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 28, 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.

(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. 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 November 10, 2003

Common Stock, $1 par value per share		126,852,009
		(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
	Consolidated Results of Continuing Operations -- Three Months and Nine Months Ended September 28, 2003 Versus Three and Nine Months Ended September 29, 2002
	Effect of Accounting Change
	Segment Results of Operations
	Liquidity and Capital Resources
	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
EXHIBIT INDEX
EX-10.1 SIXTH AMEND. TO THE RECEIVABLE SALE AGMNT
EX-10.2 SECOND AMEND. TO THE PURCHASE & SALE AGMNT
EX-31.1 SECTION 302 CERTIFICATION OF C.E.O.
EX-31.2 SECTION 302 CERTIFICATION OF C.F.O.
EX-32.1 SECTION 906 CERTIFICATION OF CEO & CFO

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		22
	Consolidated Results of Continuing Operations		22
	Segment Results of Operations		25
	Liquidity and Capital Resources		26
	Critical Accounting Policies, Commitments and Certain Other Matters		29
	Forward-Looking Information and Factors Affecting Future Performance		29
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

PART I. FINANCIAL INFORMATION


Item 1.	*Financial Statements*

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS



		Three Months Ended						Nine Months Ended

		September 28,			September 29,			September 28,			September 29,
		2003			2002			2003			2002


		(In thousands except						(In thousands except
		share and per share data)						share and per share data)

					(Unaudited)
Sales		$	367,085		$	366,011		$	1,102,658		$	1,095,400
Cost of sales			214,545			219,256			658,365			663,017
Research and development expenses			20,108			20,505			62,837			64,915
Selling, general and administrative expenses			91,686			102,436			282,042			322,984
Restructuring (reversals) charges, net			179			—			(2,994	)		9,224
Gains on dispositions			(369	)		—			(2,057	)		(5,216	)
Amortization of intangible assets			7,019			7,120			21,257			21,269

Operating income from continuing operations			33,917			16,694			83,208			19,207
Gain on repurchase of convertible debentures			—			(6,785	)		—			(6,785	)
Loss on early extinguishment of debt			—			—			—			5,539
Interest and other expense, net			13,287			11,516			41,794			28,028

Income (loss) from continuing operations before income taxes			20,630			11,963			41,414			(7,575	)
Provision (benefit) for income taxes			6,499			2,213			13,253			(2,742	)

Income (loss) from continuing operations			14,131			9,750			28,161			(4,833	)
Loss from discontinued operations, net of income taxes			—			(2,604	)		(1,597	)		(15,711	)
Gain (loss) on disposition of discontinued operations, net of income taxes			138			—			(1,535	)		(10,966	)

Net income (loss) before effect of accounting change			14,269			7,146			25,029			(31,510	)
Effect of accounting change, net of income taxes			—			—			—			(117,800	)

Net income (loss)		$	14,269		$	7,146		$	25,029		$	(149,310	)

Basic and diluted earnings (loss) per share:
	Continuing operations	$	0.11		$	0.08		$	0.22		$	(0.04	)
	Loss from discontinued operations, net of income tax		—			(0.02	)		(0.01	)		(0.13	)
	Loss on disposition of discontinued operations, net of income tax		—			—			(0.01	)		(0.09	)

	Net income (loss) before effect of accounting change		0.11			0.06			0.20			(0.25	)
	Effect of accounting change, net of income tax		—			—			—			(0.94	)

	Net income (loss)	$	0.11		$	0.06		$	0.20		$	(1.19	)

Weighted average shares of common stock outstanding:
	Basic		126,287			126,240			126,346			125,335
	Diluted		128,034			126,775			127,568			125,335
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


			September 28,			December 29,
			2003			2002


			(Unaudited)

			(In thousands except
			share and per share data)
Current assets:
	Cash and cash equivalents		$	141,316		$	130,615
	Cash held in escrow			—			186,483
	Accounts receivable, net			264,261			304,647
	Inventories			199,155			205,455
	Other current assets			157,786			152,137
	Current assets of discontinued operations			9,573			12,006

		Total current assets		772,091			991,343

Property, plant and equipment:
	At cost			614,046			598,048
	Accumulated depreciation			(336,528	)		(294,026	)

Net property, plant and equipment				277,518			304,022
Investments				11,578			14,298
Intangible assets				1,445,783			1,439,774
Other assets				80,194			83,835
Long-term assets of discontinued operations				2,160			2,967

		Total assets	$	2,589,324		$	2,836,239

Current liabilities:
	Short-term debt		$	4,591		$	5,008
	Convertible debt			—			186,483
	Accounts payable			133,703			146,290
	Accrued restructuring costs and integration costs			16,953			40,748
	Accrued expenses			292,310			316,427
	Current liabilities of discontinued operations			—			2,718

		Total current liabilities		447,557			697,674
Long-term debt				564,745			614,053
Long-term liabilities				276,155			270,031
Long-term liabilities of discontinued operations				2,235			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 126,797,000 and 125,854,000 outstanding at September 28, 2003 and December 29, 2002			145,101			145,101
	Capital in excess of par value			678,790			679,929
	Unearned compensation			(3,791	)		(5,890	)
	Retained earnings			653,562			655,066
	Accumulated other comprehensive income (loss)			7,488			(31,865	)
	Cost of shares held in treasury — 18,304,000, shares at September 28, 2003 and 19,247,000 shares at December 29, 2002			(182,518	)		(189,997	)

		Total stockholders’ equity		1,298,632			1,252,344

		Total liabilities and stockholders’ equity	$	2,589,324		$	2,836,239

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

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



		Nine Months Ended

		September 28,			September 29,
		2003			2002


		(In thousands)
		(Unaudited)
Operating activities:
Net income (loss)		$	25,029		$	(149,310	)
Add net loss from discontinued operations			3,132			26,677
Add effect of accounting change, net of income taxes			—			117,800

Net income (loss) from continuing operations			28,161			(4,833	)
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used) in continuing operations:
Restructuring reversals, net of expense			(2,994	)		—
Stock-based compensation			5,941			6,631
Amortization of debt discount and issuance costs			8,245			15,694
Depreciation and amortization			58,014			55,849
Gains on dispositions and sales of investments, net			(2,057	)		(5,335	)
Gain on purchase of debt, net			—			1,470
Changes in operating assets and liabilities which provided (used) cash, excluding effects from companies purchased and divested:
	Accounts receivable		56,652			38,822
	Inventories		14,380			30,326
	Accounts payable		(8,798	)		10,560
	Accrued restructuring costs		(16,292	)		(28,856	)
	Accrued expenses and other		(55,517	)		(58,366	)

Net cash provided by operating activities from continuing operations			85,735			61,962
Net cash provided by (used in) operating activities from discontinued operations			3,837			(6,495	)

Net cash provided by operating activities			89,572			55,467
Investing activities:
	Cash withdrawn from escrow to repay debt		187,477			—
	Capital expenditures		(11,194	)		(31,751	)
	Proceeds from dispositions of property, plant and equipment, net		3,295			28,342
	Settlement of disposition of businesses, net		(846	)		97,494
	Proceeds (cost) of acquisitions, net of cash acquired		534			(39,208	)
	Proceeds from sale of investments		—			3,242

Net cash provided by investing activities from continuing operations			179,266			58,119
Net cash used in (provided by) investing activities from discontinued operations			1,400			(5,200	)

Net cash provided by investing activities			180,666			52,919
Financing activities:
	Payment of debt issuance costs		(1,725	)		—
	Prepayment of zero coupon convertible notes		(189,901	)		(84,440	)
	Prepayment of term loan debt		(50,000	)		—
	Prepayment of short-term debt		—			(123,683	)
	(Decrease) increase in other credit facilities		(1,737	)		65,202
	Proceeds from issuance of common stock		2,355			10,054
	Purchases of common stock		—			(1,636	)
	Cash dividends		(26,531	)		(26,436	)

Net cash used in financing activities			(267,539	)		(160,939	)

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