 | ) | | | | | | | (0.83 | ) | | | (0.13 | ) | | | | | | | | | | | (0.11 | ) |
| | |
|
|
| | | | | |
|
|
| |
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|
| | | | | | | | | |
|
|
|
|
Basic earnings per common share | | $ | (0.26 | ) | | | | | | $ | (0.26 | ) | | $ | 0.46 | | | | | | | | | | | $ | 0.49 | |
| | |
|
|
| | | | | |
|
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| |
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|
| | | | | | | | | |
|
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|
|
Diluted earnings per common share from continuing operations | | $ | 0.56 | | | | | | | $ | 0.57 | | | $ | 0.57 | | | | | | | | | | | $ | 0.59 | |
Discontinued operations | | $ | (0.82 | ) | | | | | | $ | (0.82 | ) | | $ | (0.13 | ) | | | | | | | | | | $ | (0.11 | ) |
| | |
|
|
| | | | | |
|
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| |
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|
| | | | | | | | | |
|
|
|
|
Diluted earnings per common share | | $ | (0.26 | ) | | | | | | $ | (0.26 | ) | | $ | 0.45 | | | | | | | | | | | $ | 0.48 | |
| | |
|
|
| | | | | |
|
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|
| | | | | | | | | |
|
|
|
|
Weighted average basic shares outstanding | | | 104,863 | | | | | | | | 104,863 | | | | 106,412 | | | | | | | | | | | | 106,412 | |
Weighted average diluted shares outstanding | | | 105,920 | | | | | | | | 105,920 | | | | 109,043 | | | | | | | | | | | | 109,043 | |
| (A) | | These Adjusted Consolidated Statements of Income are for informational purposes only and are not in accordance with US generally accepted accounting principles (GAAP). These statements exclude the impact of the restructuring charges. |
| (B) | | Amounts previously reported in our audited financial statements for the year ended September 30, 2002. Includes the results of Vacuum Process Technology, Inc. (VPT) which was discontinued during FY2002. |
| (C) | | Reflects the impact of the discontinuance of Applied Biotech, Inc. (ABI) and BioRobotics Group Limited (BioRobtics) on historical financial results. |
| (D) | | Reflects the impact of restructuring charges. |
April 22, 2003
Page 14 of 15
Exhibit 6
Operating Results and Selected Balance Sheet Information For Discontinued Operations
|
| | | Three Months Ended March 31,
| |
| | | 2003
| | | 2002
| |
| | | (unaudited) | |
| | | ABI
| | | BioRobotics
| | | VPT
| | | Combined
| | | ABI
| | BioRobotics
| | | VPT
| | | Combined
| |
Net Sales | | $ | 6,555 | | | $ | 499 | | | $ | 267 | | | $ | 7,321 | | | $ | 9,533 | | $ | 1,618 | | | $ | 492 | | | $ | 11,642 | |
Gross Profit | | | 1,525 | | | | 5 | | | | (819 | ) | | | 712 | | | | 4,311 | | | 983 | | | | (18 | ) | | | 5,275 | |
Pretax loss | | | (65,399 | ) | | | (42,062 | ) | | | (4,799 | ) | | | (112,260 | ) | | | 2,135 | | | (235 | ) | | | (744 | ) | | | 1,157 | |
Income tax benefit | | | (11,390 | ) | | | (12,163 | ) | | | (1,460 | ) | | | (25,014 | ) | | | 781 | | | (68 | ) | | | (287 | ) | | | 426 | |
Net loss | | | (54,008 | ) | | | (29,899 | ) | | | (3,339 | ) | | | (87,246 | ) | | | 1,354 | | | (167 | ) | | | (13,657 | ) | | | (12,470 | ) |
|
| | | Six Months Ended March 31,
| |
| | | 2003
| | | 2002
| |
| | | (unaudited) | |
| | | ABI
| | | BioRobotics
| | | VPT
| | | Combined
| | | ABI
| | BioRobotics
| | | VPT
| | | Combined
| |
Net Sales | | $ | 13,841 | | | $ | 1,951 | | | $ | 884 | | | $ | 16,676 | | | $ | 17,329 | | $ | 3,038 | | | $ | 1,972 | | | $ | 22,339 | |
Gross Profit | | | 4,261 | | | | 921 | | | | (803 | ) | | | 4,379 | | | | 8,169 | | | 1,256 | | | | 300 | | | | 9,725 | |
Pretax loss | | | (64,806 | ) | | | (42,508 | ) | | | (5,042 | ) | | | (112,356 | ) | | | 4,316 | | | (787 | ) | | | (944 | ) | | | 2,585 | |
Income tax benefit | | | (11,360 | ) | | | (12,120 | ) | | | (1,549 | ) | | | (25,028 | ) | | | 1,580 | | | (265 | ) | | | (368 | ) | | | 947 | |
Net loss | | | (53,447 | ) | | | (30,388 | ) | | | (3,493 | ) | | | (87,328 | ) | | | 2,736 | | | (522 | ) | | | (13,776 | ) | | | (11,562 | ) |
|
| | | For The Period Ended
| |
| | | March 31, 2003
| | | September 30, 2002
| |
| | | (unaudited) | | | | | | | | | | | | |
| | | ABI
| | | BioRobotics
| | | VPT
| | | Combined
| | | ABI
| | BioRobotics
| | | VPT
| | | Combined
| |
Current assets | | $ | 16,677 | | | $ | 15,994 | | | $ | — | | | $ | 32,671 | | | $ | 22,844 | | $ | 3,617 | | | $ | 3,802 | | | $ | 30,262 | |
Property, plant and equipment, net | | | 5,618 | | | | 771 | | | | — | | | | 6,389 | | | | 5,496 | | | 714 | | | | 817 | | | | 7,027 | |
Intangible assets | | | 12,919 | | | | 425 | | | | — | | | | 13,344 | | | | 74,801 | | | 39,711 | | | | — | | | | 114,512 | |
Total assets | | | 35,214 | | | | 17,189 | | | | — | | | | 52,404 | | | | 103,335 | | | 44,042 | | | | 5,467 | | | | 152,844 | |
Current liabilities | | | 4,585 | | | | 754 | | | | — | | | | 5,338 | | | | 2,830 | | | 6,174 | | | | 305 | | | | 9,309 | |
Total liabilities | | | 4,585 | | | | 754 | | | | — | | | | 5,338 | | | | 2,830 | | | 6,174 | | | | 305 | | | | 9,309 | |
April 22, 2003
Page 15 of 15
Exhibit 7
Calculation of EBITDA
(historical amounts have been restated to reflect discontinued operations)
| | | Three Months Ended March 31,
| | Six Months Ended March 31,
|
| | | 2003
| | 2002
| | 2003
| | 2002
|
| | | (unaudited) |
Income from continuing operations before income taxes | | $ | 48,604 | | $ | 49,557 | | $ | 93,983 | | $ | 95,397 |
Interest expense | | | 10,381 | | | 10,344 | | | 20,792 | | | 20,578 |
Depreciation | | | 10,604 | | | 9,158 | | | 21,376 | | | 18,472 |
Amortization | | | 4,848 | | | 3,895 | | | 9,559 | | | 7,099 |
| | |
|
| |
|
| |
|
| |
|
|
EBITDA | | $ | 74,437 | | $ | 72,954 | | $ | 145,710 | | $ | 141,546 |
| | |
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| |
|
| |
|
| |
|
|
