SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
MARCH 21, 2005
Date of Report
(Date of earliest event reported)
NEW BRUNSWICK SCIENTIFIC CO., INC.
(Exact Name of Registrant as Specified in Charter)
NEW JERSEY 0-6994 22-1630072
(State or Other Jurisdiction of (Commission File Number)
(IRS Employer Identification No.)
Incorporation)
44 TALMADGE ROAD, EDISON, NJ 08818-4005
(Address of Principal Executive Offices) (ZIP Code)
Registrant's telephone number, including area code: (732) 287-1200
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
New Brunswick Scientific Co., Inc. ("NBS" or the "Company") is in the process of
preparing a restatement of its consolidated financial statements for the 2001,
2002 and 2003 annual periods as well as for the 2003 quarters and the 2004
quarters through October 2, 2004. We plan to file these financial statements in
our 2004 Form 10-K with the U.S. Securities and Exchange Commission ("SEC") as
soon as practicable. Item 4.02 contains additional information about the
restatement of our financial statements.
The restatements discussed in Item 4.02, which relate to three interest rate
swap agreements entered into in 1999 and 2004 to fix the interest rate of
variable rate debt incurred principally for acquisitions in 1999 and 2003, will
not impact our income (loss) from operations or cash in any of the above
periods.
The information in this Item 2.02 is being furnished and shall not be deemed to
be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934
(the "Exchange Act") or otherwise subject to the liability of that Section, nor
shall such information be deemed to be incorporated by reference in any
registration statement or other document filed under the Securities Act of 1933
or the Exchange Act, except as otherwise stated in such filing.
ITEM 4.02. NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS.
On March 16, 2005, the audit committee of our board of directors agreed with
recommendations from senior management and concluded that our previously issued
financial statements for the 2001, 2002 and 2003 annual periods as well as for
the 2003 quarters and the 2004 quarters through October 2, 2004, should no
longer be relied upon and should be restated. This restatement results from the
misapplication of SFAS No. 133 "Accounting for Derivative Instruments and
Hedging Activities" as it applies to three interest rate swaps that were entered
into in 1999 and 2004 to fix the interest rates on variable-rate debt incurred
primarily for acquisitions in 1999 and 2003 under our bank credit agreement.
These interest rate swaps were not previously disclosed or accounted for.
The restatement, which will not affect income (loss) from operations or cash in
any period, is expected to increase interest expense for the years ended
December 31, 2001 and 2002 and decrease interest expense for the year ended
December 31, 2003 and for the nine-month period ended October 2, 2004. The
after tax effect of these changes are estimated as follows (unaudited): 2001 -
$(117,000), 2002 - $(172,000), 2003 - $103,000 and 2004 (through October 2,
2004) - $103,000. In addition, 2001 will reflect the cumulative effect of a
change in accounting principle of approximately $(129,000), net of tax, relating
to the adoption of SFAS No. 133. A brief background and description of this
misstatement and senior management's and the audit committee's conclusion
follows.
The interest rate swaps were not properly designated as effective cash flow
hedges, as defined by SFAS No. 133 which went into effect in 2001. If properly
designated, the Company believes the changes in the fair value of the swaps
could have been accounted for as a component of accumulated other comprehensive
income (loss) in the balance sheet, since, in all other respects, they met
derivative effectiveness testing requirements. However, since they were not
properly designated, the accounting rules require the changes in the fair value
of the swaps to be recorded as a change to interest expense in each period's
statement of operations.
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Members of our audit committee have discussed the matters disclosed within this
filing with our independent auditors. Our independent auditors are currently
reviewing our proposed revisions to our financial statements and related
footnote disclosures. We plan to file the restated financial statements in our
2004 Form 10-K with the SEC as soon as practicable.
The information in this report relating to the proposed revisions to our
financial statements constitutes "forward-looking statements". As noted above,
these proposed revisions are currently being reviewed by our independent
auditors and are subject to change based on such review.
ITEM 9.01 EXHIBITS
(a) A copy of the Company's press release, issued March 21, 2005 is filed
herewith, relating to the matters disclosed in Item 2.02 above.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEW BRUNSWICK SCIENTIFIC CO., INC.
Date: March 21, 2005 By: /s/Samuel Eichenbaum
Samuel Eichenbaum
Vice President, Finance and
Chief Financial Officer
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EXHIBIT
NEW BRUNSWICK SCIENTIFIC CO., INC.
P.O. Box 4005 - 44 Talmadge Road - Edison, NJ 08818-4005 U.S.A.
INVESTOR CONTACTS:
Samuel Eichenbaum Matthew J. Dennis, CFA
Vice President, Finance and Treasurer NBS Investor Relations
New Brunswick Scientific Co., Inc. Clear Perspective Group, LLC
732.650.2500 440.353.0552
same@nbsc.com mdennis@cpg-llc.com
FOR IMMEDIATE RELEASE
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New Brunswick Scientific Co., Inc., to Restate Financial Statements
EDISON, NEW JERSEY, MARCH 21, 2005-New Brunswick Scientific Co., Inc. (NBS)
(NASDAQ:NBSC), today announced that it will restate its financial statements for
the 2001, 2002 and 2003 annual periods as well as for the 2003 quarters and 2004
quarters through October 2, 2004, to properly reflect three interest rate swap
agreements entered into in 1999 and 2004 to fix the interest rates on
variable-rate debt incurred primarily for acquisitions in 1999 and 2003 under
its bank credit agreement.
The interest rate swaps were not previously disclosed or accounted for and were
not properly designated as effective cash flow hedges, as defined by the
accounting rules for derivatives that went into effect in 2001 ("SFAS No. 133").
If properly designated, the Company believes the changes in the fair value of
the swaps could have been accounted for as a component of other comprehensive
income (loss) in the balance sheet, since, in all other respects, they met
derivative effectiveness testing requirements. However, since they were not
properly designated, the accounting rules require the changes in the fair value
of the swaps to be recorded as a change in interest expense in each period's
statement of operations.
The restatement, which will not affect income (loss) from operations or cash in
any period, is expected to increase interest expense in the 2001 and 2002 annual
periods and decrease interest expense in the 2003 annual period and the 2004
nine-month period through October 2, 2004. The after tax effect of these
changes are estimated as follows (unaudited): 2001 - $(117,000), 2002 -
$(172,000), 2003 - $103,000 and 2004 (through October 2, 2004) - $103,000. In
addition, 2001 will reflect the cumulative effect of a change in accounting
principle of approximately $(129,000), net of tax, relating to the adoption of
SFAS No. 133.
David Freedman, the Chairman of the Company said: "The decision to restate was
made after discussions with our Audit Committee and external auditors and we
intend to complete the restatement as soon as practicable. The restatement
results from the misapplication of a technical accounting rule. The Company
does not hold or issue derivative financial instruments for trading or
speculative purposes. Since the swaps were originally intended as effective
hedges to lock in interest rates, the changes in fair value of the instruments
could have been reflected as a component of accumulated other comprehensive
income (loss) in the balance sheet if they had been properly designated as
effective derivative instruments and supported by appropriate documentation in
accordance with the accounting rules for derivatives."
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About New Brunswick Scientific
New Brunswick Scientific Co., Inc., is a leading global provider of a
comprehensive line of research equipment and scientific instrumentation for use
in the life science industry. The Company's products are used in the creation,
maintenance and control of physical and biochemical environments required for
the growth, detection and storage of microorganisms for medical, biological and
chemical applications, as well as environmental research and commercial product
development. NBS is a forerunner in the research and development of pioneering
equipment to meet the challenges of new areas of advancement in life science.
Established in 1946, New Brunswick Scientific is headquartered in Edison, New
Jersey, with sales and distribution facilities strategically located in the
United States, Europe and Asia. For more information, please visit www.nbsc.com
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This document contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
may be identified by words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," "will" or words of similar meaning and
include, but are not limited to, statements about the expected future business
and financial performance of the Company. The forward-looking statements involve
a number of risks and uncertainties, including but not limited to, changes in
economic conditions, demand for the Company's products, pricing pressures,
intense competition in the industries in which the Company operates, the need
for the company to keep pace with technological developments and timely respond
to changes in customer needs, the Company's dependence on third party suppliers,
the effect on foreign sales of currency fluctuations, acceptance of new
products, the labor relations of the Company and its customers and other factors
identified in the Company's Securities and Exchange Commission filings.
Forward-looking statements are based on management's current expectations and
assumptions, which are inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict. Actual outcomes and results may
differ materially from these expectations and assumptions due to changes in
global political, economic, business, competitive, market, regulatory and other
factors. The Company undertakes no obligation to publicly update or review any
forward-looking information, whether as a result of new information, future
developments or otherwise.
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