July 22, 2003
Page 1 of 13
EXHIBIT 99.1
[APOGENT logo appears here]
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 Third Quarter and Year-to-Date Results
PORTSMOUTH, N.H (July 22, 2003): Apogent Technologies Inc. (NYSE: AOT), a leading manufacturer of clinical diagnostic and life science research products, today reported financial results for the third quarter and year-to-date ended June 30, 2003. Diluted earnings per share from continuing operations for the third quarter were $0.36.
Income and diluted earnings per share from continuing operations for the third quarter were $35.7 million and $0.36, respectively. These results compare with income and diluted earnings per share from continuing operations for the third quarter of fiscal 2002 of $33.9 million and $0.31, respectively. Excluding restructuring, income and diluted earnings per share from continuing operations for the third quarter were $36.6 million and $0.36, respectively. For the third quarter of fiscal 2002, income and diluted earnings per share from continuing operations, excluding restructuring, were $34.9 million and $0.32, respectively.
Net sales for the third quarter were $278.5 million compared with $267.2 million in the same period last year, an increase of 4.2%. Net sales year-to-date were $812.9 million compared to $756.3 million for the prior year, an increase of 7.5%.
Commenting on the financial results of the Company, Frank H. Jellinek, Jr., President and Chief Executive Officer of Apogent, said: “During the third quarter, we continued to see growth in various segments of our consumables businesses. We experienced significant growth in our immunodiagnostics and clinical consumables segments. However, this growth was offset by continued softness in capital equipment sales and cautious spending from large pharmaceutical accounts for other research products.
July 22, 2003
Page 2 of 13
Also, we continue to examine all aspects of our business closely in an effort to reduce costs and working capital.”
During the quarter, the Company repurchased 8,499,522 shares of its common stock, including 6,022,952 shares purchased as part of the previously announced modified “Dutch Auction” tender offer. With regard to the Company’s continuing share buyback program, Mr. Jellinek commented: “We were pleased with the results of the tender offer, and we intend to continue with our plan to reduce our share count on an opportunistic basis, as announced at the end of last quarter.”
THIRD QUARTER AND YEAR-TO-DATE FINANCIAL RESULTS
Quarterly and year-to-date comparisons of net sales by business segment are as follows:
NET SALES
| | | Three Months Ended June 30, (in thousands)
| | | | | | |
Business Segment
| | 2003
| | 2002
| | Growth1
| | | Internal Growth
| |
Clinical Group | | $ | 127,818 | | $ | 122,754 | | 4.1 | % | | 1.7 | % |
Research Group | | | 150,660 | | | 144,438 | | 4.3 | % | | 0.5 | % |
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Total | | $ | 278,478 | | $ | 267,192 | | 4.2 | % | | 1.0 | % |
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| | | Nine Months Ended June 30, (in thousands)
| | | | | | |
Business Segment
| | 2003
| | 2002
| | Growth1
| | | Internal Growth
| |
Clinical Group | | $ | 379,747 | | $ | 351,137 | | 8.1 | % | | 2.5 | % |
Research Group | | | 433,167 | | | 405,117 | | 6.9 | % | | 2.0 | % |
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Total | | $ | 812,914 | | $ | 756,254 | | 7.5 | % | | 2.3 | % |
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1 Please refer to Exhibit 7 for a breakdown of net sales growth for the three and nine month periods ended June 30, 2003.
July 22, 2003
Page 3 of 13
Apogent’s net sales for the quarter and year-to-date periods by geographic area were as follows:
| | | Three Months Ended June 30, (in thousands) |
Geographic Area
| | 2003
| | 2002
|
North America | | $ | 203,205 | | $ | 198,494 |
Europe | | | 51,416 | | | 44,704 |
Asia | | | 17,327 | | | 16,166 |
Other | | | 6,530 | | | 7,828 |
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Total | | $ | 278,478 | | $ | 267,192 |
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| | | Nine Months Ended June 30, (in thousands) |
Geographic Area
| | 2003
| | 2002
|
North America | | $ | 592,171 | | $ | 556,263 |
Europe | | | 152,486 | | | 132,075 |
Asia | | | 49,413 | | | 44,722 |
Other | | | 18,844 | | | 23,194 |
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Total | | $ | 812,914 | | $ | 756,254 |
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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 third quarter of fiscal 2003 was $133.7 million, an increase of 2.5% from $130.4 million for the same period last year. Gross margin fell from 48.8% in the third quarter of last year to 48.0% in the third quarter of this year. Year-to-date gross margin was 47.9%, or $389.8 million, versus 48.8% or $369.4 million last year.
Selling, general and administrative expenses for the quarter were $70.4 million, an increase of 5.6% from $66.7 million for the same period last year. Selling, general and administrative expenses were $210.7 million for the first nine months of the fiscal year versus $190.2 million for the same period last year.
Operating income for the third quarter of 2003 was $63.3 million, a decrease of 0.8%, from $63.8 million for the same period last year. Operating income year-to-date was $179.1 million compared to $179.2 million for the same period last year.
Earnings before interest, taxes, depreciation and amortization from continuing operations (Adjusted EBITDA) was $77.7 million for the three months ended June 30,
July 22, 2003
Page 4 of 13
2003, versus $78.0 million for the same period in 2002. Adjusted EBITDA was $223.4 million and $219.6 million for the nine months ended June 30, 2003 and 2002, respectively. Net income was $37.0 million for the three months ended June 30, 2003 compared to $36.1 million for the same period in 2002. Net income was $9.3 million for the nine months ended June 30, 2003 compared to $85.0 million for the same period in 2002.
The Company has included information concerning Adjusted EBITDA because management believes that certain investors use Adjusted EBITDA as one measure of a company’s historical ability to service its debt. Adjusted 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. Adjusted EBITDA has not been prepared in accordance with generally accepted accounting principles (GAAP). Adjusted 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.
Accounts receivable were $174.9 million and inventory was $213.4 million at the end of the third quarter. Outstanding days of sales in the third quarter were 55.3 days compared with 56.9 days for the same period last year, restated for the discontinued operations. Inventory turns for the quarter were 2.6, compared with 2.6 for the last quarter, and 2.6 for the third quarter of last year.
RESTRUCTURING
Restructuring expenses during the three and nine months ended June 30, 2003 were $1.4 million and $1.8 million, respectively. These charges were primarily related to severance and other costs associated with the consolidation of facilities and discontinuance of certain product lines.
INCOME TAXES
During the quarter, the Company revised its estimated effective annual tax rate for fiscal 2003 down from 36.5% to 36% due to the expected utilization of additional foreign tax credits. The effective tax rate for the three months ended June 30, 2003 of 29.7% was favorably impacted by the utilization of additional foreign tax credits on the Company’s prior year tax returns filed this quarter and the cumulative effect of the fiscal 2003 rate change. The Company anticipates that its estimated effective annual tax rate for the fiscal year 2004 will be 36%.
SHARE REPURCHASES
Pursuant to our previously announced modified “Dutch Auction” tender offer, Apogent repurchased approximately 6.0 million shares during the third quarter at a price of $17.50. In addition, the Company repurchased approximately 2.5 million additional shares at an average price of $20.49 per share.
July 22, 2003
Page 5 of 13
As of the end of the third quarter, the number of shares outstanding was approximately 93.7 million.
In accordance with prior Board authorizations, the Company is authorized to repurchase an additional 13.4 million shares over the course of the period ending September 30, 2005.
BOND OFFERING
As previously announced, Apogent sold $250 million of 6 ½% senior subordinated notes due 2013 in a private placement that closed on June 2, 2003. Apogent and its guarantor subsidiaries recently filed an exchange offer registration statement with respect to these notes, as promised in connection with their issuance.
ACQUISITION
On July 1, 2003, Apogent purchased the PathoDx line of products from Diagnostic Products Corporation. The PathoDx line consists of manual latex agglutination and immunoflorescent microscopy diagnostic tests. Net sales from this product line for the first full year are expected to be approximately $2.5 million.
OUTLOOK FOR THE BALANCE OF THE YEAR AND FISCAL 2004
The Company is maintaining 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, or $0.04 to $0.05 per share). Although the Company has not commenced its detailed budgeting process for fiscal year 2004, the Company’s preliminary estimate of diluted earnings per share for fiscal 2004 falls within a range of $1.50 to $1.65. This range assumes that the Company repurchases an additional 6.5 million shares.
CONFERENCE CALL
On Wednesday, July 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 June 30, 2003. The dial-in numbers for the teleconference are:
| | | |
| | | Domestic Callers | | (877) 679-9049 | | |
| | | |
| | | International Callers | | (952) 556-2803 | | |
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 August 23, 2003.
A telephone replay of the call will also be available until 1:00 p.m. EST on Thursday, July 24, 2003. The telephone replay numbers are (800) 615-3210 (Domestic Callers) or (703) 326-3020. (International Callers), passcode 6400826.
July 22, 2003
Page 6 of 13
UPCOMING COMPANY TRADE SHOW EXHIBITS
Show
| | Details
| | |
American Association of Clinical Chemistry | | July 20 – 24, 2003 Philadelphia, PA www.aacc.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 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.
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July 22, 2003
Page 7 of 13
Exhibit 1
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands except share and per share data)
(unaudited)
| | | June 30,
2003
| | | September 30,
2002
| |
| Assets | | | | | | | | |
| Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 86,150 | | | $ | 16,327 | |
Accounts receivable (less allowance for doubtful accounts of
$4,008 and $5,723 respectively) | | | 174,945 | | | | 186,950 | |
Inventories | | | 213,367 | | | | 203,997 | |
Deferred income taxes | | | 14,127 | | | | 14,127 | |
Prepaid expenses and other current assets | | | 18,957 | | | | 19,689 | |
| | | | | | | | | |
Assets of discontinued operations—avail. for sale | | | 52,879 | | | | 5,436 | |
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Total current assets | | | 560,425 | | | | 446,526 | |
Available for sale security | | | 62,727 | | | | 60,183 | |
Property, plant and equipment, net | | | 274,958 | | | | 270,893 | |
Intangible assets | | | 1,173,866 | | | | 1,243,113 | |
Other assets | | | 19,414 | | | | 15,370 | |
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Total assets | | $ | 2,091,390 | | | $ | 2,036,085 | |
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Liabilities and Shareholders’ Equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
Short-term debt and overdrafts | | $ | 14,006 | | | $ | 10,640 | |
Accounts payable | | | 45,512 | | | | 53,779 | |
Current portion of long-term debt | | | 2,204 | | | | 25,352 | |
Income taxes payable | | | 46,975 | | | | 53,064 | |
Accrued payroll and employee benefits | | | 31,056 | | | | 32,009 | |
Accrued interest expense | | | 9,341 | | | | 16,630 | |
Restructuring reserve | | | 1,250 | | | | 1,548 | |
Other current liabilities | | | 29,367 | | | | 23,074 | |
Liabilities of discontinued operations | | | 5,545 | | | | 305 | |
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|
Total current liabilities | | | 185,256 | | | | 216,401 | |
Long-term debt | | | 884,717 | | | | 635,020 | |
Securities lending agreement | | | 62,727 | | | | 60,183 | |
Deferred income taxes | | | 144,090 | | | | 132,100 | |
Other liabilities | | | 17,522 | | | | 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 shares
issued 107,019,535 and 106,976,877 shares respectively;
outstanding 93,698,339 and 105,967,853 shares respectively | | | 1,070 | | | | 1,070102 | |
Equity rights, 50 rights at $1.09 per right | | | — | | | | — | |
Additional paid-in capital | | | 270,591 | | | | 271,682 | |
Retained earnings | | | 758,095 | | | | 748,791 | |
Accumulated other comprehensive income (loss) | | | 8,100 | | | | (26,419 | ) |
Treasury common stock 13,321,196 and 1,009,024 shares at cost | | | (240,778 | ) | | | (19,986 | ) |
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Total shareholders’ equity | | | 797,078 | | | | 975,138 | |
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Total liabilities and shareholders’ equity | | $ | 2,091,390 | | | $ | 2,036,085 | |
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July 22, 2003
Page 8 of 13
Exhibit 2
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)
(unaudited)
| | | Three Months Ended
June 30,
| | | Nine Months Ended
June 30,
| |
| | | 2003
| | | 2002
| | | 2003
| | | 2002
| |
Net sales | | $ | 278,478 | | | $ | 267,192 | | | $ | 812,914 | | | $ | 756,254 | |
Cost of sales | | | 143,839 | | | | 135,304 | | | | 422,205 | | | | 381,750 | |
Restructuring charge | | | 955 | | | | 1,440 | | | | 955 | | | | 5,113 | |
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Total cost of sales | | | 144,794 | | | | 136,744 | | | | 423,160 | | | | 386,863 | |
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Gross profit | | | 133,684 | | | | 130,448 | | | | 389,754 | | | | 369,391 | |
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Selling, general and administrative expenses | | | 69,923 | | | | 66,655 | | | | 209,863 | | | | 188,577 | |
Restructuring charge | | | 475 | | | | — | | | | 807 | | | | 1,614 | |
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Total selling, general and administrative expenses | | | 70,398 | | | | 66,655 | | | | 210,670 | | | | 190,191 | |
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Operating income | | | 63,286 | | | | 63,793 | | | | 179,084 | | | | 179,200 | |
Other income (expense): | | | | | | | | | | | | | | | | |
Interest expense | | | (11,635 | ) | | | (10,273 | ) | | | (32,427 | ) | | | (30,851 | ) |
Amortization of deferred financing fees | | | (1,006 | ) | | | (938 | ) | | | (2,809 | ) | | | (2,680 | ) |
Other, net | | | 163 | | | | 963 | | | | 943 | | | | 3,272 | |
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Income from continuing operations before income taxes | | | 50,808 | | | | 53,545 | | | | 144,791 | | | | 148,941 | |
Income taxes | | | 15,104 | | | | 19,597 | | | | 49,408 | | | | 54,512 | |
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Income from continuing operations | | | 35,704 | | | | 33,948 | | | | 95,383 | | | | 94,429 | |
Discontinued operations, net of income tax benefit | | | 1,249 | | | | 2,125 | | | | (86,079 | ) | | | (9,437 | ) |
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Net income | | $ | 36,953 | | | $ | 36,073 | | | $ | 9,304 | | | $ | 84,992 | |
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Basic earnings per common share from continuing operations | | $ | 0.36 | | | $ | 0.32 | | | $ | 0.93 | | | $ | 0.89 | |
Discontinued operations | | | 0.01 | | | | 0.02 | | | | (0.84 | ) | | | (0.09 | ) |
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Basic earnings per common share | | $ | 0.37 | | | $ | 0.34 | | | $ | 0.09 | | | $ | 0.80 | |
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Diluted earnings per common share from continuing operations | | $ | 0.36 | | | $ | 0.31 | | | $ | 0.92 | | | $ | 0.87 | |
Discontinued operations | | $ | 0.01 | | | | 0.02 | | | | (0.83 | ) | | | (0.09 | ) |
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Diluted earnings per common share | | $ | 0.37 | | | $ | 0.33 | | | $ | 0.09 | | | $ | 0.78 | |
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Weighted average basic shares outstanding | | | 99,486 | | | | 106,816 | | | | 103,053 | | | | 106,452 | |
Weighted average diluted shares outstanding | | | 100,526 | | | | 109,010 | | | | 104,056 | | | | 108,996 | |
July 22, 2003
Page 9 of 13
Exhibit 3
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| | | Nine Months Ended
June 30,
| |
| | | 2003
| | | 2002
| |
Cash flows from operating activities: | | | | | | | | |
Net income | | $ | 9,304 | | | $ | 84,992 | |
Adjustments to reconcile net income to net cash provided by operating activities | | | | | | | | |
Discontinued operations | | | 86,079 | | | | 9,437 | |
Depreciation | | | 31,819 | | | | 27,499 | |
Amortization | | | 14,377 | | | | 12,272 | |
Gain on sale of property, plant and equipment | | | 244 | | | | 100 | |
Provision for losses on doubtful accounts | | | (808 | ) | | | (496 | ) |
Inventory provisions | | | 982 | | | | (2,919 | ) |
Deferred income taxes | | | 10,252 | | | | 3,416 | |
Changes in assets and liabilities, net of effects of businesses acquired: | | | | | | | — | |
Decrease in accounts receivable | | | 3,312 | | | | 1,107 | |
Increase in inventories | | | (12,092 | ) | | | (17,817 | ) |
Increase in prepaid expenses and other current assets | | | (3,376 | ) | | | (4,734 | ) |
Decrease in accounts payable | | | (6,956 | ) | | | (7,409 | ) |
Increase (decrease) in income taxes payable | | | (6,604 | ) | | | 14,964 | |
Decrease in accrued payroll and employee benefits | | | (1,372 | ) | | | (957 | ) |
Decrease in accrued interest expense | | | (7,290 | ) | | | (6,861 | ) |
Increase (decrease) in restructuring reserve | | | (298 | ) | | | 3,188 | |
Increase (decrease) in other current liabilities | | | 2,842 | | | | (6,045 | ) |
Net change in other assets and liabilities | | | (4,970 | ) | | | 9,051 | |
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Net cash provided by operating activities | | | 115,445 | | | | 118,788 | |
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Cash flows from investing activities: | | | | | | | | |
Capital expenditures | | | (37,684 | ) | | | (31,356 | ) |
Proceeds from sales of property, plant and equipment | | | 1,221 | | | | 1,119 | |
Net payments for businesses acquired | | | (21,654 | ) | | | (142,117 | ) |
Other investing activities | | | 1,546 | | | | — | |
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Net cash used in investing activities | | | (56,571 | ) | | | (172,354 | ) |
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Cash flows from financing activities: | | | | | | | | |
Proceeds from revolving credit facility | | | 469,400 | | | | 285,200 | |
Principal payments on revolving credit facility | | | (469,400 | ) | | | (465,300 | ) |
Proceeds from long-term debt | | | 250,000 | | | | 300,000 | |
Principal payments on long-term debt | | | (23,408 | ) | | | (45,372 | ) |
Proceeds from the exercise of stock options | | | 2,543 | | | | 8,407 | |
Proceeds from stock purchase program | | | 927 | | | | — | |
Purchase of treasury stock | | | (226,348 | ) | | | — | |
Financing fees paid | | | (9,168 | ) | | | (8,081 | ) |
Other financing activities | | | 2,510 | | | | (374 | ) |
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Net cash provided by (used in) financing activities | | | (2,944 | ) | | | 74,480 | |
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Effect of exchange rate changes on cash and cash equivalents | | | 13,893 | | | | 4,503 | |
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Net increase in cash and cash equivalents | | | 69,823 | | | | 25,417 | |
Cash and cash equivalents at beginning of period | | | 16,327 | | | | 9,192 | |
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Cash and cash equivalents at end of period | | $ | 86,150 | | | $ | 34,609 | |
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July 22, 2003
Page 10 of 13
Exhibit 4
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Adjusted Consolidated Statements of Income
(In thousands, except per share data)
(unaudited)
| | | Three months ended June 30, 2003
| | | Three months ended June 30, 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 | | $ | 278,478 | | | $ | — | | | $ | 278,478 | | | $ | 280,700 | | | $ | (13,508 | ) | | $ | — | | | $ | 267,192 | |
Cost of sales | | | 143,839 | | | | — | | | | 143,839 | | | | 141,783 | | | | (6,479 | ) | | | — | | | | 135,304 | |
Restructuring charge | | | 955 | | | | (955 | ) | | | — | | | | 1,440 | | | | — | | | | (1,440 | ) | | | — | |
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Total cost of sales | | | 144,794 | | | | (955 | ) | | | 143,839 | | | | 143,223 | | | | (6,479 | ) | | | (1,440 | ) | | | 135,304 | |
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|
Gross profit | | | 133,684 | | | | 955 | | | | 134,639 | | | | 137,477 | | | | (7,029 | ) | | | 1,440 | | | | 131,888 | |
Selling, general and administrative expenses | | | 69,923 | | | | — | | | | 69,923 | | | | 70,189 | | | | (3,534 | ) | | | — | | | | 66,655 | |
Restructuring charge | | | 475 | | | | (475 | ) | | | — | | | | — | | | | — | | | | — | | | | — | |
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Total selling, general and administrative expenses | | | 70,398 | | | | (475 | ) | | | 69,923 | | | | 70,189 | | | | (3,534 | ) | | | — | | | | 66,655 | |
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Operating income | | | 63,286 | | | | 1,430 | | | | 64,716 | | | | 67,288 | | | | (3,495 | ) | | | 1,440 | | | | 65,233 | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (11,635 | ) | | | — | | | | (11,635 | ) | | | (10,273 | ) | | | — | | | | — | | | | (10,273 | ) |
Amortization of deferred financing fees | | | (1,006 | ) | | | — | | | | (1,006 | ) | | | (938 | ) | | | — | | | | — | | | | (938 | ) |
Other, net | | | 163 | | | | — | | | | 163 | | | | 943 | | | | 20 | | | | — | | | | 963 | |
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Income from continuing operations before income taxes | | | 50,808 | | | | 1,430 | | | | 52,238 | | | | 57,020 | | | | (3,475 | ) | | | 1,440 | | | | 54,985 | |
Income taxes | | | 15,104 | | | | 515 | | | | 15,619 | | | | 20,846 | | | | (1,249 | ) | | | 526 | | | | 20,123 | |
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Income from continuing operations | | | 35,704 | | | | 915 | | | | 36,619 | | | | 36,174 | | | | (2,226 | ) | | | 914 | | | | 34,862 | |
Discontinued operations, net of income tax benefit | | | 1,249 | | | | — | | | | 1,249 | | | | (101 | ) | | | 2,226 | | | | — | | | | 2,125 | |
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Net income | | $ | 36,953 | | | $ | 915 | | | $ | 37,868 | | | $ | 36,073 | | | $ | — | | | $ | 914 | | | $ | 36,987 | |
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Basic earnings per common share from continuing operations | | $ | 0.36 | | | | | | | $ | 0.37 | | | $ | 0.34 | | | | | | | | | | | $ | 0.33 | |
Discontinued operations | | | 0.01 | | | | | | | | 0.01 | | | | (0.00 | ) | | | | | | | | | | | 0.02 | |
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Basic earnings per common share | | $ | 0.37 | | | | | | | $ | 0.38 | | | $ | 0.34 | | | | | | | | | | | $ | 0.35 | |
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Diluted earnings per common share from continuing operations | | $ | 0.36 | | | | | | | $ | 0.36 | | | $ | 0.33 | | | | | | | | | | | $ | 0.32 | |
Discontinued operations | | $ | 0.01 | | | | | | | $ | 0.01 | | | $ | (0.00 | ) | | | | | | | | | | $ | 0.02 | |
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Diluted earnings per common share | | $ | 0.37 | | | | | | | $ | 0.38 | | | $ | 0.33 | | | | | | | | | | | $ | 0.34 | |
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Weighted average basic shares outstanding | | | 99,486 | | | | | | | | 99,486 | | | | 106,816 | | | | | | | | | | | | 106,816 | |
Weighted average diluted shares outstanding | | | 100,526 | | | | | | | | 100,526 | | | | 109,010 | | | | | | | | | | | | 109,010 | |
| (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. 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. |
July 22, 2003
Page 11 of 13
Exhibit 5
APOGENT TECHNOLOGIES INC. AND SUBSIDIARIES
Adjusted Consolidated Statements of Income
(In thousands, except per share data)
(unaudited)
| | | Nine months ended June 30, 2003
| | | Nine months ended June 30, 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 | | $ | 812,914 | | | $ | — | | | $ | 812,914 | | | $ | 790,129 | | | $ | (33,875 | ) | | $ | — | | | $ | 756,254 | |
Cost of sales | | | 422,205 | | | | — | | | | 422,205 | | | | 398,871 | | | | (17,121 | ) | | | — | | | | 381,750 | |
Restructuring charge | | | 955 | | | | (955 | ) | | | — | | | | 5,113 | | | | — | | | | (5,113 | ) | | | — | |
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Total cost of sales | | | 423,160 | | | | (955 | ) | | | 422,205 | | | | 403,984 | | | | (17,121 | ) | | | (5,113 | ) | | | 381,750 | |
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Gross profit | | | 389,754 | | | | 955 | | | | 390,709 | | | | 386,145 | | | | (16,754 | ) | | | 5,113 | | | | 374,504 | |
Selling, general and administrative expenses | | | 209,863 | | | | — | | | | 209,863 | | | | 198,319 | | | | (9,742 | ) | | | — | | | | 188,577 | |
Restructuring charge | | | 807 | | | | (807 | ) | | | — | | | | 1,614 | | | | — | | | | (1,614 | ) | | | — | |
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Total selling, general and administrative expenses | | | 210,670 | | | | (807 | ) | | | 209,863 | | | | 199,933 | | | | (9,742 | ) | | | (1,614 | ) | | | 188,577 | |
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Operating income | | | 179,084 | | | | 1,762 | | | | 180,846 | | | | 186,212 | | | | (7,012 | ) | | | 6,727 | | | | 185,927 | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (32,427 | ) | | | — | | | | (32,427 | ) | | | (30,804 | ) | | | (47 | ) | | | — | | | | (30,851 | ) |
Amortization of deferred financing fees | | | (2,809 | ) | | | — | | | | (2,809 | ) | | | (2,680 | ) | | | — | | | | — | | | | (2,680 | ) |
Other, net | | | 943 | | | | — | | | | 943 | | | | 3,217 | | | | 55 | | | | — | | | | 3,272 | |
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Income from continuing operations before income taxes | | | 144,791 | | | | 1,762 | | | | 146,553 | | | | 155,945 | | | | (7,004 | ) | | | 6,727 | | | | 155,668 | |
Income taxes | | | 49,408 | | | | 634 | | | | 50,042 | | | | 57,076 | | | | (2,564 | ) | | | 2,455 | | | | 56,967 | |
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Income from continuing operations | | | 95,383 | | | | 1,128 | | | | 96,511 | | | | 98,869 | | | | (4,440 | ) | | | 4,272 | | | | 98,701 | |
Discontinued operations, net of income tax benefit | | | (86,079 | ) | | | — | | | | (86,079 | ) | | | (13,877 | ) | | | 4,440 | | | | — | | | | (9,437 | ) |
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Net income | | $ | 9,304 | | | $ | 1,128 | | | $ | 10,432 | | | $ | 84,992 | | | $ | — | | | $ | 4,272 | | | $ | 89,264 | |
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Basic earnings per common share from continuing operations | | $ | 0.93 | | | | | | | $ | 0.94 | | | $ | 0.93 | | | | | | | | | | | $ | 0.93 | |
Discontinued operations | | | (0.84 | ) | | | | | | | (0.84 | ) | | | (0.13 | ) | | | | | | | | | | | (0.09 | ) |
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Basic earnings per common share | | $ | 0.09 | | | | | | | $ | 0.10 | | | $ | 0.80 | | | | | | | | | | | $ | 0.84 | |
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Diluted earnings per common share from continuing operations | | $ | 0.92 | | | | | | | $ | 0.93 | | | $ | 0.91 | | | | | | | | | | | $ | 0.91 | |
Discontinued operations | | $ | (0.83 | ) | | | | | | $ | (0.83 | ) | | $ | (0.13 | ) | | | | | | | | | | $ | (0.09 | ) |
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Diluted earnings per common share | | $ | 0.09 | | | | | | | $ | 0.10 | | | $ | 0.78 | | | | | | | | | | | $ | 0.82 | |
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Weighted average basic shares outstanding | | | 103,053 | | | | | | | | 103,053 | | | | 106,452 | | | | | | | | | | | | 106,452 | |
Weighted average diluted shares outstanding | | | 104,056 | | | | | | | | 104,056 | | | | 108,996 | | | | | | | | | | | | 108,996 | |
| (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. 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. |
July 22, 2003
Page 12 of 13
Exhibit 6
Calculation of Adjusted EBITDA
(historical amounts have been restated to reflect discontinued operations)
| | | Three Months Ended
June 30,
| | Nine Months Ended
June 30,
| |
| | | 2003
| | 2002
| | 2003
| | | 2002
| |
| | | (unaudited) | |
Net income | | $ | 36,953 | | $ | 36,073 | | $ | 9,304 | | | $ | 84,992 | |
Less: Discontinued operations | | | 1,249 | | | 2,125 | | | (86,079 | ) | | | (9,437 | ) |
Income Taxes | | | 15,104 | | | 19,597 | | | 49,408 | | | | 54,512 | |
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Income from continuing operations before income taxes | | | 50,808 | | | 53,545 | | | 144,791 | | | | 148,941 | |
Interest expense | | | 11,635 | | | 10,273 | | | 32,427 | | | | 30,851 | |
Depreciation | | | 10,443 | | | 9,027 | | | 31,819 | | | | 27,499 | |
Amortization | | | 4,818 | | | 5,173 | | | 14,377 | | | | 12,272 | |
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Adjusted EBITDA | | $ | 77,704 | | $ | 78,018 | | $ | 223,414 | | | $ | 219,563 | |
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July 22, 2003
Page 13 of 13
Exhibit 7
| | | Three Months
Ended
| | Nine Months
Ended
|
| | | June 30, |
| | | (unaudited) |
| Components of Net Sales Growth | | 2003
| | 2003
|
Internal growth | | 1.0% | | 2.3% |
Acquisitions | | 0.5% | | 2.8% |
Foreign exchange | | 2.7% | | 2.4% |
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| |
|
Total sales growth | | 4.2% | | 7.5% |
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|
The above figures represent the percentage growth in net sales as compared to the same period in fiscal 2002.
