NEWS RELEASE
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NEW BRUNSWICK SCIENTIFIC CO., INC.
BOX 4005 - 44 TALMADGE RD. - EDISON, NJ 08818-4005 - 732-287-1200
FAX 732-287-4222
INTERNET: HTTP://WWW.NBSC.COM - E-MAIL: BIOINFO@NBSC.COM
INVESTOR CONTACT:
Samuel Eichenbaum
Vice President, Finance
732.650.2500
E-mail: same@nbsc.com FOR IMMEDIATE RELEASE
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NEW BRUNSWICK SCIENTIFIC REPORTS FIRST-QUARTER 2003 FINANCIAL RESULTS
EDISON, NEW JERSEY, MAY 13, 2003-New Brunswick Scientific Co., Inc. (NBS)
(NASDAQ: NBSC), a designer and manufacturer of a wide variety of research
equipment and scientific instruments for the life sciences, today announced
financial results for the 2003 first quarter ended March 29, 2003.
For 2003's first quarter, net sales were $11,585,000, a 12.7% decline from the
$13,263,000 reported for last year's first three months. The revenue decline
reflects sharp reductions in domestic and world market capital expenditures for
life science equipment. All of the Company's product lines were impacted by
lower sales during the period with the exception of ultra-low temperature
freezers. Gross margins for the 2003 first quarter fell to 36.2% from 42.8% a
year ago, primarily due to unabsorbed manufacturing overhead caused by the
decreased activity and downward pressure on prices. SG&A expenses were down
slightly on a dollar basis, but represented 35.4% of sales versus 31.0% in the
year-ago period.
New Brunswick Scientific thus incurred a first-quarter net loss of $432,000 or
$0.06 per diluted share compared with first-quarter 2002 net income of $566,000
or $0.07 per diluted share, reflecting the aforementioned factors as well as
product development costs, which were up 43.1% during the quarter.
Co-founder and Chairman David Freedman said: "As we projected, softness has
lingered into the opening months of 2003. Its persistence suggests a mixed
near-term outlook. The efficiency improvements that we have implemented over the
past year continue to result in shortened lead times and better sourcing.
However, our financial results have yet to reflect the full impact of these
efforts due to the significant capital expenditure declines in both our domestic
and international markets during these challenging times. In response to these
difficult market conditions, we initiated a 9% reduction-in-force at our Edison
facility in April, which will result in a second quarter charge of approximately
$100,000. While we are unable accurately to pinpoint when normalization will
occur, our efficiency improvements and increased expenditures for product
development, which reflect our focus on product innovation, have positioned us
to prosper when our markets recover. We intend to introduce a number of new
products at large industry trade shows this month including additional models of
our new customizable line of sterilizable-in-place fermentors, a small
sterilizable-in-place benchtop fermentor and a new biological shaker."
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Mr. Freedman, commenting on developments with DGI BioTechnologies, Inc., a
drug-lead discovery operation in which NBS holds a minority equity position,
said: "As announced previously, near the end of last year's third quarter, DGI's
two major shareholders-NBS and BankInvest- had provided DGI with a bridge loan
in order to sustain its operations until DGI's anticipated closing of a
financing transaction with an investment group. It has recently become definite
that this financing will not take place, however, DGI has entered into an
arrangement with an investment group, which includes current DGI management, to
provide short-term financing, which in addition to anticipated revenues DGI
management believes should provide operating funds through the first quarter of
2004. The Company has agreed to receive shares in DGI for the next 12 months in
lieu of rent from DGI ultimately resulting in a fully diluted interest in DGI of
23.4%.
New Brunswick Scientific Co., Inc., designs and manufactures a wide variety of
research equipment and scientific instruments for the life sciences and holds a
minority equity position in DGI BioTechnologies, Inc., a drug-lead-discovery
operation.
This press release includes statements that may constitute forward-looking
statements made pursuant to the Safe Harbor provision of the Private Securities
Litigation Reform Act of 1995. This information may involve risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are based on reasonable
assumptions, such statements are subject to risks and uncertainties that could
cause actual results to differ materially from those projected. Further
information concerning risk factors is described in the Company's Securities and
Exchange Commission filings.
--FINANCIAL RESULTS FOLLOW--
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NEW BRUNSWICK SCIENTIFIC CO., INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per-share amounts)
(Unaudited)
Three Months Ended
March 29, March 31,
2003 2002
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Net sales $ 11,585 $ 13,263
Operating costs and expenses:
Cost of sales 7,392 7,583
Selling, general and administrative expenses 4,104 4,110
Research, development and engineering expenses 857 599
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Total operating costs and expenses 12,353 12,292
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(Loss) income from operations (768) 971
Other income (expense):
Interest income 18 9
Interest expense (114) (115)
Other, net 144 6
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48 (100)
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(Loss) income before income tax (benefit) expense (720) 871
Income tax (benefit) expense (288) 305
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Net (loss) income $ (432) $ 566
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Basic net (loss) income per share $ (0.06) $ 0.08
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Diluted net (loss) income per share $ (0.06) $ 0.07
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Basic weighted average number of shares outstanding 7,791 7,494
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Diluted weighted average number of shares outstanding 7,791 7,678
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SELECTED BALANCE SHEET ITEMS
(Dollars in thousands)
MARCH 29, DECEMBER 31,
2003 2002
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(Unaudited)
Cash and cash equivalents $ 6,975 $ 9,718
Accounts receivable 9,642 9,991
Inventories 12,694 11,676
Property, plant and equipment, net 5,595 5,615
Total assets 43,507 45,264
Accounts payable and accrued expenses 5,363 6,489
Long-term debt, net of current installments 5,136 5,213
Shareholders' equity 30,104 30,642
Working capital 25,739 26,251
Current ratio 5.5 to 1 4.8 to 1
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