1
EXHIBIT 99a
CONDENSED STATEMENT OF INCOME THE DEXTER CORPORATION
- ---------------------------------------------------------------------------------------------------
Three Months Ended September 30 Nine Months Ended September 30
In thousands of dollars ------------------------------- ------------------------------
(except per share amounts) 1997 1996 Change 1997 1996 Change
- ---------------------------------------------------------------------------------------------------
REVENUES
Net sales $286,928 $269,493 + 6% $852,413 $832,421 + 2%
Other income 2,349 3,182 -26% 9,275 8,379 +11%
-------- -------- -------- --------
289,277 272,675 + 6% 861,688 840,800 + 2%
EXPENSES
Cost of sales 182,758 176,997 + 3% 545,300 547,278
Marketing and administrative 59,698 54,755 + 9% 175,747 167,149 + 5%
Research and development 13,442 12,470 + 8% 40,499 38,488 + 5%
Interest 5,287 4,929 + 7% 15,585 15,671 - 1%
Gain on divestiture of product
lines (2,719)
-------- -------- -------- --------
INCOME BEFORE TAXES 28,092 23,524 +19% 84,557 74,933 +13%
Income taxes 10,113 8,351 +21% 30,441 26,601 +14%
-------- -------- -------- --------
INCOME BEFORE MINORITY INTERESTS 17,979 15,173 +18% 54,116 48,332 +12%
Minority interests 3,736 3,432 + 9% 11,004 11,050
-------- -------- -------- --------
NET INCOME $ 14,243 $ 11,741 +21% $ 43,112 $ 37,282 +16%
======== ======== ======== ========
NET INCOME PER SHARE $0.62 $0.50 +24% $1.87 $1.57 +19%
DIVIDENDS DECLARED PER SHARE $0.24 $0.22 + 9% $0.72 $0.66 + 9%
AVERAGE SHARES OUTSTANDING (000) 22,914 23,545 - 3% 23,037 23,733 - 3%
- ---------------------------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
Amounts are unaudited.
2
EXHIBIT 99b
THE DEXTER CORPORATION
CONDENSED STATEMENT OF FINANCIAL POSITION
- ----------------------------------------------------------------------------------------
In thousands of dollars SEPTEMBER 30 DECEMBER 31 SEPTEMBER 30
(except per share amounts) -------------------------------------------
1997 1996 1996
- ----------------------------------------------------------------------------------------
ASSETS
Cash and short-term securities $ 86,501 $103,420 $ 82,356
Accounts receivable, net 203,265 178,093 200,546
Inventories
Materials and supplies 59,860 58,290 57,085
In process and finished 119,622 110,457 107,177
LIFO reserve (18,631) (19,836) (21,231)
-------- -------- --------
160,851 148,911 143,031
Prepaid and deferred expenses 32,628 29,987 31,882
-------- -------- --------
Total current assets 483,245 460,411 457,815
Property, plant and equipment, at cost, net 343,301 334,266 321,912
Excess of cost over net assets of
business acquired 76,373 71,906 74,805
Other assets 49,118 87,221 83,575
-------- -------- --------
$952,037 $953,804 $938,107
======== ======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Short-term debt $ 3,705 $ 5,111 $ 5,501
Current installments of long-term debt 31,553 12,297 12,649
Accounts payable 98,045 91,855 81,568
Accrued liabilities and taxes 108,381 101,691 104,089
Current environmental reserves 2,223 1,358 1,207
Dividends payable 5,502 5,170 5,183
-------- -------- --------
Total current liabilities 249,409 217,482 210,197
Long-term debt 168,459 209,952 208,839
Deferred items 51,394 46,874 48,316
Long-term environmental reserves 14,154 14,978 15,219
Minority interests 100,985 90,403 85,759
Shareholders' equity
Common stock and paid-in capital 36,893 36,495 34,768
Retained earnings 402,034 375,480 369,212
Currency translation effects (18,767) (2,187) (3,185)
Treasury stock (52,524) (35,673) (31,018)
-------- -------- --------
Total shareholders' equity 367,636 374,115 369,777
-------- -------- --------
$952,037 $953,804 $938,107
======== ======== ========
EQUITY PER SHARE $16.04 $15.94 $15.69
- ----------------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
Amounts as of September 30, 1997 and September 30, 1996 are unaudited.
3
EXHIBIT 99c
THE DEXTER CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
- -----------------------------------------------------------------------------------------
Nine Months Ended September 30
------------------------------
In thousands of dollars 1997 1996
- -----------------------------------------------------------------------------------------
OPERATIONS
Net income $ 43,112 $ 37,282
Noncash items
Depreciation and amortization 33,955 33,537
Gain on divestiture of product lines (2,719)
Income taxes not due 1,453 10,839
Minority interests 11,004 11,050
LIFO inventory credit (1,205) (3,478)
Equity in net income of affiliates (3,520) (3,196)
Other 674 3,658
Operating working capital increase (27,508) (2,886)
--------- --------
57,965 84,087
--------- --------
INVESTMENTS
Property, plant and equipment (45,092) (38,455)
Acquisitions (20,661) (16,198)
Divestitures 41,539 34,913
Joint ventures 2,102 4,047
Proceeds from exercise of LTI stock options 3,164 1,736
Other 3,258 (3,853)
--------- --------
(15,690) (17,810)
--------- --------
FINANCING
Long-term debt (21,197) (6,576)
Short-term debt, net (1,256) (8,035)
Dividends paid (16,226) (15,782)
LTI dividends paid to minority interest shareholders (1,307) (1,133)
Purchase of treasury stock (20,517) (21,434)
Other 3,069 3,718
--------- --------
(57,434) (49,242)
--------- --------
(DECREASE) INCREASE IN CASH AND SHORT-TERM SECURITIES $ (15,159) $ 17,035
========= ========
RECONCILIATION OF (DECREASE) INCREASE 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 86,501 82,356
--------- --------
(Decrease) Increase in cash and short-term securities
per Statement of Financial Position (16,919) 16,814
Currency translation effects 1,760 221
--------- --------
$ (15,159) $ 17,035
========= ========
INTEREST PAID $ 14,178 $ 16,338
TAXES PAID $ 28,988 $ 15,762
- ----------------------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
Amounts are unaudited.
4
EXHIBIT 99d
NET SALES BY MARKET THE DEXTER CORPORATION
- ----------------------------------------------------------------------------------------------------------------------
Three Months Ended September 30 Nine Months Ended September 30
-------------------------------------- -----------------------------------------
In thousands of dollars 1997 1996 Change 1997 1996 Change
- ----------------------------------------------------------------------------------------------------------------------
AEROSPACE $ 15,906 $ 13,102 + 21% $ 45,090 $ 37,635 + 20%
ELECTRONICS 55,577 47,136 + 18% 159,426 144,614 + 10%
FOOD PACKAGING (1) 70,522 68,276 + 3% 207,800 205,781 + 1%
MEDICAL 106,031 102,111 + 4% 320,597 303,396 + 6%
OTHER (2) 38,892 38,868 119,500 140,995 - 15%
---------- ----------- ----------- ---------
CONSOLIDATED $ 286,928 $ 269,493 + 6% $ 852,413 $ 832,421 + 2%
========== =========== =========== =========
- -----------------------------------------------------------------------------------------------------------------------
(1) The effect of businesses acquired increased net sales to the Food
Packaging market by $5.1 million, or 8%, for the quarter, and $12.9
million, or 6%, year-to-date.
(2) The effect of businesses divested decreased net sales in the "Other"
category by $19.3 million, or 14%, year-to-date.
Amounts are unaudited.
5
Exhibit 99e
The Dexter Corporation
Notes to Consolidated Financial Statements
Note 1 -- In the opinion of the 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 the 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.
Note 3 -- 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 of the Statement on
the calculation of earnings per share amounts for the three and
nine month periods ended September 30, 1997 and 1996 is not
expected to be material.
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income and Statement of Financial Accounting
Standards No. 131, Disclosures about Segments of an Enterprise
and Related Information (the "Statements"), which become
effective for financial statements for periods beginning after
December 15, 1997. The Company is currently evaluating the impact
of these Statements on its financial reporting practices.
Note 4 -- The following are included as components of Common Stock and
Paid-in Capital.
COMMON STOCK & PAID-IN CAPITAL SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
(IN THOUSANDS OF DOLLARS) 1997 1996 1996
- ------------------------------ -------- -------- --------
Common stock $ 24,984 $ 24,984 $ 24,984
Paid-in capital 17,111 14,669 13,938
Unrealized losses on
investments (427) (174) (350)
Unearned compensation on
restricted stock (4,571) (2,780) (3,331)
Pension liability adjustment (204) (204) (473)
-------- -------- --------
$ 36,893 $ 36,495 $ 34,768
======== ======== ========
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 September 30, 1997 and 1996, and the related
condensed statement of income for the three and nine month periods then ended,
and condensed statement of cash flows for the nine 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
October 15, 1997