PERKINELMER INC - 10-Q Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
	þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002 or
	o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-5075

PerkinElmer, Inc.

(Exact Name Of Registrant As Specified In Its Charter)


Massachusetts		04-2052042
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

45 William Street, Wellesley, Massachusetts (Address of principal executive offices)		02481 (Zip Code)

(781) 237-5100

(Registrant’s telephone number, including area code)

NONE

(Former name, former address and former fiscal year,

if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class		Outstanding at August 7, 2002

Common Stock, $1 par value		125,007,927 (Excluding treasury shares)

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION				1
	Item 1. Financial Statements			1
		Consolidated Income Statements		1
		Consolidated Balance Sheets		2
		Consolidated Statements of Cash Flows		3

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS				4
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			14
		Acquisitions and Divestitures		14
		Change In Accounting Principle		14
		Discussion of Consolidated Results of Continuing Operations		14
		Segment Results of Operations		18
		Critical Accounting Policies, Commitments and Certain Other Matters		22
		Forward-Looking Information and Factors Affecting Future Performance		22
	Item 3. Quantitative and Qualitative Disclosures About Market Risk			27

PART II. OTHER INFORMATION				28
	Item 1. Legal Proceedings			28
	Item 6. Exhibits and Reports on Form 8-K			28

SIGNATURES				30

EXHIBIT INDEX				31

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(1) Basis of Presentation
	(2) Acquisitions
	(3) Restructuring Charges
	(4) Gains on Dispositions
	(5) Inventories
	(6) Comprehensive Income (Loss)
	(7) Industry Segment Information
	(8) Discontinued Operations
	(9) Extraordinary Item
	(10) Goodwill and Intangible Assets
	(11) Recently Issued Accounting Pronouncements
	(12) Contingencies
	(13) Indebtedness
	Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
	Acquisitions and Divestitures
	Change in Accounting Principle
	Discussion Of Consolidated Results Of Continuing Operations
	Segment Results of Operations
	Critical Accounting Policies, Commitments and Certain Other Matters
	Forward-Looking Information and Factors Affecting Future Performance
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
EXHIBIT INDEX
Ex-99.1 CERTIFICATION PURSUANT TO SECTION 906

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(Unaudited)



		Three Months Ended					Six Months Ended

		June 30,			July 1,		June 30,			July 1,
		2002			2001		2002			2001


		(In thousands except share and per share data)
Sales		$	335,671		$	321,424	$	637,330		$	642,396
Cost of sales			187,663			167,453		373,800			343,053
Revaluation of acquired inventory			—			—		1,500			—
Research and development expenses			22,016			18,402		43,250			38,563
Selling, general and administrative expenses			113,795			99,744		222,238			196,090
Loss (gains) on dispositions and restructuring charges, net			—			—		4,008			(1,779	)

Operating income (loss) from continuing operations			12,197			35,825		(7,466	)		66,469
Other expense, net			7,661			5,992		15,573			17,122

Income (loss) from continuing operations before income taxes			4,536			29,833		(23,039	)		49,347
Provision (benefit) for income taxes			821			8,722		(6,902	)		16,020

Income (loss) from continuing operations before extraordinary item and effect of accounting change			3,715			21,111		(16,137	)		33,327
Discontinued operations:
(Loss) income from discontinued operations, net of income tax			(1,845	)		8,298		(7,953	)		19,578
Loss on disposition of discontinued operations, net of income tax			(10,966	)		—		(10,966	)		—

Net (loss) income before extraordinary item and effect of accounting change			(9,096	)		29,409		(35,056	)		52,905
Extraordinary item, net of income tax			—			—		(3,600	)		—
Effect of accounting change, net of income tax			—			—		(117,800	)		—

Net (loss) income		$	(9,096	)	$	29,409	$	(156,456	)	$	52,905

Basic earnings (loss) per share:
	Net income from continuing operations before extraordinary item and effect of accounting change	$	0.03		$	0.21	$	(0.13	)	$	0.33
	Discontinued operations:
	(Loss) income from discontinued operations, net of income tax		(0.01	)		0.08		(0.06	)		0.20
	Loss on disposition of discontinued operation, net of income tax		(0.09	)		—		(0.09	)		—

	Net (loss) income before extraordinary item and effect of accounting change		(0.07	)		0.29		(0.28	)		0.53
	Extraordinary item, net of income tax		—			—		(0.03	)		—
	Effect of accounting change, net of income tax		—			—		(0.94	)		—

	Net (loss) income	$	(0.07	)	$	0.29	$	(1.25	)	$	0.53

Diluted earnings (loss) per share:
	Net income from continuing operations before extraordinary item and effect of accounting change	$	0.03		$	0.20	$	(0.13	)	$	0.32
	Discontinued operations:
	(Loss) income from discontinued operations, net of income tax		(0.01	)		0.08		(0.06	)		0.19
	Loss on disposition of discontinued operations, net of income tax		(0.09	)		—		(0.09	)		—

	Net (loss) income before extraordinary item and effect of accounting change		(0.07	)		0.28		(0.28	)		0.51
	Extraordinary item, net of income tax		—			—		(0.03	)		—
	Effect of accounting change, net of income tax		—			—		(0.94	)		—

	Net (loss)income	$	(0.07	)	$	0.28	$	(1.25	)	$	0.51

Weighted average shares of common stock outstanding:
	Basic		124,901			100,622		124,883			100,388
	Diluted		125,556			104,097		124,883			104,099
Cash dividends per common share		$	0.07		$	0.07	$	0.14		$	0.14

The accompanying unaudited notes are an integral part of these consolidated financial statements.

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


			June 30,			December 30,
			2002			2001


			(In thousands except
			share and per share data)
Current assets:
	Cash and cash equivalents		$	143,343		$	138,250
	Accounts receivable			284,631			292,266
	Inventories			206,361			227,057
	Other current assets			170,193			150,613
	Current assets of discontinued operations			59,216			141,374

		Total current assets		863,744			949,560

Property, plant and equipment:
	At cost			429,042			412,776
	Accumulated depreciation			(186,070	)		(162,604	)

Net property, plant and equipment				242,972			250,172
Investments				16,384			18,081
Intangible assets				1,377,318			1,491,700
Other assets				104,663			119,307
Long-term assets of discontinued operations				103,476			145,886

		Total assets	$	2,708,557		$	2,974,706

Current liabilities:
	Short-term debt		$	99,896		$	125,741
	Accounts payable			117,689			115,589
	Accrued restructuring costs			32,776			49,783
	Accrued expenses			311,214			411,466
	Current liabilities of discontinued operations			39,397			57,360

		Total current liabilities		600,972			759,939
Long-term debt				606,537			598,125
Long-term liabilities				262,285			249,182
Long-term liabilities of discontinued operations				15,370			3,903
Commitment and contingencies
Stockholders’ equity:
	Preferred stock — $1 par value, authorized 1,000,000 shares; none issued or outstanding			—			—
	Common stock — $1 par value, authorized 300,000,000 shares; issued 145,101,000 shares at June 30, 2002 and December 30, 2001			145,101			145,101
	Capital in excess of par value			644,218			641,164
	Retained earnings			667,786			842,004
	Accumulated other comprehensive loss			(35,794	)		(60,940	)
	Cost of shares held in treasury — 20,119,000 shares at June 30, 2002 and 20,913,000 shares at December 30, 2001			(197,918	)		(203,772	)

		Total stockholders’ equity		1,223,393			1,363,557

		Total liabilities and stockholders’ equity	$	2,708,557		$	2,974,706

The accompanying unaudited notes are an integral part of these consolidated financial statements.

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



		Six Months Ended

		June 30,			July 1,
		2002			2001


		(In thousands)
Operating activities:
Net (loss) income		$	(156,456	)	$	52,905
Less effect of accounting change			117,800			—
Less net loss (income) from discontinued operations			18,919			(19,578	)

(Loss) income from continuing operations			(19,737	)		33,327
Adjustments to reconcile net (loss) income from continuing operations to net cash (used in) provided by continuing operations:
Revaluation of acquired inventory			1,500			—
Amortization of debt discount and issuance costs			10,455			10,018
Depreciation and amortization			33,550			36,801
Gains on dispositions and sales of investments, net			(5,199	)		(1,897	)
Changes in operating assets and liabilities which provided (used) cash, excluding effects from companies purchased and divested:
	Accounts receivable		24,662			4,073
	Inventories		27,635			(29,676	)
	Accounts payable and accrued expenses		(55,421	)		(24,623	)
	Accrued restructuring costs		(26,225	)		(15,112	)
	Other assets and liabilities		(17,803	)		(6,705	)

Net cash (used in) provided by operating activities from continuing operations			(26,583	)		6,206
Net cash provided by operating activities from discontinued operations			7,100			28,451

Net cash (used in) provided by operating activities			(19,483	)		34,657
Investing activities:
	Capital expenditures		(22,810	)		(39,379	)
	Proceeds from dispositions of businesses, net		90,894			(4,195	)
	Proceeds from disposition of property, plant and equipment, net		28,058			587
	Cost of acquisitions, net of cash acquired		(36,308	)		(5,103	)
	Proceeds from sale of investments, net		2,384			1,505

Net cash provided by (used in) investing activities from continuing operations			62,218			(46,585	)
Net ca

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