FSH, the stock that might be a trickle play, reports a quarter.
>>HAMPTON, N.H., Nov. 1 /PRNewswire/ -- Fisher Scientific International Inc. (NYSE: FSH - news), the world leader in serving science, today reported record sales and operating income for the three- and nine-month periods ended Sept. 30, 2001, reflecting solid performance across all business segments.
Third-Quarter 2001 Results
Sales for the third quarter increased 10.1 percent to $729.5 million compared with $662.3 million in the corresponding period of last year. Excluding the effect of foreign exchange, sales totaled $732.0 million for the latest quarter, a 10.5 percent increase from the year-ago period. The company's e-commerce sales increased to $127.9 million, or 17.5 percent of total sales, compared with $95.3 million, or 14.4 percent of total sales, in the prior year's third quarter.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 15.6 percent to $71.3 million compared with $61.7 million, adjusted for nonrecurring items, in the same period of last year. Operating income increased 14.2 percent to $52.2 million for the third quarter compared with $45.7 million, excluding nonrecurring expenses, a year ago.
Net income increased to $16.9 million for the third quarter compared with $15.2 million, adjusted for nonrecurring items, during the same period last year. Diluted earnings per share (EPS) were 30 cents for the 2001 third quarter, the same as for the previous year's third quarter, when EPS reflected a 31 percent tax rate resulting from tax-planning initiatives, which reduced the annual tax rate from 45 percent to 40 percent. Adjusted for a 40 percent tax rate and the dilutive effect of the equity offering in May 2001, EPS in the third quarter of last year was 26 cents.
``Sales growth and operating margins continued to improve this quarter, reflecting growth in our core businesses, increased demand for our lab workstations and the contribution of acquisitions made earlier this year,'' said Paul M. Montrone, chairman and chief executive officer of Fisher Scientific International. ``Fisher's continued positive performance in the current economic environment reflects the strength of our broad product and service offering.''
Year-to-Date Results
For the nine-month period ended Sept. 30, 2001, sales totaled $2,125.3 million, a 7.5 percent increase, compared with $1,977.6 million in the same period last year. Excluding the effect of foreign exchange, sales totaled $2,144.0 million for the first nine months, an 8.4 percent increase from the first nine months of last year. E-commerce sales totaled $366.3 million, or 17.2 percent of total sales, in the first nine months compared with $266.3 million, or 13.5 percent of total sales, in the first nine months of the prior year.
EBITDA, excluding nonrecurring and restructuring-related expenses, for the nine-month period increased 11.7 percent to $194.4 million compared with $174.0 million in the year-ago nine-month period. Year-to-date operating income, excluding restructuring and other nonrecurring charges, increased to $140.8 million compared with $125.9 million in the same period last year.
Net income, excluding nonrecurring and restructuring-related expenses, increased 16.6 percent to $38.6 million for the first nine months compared with net income of $33.1 million in the same period last year. Diluted EPS, excluding nonrecurring expenses, was 75 cents, the same as in the first nine months of last year, reflecting the dilution from the equity offering. Excluding the dilutive effect of the offering, EPS increased 6 cents.
Operating cash flow for the first nine months increased to $77.8 million compared with $51.8 million in the same period last year. Capital expenditures increased to $23.8 million for the first nine months versus $18.7 million for the same period last year.
Business Segment Results
Sales within domestic distribution grew to $619.9 million in the third quarter of 2001, representing an increase of 10.6 percent from the same period in 2000. In the third quarter, operating income increased to $47.1 million from $42.4 million in the corresponding period of last year. Year to date, domestic distribution sales reached $1,795.8 million compared with $1,653.0 million for the first nine months of last year, an 8.6 percent increase. Operating income grew in the first nine months to $128.5 million, a 10.1 percent increase over the previous year's period.
International distribution sales totaled $105.8 million in the third quarter, a 5.5 percent increase from the same quarter last year. Excluding the effect of foreign exchange, sales were $108.2 million, representing a 7.9 percent increase compared with sales of the corresponding quarter last year. For the latest quarter, operating income increased to $3.1 million from $2.8 million in 2000. Sales in the first nine months increased to $320.2 million compared with $316.4 million in the same period last year, while year-to-date operating income increased to $9.2 million from $7.1 million in the same period last year. Excluding foreign-exchange effects, sales were $336.8 million, representing a 6.4 percent increase over the prior year.
Third-quarter sales within the laboratory-workstations segment increased 15.2 percent to $45.6 million from $39.6 million in the prior year's third period, while operating income was $1.8 million compared with $0.8 million in the corresponding quarter last year. Year-to-date sales rose to $132.1 million, an 8.2 percent increase over the previous year's period. Operating income for the nine-month period was $3.3 million compared with $2.9 million in the prior year.
Order activity in the laboratory-workstations segment continued to be strong in the third quarter. Backlog increased to $111 million, up 38 percent from the corresponding period of the prior year.
Company Outlook
The demonstrated strength of Fisher's core business, the continued increase in backlog in the laboratory-workstations segment, the completion of the Fisher Clinical Services, MAS and SEC acquisitions and the anticipated closing of the Cole-Parmer transaction this month reinforce the company's confidence about its future. For 2001, the company expects annual revenue growth of 8.5 percent to 9.5 percent, and EPS, adjusted for nonrecurring and restructuring expenses, to be approximately $1.01 based on an estimated weighted average of 53.3 million diluted shares outstanding. Cash EPS, which excludes goodwill amortization, is estimated to be approximately $1.25.
Our outlook by segment for 2001 follows.
Revenue Growth Rate
(excluding foreign-exchange
Segment effects in Q4) Operating Margin
Domestic (1) 10.0% - 11.0% 7.1%
International 4.0% 3.2%
Lab Workstations 7.5% 2.7%
(1) The Cole-Parmer business will be included in our domestic-distribution
segment.
The company expects operating cash flow for 2001 to be $110 million to $120 million. Total depreciation and amortization for the year is estimated to be approximately $80 million, and capital expenditures are estimated at $45 million.
Fisher will adopt Statement of Financial Accounting Standards No. 141, ``Business Combinations'' (``SFAS 141'') and Statement of Financial Accounting Standards No. 142, ``Goodwill and Other Intangible Assets'' (``SFAS 142'') effective Jan. 1, 2002. These statements require that goodwill and certain intangible assets not be amortized, and also require the company to review them and write them down if they are determined to be impaired. The company is currently in the process of evaluating the effect that the adoption of these statements will have on its financial statements. The following 2002 projections reflect the company's best estimate of the effect of these statements.
For 2002, the company expects revenue growth, excluding foreign-exchange effects, of approximately 11 percent to 12 percent, and operating margins, on the new basis of accounting, in the 7.5 percent to 7.7 percent range. The new basis of accounting is expected to result in an improvement in 2002 operating income of approximately $15 million.
Fisher estimates EPS for 2002 will be $1.52 to $1.57 based on an estimated weighted average of approximately 58.6 million diluted shares outstanding. This excludes any transitional impairment-related write-offs that may need to be recorded once the Financial Accounting Standards Board's implementation guidance for SFAS 141 and SFAS 142 is finalized and interpreted. The EPS estimate is based on a 37 percent tax rate compared with 40 percent this year. This decrease is solely due to the elimination of goodwill amortization.
Operating cash flow for 2002 is expected to be in the $120 million to $130 million range, and total depreciation and amortization for the next year is estimated to be approximately $85 million. Capital expenditures are estimated at $65 million, reflecting the construction of a new warehouse facility on the West Coast and increased investment in chemical manufacturing and pharmaceutical services.
Upcoming Presentations
Fisher Scientific will present at the Merrill Lynch Global Leverage Finance Conference at 9 a.m. Mountain Standard Time (MST) on Nov. 12, 2001, at the Fairmont Scottsdale Princess Hotel, and also at the Credit Suisse First Boston (CSFB) Healthcare Conference at noon (MST) on Nov. 14, 2001, at the Arizona Biltmore. Both hotels are located in Scottsdale, Ariz. The company also will present at the JP Morgan H&Q Healthcare Conference, Jan. 7-10, 2002, at the Westin St. Francis Hotel in San Francisco.
About Fisher Scientific International Inc.
As the world leader in serving science, Fisher Scientific International Inc. (NYSE: FSH - news) offers more than 600,000 products and services that enable scientific discovery and clinical laboratory testing services to more than 350,000 customers located in approximately 145 countries. As a result of its broad product offering, integrated global logistics network and electronic- commerce capabilities, Fisher serves as a one-stop source of products, services and global solutions for many of its customers. The company's primary target markets are life science, clinical laboratory and industrial-safety supply. Additional information about Fisher is available on the company's Web site at www.fisherscientific.com.<<
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Cheers, Tuck |
