1
EXHIBIT 99a
THE DEXTER CORPORATION
CONDENSED STATEMENT OF INCOME
- --------------------------------------------------------------------------------
Three Months Ended March 31
In thousands of dollars --------------------------------------
(except per share amounts) 1997 1996 Change
- --------------------------------------------------------------------------------
REVENUES
Net sales $272,260 $277,227 - 2%
Other income 4,224 2,175 +94%
-------- --------
276,484 279,402 - 1%
EXPENSES
Cost of sales 175,302 182,525 - 4%
Marketing and administrative 57,050 56,237 + 1%
Research and development 13,341 12,843 + 4%
Interest 4,809 5,366 -10%
-------- --------
INCOME BEFORE TAXES 25,982 22,431 +16%
Income taxes 9,353 7,963 +17%
-------- --------
INCOME BEFORE MINORITY INTERESTS 16,629 14,468 +15%
Minority interests 3,757 3,320 +13%
-------- --------
NET INCOME $ 12,872 $ 11,148 +15%
======== ========
NET INCOME PER SHARE $ 0.55 $ 0.46 +20%
DIVIDENDS DECLARED PER SHARE $ 0.24 $ 0.22 + 9%
AVERAGE SHARES OUTSTANDING (000) 23,275 23,999 - 3%
- -------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
2
EXHIBIT 99b
THE DEXTER CORPORATION
CONDENSED STATEMENT OF FINANCIAL POSITION
- --------------------------------------------------------------------------------
In thousands of dollars MARCH 31 December 31 March 31
(except per share amounts) 1997 1996 1996
- ---------------------------------------------------------------------------------------------
ASSETS
Cash and short-term securities $ 62,120 $ 103,420 $ 57,222
Accounts receivable, net 192,099 178,093 209,415
Inventories
Materials and supplies 58,662 58,290 58,057
In process and finished 116,721 110,457 128,152
LIFO reserve (19,403) (19,836) (23,886)
--------- --------- --------
155,980 148,911 162,323
Prepaid and deferred expenses 34,395 29,987 35,045
--------- --------- --------
Total current assets 444,594 460,411 464,005
Property, plant and equipment, at cost, net 332,320 334,266 324,478
Excess of cost over net assets of
businesses acquired 80,366 71,906 79,744
Other assets 89,472 87,221 76,753
--------- --------- --------
$ 946,752 $ 953,804 $944,980
========= ========= ========
LIABILITIES & SHAREHOLDERS' EQUITY
Short-term debt $ 5,500 $ 5,111 $ 25,119
Current installments of long-term debt 11,914 12,297 13,053
Accounts payable 97,904 91,855 90,792
Accrued liabilities and taxes 103,416 101,691 89,850
Current environmental reserves 2,117 1,358 1,364
Dividends payable 5,559 5,170 5,256
--------- --------- --------
Total current liabilities 226,410 217,482 225,434
Long-term debt 208,339 209,952 214,874
Deferred items 49,900 46,874 48,184
Long-term environmental reserves 14,278 14,978 15,480
Minority interests 91,616 90,403 79,204
Shareholders' equity
Common stock and paid-in capital 36,925 36,495 35,172
Retained earnings 382,788 375,480 353,436
Currency translation effects (16,791) (2,187) (2,222)
Treasury stock (46,713) (35,673) (24,582)
--------- --------- --------
Total shareholders' equity 356,209 374,115 361,804
--------- --------- --------
$ 946,752 $ 953,804 $944,980
========= ========= ========
EQUITY PER SHARE $ 15.41 $ 15.94 $ 15.19
- --------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
3
EXHIBIT 99c
THE DEXTER CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
- --------------------------------------------------------------------------------
Three Months Ended March 31
----------------------------
In thousands of dollars 1997 1996
- --------------------------------------------------------------------------------------
OPERATIONS
Net income $ 12,872 $ 11,148
Noncash items
Depreciation and amortization 10,993 11,438
Income taxes not due 5,379 7,620
Minority interests 3,757 3,320
LIFO inventory credit (433) (823)
Equity in net income of affiliates (2,351) (638)
Other 402 1,344
Operating working capital increase (26,756) (18,849)
--------- --------
3,863 14,560
--------- --------
INVESTMENTS
Property, plant and equipment (11,629) (10,116)
Acquisitions (17,002) (7,203)
Joint ventures (449) 227
Proceeds from exercise of LTI stock options 615 679
Other 2,066 (503)
--------- --------
(26,399) (16,916)
--------- --------
FINANCING
Long-term debt (705) (914)
Short-term debt, net 605 11,546
Dividends paid (5,175) (5,351)
LTI dividends paid to minority interest shareholders (428) (351)
Purchase of treasury stock (11,317) (10,279)
Other 13 (256)
--------- --------
(17,007) (5,605)
--------- --------
DECREASE IN CASH AND SHORT-TERM SECURITIES $ (39,543) $ (7,961)
========= ========
RECONCILIATION OF DECREASE IN
CASH AND SHORT-TERM SECURITIES
Cash and short-term securities at beginning of period $ 103,420 $ 65,542
Cash and short-term securities at end of period 62,120 57,222
--------- --------
Decrease in cash and short-term securities
per Statement of Financial Position (41,300) (8,320)
Currency translation effects 1,757 359
--------- --------
$ (39,543) $ (7,961)
========= ========
INTEREST PAID $ 3,715 $ 4,216
TAXES PAID $ 3,974 $ 343
- --------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
4
EXHIBIT 99d
THE DEXTER CORPORATION
NET SALES BY MARKET
- -----------------------------------------------------------------------------
Three Months Ended March 31
-----------------------------------------
In thousands of dollars 1997 1996 Change
- -----------------------------------------------------------------------------
AEROSPACE $ 13,471 $ 12,027 +12%
ELECTRONICS 49,831 49,456 + 1%
FOOD PACKAGING (1) 64,824 67,381 - 4%
MEDICAL 105,403 98,750 + 7%
OTHER (2) 38,731 49,613 -22%
-------- --------
CONSOLIDATED $272,260 $277,227 - 2%
======== ========
- --------------------------------------------------------------------------------
(1) The effect of businesses acquired increased net sales to the Food
Packaging market by $2.6 million, or 4%.
(2) The effect of businesses divested decreased net sales in the "Other"
category by $9.1 million, or 18%.
5
Exhibit 99e
The Dexter Corporation
Notes to Consolidated Financial Statements
Note 1 - In the opinion of company's management, the unaudited financial
statements reflect adjustments of a normal recurring nature which
are necessary to present a fair statement of the results for the
interim periods. The notes to the consolidated financial
statements including management's discussion in Part 1, Item 2 of
this Form 10-Q are incorporated as part of these consolidated
financial statements. The year-end condensed balance sheet data
was derived from audited financial statements.
Note 2 - Net income per share figures in the consolidated Condensed
Statement of Income are based on the weighted average number of
shares outstanding as indicated for each period. No effect has
been given to stock options or restricted stock awards
outstanding as no material dilutive effect would result from the
inclusion of these items.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per
Share (the "Statement"), which is required to be adopted on
December 31, 1997. At that time, the Company will be required to
change the method currently used to compute earnings per share
and to restate all prior periods. The impact is not expected to
change the earnings per share for the first quarter ended March
31, 1997 and March 31, 1996. The impact of the Statement on the
calculation of diluted earnings per share for these quarters is
not expected to be material.
Note 3 - The following are included as components of Common Stock and
Paid-in Capital.
COMMON STOCK & PAID-IN CAPITAL MARCH 31, DECEMBER 31, MARCH 31,
(IN THOUSANDS OF DOLLARS) 1997 1996 1996
- ------------------------------ --------- ------------ ---------
Common stock $24,984 $24,984 $24,984
Paid-in capital 14,714 14,669 12,510
Unrealized losses on
investments (174) (174) (300)
Unearned compensation on
restricted stock (2,395) (2,780) (1,549)
Pension liability adjustment (204) (204) (473)
------- ------- -------
$36,925 $36,495 $35,172
======= ======= =======
6
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
The Dexter Corporation
We have reviewed the accompanying condensed statement of financial position of
The Dexter Corporation as of March 31, 1997 and 1996, and the related condensed
statements of income and cash flows for the three month periods then ended.
These financial statements are the responsibility of the company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated statement of financial position of The Dexter
Corporation as of December 31, 1996, and the related consolidated statements of
income, cash flows, and changes in shareholders' equity for the year then ended
(not presented herein); and in our report dated February 4, 1997, we expressed
an opinion which included an explanatory paragraph regarding the adoption of
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" and SFAS No. 123, "Accounting for
Stock-Based Compensation" on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed statement of
financial position as of December 31, 1996, is fairly stated, in all material
respects, in relation to the consolidated statement of financial position from
which it has been derived.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Springfield, Massachusetts
April 10, 1997