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 September 26, 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 November 1, 2004
Common Stock, $1 par value per share		128,099,015

TABLE OF CONTENTS


		Page
	PART I. FINANCIAL INFORMATION
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 Overview	24
	Consolidated Results of Continuing Operations	24
	Reporting Segment Results of Continuing Operations	31
	Liquidity and Capital Resources	33
	Off-Balance Sheet Arrangements	36
	Dividends	36
	Application of Critical Accounting Policies and Estimates	36
	Forward-Looking Information and Factors Affecting Future Performance	36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41

Item 4.	Controls and Procedures	43

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	44

Item 6.	Exhibits	44

Signature		45

Exhibit Index		46

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS


	Three Months Ended						Nine Months Ended
	September 26, 2004			September 28, 2003			September 26, 2004			September 28, 2003
	(Unaudited)						(Unaudited)
	(In thousands except per share data)						(In thousands except per share data)
Sales	$	403,403		$	366,185		$	1,208,625		$	1,100,177
Cost of sales		243,270			213,243			729,292			654,360
Research and development expenses		21,359			19,659			63,425			61,467
Selling, general and administrative expenses		89,042			91,544			282,396			281,720
Restructuring charges (reversals), net		—			179			—			(2,994	)
Gains on dispositions		(299	)		(369	)		(662	)		(2,057	)
Amortization of intangible assets		7,140			7,013			21,318			21,240

Operating income from continuing operations		42,891			34,916			112,856			86,441
Interest and other expense, net		8,484			13,287			27,895			41,789

Income from continuing operations before income taxes		34,407			21,629			84,961			44,652
Provision for income taxes		9,806			6,863			24,640			14,406

Income from continuing operations		24,601			14,766			60,321			30,246
Loss from discontinued operations, net of income taxes		(318	)		(635	)		(1,734	)		(3,682	)
(Loss) gain on disposition of discontinued operations, net of income taxes		(269	)		138			(467	)		(1,535	)

Net income	$	24,014		$	14,269		$	58,120		$	25,029

Basic earnings per share:
Continuing operations	$	0.19		$	0.12		$	0.47		$	0.24
Loss from discontinued operations, net of income tax		—			(0.01	)		(0.01	)		(0.03	)
Loss on disposition of discontinued operations, net of income tax		—			—			—			(0.01	)

Net income	$	0.19		$	0.11		$	0.46		$	0.20

Diluted earnings per share:
Continuing operations	$	0.19		$	0.12		$	0.47		$	0.24
Loss from discontinued operations, net of income tax		—			—			(0.01	)		(0.03	)
Loss on disposition of discontinued operations, net of income tax		—			—			—			(0.01	)

Net income	$	0.19		$	0.11		$	0.45		$	0.20

Weighted average shares of common stock outstanding:
Basic		127,562			126,287			127,123			126,346
Diluted		129,395			128,034			129,230			127,568
Cash dividends per common share	$	0.07		$	0.07		$	0.21		$	0.21

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

PERKINELMER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	September 26, 2004			December 29, 2003
	(Unaudited)
	(In thousands except share and per share data)
Current assets:
Cash and cash equivalents	$	220,041		$	191,499
Accounts receivable, net		272,460			288,027
Inventories		189,082			188,602
Other current assets		94,236			94,679
Current assets of discontinued operations		1,323			3,493

Total current assets		777,142			766,300
Property, plant and equipment:
At cost		621,458			618,651
Accumulated depreciation		(382,277	)		(352,290	)

Net property, plant and equipment		239,181			266,361
Investments		10,230			10,874
Intangible assets		403,970			424,703
Goodwill, net		1,030,241			1,034,911
Other assets		98,037			100,220
Long-term assets of discontinued operations		513			4,358

Total assets	$	2,559,314		$	2,607,727

Current liabilities:
Short-term debt	$	4,995		$	5,167
Accounts payable		131,227			154,260
Accrued restructuring and integration costs		3,824			8,055
Accrued expenses		301,017			283,695
Current liabilities of discontinued operations		858			846

Total current liabilities		441,921			452,023
Long-term debt		469,493			544,307
Long-term liabilities		257,611			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 128,094,000 and 145,101,000 at September 26, 2004 and December 28, 2003, respectively; and outstanding 128,094,000 and 126,909,000 at September 26, 2004 and December 28, 2003, respectively		128,094			145,101
Capital in excess of par value		532,667			681,550
Unearned compensation		(4,358	)		(3,494	)
Retained earnings		703,923			672,616
Accumulated other comprehensive income		29,963			30,908
Cost of shares held in treasury — 18,192,000 shares at December 28, 2003		—			(177,631	)

Total stockholders’ equity		1,390,289			1,349,050

Total liabilities and stockholders’ equity	$	2,559,314		$	2,607,727

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 26, 2004			September 28, 2003
	(Unaudited)
	(In thousands)
Operating activities:
Net income	$	58,120		$	25,029
Add net loss from discontinued operations		1,734			3,682
Add net loss on disposition of discontinued operations		467			1,535

Net income from continuing operations		60,321			30,246
Adjustments to reconcile net income from continuing operations to net cash provided by continuing operations:
Restructuring reversals, net of expense		—			(2,994	)
Stock-based compensation		4,819			5,941
Amortization of debt discount and issuance costs		4,870			8,245
Depreciation and amortization		56,361			58,014
Gains on dispositions and sales of investments, net		(662	)		(2,057	)
Changes in operating assets and liabilities:
Accounts receivable		14,679			56,652
Inventories		(771	)		14,380
Accounts payable		(23,068	)		(8,798	)
Accrued restructuring costs		(4,231	)		(16,292	)
Accrued expenses and other

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents