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 September 29, 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 November 4, 2002

Common Stock, $1 par value		126,344,168 (Excluding treasury shares)

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
	CONSOLIDATED INCOME STATEMENTS
	CONSOLIDATED BALANCE SHEETS
	CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	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
	Item 4. Controls and Procedures
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
CERTIFICATIONS
SECTION 906 CERTIFICATION

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			16
		Acquisitions and Divestitures		16
		Change In Accounting Principle		16
		Discussion of Consolidated Results of Continuing Operations		17
		Segment Results of Operations		20
		Critical Accounting Policies, Commitments and Certain Other Matters		26
		Forward-Looking Information and Factors Affecting Future Performance		26
	Item 3. Quantitative and Qualitative Disclosures About Market Risk			30
	Item 4. Controls and Procedures			31

PART II. OTHER INFORMATION				31
	Item 1. Legal Proceedings			31
	Item 6. Exhibits and Reports on Form 8-K			32

SIGNATURE				33

CERTIFICATIONS				34

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(Unaudited)



		Three Months Ended						Nine Months Ended

		September 29,			September 30,			September 29,			September 30,
		2002			2001			2002			2001


		(In thousands except per share data)
Sales		$	366,011		$	348,322		$	1,095,400		$	1,119,358
Cost of sales			219,256			192,649			663,017			622,553
Research and development expenses			20,505			18,488			64,915			61,086
Selling, general and administrative expenses			109,556			86,998			344,253			293,329
Loss (gains) on dispositions and restructuring charges, net			—			(2,500	)		4,008			(13,348	)

Operating income from continuing operations			16,694			52,687			19,207			155,738
Other expense, net			4,731			4,486			26,782			23,362

Income (loss) from continuing operations before income taxes			11,963			48,201			(7,575	)		132,376
Provision (benefit) for income taxes			2,213			14,215			(2,742	)		43,231

Income (loss) from continuing operations before effect of accounting change			9,750			33,986			(4,833	)		89,145
Discontinued operations:
Loss from discontinued operations, net of income tax			(2,604	)		(2,767	)		(15,711	)		(5,020	)
Loss on disposition of discontinued operations, net of income tax			—			—			(10,966	)		—

Net income (loss) before effect of accounting change			7,146			31,219			(31,510	)		84,125
Effect of accounting change, net of income tax			—			—			(117,800	)		—

Net income (loss)		$	7,146		$	31,219		$	(149,310	)	$	84,125

Basic earnings (loss) per share:
	Income (loss) from continuing operations before effect of accounting change	$	0.08		$	0.34		$	(0.04	)	$	0.89
	Discontinued operations:
	Loss from discontinued operations, net of income tax	$	(0.02	)	$	(0.03	)	$	(0.13	)	$	(0.05	)
	Loss on disposition of discontinued operation, net of income tax		—			—			(0.09	)		—

	Net (loss) income before effect of accounting change	$	0.06		$	0.31			(0.25	)		0.84
	Effect of accounting change, net of income tax		—			—			(0.94	)		—

	Net income (loss)	$	0.06		$	0.31		$	(1.19	)	$	0.84

Diluted earnings (loss) per share:
	Income (loss) from continuing operations before effect of accounting change	$	0.08		$	0.33		$	(0.04	)	$	0.86
	Discontinued operations:
	Loss from discontinued operations, net of income tax	$	(0.02	)	$	(0.03	)	$	(0.13	)	$	(0.05	)
	Loss on disposition of discontinued operations, net of income tax		—			—			(0.09	)		—

	Net income (loss) before effect of accounting change	$	0.06		$	0.30			(0.25	)	$	0.81
	Effect of accounting change, net of income tax		—			—			(0.94	)		—

	Net income (loss)	$	0.06		$	0.30		$	(1.19	)	$	0.81

Weighted average shares of common stock outstanding:
	Basic		126,240			101,133			125,335			100,636
	Diluted		126,775			104,341			125,335			104,179
Cash dividends per common share		$	0.07		$	0.07		$	0.21		$	0.21

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

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


			September 29,			December 30,
			2002			2001


			(In thousands except
			share and per share data)
Current assets:
	Cash and cash equivalents		$	97,549		$	138,250
	Accounts receivable			294,651			319,063
	Inventories			221,536			244,841
	Other current assets			168,457			150,686
	Current assets of discontinued operations			10,212			90,518

		Total current assets		792,405			943,358

Property, plant and equipment:
	At cost			556,280			530,327
	Accumulated depreciation			(280,006	)		(247,703	)

Net property, plant and equipment				276,274			282,624
Investments				14,293			18,197
Intangible assets				1,446,689			1,530,053
Other assets				62,497			102,055
Long-term assets of discontinued operations				7,157			93,651

		Total assets	$	2,599,315		$	2,969,938

Current liabilities:
	Short-term debt		$	153,218		$	125,984
	Accounts payable			138,260			128,952
	Accrued restructuring costs			31,970			51,735
	Accrued expenses			345,697			427,550
	Current liabilities of discontinued operations			3,684			20,814

		Total current liabilities		672,829			755,035
Long-term debt				438,792			598,125
Long-term liabilities				272,599			253,164
Long-term liabilities of discontinued operations				2,158			57
Commitments 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 September 29, 2002 and December 30, 2001			145,101			145,101
	Capital in excess of par value			644,188			641,164
	Retained earnings			666,255			842,004
	Accumulated other comprehensive loss			(45,023	)		(60,940	)
	Cost of shares held in treasury — 19,798,000 shares at September 29, 2002 and 20,913,000 shares at December 30, 2001			(197,584	)		(203,772	)

		Total stockholders’ equity		1,212,937			1,363,557

		Total liabilities and stockholders’ equity	$	2,599,315		$	2,969,938

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

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



		Nine Months Ended

		September 29,			September 30,
		2002			2001


		(In thousands)
Operating activities:
Net (loss) income		$	(149,310	)	$	84,125
Less effect of accounting change			117,800			—
Less net loss from discontinued operations			26,677			5,020

(Loss) income from continuing operations			(4,833	)		89,145
Adjustments to reconcile (loss) income from continuing operations to net cash provided by (used in) continuing operations:
Revaluation of acquired inventory			1,500			—
Amortization of debt discount and issuance costs			15,694			15,473
Depreciation and amortization			55,849			61,917
Gains on dispositions and sales of investments, net			(5,335	)		(17,339	)
Net gain on purchase of debt			1,470			—
Changes in operating assets and liabilities which provided (used) cash, excluding effects from companies purchased and divested:
	Accounts receivable		38,822			3,311
	Inventories		28,826			(41,763	)
	Accounts payable		10,560			(1,813	)
	Accrued restructuring costs		(28,856	)		(27,238	)
	Accrued expenses and other		(55,743	)		(6,035	)

Net cash provided by operating activities from continuing operations			57,954			75,658
Net cash used in operating activities from discontinued operations			(6,495	)		(10,542	)

Net cash provided by operating activities			51,459			65,116
Investing activities:
	Capital expenditures		(31,751	)		(72,796	)
	Proceeds from dispositions of businesses, net		97,494			—
	Proceeds from disposition of property, plant and equipment, net		28,342			6,800
	Cost of acquisitions, net of cash acquired		(39,208	)		(16,412	)
	Proceeds from sale of investments, net		3,242			3,637

Net cash provided by (used in) investing activities from continuing operations			58,119			(78,771	)
Net cash used in investing activities from discontinued operations			(5,200	)		(17,077	)

Net cash provided by (used in) investing activities			52,919			(95,848	)
Financing activities:
	Increase in commercial paper borrowings		—			43,000
	Increase (decrease) in other debt		65,202			(6,467	)
	Prepayment of short-term debt		(123,683	)

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