New Brunswick Scientific Reports 2002 Third-Quarter And Nine-Months Financial Results
Monday November 11, 9:17 am ET
EDISON, N.J., Nov. 11 /PRNewswire-FirstCall/ -- New Brunswick Scientific Co., Inc. ("NBS") (Nasdaq: NBSC - News), today reported its financial results for the third quarter and nine months ended September 30, 2002.
For the third quarter of 2002, net sales were $13.1 million compared with $13.5 million for the year-ago quarter. Last year's third-quarter revenues included $1.2 million from fully custom-engineered bioprocess equipment, a product line for which the Company ceased accepting orders after June 29, 2001. Net sales, excluding sales of custom engineered bioprocess equipment during the 2001 quarter, increased 6 percent compared with the prior year quarter. Net income more than doubled to $258,000, or $0.03 per diluted share, versus $123,000, or $0.02 per diluted share, for 2001's comparable quarter.
For the 2002 nine-months, revenues were $42.4 million compared with the $43.0 million reported for the same period last year. Adjusted to exclude sales of fully custom-engineered bioprocess equipment and DGI revenues (which were consolidated with those of the Company through June 14, 2001) aggregating $5.3 million in the year-ago period, net sales increased more than 12 percent for the 2002 nine-months.
Net income for the nine-months was $1.7 million, or $0.21 per diluted share, versus $375,000, or $0.05 per diluted share, in 2001. Last year's results included approximately $3.7 million, net due to the following nonrecurring items: $4.9 million of revenue from the custom equipment mentioned above, $400,000 of revenue from DGI, $1.3 million in research expenses attributable to DGI and $260,000 in nonrecurring severance costs.
New Brunswick Scientific co-founder and Chairman David Freedman said, "We are gratified that, despite less-than-ideal business conditions, we were able to generate meaningful earnings during the quarter and nine-month period. The improvement in bottom line was partially attributable to the absence of $0.9 million of DGI research expenses, net of revenues, in 2001's nine-month period. We also benefited from an improved product mix, related in part to our exit last year from the fully custom engineered bioprocess equipment business."
Mr. Freedman continued, "Near the end of the third quarter, NBS and BankInvest, DGI's two major shareholders, provided DGI with a bridge loan in order to sustain its operations until DGI's anticipated closing of a financing transaction with an investment group. NBS, which had no obligation to make the loan and has no obligation to provide future financing, made the loan solely as a means of allowing DGI more time to complete its financing. As compensation for making the loans, NBS and BankInvest will each receive Convertible Preferred shares in DGI in proportion to their respective share of the loan. Consequently, NBS' ownership interest in DGI at September 30, 2002, was reduced from 47.0% to 41.3%. The $150,000 portion advanced by NBS to DGI has been expensed as a charge to equity in operations of DGI due to the uncertainty surrounding DGI's ability to consummate the equity financing and the resulting uncertainty as to the ability of DGI to repay the loan, absent the procurement of financing. Under the terms of the loan agreement, should the financing be consummated, NBS will be repaid in full from the proceeds. Such repayment would then be recorded as income from equity in operations of DGI.
"Although our domestic operations have performed well this year and the fourth quarter has traditionally been a strong period for the Company, particularly the fourth quarter of 2001, significant weakness in the laboratory research equipment market, especially in Europe, persists, affecting our European operations and restraining overall performance as a result. We would, therefore, characterize our outlook as guardedly optimistic with respect to our business and performance goals, although the results for the fourth quarter of 2002 will likely trail last year's fourth quarter results," Mr. Freedman concluded.
New Brunswick Scientific Co., Inc., designs and manufactures a wide variety of research equipment and scientific instruments for the life sciences and holds a minority equity position in DGI BioTechnologies, Inc., a drug-lead-discovery operation.
This press release includes statements that may constitute forward-looking statements made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. This information may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Further information concerning risk factors is described in the Company's Securities and Exchange Commission filings.
NEW BRUNSWICK SCIENTIFIC CO., INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Net sales $13,057 $13,542 $42,433 $43,041
Operating costs and expenses:
Cost of sales 7,498 8,500 24,757 26,085
Selling, general and
administrative
expenses(1) 4,028 3,727 12,446 11,896
Research, development
and engineering
expenses 795 601 2,117 2,049
DGI research expenses -- -- -- 1,312
Non-recurring
severance costs -- -- -- 260
Total operating
costs and expenses 12,321 12,828 39,320 41,602
Income from operations 736 714 3,113 1,439
Other income (expense):
Interest income 15 12 32 45
Interest expense (115) (141) (351) (437)
Other, net (8) (29) 6 (76)
(108) (158) (313) (468)
Income before income
tax expense and equity
in operations of DGI 628 556 2,800 971
Income tax 220 30 980 103
Income before equity
in operations of DGI 408 526 1,820 868
Equity in operations
of DGI (150) (403) (150) (493)
Net income $258 $123 $1,670 $375
Basic earnings
per share $0.03 $0.02 $0.22 $0.05
Diluted earnings
per share $0.03 $0.02 $0.21 $0.05
Basic weighted average
number of shares
outstanding 7,717 7,418 7,614 7,407
Diluted weighted average
number of shares
outstanding 7,836 7,460 7,829 7,429
(1) The Company adopted the provisions of SFAS 142 as of January 1, 2002,
and has determined that no impairment exists to its goodwill at that
date. Goodwill is no longer being amortized; however, the 2001 three
and nine-month periods include $46 and $137, respectively, of goodwill
amortization.
Selected Balance Sheet Items
(Dollars in thousands)
September 30, December 31,
2002 2001
(Unaudited)
Cash and cash equivalents $7,630 $3,794
Inventories 14,035 15,168
Property, plant and equipment, net 4,598 4,868
Total assets 44,160 44,543
Accounts payable and accrued expenses 6,185 9,136
Long-term debt, net of current installments 5,343 6,751
Shareholders' equity 30,277 26,296
Working capital 26,436 24,389
Current ratio 5.1 to 1 3.6 to 1 |
