UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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 29, 2003 | ||
| 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.
| 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
NONE
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. Yes þ No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o
Number of shares outstanding of each of the issuer’s classes of common stock:
| Class | Outstanding at August 8, 2003 | |
| Common Stock, $1 par value per share | 126,733,117 | |
| (Excluding treasury shares) |
TABLE OF CONTENTS
| Page | ||||||
| PART I. FINANCIAL INFORMATION | ||||||
|
Item 1.
|
Financial Statements | 2 | ||||
| Consolidated Income Statements | 2 | |||||
| Consolidated Balance Sheets | 3 | |||||
| Consolidated Statements of Cash Flows | 4 | |||||
| Notes to Consolidated Financial Statements | 5 | |||||
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 | ||||
| Discussion of Consolidated Results of Continuing Operations | 23 | |||||
| Segment Results of Operations | 25 | |||||
| Acquisitions and Divestitures | 27 | |||||
| Liquidity and Capital Resources | 27 | |||||
| Critical Accounting Policies, Commitments and Certain Other Matters | 29 | |||||
| Forward-Looking Information and Factors Affecting Future Performance | 30 | |||||
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk | 35 | ||||
|
Item 4.
|
Controls and Procedures | 36 | ||||
| PART II. OTHER INFORMATION | ||||||
|
Item 1.
|
Legal Proceedings | 36 | ||||
|
Item 6.
|
Exhibits and Reports on Form 8-K | 37 | ||||
| SIGNATURE | 38 | |||||
1
PART I. FINANCIAL INFORMATION
| Item 1. | Financial Statements |
PERKINELMER, INC. AND SUBSIDIARIES
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 29, | June 30, | June 29, | June 30, | ||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||||
| (In thousands except | (In thousands except | ||||||||||||||||
| per share data) | per share data) | ||||||||||||||||
| (Unaudited) | |||||||||||||||||
|
Sales
|
$ | 377,124 | $ | 383,096 | $ | 735,573 | $ | 729,389 | |||||||||
|
Cost of sales
|
224,540 | 223,198 | 443,820 | 443,761 | |||||||||||||
|
Research and development expenses
|
21,877 | 22,603 | 42,729 | 44,410 | |||||||||||||
|
Selling, general and administrative expenses
|
97,477 | 112,829 | 190,356 | 220,549 | |||||||||||||
|
Restructuring (reversals) charges, net
|
(2,728 | ) | — | (3,173 | ) | 9,224 | |||||||||||
|
Gains on dispositions
|
(1,108 | ) | — | (1,688 | ) | (5,216 | ) | ||||||||||
|
Amortization of intangible assets
|
7,043 | 7,057 | 14,238 | 14,149 | |||||||||||||
|
Operating income from continuing
operations
|
30,023 | 17,409 | 49,291 | 2,512 | |||||||||||||
|
Interest and other expense, net
|
14,160 | 8,422 | 28,507 | 22,050 | |||||||||||||
|
Income (loss) from continuing operations before
income taxes
|
15,863 | 8,987 | 20,784 | (19,538 | ) | ||||||||||||
|
Provision (benefit) for income taxes
|
5,155 | 2,912 | 6,754 | (4,954 | ) | ||||||||||||
|
Income (loss) from continuing
operations
|
10,708 | 6,075 | 14,030 | (14,584 | ) | ||||||||||||
|
Loss from discontinued operations, net of income
taxes
|
(617 | ) | (4,205 | ) | (1,597 | ) | (13,106 | ) | |||||||||
|
Loss on disposition of discontinued operations,
net of income taxes
|
(1,693 | ) | (10,966 | ) | (1,673 | ) | (10,966 | ) | |||||||||
|
Net income (loss) before effect of accounting
change
|
8,398 | (9,096 | ) | 10,760 | (38,656 | ) | |||||||||||
|
Effect of accounting change, net of income taxes
|
— | — | — | (117,800 | ) | ||||||||||||
|
Net income (loss)
|
$ | 8,398 | $ | (9,096 | ) | $ | 10,760 | $ | (156,456 | ) | |||||||
|
Basic earnings (loss) per share:
|
|||||||||||||||||
|
Continuing operations
|
$ | 0.09 | $ | 0.05 | $ | 0.11 | $ | (0.12 | ) | ||||||||
|
Loss from discontinued operations, net of income
tax
|
— | (0.03 | ) | (0.01 | ) | (0.10 | ) | ||||||||||
|
Loss on disposition of discontinued operations,
net of income tax
|
(0.01 | ) | (0.09 | ) | (0.01 | ) | (0.09 | ) | |||||||||
|
Net income (loss) before effect of accounting
change
|
0.07 | (0.07 | ) | 0.09 | (0.31 | ) | |||||||||||
|
Effect of accounting change, net of income tax
|
— | — | — | (0.94 | ) | ||||||||||||
|
Net income (loss)
|
$ | 0.07 | $ | (0.07 | ) | $ | 0.09 | $ | (1.25 | ) | |||||||
|
Diluted earnings (loss) per share:
|
|||||||||||||||||
|
Continuing operations
|
$ | 0.08 | $ | 0.05 | $ | 0.11 | $ | (0.12 | ) | ||||||||
|
Loss from discontinued operations, net of income
tax
|
— | (0.03 | ) | (0.01 | ) | (0.10 | ) | ||||||||||
|
Loss on disposition of discontinued operations,
net of income tax
|
(0.01 | ) | (0.09 | ) | (0.01 | ) | 0.09 | ) | |||||||||
|
Net income (loss) before effect of accounting
change
|
0.07 | (0.07 | ) | 0.08 | (0.31 | ) | |||||||||||
|
Effect of accounting change, net of income tax
|
— | — | — | (0.94 | ) | ||||||||||||
|
Net income (loss)
|
$ | 0.07 | $ | (0.07 | ) | $ | 0.08 | $ | (1.25 | ) | |||||||
|
Weighted average shares of common stock
outstanding:
|
|||||||||||||||||
|
Basic
|
125,707 | 124,901 | 125,678 | 124,883 | |||||||||||||
|
Diluted
|
126,898 | 125,556 | 126,636 | 124,883 | |||||||||||||
|
Cash dividends per common share
|
$ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.07 | |||||||||
The accompanying unaudited notes are an integral part of these consolidated financial statements.
2
PERKINELMER, INC. AND SUBSIDIARIES
| June 29, | December 29, | |||||||||
| 2003 | 2002 | |||||||||
| (Unaudited) | ||||||||||
| (In thousands except | ||||||||||
| per share data) | ||||||||||
|
Current assets:
|
||||||||||
|
Cash and cash equivalents
|
$ | 144,623 | $ | 130,615 | ||||||
|
Cash held in escrow
|
154,865 | 186,483 | ||||||||
|
Accounts receivable, net
|
269,820 | 304,647 | ||||||||
|
Inventories
|
197,186 | 205,455 | ||||||||
|
Other current assets
|
157,802 | 152,137 | ||||||||
|
Current assets of discontinued operations
|
11,790 | 12,006 | ||||||||
|
Total current assets
|
936,086 | 991,343 | ||||||||
|
Property, plant and equipment:
|
||||||||||
|
At cost
|
618,935 | 598,048 | ||||||||
|
Accumulated depreciation
|
(327,216 | ) | (294,026 | ) | ||||||
|
Net property, plant and equipment
|
291,719 | 304,022 | ||||||||
|
Investments
|
11,927 | 14,298 | ||||||||
|
Intangible assets
|
1,452,801 | 1,439,774 | ||||||||
|
Other assets
|
80,452 | 83,835 | ||||||||
|
Long-term assets of discontinued operations
|
2,158 | 2,967 | ||||||||
|
Total assets
|
$ | 2,775,143 | $ | 2,836,239 | ||||||
|
Current liabilities:
|
||||||||||
|
Short-term debt
|
$ | 4,791 | $ | 5,008 | ||||||
|
Convertible debt
|
156,813 | 186,483 | ||||||||
|
Accounts payable
|
131,018 | 146,290 | ||||||||
|
Accrued restructuring costs and integration costs
|
25,046 | 40,748 | ||||||||
|
Accrued expenses
|
303,069 | 316,427 | ||||||||
|
Current liabilities of discontinued operations
|
539 | 2,718 | ||||||||
|
Total current liabilities
|
621,276 | 697,674 | ||||||||
|
Long-term debt
|
584,483 | 614,053 | ||||||||
|
Long-term liabilities
|
273,739 | 270,031 | ||||||||
|
Long-term liabilities of discontinued operations
|
2,166 | 2,137 | ||||||||
|
Commitments and contingencies
|
||||||||||
|
Stockholders’ equity:
|
||||||||||
|
Preferred stock — $1 par value per
share, authorized 1,000,000 shares; none issued or
outstanding
|
— | — | ||||||||
|
Common stock — $1 par value per share,
authorized 300,000,000 shares; issued 145,101,000 and
126,199,000 and 125,854,000 outstanding at June 29, 2003
and December 29, 2002
|
145,101 | 145,101 | ||||||||
|
Capital in excess of par value
|
678,845 | 679,929 | ||||||||
|
Unearned compensation
|
(4,490 | ) | (5,890 | ) | ||||||
|
Retained earnings
|
648,164 | 655,066 | ||||||||
|
Accumulated other comprehensive income (loss)
|
10,145 | (31,865 | ) | |||||||
|
Cost of shares held in treasury —
18,902,000 shares at June 29, 2003 and 19,247,000
shares at December 29, 2002
|
(184,286 | ) | (189,997 | ) | ||||||
|
Total stockholders’ equity
|
1,293,479 | 1,252,344 | ||||||||
|
Total liabilities and stockholders’
equity
|
$ | 2,775,143 | $ | 2,836,239 | ||||||
The accompanying unaudited notes are an integral part of these consolidated financial statements.
3
PERKINELMER, INC. AND SUBSIDIARIES
| Six Months Ended | |||||||||
| June 29, | June 30, | ||||||||
| 2003 | 2002 | ||||||||
| (In thousands) | |||||||||
| (Unaudited) | |||||||||
|
Operating activities:
|
|||||||||
|
Net income (loss)
|
$ | 10,760 | $ | (156,456 | ) | ||||
|
Add net loss from discontinued operations
|
3,270 | 24,072 | |||||||
|
Add effect of accounting change, net of income
taxes
|
— | 117,800 | |||||||
|
Net income (loss) from continuing operations
|
14,030 | (14,584 | ) | ||||||
|
Adjustments to reconcile net income (loss) from
continuing operations to net cash provided by (used) in
continuing operations:
|
|||||||||
|
Restructuring reversals, net of expense
|
(3,173 | ) | — | ||||||
|
Stock-based compensation
|
1,400 | 487 | |||||||
|
Amortization of debt discount and issuance costs
|
6,179 | 10,455 | |||||||
|
Depreciation and amortization
|
38,544 | 37,869 | |||||||
|
Gains on dispositions and sales of investments,
net
|
(1,688 | ) | (5,216 | ) | |||||
|
Changes in operating assets and liabilities which
provided (used) cash, excluding effects from companies purchased
and divested:
|
|||||||||
|
Accounts receivable
|
51,574 | 26,847 | |||||||
|
Inventories
|
15,962 | 26,357 | |||||||
|
Accounts payable
|
(9,196 | ) | (292 | ) | |||||
|
Accrued restructuring costs
|
(11,183 | ) | (27,052 | ) | |||||
|
Accrued expenses and other
|
(43,042 | ) | (71,309 | ) | |||||
|
Net cash provided by (used in) operating
activities from continuing operations
|
59,407 | (16,438 | ) | ||||||
|
Net cash provided by (used in) operating
activities from discontinued operations
|
1,504 | (3,045 | ) | ||||||
|
Net cash provided by (used in) operating
activities
|
60,911 | (19,483 | ) | ||||||
|
Investing activities:
|
|||||||||
|
Cash withdrawn from escrow to repay debt
|
32,509 | — | |||||||
|
Capital expenditures
|
(8,279 | ) | (26,262 | ) | |||||
|
Proceeds from dispositions of property, plant and
equipment, net
|
3,295 | 28,058 | |||||||
|
Settlement of disposition of businesses, net
|
(866 | ) | 90,894 | ||||||
|
Proceeds (cost) of acquisitions, net of cash
acquired
|
534 | (36,308 | ) | ||||||
|
Proceeds from sale of investments
|
— | 2,384 | |||||||
|
Net cash provided by investing activities from
continuing operations
|
27,193 | 58,766 | |||||||
|
Net cash used in investing activities from
discontinued operations
|
250 | (5,194 | ) | ||||||
|
Net cash provided by (used in) investing
activities
|
27,443 | 53,572 | |||||||
|
Financing activities:
|
|||||||||