PERKINELMER INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 27, 2004

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-5075

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		02481
(Address of principal executive offices)		(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 x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

Number of shares outstanding of each of the issuer’s classes of common stock:

Class

Outstanding at August 2, 2004

Common Stock, $1 par value per share

128,129,281

(Excluding treasury shares)

TABLE OF CONTENTS


		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Income Statements	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
	Overview	25
	Consolidated Results of Continuing Operations	25
	Reporting Segment Results of Continuing Operations	31
	Liquidity and Capital Resources	34
	Off-Balance Sheet Arrangements	36
	Application of Critical Accounting Policies and Estimates	37
	Forward-Looking Information and Factors Affecting Future Performance	37

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	43

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	44

Item 6.	Exhibits and Reports on Form 8-K	44

Signature		46

Exhibit Index		46

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS


	Three Months Ended						Six Months Ended
	June 27, 2004			June 29, 2003			June 27, 2004			June 29, 2003
	(Unaudited)						(Unaudited)
	(In thousands except per share data)						(In thousands except per share data)
Sales	$	412,614		$	376,252		$	805,222		$	733,992
Cost of sales		246,473			223,296			486,839			441,344
Research and development expenses		22,264			21,877			42,892			42,728
Selling, general and administrative expenses		97,650			97,455			193,464			190,248
Restructuring reversals, net		—			(2,728	)		—			(3,173	)
Gains on dispositions		—			(1,108	)		(363	)		(1,688	)
Amortization of intangible assets		7,077			7,037			14,178			14,227

Operating income from continuing operations		39,150			30,423			68,212			50,306
Interest and other expense, net		9,865			14,165			19,411			28,502

Income from continuing operations before income taxes		29,285			16,258			48,801			21,804
Provision for income taxes		8,361			5,284			14,153			7,086

Income from continuing operations		20,924			10,974			34,648			14,718
Loss from discontinued operations, net of income taxes		(89	)		(883	)		(344	)		(2,285	)
Loss on disposition of discontinued operations, net of income taxes		—			(1,693	)		(198	)		(1,673	)

Net income	$	20,835		$	8,398		$	34,106		$	10,760

Basic earnings (loss) per share:
Continuing operations	$	0.16		$	0.09		$	0.27		$	0.12
Loss from discontinued operations, net of income tax		—			(0.01	)		—			(0.02	)
Loss on disposition of discontinued operations, net of income tax		—			(0.01	)		—			(0.01	)

Net income	$	0.16		$	0.07		$	0.27		$	0.09

Diluted earnings (loss) per share:
Continuing operations	$	0.16		$	0.09		$	0.27		$	0.12
Loss from discontinued operations, net of income tax		—			(0.01	)		—			(0.02	)
Loss on disposition of discontinued operations, net of income tax		—			(0.01	)		—			(0.01	)

Net income	$	0.16		$	0.07		$	0.26		$	0.08

Weighted average shares of common stock outstanding:
Basic		127,121			125,707			126,903			125,678
Diluted		129,362			126,898			129,148			126,636
Cash dividends per common share	$	0.07		$	0.07		$	0.14		$	0.14

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

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	June 27, 2004			December 29, 2003
	(Unaudited)
	(In thousands except per share data)
Current assets:
Cash and cash equivalents	$	196,728		$	191,499
Accounts receivable, net		273,921			288,027
Inventories		189,605			190,346
Other current assets		98,782			95,213
Current assets of discontinued operations		950			1,214

Total current assets		759,986			766,299
Property, plant and equipment:
At cost		619,712			619,201
Accumulated depreciation		(372,634	)		(352,530	)

Net property, plant and equipment		247,078			266,671
Investments		10,073			10,874
Intangible assets		410,571			424,703
Goodwill, net		1,026,959			1,034,911
Other assets		98,817			102,652
Long-term assets of discontinued operations		359			1,609

Total assets	$	2,553,843		$	2,607,719

Current liabilities:
Short-term debt	$	4,945		$	5,167
Accounts payable		129,925			154,426
Accrued restructuring costs and integration costs		5,152			8,055
Accrued expenses		301,272			283,868
Current liabilities of discontinued operations		540			499

Total current liabilities		441,834			452,015
Long-term debt		484,431			544,307
Long-term liabilities		260,388			262,347

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 outstanding 127,836,000 and 126,909,000 at June 27, 2004 and December 28, 2003, respectively		145,101			145,101
Capital in excess of par value		685,885			681,550
Unearned compensation		(6,201	)		(3,494	)
Retained earnings		688,876			672,616
Accumulated other comprehensive income		22,366			30,908
Cost of shares held in treasury — 17,265,000 shares at June 27, 2004 and 18,192,000 shares at December 28, 2003		(168,837	)		(177,631	)

Total stockholders’ equity		1,367,190			1,349,050

Total liabilities and stockholders’ equity	$	2,553,843		$	2,607,719

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

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


		Six Months Ended
		June 27, 2004			June 29, 2003
		(Unaudited)
		(In thousands)
Operating activities:
Net income		$	34,106		$	10,760
Add net loss from discontinued operations			344			2,285
Add net loss on disposition of discontinued operations			198			1,673

Net income from continuing operations			34,648			14,718
Adjustments to reconcile net income from continuing operations to net cash provided by continuing operations:
Restructuring reversals, net of expense			—			(3,173	)
Stock-based compensation			5,095			5,266
Amortization of debt discount and issuance costs			3,561			6,179
Depreciation and amortization			38,502			38,544
Gains on dispositions and sales of investments, net			(363	)		(938	)
Changes in operating assets and liabilities:
Accounts receivable			10,689			51,574
Inventories			(607	)		15,962
Accounts payable	&n

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