Fisher Scientific Reports Record Sales and Earnings for 2002
Monday February 3, 4:59 pm ET
Raises EPS Outlook for 2003 to $2.20 to $2.30
HAMPTON, N.H.--(BUSINESS WIRE)--Feb. 3, 2003--Fisher Scientific International Inc. (NYSE: FSH - News), the world leader in serving science, today reported record sales and earnings for the full year ended Dec. 31, 2002, reflecting solid performance across all its business segments.
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"We concluded our centennial year on a high note, achieving record sales, earnings and operating cash flow for 2002," said Paul M. Montrone, chairman and chief executive officer. "We are well positioned to achieve our objectives for 2003."
2002 Reported Results
Sales for the fourth quarter increased 8.9 percent to $822.1 million compared with $754.7 million in the corresponding period of 2001. Excluding the effect of foreign exchange, sales totaled $811.9 million in the fourth quarter, a 7.6 percent increase over the same quarter in 2001. Fourth-quarter net income increased to $26.9 million, or 46 cents per diluted share, compared with $11.0 million, or 19 cents per diluted share, in the fourth quarter of 2001.
For the year ended Dec. 31, 2002, sales totaled $3,238.4 million, a 12.4 percent increase from sales of $2,880.0 million in 2001. Excluding the effect of foreign exchange, sales totaled $3,221.4 million in 2002, an 11.9 percent increase from comparable 2001 sales. Full-year net income increased to $50.6 million, or 87 cents per diluted share, compared with net income of $16.4 million, or 31 cents per share, in 2001. Cash from operations totaled $159.3 million, consistent with the prior year, and capital expenditures increased slightly to $43.9 million.
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 goodwill write-off in 2002. These items are outlined in the attached tables.
Income from operations for the quarter increased 10.4 percent to $61.4 million from $55.6 million in the fourth quarter of 2001.
Fourth-quarter net income increased 33.8 percent to $26.5 million compared with net income of $19.8 million in the corresponding period of 2001, reflecting an improvement in operating income and a reduction in both interest expense and the effective tax rate. Diluted earnings per share (EPS) were 45 cents in the fourth quarter compared with 34 cents per share in the fourth quarter of 2001.
Income from operations for the full year increased 16.2 percent to $242.9 million from $209.0 million during 2001.
Net income for the full year increased 47.8 percent to $102.4 million compared with net income of $69.3 million in 2001. EPS was $1.77 per diluted share in 2002 compared with $1.31 per diluted share in the prior year.
Business-Segment Results
Domestic distribution sales increased 7.0 percent to $688.9 million in the fourth quarter of 2002 compared with the same period in 2001. Operating income increased to $51.6 million from $46.7 million in the corresponding period of 2001. For full-year 2002, domestic distribution sales reached $2,776.0 million compared with $2,439.9 in 2001, a 13.8 percent increase. Operating income for 2002 grew to $210.8 million, a 16.3 percent increase over the previous year.
Excluding foreign-exchange effects, international distribution sales totaled $111.3 million in the latest quarter, a 5.8 percent increase compared with the prior year's quarter. Reported sales totaled $119.5 million in the fourth quarter, a 13.6 percent increase from the fourth quarter of 2001. For the latest quarter, operating income totaled $5.8 million, in line with the same period in 2001, reflecting margin improvement, offset by integration costs related to the acquisition of Retsch and Emergo. Sales for the full year increased to $448.4 million compared with $425.4 million in 2001, while operating income in 2002 increased to $21.4 million from $18.6 million in 2001. Excluding foreign-exchange effects, sales were $435.4 million, representing a 2.4 percent increase over the prior year.
Fourth-quarter sales of the laboratory-workstations segment increased 25.4 percent to $58.3 million from $46.5 million in the prior year, while operating income was $4.3 million compared with $2.5 million in the corresponding quarter of 2001. Fourth-quarter revenue was positively affected by a homeland-security project not expected to be repeated in 2003. Full-year sales rose to $193.9 million, up 8.6 percent from $178.6 million the prior year. Operating income for the year was $11.7 million compared with $8.7 million in 2001.
Order activity in the laboratory-workstations segment continued to be stable in the fourth quarter, with backlog at approximately $108 million.
Special Items
As previously announced, in November, Fisher acquired Maybridge Chemical Holdings Limited and Mimotopes Pty. Ltd. Maybridge is a United Kingdom-based provider of organic compounds and combinatorial libraries for use in drug discovery. Mimotopes is an Australia-based manufacturer of custom peptides and peptide libraries used in conducting scientific research. The results of Maybridge and Mimotopes have been included in the domestic distribution segment.
Shortly, Fisher expects to close a new $550 million senior secured credit facility, which includes a five-year, $150 million revolving credit facility and a seven-year, $400 million term-loan facility. On Jan. 14, the company issued $200 million of senior subordinated notes at a price to yield 7.4 percent. The net proceeds from the term-loan facility and the notes offering will be used to refinance the company's 9 percent senior subordinated notes due in 2008, which were callable after Jan. 31. Excluding approximately $45 million of one-time charges associated with the refinancing, of which $27 million is cash, the company estimates that this refinancing will provide $12 million to $14 million of pretax savings this year.
Company Outlook
For 2003, Fisher expects revenue growth, excluding foreign-exchange effects, of approximately 5 percent to 6 percent, and operating margins in the 7.7 percent to 7.9 percent range versus 7.5 percent in 2002. The company's outlook for 2003 by segment follows:
Segment Revenue Growth Rate Operating Margin
(excluding foreign exchange)
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Domestic distribution 5.5 % - 6.5 % 7.6 % - 7.8 %
International distribution 4.0 % - 5.0 % 5.5 % - 6.5 %
Lab workstations 0.0 % - 1.0 % 5.5 % - 6.0 %
Excluding the aforementioned nonrecurring charges, Fisher is raising its 2003 EPS guidance to a range of $2.20 to $2.30 from its previously announced range of $2.10 to $2.15, based on an estimated weighted average of approximately 59.2 million diluted shares outstanding and a 30 percent tax rate. EPS for the first quarter is expected to 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 for the year is estimated to be approximately $78 million. Capital expenditures are estimated at approximately $60 million, reflecting continued facility consolidation and increased investment in chemical manufacturing and pharmaceutical services.
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