Fisher Scientific Reports Record Sales and Net Income; Company Provides EPS Outlook for 2003 of $2.10 to $2.15
Monday November 4, 5:02 pm ET
HAMPTON, N.H., Nov. 4 /PRNewswire-FirstCall/ -- Fisher Scientific International Inc. (NYSE: FSH - News), the world leader in serving science, today reported record sales and net income for the quarter and year- to-date period ended Sept. 30, 2002.
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"Our results this quarter reflect continued growth in our domestic distribution business and improved profitability in our international distribution business," said Paul M. Montrone, chairman and chief executive officer of Fisher Scientific. "We continue to generate strong cash flow, allowing us to further strengthen our balance sheet and increase net income."
2002 Reported Results
Sales for the third quarter increased 13.9 percent to $830.9 million compared with $729.5 million in the corresponding period of 2001. Excluding the effect of foreign exchange, sales totaled $822.9 million, a 12.8 percent increase over the prior year. The company's e-commerce sales increased to $191.4 million during the quarter, or 23 percent of total sales, compared with $127.9 million, or 18 percent of total sales, in the third quarter of 2001.
For the nine-month period ended Sept. 30, 2002, sales totaled $2,416.3 million, a 13.7 percent increase from sales of $2,125.3 million in the same period last year. E-commerce sales increased to $540.2 million, or 22 percent of total sales, in the first nine months compared with $366.3 million, or 17 percent of total sales, in the first nine months of the prior year.
Reported income from operations for the quarter increased 27.4 percent to $66.5 million compared with $52.2 million in the same quarter last year, reflecting improvements in core operations, the impact of acquired businesses and the exclusion of goodwill amortization in 2002. Income from operations in the prior period includes $4.4 million of goodwill amortization. For the nine months ended Sept. 30, 2002, income from operations as reported was $183.0 million compared with $88.1 million in the same period of the prior year. Reported operating income in the prior-year period included $52.7 million in restructuring and other charges and $12.6 million of goodwill amortization.
Fisher reported diluted earnings per share (EPS) of 52 cents for the quarter versus EPS of 30 cents in the corresponding period of 2001 and EPS of 41 cents for the nine months ended Sept. 30, 2002, compared with EPS of 10 cents in the year-ago nine-month period.
Pro Forma Financial Results
To facilitate comparison with the prior-year periods in the following discussion, goodwill amortization has been excluded from the results of the prior-year periods. In addition, the discussion excludes previously disclosed nonrecurring and restructuring charges and credits for both periods, and this year's goodwill write-off. These items are outlined in the attached tables.
Income from operations for the quarter increased 17.5 percent to $66.5 million from $56.6 million in the third quarter of 2001. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 17.8 percent to $84.1 million in the third quarter compared with $71.4 million in the same period last year.
Third quarter net income increased 43.8 percent to $29.9 million compared with income of $20.8 million in the corresponding period of 2001, reflecting an improvement in operating income and a reduction in both interest expense and tax rate. Diluted EPS was 52 cents per share in the third quarter compared with 36 cents per share in the third quarter of 2001.
Income from operations for the nine-month period increased 18.3 percent to $181.5 million from $153.4 million during the same period last year. EBITDA increased 19.9 percent to $233.3 million for the nine-month period compared with $194.5 million in the year-ago nine-month period.
Net income for the nine-month period increased 53.3 percent to $75.9 million compared with income of $49.5 million in the first nine months of 2001. EPS was $1.31 per diluted share in the first nine months compared with 96 cents per diluted share in the same period of the prior year.
For the nine-month period, the company generated $124.2 million in cash from operations compared with $77.8 million in the same period last year, reflecting an increase in earnings and working capital management improvements. Capital expenditures for the nine-month period increased to $26.8 million from $23.8 million previously, reflecting continued investment in manufacturing and pharmaceutical services capabilities.
Business-Segment Results
Domestic distribution sales increased 15.6 percent to $716.9 million in the third quarter of 2002 compared with the same period last year. Operating income increased 17.8 percent to $58.1 million from $49.3 million in the corresponding period of 2001, reflecting the contribution of the Cole-Parmer acquisition and growth in the core business. Year to date, domestic distribution sales reached $2,087.1 million compared with $1,795.8 million for the first nine months of last year, a 16.2 percent increase. Operating income grew in the first nine months to $159.2 million, an 18.3 percent increase over the first nine months of 2001.
International distribution sales totaled $114.6 million for the third quarter, an 8.3 percent increase from the third quarter of 2001. Excluding foreign-exchange effects, sales were $108.4 million, or a 2.5 percent increase. For the latest quarter, operating income increased 34.9 percent to $5.8 million from $4.3 million in the year-ago period, reflecting benefits associated with the restructuring efforts initiated at the end of last year. Sales in the first nine months were $328.9 million compared with $320.2 million for the same period last year, while year-to-date operating income increased 21.9 percent to $15.6 million from $12.8 million in the corresponding period last year.
Sales within the laboratory-workstations segment remained flat with the prior year at $45.7 million. Operating income was $2.9 million compared with $2.8 million in the corresponding quarter of 2001. Year-to-date sales rose to $135.6 million, a 2.6 percent increase over the prior-year period. Operating income for the nine-month period was $7.4 million compared with $6.2 million in the prior year, reflecting an increase in manufacturing efficiencies. Backlog in the laboratory-workstations segment remained stable at $113 million.
Company Outlook
For 2002, Fisher continues to expect revenue growth, excluding foreign- exchange effects, of approximately 12 percent, and operating margins, excluding nonrecurring credits, in the 7.5 percent to 7.6 percent range versus 7.3 percent on a comparable basis in 2001. Our outlook by segment is as follows.
Segment Revenue Growth Rate Operating
(excluding foreign Margin
exchange)
Domestic 13.5%-14.0% 7.5%-7.7%
International 3.0%-3.5% 4.6%-4.9%
Lab Workstations 7.0%-7.5% 6.3%-6.6%
The company is raising its 2002 guidance for its operating cash flow to a range of $140 million to $150 million, up from the previously issued guidance of $120 million to $130 million, primarily due to improved working capital management. In addition, Fisher expects total capital expenditures of approximately $45 million for 2002, compared with prior estimates of $55 million to $65 million, reflecting a change in the timing of cash outlays for select facility-expansion projects.
Fisher expects EPS for 2002 to be at the high end of its previously announced guidance range of $1.70 to $1.75. This guidance excludes the cumulative effect of the accounting change for goodwill, the charges related to the April note offering and the restructuring credit.
For 2003, the company expects revenue growth, excluding foreign-exchange effects, of approximately 5.0 percent to 6.0 percent, operating margins in the 7.7 percent to 7.9 percent range, and a 30 percent tax rate.
Fisher estimates EPS for 2003 will be $2.10 to $2.15 based on an estimated weighted average of approximately 58.5 million diluted shares outstanding. The company estimates 2003 first-quarter EPS will be 44 cents to 46 cents.
Operating cash flow for 2003 is expected to be in the $180 million to $190 million range, and total depreciation and amortization is estimated to be approximately $80 million. Capital expenditures are estimated at $50 million to $60 million, reflecting the completion of a new warehouse facility on the West Coast and continued investment in pharmaceutical services capacity.
Upcoming Presentations
Fisher Scientific will present at the following events:
Credit Suisse First Boston Healthcare Conference on Nov. 12 at the
Arizona Biltmore Resort & Spa in Phoenix
JP Morgan H&Q Healthcare Conference, Jan. 6-9, at the Westin St. Francis Hotel in San Francisco
Conference Call Scheduled
Fisher will host a teleconference to discuss its third quarter financial results and its full-year 2002 and 2003 guidance tomorrow, Nov. 5, at 10 a.m. EST. Interested parties who would like to participate may call 877-648-7975 (ID: Fisher Scientific). International callers should dial (+1) 706-634-2332. Following the call, an audio replay will be available for 10 days. U.S. callers should dial 800-642-1687. International callers should dial (+1) 706- 645-9291. The conference replay code is 2560346.
The conference call also will be webcast on Fisher's Web site (www.fisherscientific.com). The webcast may be accessed on the Investor Info page and will be archived until Dec. 6.
About Fisher Scientific International Inc.
Fisher Scientific International Inc. (NYSE: FSH - News) is the world leader in serving science. We enable scientific discovery and clinical-laboratory testing services by offering more than 600,000 products and services to over 350,000 customers in approximately 145 countries. As a result of its broad product offering, electronic-commerce capabilities, and integrated global logistics network, 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 scientific research and healthcare. Additional information about Fisher is available on the company's Web site at www.fisherscientific.com.
This announcement includes forward-looking statements. Fisher Scientific has based these forward-looking statements on its current expectations and projections about future events. Although Fisher Scientific believes that its assumptions made in connection with the forward-looking statements are reasonable, no assurances can be given that its assumptions and expectations will prove to have been correct. These forward-looking statements are subject to various risks, uncertainties and assumptions. Fisher Scientific undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this announcement might not occur.
Fisher Scientific International Inc.
Statement of Operations
(in millions, except per share data)
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Sales $830.9 $729.5 $2,416.3 $2,125.3
Cost of sales 612.8 543.9 1,779.6 1,585.6
Selling, general and administrative
expense 151.6 133.4 455.2 400.0
Restructuring and other charges
(credits) - - (1.5) 51.6
Income from operations 66.5 52.2 183.0 88.1
Interest expense 22.4 24.1 69.2 74.9
Other expense, net 0.1 (0.1) 11.9 1.6
Income before income taxes and
cumulative effect of
accounting change 44.0 28.2 101.9 11.6
Income tax provision 14.1 11.3 32.1 6.2
Income before cumulative effect of
accounting change 29.9 16.9 69.8 5.4
Cumulative effect of accounting
change - - (46.1) -
Net income $29.9 $16.9 $23.7 $5.4
Basic net income per common share
before cumulative effect
of accounting change $0.55 $0.31 $1.28 $0.11
Cumulative effect of accounting
change - - (0.84) -
Basic net income per common share $0.55 $0.31 $0.44 $0.11
Diluted net income per common share
before cumulative effect
of accounting change $0.52 $0.30 $1.21 $0.10
Cumulative effect of accounting
change - - (0.80) -
Diluted net income per common share $0.52 $0.30 $0.41 $0.10
Weighted average common shares
outstanding:
Basic 54.6 54.0 54.4 47.8
Diluted 57.8 57.1 57.8 51.6
Supplementary Pro Forma Information:
The following amounts exclude nonrecurring, restructuring-related
charges, goodwill amortization and cumulative effect of accounting
change:
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Pro Forma Income from Operations and
EBITDA
Income from operations $66.5 $52.2 $183.0 $88.1
Restructuring and other charges
(credits) - - (1.5) 51.6
Nonrecurring operating charges - - - 1.1
Goodwill amortization - 4.4 - 12.6
Pro Forma Income from Operations 66.5 56.6 181.5 153.4
Other expense, net (0.1) 0.1 (11.9) (1.6)
Swap unwind and deferred financing
costs - - 11.2 -
Depreciation and amortization 19.0 16.2 56.6 47.0
Amortization of deferred financing
fees (1.3) (1.5) (4.1) (4.3)
Pro Forma EBITDA $84.1 $71.4 $233.3 $194.5
Pro Forma Net Income
Net income $29.9 $16.9 $23.7 $5.4
Restructuring and other charges
(credits), net of tax - - (1.0) 32.5
Swap unwind and deferred financing
costs, net of tax - - 7.1 -
Nonrecurring operating charges, net
of tax - - - 0.7
Goodwill amortization, net of tax - 3.9 - 10.9
Cumulative effect of accounting
change, net of tax - - 46.1 -
Pro Forma Net Income $29.9 $20.8 $75.9 $49.5
Pro Forma Diluted Net Income Per
Share $0.52 $0.36 $1.31 $0.96
Fisher Scientific International Inc.
Segment Results
(in millions)
(UNAUDITED)
Three Months Ended
September 30,
Growth
2002 2001 Rate
Revenue
Domestic Distribution $716.9 $619.9 15.6%
International Distribution 114.6 105.8 8.3%
Laboratory Workstations 45.7 45.6 0.2%
Eliminations (46.3) (41.8)
Total $830.9 $729.5 13.9%
Three Months Ended
September 30,
Operating Operating
2002 Margin 2001 Margin
Operating Income
Domestic Distribution $58.1 8.1% $49.3 8.0%
International Distribution 5.8 5.1% 4.3 4.1%
Laboratory Workstations 2.9 6.3% 2.8 6.1%
Eliminations (0.3) 0.2
Segment sub-total 66.5 8.0% 56.6 7.8%
Restructuring and other charges
(credits) - -
Nonrecurring operating charges - -
Goodwill amortization - 4.4
Operating income $66.5 $52.2
Fisher Scientific International Inc.
Segment Results
(in millions)
(UNAUDITED)
Nine Months Ended
September 30,
Growth
2002 2001 Rate
Revenue
Domestic Distribution $2,087.1 $1,795.8 16.2%
International Distribution 328.9 320.2 2.7%
Laboratory Workstations 135.6 132.1 2.6%
Eliminations (135.3) (122.8)
Total $2,416.3 $2,125.3 13.7%
Nine Months Ended
September 30,
Operating Operating
2002 Margin 2001 Margin
Operating Income
Domestic Distribution $159.2 7.6% $134.6 7.5%
International Distribution 15.6 4.7% 12.8 4.0%
Laboratory Workstations 7.4 5.5% 6.2 4.7%
Eliminations (0.7) (0.2)
Segment sub-total 181.5 7.5% 153.4 7.2%
Restructuring and other charges
(credits) (1.5) 51.6
Nonrecurring operating charges - 1.1
Goodwill amortization - 12.6
Operating income $183.0 $88.1
Goodwill amortization has been removed from segment operating income in
2001.
Fisher Scientific International Inc.
Balance Sheet
(in millions)
September 30, December 31,
2002 2001
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $77.9 $75.1
Receivables, net 379.6 332.0
Inventories 274.0 261.4
Other current assets 88.3 89.3
Total current assets 819.8 757.8
Property, plant and equipment 316.8 322.1
Goodwill 461.7 507.4
Other assets 249.5 251.9
Total assets $1,847.8 $1,839.2
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $27.5 $75.7
Accounts payable 373.3 336.1
Accrued and other current
liabilities 214.0 225.9
Total current liabilities 614.8 637.7
Long-term debt 922.8 956.1
Other liabilities 212.6 222.1
Total liabilities 1,750.2 1,815.9
Commitments and contingencies
Total stockholders' equity 97.6 23.3
Total liabilities and
stockholders' equity $1,847.8 $1,839.2
Fisher Scientific International Inc.
Condensed Statement of Cash Flows
(in millions)
(UNAUDITED)
Nine Months Ended
September 30,
2002 2001
Cash flows from operating activities:
Net income $23.7 $5.4
Depreciation and amortization 56.6 59.6
Other adjustments to reconcile net
income to cash provided by
operating activities 75.4 41.6
Changes in working capital and
other assets and liabilities (31.5) (28.8)
Cash provided by operating
activities 124.2 77.8
Cash flows from investing activities:
Acquisitions, net of cash acquired (7.9) (163.9)
Capital expenditures (26.8) (23.8)
Other investing activity (0.5) (9.1)
Cash used in investing
activities (35.2) (196.8)
Cash flows from financing activities:
Proceeds from sale of common stock - 289.9
Net change in debt (85.3) (8.0)
Other financing activity (3.6) 0.8
Cash provided by (used in)
financing activities (88.9) 282.7
Effect of exchange rate changes on
cash 2.7 0.1
Net change in cash and cash
equivalents 2.8 163.8
Cash and cash equivalents - beginning
of period 75.1 66.0
Cash and cash equivalents - end of
period $77.9 $229.8
Media Contact:
Gia L. Oei, 603-929-2489
E-mail: Gia.Oei@nh.fishersci.com
Investor Contact:
Carolyn Miller, 603-929-2381
E-mail: Carolyn.Miller@nh.fishersci.com |
