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Biotech / Medical : New Brunswick Scientific Co., Inc. (NBSC) -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (444)	3/1/2002 3:25:04 PM
From: quidditch	Read Replies (1) \| Respond to of 724

My radar detector has shown me this is a good spot to fish, and I have the patience to wait. You have company at the ol' fishin' hole. From GS yesterday: FRAGMENTED MARKET YIELDS ACQUISITION OPPORTUNITIES. With $300 million in incremental borrowing capacity, Fisher continues to seek opportunities to identify complementary fill-in acquisitions. Our belief is that management's preference remains biased toward niche manufacturing capacity whose products can be sold through FSH's distribution customer base. While there remains a breadth of strategic opportunities, most appear to be represent $50-$100 million in annual revenues. Management remains committed to its 15% internal rate of return hurdle on any potential transactions, as this usually yields valuations of 5x-7x LTM EBITDA. While product portfolio expansion opportunities are clearly a benefit of acquisition activities, we highlight FSH's historical ability to squeeze working capital from acquired assets, yielding expedited cash realization and higher rates or return. -- LABORATORY WORKSTATIONS COMPARABLE POSTS STRONG GROWTH. Kewaunee Scientific Corporation (KEQU), a competitor to FSH's Hamilton Laboratory workstation operation, posted strong growth in its Q3 (January) financial results. Total sales grew 18% to $20.8 million (versus Hamilton's Q4 growth of 7.9% to $46.5 million), driven by 35% growth in laboratory products, with incrementally improved margins. Technical products sales declined 57% y/y, reflecting the more capital constrained environment in the technology sector. We highlight Kewuanee's results as we believe they could represent an early barometer of a sustained broader recovery for laboratory capital expenditures.[emphasis added] -- REMAIN POSITIVE ON SHARES BASED ON VALUATION, EPS OUTLOOK. With Fisher having executed effectively on both its Q4 results (better then expectations) and secondary offering, we see good visibility on '02 results, with some room for upward revision. As such, we remain comfortable with our 2002 forecast of $3.2 billion in sales (+11.4%), EBITDA of $317 million (+17.6 %), and EPS of $1.66 (+31%). Nevertheless, shares remain at the low end of their valuation range despite the favorable outlook. We note that from the May 2001 offering until the secondary was announced on in January, Fisher traded at a mean 12-month forward multiple of 19.6x on cash EPS compared with 16.6x today (8.0x 2002 EBITDA), a 13% discount. As such, we maintain our Recommended List rating on shares of FSH with a $38 target or 19x our revised C'02 estimate of $2.00. quid