-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rj3PBfE1Hu1G8OuoLXEb45vsFuKVNyi2ZY0Gg03pZ6VhUxColEbyueJW98nlYquL uyFnYyAQe3Hgl+2LzEy8tQ== 0000914039-98-000168.txt : 19980511 0000914039-98-000168.hdr.sgml : 19980511 ACCESSION NUMBER: 0000914039-98-000168 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980508 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEXTER CORP CENTRAL INDEX KEY: 0000028582 STANDARD INDUSTRIAL CLASSIFICATION: PAINTS, VARNISHES, LACQUERS, ENAMELS & ALLIED PRODUCTS [2851] IRS NUMBER: 060321410 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05542 FILM NUMBER: 98613895 BUSINESS ADDRESS: STREET 1: ONE ELM ST CITY: WINDSOR LOCKS STATE: CT ZIP: 06096 BUSINESS PHONE: 2036279051 MAIL ADDRESS: STREET 1: ONE ELM ST CITY: WINDSOR LOCKS STATE: CT ZIP: 06096 10-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10 - Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________________ to _______________________ ___________________________________________________________ Commission file number 1 - 5542 DEXTER CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) CONNECTICUT 06 - 0321410 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE ELM STREET, WINDSOR LOCKS, CONNECTICUT 06096 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (860) 292-7675 - -------------- (Registrant's telephone number, including area code) The Dexter Corporation - -------------------------------------------------------------------------------- (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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
CLASS Outstanding at April 30, 1998 ----- ----------------------------- COMMON STOCK, PAR VALUE $1 23,227,567 SHARES
2 PART I FINANCIAL INFORMATION Item 1 - Financial Statements Reference is made to the following consolidated financial statements which are incorporated herein by reference: (a) Exhibit 99a - Condensed Statement of Income for the three months ended March 31, 1998 and 1997. (b) Exhibit 99b - Condensed Statement of Financial Position as of March 31, 1998, December 31, 1997, and March 31, 1997. (c) Exhibit 99c - Condensed Statement of Cash Flows for the three months ended March 31, 1998 and 1997. (d) Exhibit 99d - Statement of Comprehensive Income (Loss) for the three months ended March 31, 1998 and 1997. (e) Exhibit 99e - Net Sales by Market for the three months ended March 31, 1998 and 1997. (f) Exhibit 99f - Notes to Consolidated Financial Statements. The unaudited financial data included herein as of March 31, 1998 and 1997, and for the three-month periods then ended, have been reviewed by the registrant's independent public accountants, Coopers & Lybrand L.L.P., and their report is attached. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Analysis of Operations The Company reported record first quarter 1998 net income of $14.2 million, or $.61 per share on a diluted basis, compared with $12.9 million, or $.54 per share diluted for the first quarter of 1997. Net income increased 11% while both basic earnings per share and diluted earnings per share improved 13% in the first quarter. Sales in 1998 were a first quarter record at $289.9 million, an increase of 6% compared with sales of $272.3 million in the first quarter of 1997. A 7% increase in unit volume and a 3% increase due to acquisitions were partially offset by a 3% unfavorable effect of currency translation rates and price decreases averaging 1%. 3 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations, continued Products with strong performance in the first quarter include aerospace adhesives and coatings, liquid encapsulant materials serving the electronics market, magnetic materials, food and specialty can coatings serving international markets, and sales of products at Life Technologies, Inc. Products with weaker performance in the quarter include beer and beverage can coatings serving international markets, nonwoven materials serving the food packaging market, and printed wiring board products serving the electronics market. Consolidated gross margin of 36.3% for the first quarter of 1998, stated as a percentage of sales, increased .7 percentage points from 35.6% in the first quarter of 1997. This improvement came from wholly owned Dexter operations, primarily due to volume increases, productivity improvements, and favorable product mix. Marketing and administrative cost increased $5 million, or 9%, in the first quarter of 1998 primarily due to increased cost at Life Technologies, Inc. and marketing and administrative costs associated with businesses acquired subsequent to the first quarter of 1997. Other income of $2.3 million in the first quarter of 1998 decreased $1.9 million from the first quarter of 1997. This decrease was primarily due to lower equity income resulting from the divestiture of D & S Plastics International, which was effective April 1, 1997. The negative impact of lower equity income was offset by lower interest expense, a lower effective tax rate of 35% in the first quarter of 1998 compared with 36% in 1997, and lower minority interest expense in 1998. Analysis of Financial Condition Excess acquisition cost as of March 31, 1998 was $97.8 million, an increase of $17.4 million, compared with $80.4 million as of March 31, 1997. This was primarily due to an increase of $24.1 million due to the impact of businesses acquired subsequent to the first quarter of 1997 which was partially offset by $6.1 million of amortized costs. Other assets as of March 31, 1998 were $74 million, a decrease of $15.5 million compared with $89.5 million as of March 31, 1997. This decrease was primarily due to the divestiture of the Company's 50% equity interest in D & S Plastics International of $43.2 million, which was effective April 1, 1997. Partially offsetting this decrease was an increase of 28.6 million for patents, technology, formulas and covenants related to businesses acquired subsequent to the first quarter of 1997. 4 PART II OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders The annual meeting of the shareholders of the Company was held on April 23, 1998, where the following actions were taken: (a) The re-election to the Board of Directors of Mr. Robert M. Furek, chairman of the State Board of Trustees for the Hartford, Connecticut public school system and a partner in Resolute Partners; Mrs. Martha Clark Goss, vice president and chief financial officer of Booz, Allen & Hamilton Inc.; and Mr. Edgar G. Hotard, president and chief operating officer of Praxair, Inc. The votes for each director were as follows:
Director For Against -------- --- ------- Robert M. Furek 20,640,815 173,612 Martha Clark Goss 20,653,315 161,112 Edgar G. Hotard 20,637,056 177,371
In addition, the following directors continue in office for the terms expiring as indicated: Ms. Henrietta Holsman Fore (1999), Mr. Bernard M. Fox (1999), Mr. K. Grahame Walker (1999), George M. Whitesides, Ph.D. (1999), Mr. Charles H. Curl (2000), Mr. Peter G. Kelly (2000), and Mr. Jean-Francois Saglio (2000). (b) The selection of Coopers & Lybrand L.L.P. as auditors of the Company for the year 1998 was ratified. The votes for selection of Coopers & Lybrand L.L.P. were as follows:
For Against Abstain --- ------- ------- 20,780,101 8,497 25,829
(c) An amendment to the Company's Restated Certificate of Incorporation to change the Company's name to "Dexter Corporation" was approved. The votes for the approval of the amendment were as follows:
For Against Abstain 20,534,844 239,067 57,515
5 Item 5 - Other Information (a) Glen L. Urban, Ph.D., whose term as director expired on April 23, 1998, did not stand for re-election. Dr. Urban had served on the Board of Directors since 1989. (b) The Board of Directors elected Mr. Jeffrey W. McClelland and Mr. David Woodhead to serve as vice presidents of the Company. In addition, Mr. McClelland is president of Adhesive & Coating Systems and Mr. Woodhead is president of Magnetic Technologies. Item 6 - Exhibits and Reports on Form 8 - K (a) Exhibit 3A(1) - Amendment to the Restated Certificate of Incorporation of the registrant, filed with the Secretary of the State of Connecticut on April 23, 1998, for the purposes of changing the Company's name to Dexter Corporation. Exhibit 15 of Part 1 - Letter to Securities and Exchange Commission re: Incorporation of Accountants' Report Exhibit 27 of Part 1 - Financial Data Schedule for the period ending March 31, 1998. Restated Financial Data Schedules for the periods ended from December 31, 1995 through September 30, 1997 to include earnings per share - diluted due to the adoption of SFAS No. 128, Earnings Per Share. Exhibit 99 of Part 1 - First Quarter 1998 Financial Statements and Notes (b) No reports on Form 8 - K were filed during the quarter for which this report was filed. 6 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DEXTER CORPORATION (Registrant) Date May 8, 1998 /s/ Kathleen Burdett ------------------------------- Kathleen Burdett Vice President and Chief Financial Officer (Principal Financial Officer) 7 INDEX TO EXHIBITS Exhibit No. 3A(1) Amendment to the Restated Certificate of Incorporation of the registrant, filed with the Secretary of the State of Connecticut on April 23, 1998. 15 Letter to Securities and Exchange Commission re: Incorporation of Accountants' Report 27 Financial Data Schedule for the period ending March 31, 1998. Restated Financial Data Schedules for the periods ended December 31, 1995 through September 30, 1997 to include earnings per share -diluted due to the adoption of SFAS No. 128, Earnings Per Share. 99 First Quarter 1998 Financial Statements and Notes EX-3.A.1 2 EXHIBIT 3.A.1 1 Exhibit 3A(1) CERTIFICATE OF AMENDMENT STOCK CORPORATION Office of the Secretary of the State 30 Trinity Street / P.O. Box 150470 / Hartford, CT 06115-0470 / new / 1-97 - -------------------------------------------------------------------------------- 1. NAME OF CORPORATION: THE DEXTER CORPORATION - -------------------------------------------------------------------------------- 2. THE CERTIFICATE OF INCORPORATION IS (CHECK A, B OR C): /XX/ A. AMENDED. / / B. AMENDED AND RESTATED / / C. RESTATED - -------------------------------------------------------------------------------- 3. TEXT OF EACH AMENDMENT / RESTATEMENT: ARTICLE I The name of the corporation is "Dexter Corporation." 2 Exhibit 3A(1) continued - -------------------------------------------------------------------------------- 4. VOTE INFORMATION (CHECK A, B OR C) /XX/ A. THE RESOLUTION WAS APPROVED BY SHAREHOLDERS AS FOLLOWS: (SET FORTH ALL VOTING INFORMATION REQUIRED BY CONN. GEN. STAT. SECTION 33-800 AS AMENDED IN THE SPACE PROVIDED BELOW) See Attachment A for voting information. - -------------------------------------------------------------------------------- / / B. THE AMENDMENT WAS ADOPTED BY THE BOARD OF DIRECTORS WITHOUT SHAREHOLDER ACTION. NO SHAREHOLDER VOTE WAS REQUIRED FOR ADOPTION. / / C. THE AMENDMENT WAS ADOPTED BY THE INCORPORATORS WITHOUT SHAREHOLDER ACTION. NO SHAREHOLDER VOTE WAS REQUIRED FOR ADOPTION. - -------------------------------------------------------------------------------- 5. EXECUTION - -------------------------------------------------------------------------------- Dated this 23rd day of April, 1998 - -------------------------------------------------------------------------------- Mary Anne B. Tillona Assistant Secretary /s/ Mary Anne B. Tillona - -------------------------------------------------------------------------------- PRINT OR TYPE NAME OF CAPACITY OF SIGNATORY SIGNATURE SIGNATORY - ------------------------------------------------------------------------------- 3 Exhibit 3A(1) continued ATTACHMENT A CERTIFICATE OF AMENDMENT THE DEXTER CORPORATION The foregoing amendment was passed by an affirmative vote of 20,534,844 votes cast at the annual meeting of shareholders of The Dexter Corporation held on April 23, 1998, at which a quorum was present, which vote is greater than a majority of the votes cast at such meeting and which was sufficient for approval of the amendment under the Connecticut Business Corporations Act. The only outstanding securities of The Dexter Corporation are the shares of its common stock, $1 par value, 23,179,597 of which were outstanding as of February 27, 1998. Only shareholders of record as of the close of business on that date were entitled to vote at the annual meeting. There were 20,776,911 votes indisputably represented at the meeting. 20,534,844 votes were cast in favor and 239,067 votes were cast against the amendment. EX-15 3 EXHIBIT 15 1 Exhibit 15 Securities and Exchange Commission 450 5th Street, N.W. Judiciary Plaza Washington, D.C. 20549 We are aware that our report dated April 15, 1998, on our review of the interim financial information of Dexter Corporation as of March 31, 1998 and 1997, and for the three month periods then ended, and included in this Form 10 - Q is incorporated by reference in the company's registration statements on Form S - 8, Registration Nos. 2 - 63959, 33 - 27597, 33 - 53307, 33 - 53309, 333 - 02985, 333 - 04081, and 333 - 42663. Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the registration statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Springfield, Massachusetts May 8, 1998 EX-27.1 4 EXHIBIT 27.1
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1998 MAR-31-1998 68,509 0 194,797 7,018 169,466 467,860 724,444 373,860 990,274 239,959 185,420 0 0 24,984 357,719 990,274 289,915 292,201 184,564 184,564 0 0 4,308 27,209 9,523 14,230 0 0 0 14,230 .62 .61
EX-27.2 5 EXHIBIT 27.2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1997 SEP-30-1997 86,501 0 196,585 5,966 160,851 483,245 701,220 357,919 952,037 249,409 168,459 0 0 24,984 342,652 952,037 852,413 861,688 545,300 545,300 0 0 15,585 84,557 30,441 43,112 0 0 0 43,112 1.87 1.84
EX-27.3 6 EXHIBIT 27.3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1997 JUN-30-1997 100,529 0 200,504 5,876 156,835 497,100 686,772 350,244 959,847 248,011 188,807 0 0 24,984 335,687 959,847 565,485 572,411 362,542 362,542 0 0 10,298 56,465 20,328 28,869 0 0 0 28,869 1.25 1.23
EX-27.4 7 EXHIBIT 27.4
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1997 MAR-31-1997 62,120 0 187,389 5,652 155,980 444,594 675,255 342,935 946,752 226,410 208,339 0 0 24,984 331,225 946,752 272,260 276,484 175,302 175,302 0 0 4,809 25,982 9,353 12,872 0 0 0 12,872 .55 .54
EX-27.5 8 EXHIBIT 27.5
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 12-MOS DEC-31-1996 DEC-31-1996 103,420 0 172,288 6,620 148,911 460,411 677,836 343,570 953,804 217,482 209,952 0 0 24,984 349,131 953,804 1,100,185 1,112,365 720,980 720,980 0 0 20,500 98,252 34,880 48,722 0 0 0 48,722 2.06 2.03
EX-27.6 9 EXHIBIT 27.6
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1996 SEP-30-1996 82,356 0 189,515 5,489 143,031 457,815 655,272 333,360 938,107 210,197 208,839 0 0 24,984 344,793 938,107 832,421 840,800 547,278 547,278 0 0 15,671 74,933 26,601 37,282 0 0 0 37,282 1.57 1.55
EX-27.7 10 EXHIBIT 27.7
5 This schedule contains summary financial information extracted from the Condensed Statement of Financial Position and Condensed Statement of Income and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS DEC-31-1996 JUN-30-1996 75,058 0 187,050 5,811 147,899 458,578 635,561 323,683 926,305 211,072 208,660 0 0 24,984 334,941 926,305 562,928 568,125 370,281 370,281 0 0 10,742 51,409 18,250 25,541 0 0 0 25,541 1.07 1.06
EX-27.8 11 EXHIBIT 27.8
5 This schedule contains summary financial information extracted from the Condensed Statement of Financial Position and Condensed Statement of Income and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1996 MAR-31-1996 57,222 0 189,535 5,612 162,323 464,005 649,626 325,148 944,980 225,434 214,874 0 0 24,984 336,820 944,980 277,227 279,402 182,525 182,525 0 0 5,366 22,431 7,963 11,148 0 0 0 11,148 .46 .46
EX-27.9 12 EXHIBIT 27.9
5 This schedule contains summary financial information extracted from the Condensed Statement of Financial Position and Condensed Statement of Income and is qualified in its entirety by reference to such financial statements. 1,000 12-MOS DEC-31-1995 DEC-31-1995 65,542 0 183,076 5,851 157,034 456,721 642,239 317,036 934,161 208,098 215,839 0 0 24,984 344,631 934,161 1,088,905 1,099,044 742,206 742,206 0 0 20,931 79,824 28,337 40,578 0 0 0 40,578 1.67 1.66
EX-99 13 EXHIBIT 99 1 EXHIBIT 99a DEXTER CORPORATION CONDENSED STATEMENT OF INCOME
Three Months Ended March 31 In thousands of dollars ------------------------------------- (except per share amounts) 1998 1997 Change - ---------------------------------------------------------------------------- REVENUES Net sales $289,915 $272,260 + 6% Other income 2,286 4,224 - 46% -------- -------- 292,201 276,484 + 6% EXPENSES Cost of sales 184,564 175,302 + 5% Marketing and administrative 62,044 57,050 + 9% Research and development 14,076 13,341 + 6% Interest 4,308 4,809 - 10% -------- -------- INCOME BEFORE TAXES 27,209 25,982 + 5% Income taxes 9,523 9,353 + 2% -------- -------- INCOME BEFORE MINORITY INTERESTS 17,686 16,629 + 6% Minority interests 3,456 3,757 - 8% -------- -------- NET INCOME $ 14,230 $ 12,872 + 11% ======== ======== NET INCOME PER SHARE - BASIC $ 0.62 $ 0.55 + 13% NET INCOME PER SHARE - DILUTED $ 0.61 $ 0.54 + 13% DIVIDENDS DECLARED PER SHARE $ 0.24 $ 0.24 AVERAGE SHARES OUTSTANDING (000) 22,946 23,275 - 1%
See accompanying notes to the consolidated financial statements. Amounts are unaudited. 2 EXHIBIT 99b DEXTER CORPORATION CONDENSED STATEMENT OF FINANCIAL POSITION
MARCH 31 December 31 March 31 In thousands of dollars ------------------------------------------- (except per share amounts) 1998 1997 1997 - --------------------------------------------------------------------------------------------- ASSETS Cash and short-term securities $ 68,509 $ 68,306 $ 62,120 Accounts receivable, net 199,416 185,257 192,099 Inventories Materials and supplies 59,875 61,233 58,662 In process and finished 128,236 117,467 116,721 LIFO reserve (18,645) (18,799) (19,403) --------- --------- --------- 169,466 159,901 155,980 Prepaid and deferred expenses 30,469 26,988 34,395 --------- --------- --------- Total current assets 467,860 440,452 444,594 Property, plant and equipment, at cost, net 350,584 348,172 332,320 Excess of cost over net assets of businesses acquired 97,812 97,507 80,366 Other assets 74,018 75,645 89,472 --------- --------- --------- $ 990,274 $ 961,776 $ 946,752 ========= ========= ========= LIABILITIES & SHAREHOLDERS' EQUITY Short-term debt $ 29,962 $ 35,361 $ 5,500 Current installments of long-term debt 12,924 13,340 11,914 Accounts payable 100,514 91,155 97,904 Accrued liabilities and taxes 88,851 89,076 103,416 Current environmental reserves 2,200 2,099 2,117 Dividends payable 5,508 5,505 5,559 --------- --------- --------- Total current liabilities 239,959 236,536 226,410 Long-term debt 185,420 180,030 208,339 Deferred items 57,494 54,197 49,900 Long-term environmental reserves 13,556 13,726 14,278 Minority interests 111,142 104,426 91,616 Shareholders' equity Common stock and paid-in capital 38,333 38,158 37,303 Retained earnings 418,565 409,844 382,788 Treasury stock (51,479) (52,216) (46,713) Accumulated other comprehensive income (22,716) (22,925) (17,169) --------- --------- --------- Total shareholders' equity 382,703 372,861 356,209 --------- --------- --------- $ 990,274 $ 961,776 $ 946,752 ========= ========= ========= EQUITY PER SHARE $ 16.67 $ 16.26 $ 15.41
See accompanying notes to the consolidated financial statements. Amounts as of March 31, 1998 and March 31, 1997 are unaudited. 3 EXHIBIT 99c DEXTER CORPORATION CONDENSED STATEMENT OF CASH FLOWS
Three Months Ended March 31 ---------------------------- In thousands of dollars 1998 1997 - --------------------------------------------------------------------------------------- OPERATIONS Net income $ 14,230 $ 12,872 Noncash items Depreciation and amortization 12,939 10,993 Income taxes not due 8,092 5,379 Minority interests 3,456 3,757 LIFO inventory credit (154) (433) Equity in net income of affiliates (827) (2,351) Other (254) 402 Operating working capital increase (24,314) (26,756) -------- --------- 13,168 3,863 -------- --------- INVESTMENTS Property, plant and equipment (17,069) (11,629) Acquisitions (1,047) (17,002) Joint ventures 1,153 (449) Proceeds from exercise of LTI stock options 2,775 615 Other 1,757 2,066 -------- --------- (12,431) (26,399) -------- --------- FINANCING Long-term debt 10,193 (705) Short-term debt, net (5,423) 605 Dividends paid (5,506) (5,175) LTI dividends paid to minority interest shareholders (555) (428) Purchase of treasury stock (11,317) Other 521 13 -------- --------- (770) (17,007) -------- --------- DECREASE IN CASH AND SHORT-TERM SECURITIES $ (33) $ (39,543) ======== ========= RECONCILIATION OF DECREASE IN CASH AND SHORT-TERM SECURITIES Cash and short-term securities at beginning of period $ 68,306 $ 103,420 Cash and short-term securities at end of period 68,509 62,120 -------- --------- Increase (Decrease) in cash and short-term securities per Statement of Financial Position 203 (41,300) Currency translation effects (236) 1,757 -------- --------- $ (33) $ (39,543) ======== ========= INTEREST PAID $ 4,118 $ 3,715 TAXES PAID $ 1,431 $ 3,974
Property, plant and equipment for the three months ended March 31, 1998 includes $4,635 related to the exercise of an option to purchase land under a capital lease by Life Technologies, Inc. See accompanying notes to the consolidated financial statements. Amounts are unaudited. 4 EXHIBIT 99d DEXTER CORPORATION STATEMENT OF COMPREHENSIVE INCOME (LOSS)
Three Months Ended March 31 --------------------------- In thousands of dollars 1998 1997 - ------------------------------------------------------------------------------- NET INCOME $ 14,230 $ 12,872 -------- -------- OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX Currency translation effects 247 (14,604) Unrealized losses on investments (38) -------- -------- OTHER COMPREHENSIVE INCOME (LOSS) 209 (14,604) -------- -------- COMPREHENSIVE INCOME (LOSS) $ 14,439 $ (1,732) ======== ========
See accompanying notes to the consolidated financial statements. Amounts are unaudited. 5 EXHIBIT 99e DEXTER CORPORATION NET SALES BY MARKET
Three Months Ended March 31 ----------------------------------- In thousands of dollars 1998 1997 Change - ----------------------------------------------------------------- AEROSPACE $ 17,056 $ 13,471 + 27% ELECTRONICS (1) 55,073 49,831 + 11% FOOD PACKAGING (2) 65,835 64,824 + 2% MEDICAL 112,912 105,403 + 7% OTHER 39,039 38,731 + 1% -------- -------- CONSOLIDATED $289,915 $272,260 + 6% ======== ========
(1) The effect of businesses acquired increased net sales to the Electronics market by $2 million, or 4%. (2) The effect of businesses acquired increased net sales to the Food Packaging market by $6.3 million, or 10%. Amounts are unaudited. 6 Exhibit 99f Dexter Corporation Notes to Consolidated Financial Statements Note 1 - In the opinion of the Company's management, the unaudited financial statements reflect adjustments of a normal recurring nature which are necessary to present a fair statement of the results for the interim periods. The notes to the consolidated financial statements including management's discussion in Part 1, Item 2 of this Form 10-Q are incorporated as part of these consolidated financial statements. The year-end condensed balance sheet data was derived from the audited financial statements. Note 2 - Presented below is the reconciliation between basic earnings per share and diluted earnings per share for the three months ended March 31, 1998 and 1997:
Three Months ended March 31 Amounts in thousands --------------------------- (except per share data) 1998 1997 ------------------------------------------------------------------ Earnings per share - basic: Net income $14,230 $ 12,872 Weighted average shares outstanding 22,946 23,275 Earnings per share - basic $.62 $.55 Earnings per share - diluted: Net income $14,230 $ 12,872 Effect of subsidiary dilutive options on net income (109) (142) ------- -------- $14,121 $ 12,730 ======= ======== Weighted average shares outstanding 22,946 23,275 Weighted average effect of common stock equivalents 285 162 ------- -------- 23,231 23,437 ======= ======== Earnings per share - diluted $.61 $.54
7 Exhibit 99f Dexter Corporation Notes to Consolidated Financial Statements (continued) Note 3 - In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income, which became effective for financial statements for periods beginning after December 15, 1997. This statement requires that the company (a) report upon comprehensive income (net income and other comprehensive income) in a financial statement and (b) display the accumulated balance of other comprehensive income separately from retained earnings and paid-in capital in the shareholders' equity section of the statement of financial position. In February 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 132, Employers' Disclosures About Pensions and Other Postretirement Benefits, which becomes effective for financial statements for fiscal years beginning after December 15, 1997. The Company is currently evaluating the impact of SFAS No. 132 on its financial reporting practices. Note 4 - The following are included as components of Common Stock and Paid-in Capital.
COMMON STOCK & PAID-IN CAPITAL MARCH 31, DECEMBER 31, MARCH 31, (IN THOUSANDS OF DOLLARS) 1998 1997 1997 - ------------------------------ ------- ------- ------- Common stock $24,984 $24,984 $24,984 Paid-in capital 17,021 17,482 14,714 Unearned compensation on restricted stock (3,672) (4,308) (2,395) ------- ------- ------- $38,333 $38,158 $37,303 ======= ======= =======
Note 5 - The following are included as components of Accumulated Other Comprehensive Income.
ACCUMULATED OTHER COMPREHENSIVE MARCH 31, DECEMBER 31, MARCH 31, INCOME (IN THOUSANDS OF DOLLARS) 1998 1997 1997 - -------------------------------- -------- -------- ------- Currency translation effects ($22,228) ($22,475) ($16,791) Unrealized losses on investments (464) (426) (174) Pension liability adjustment (24) (24) (204) -------- -------- ------- ($22,716) ($22,925) ($17,169) ======== ======== ========
8 REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of Dexter Corporation We have reviewed the accompanying condensed statement of financial position of Dexter Corporation as of March 31, 1998 and 1997, and the related condensed statements of income, comprehensive income and cash flows for the three month periods then ended. These financial statements are the responsibility of the company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated statement of financial position of Dexter Corporation as of December 31, 1997, and the related consolidated statements of income, cash flows, and changes in shareholders' equity for the year then ended (not presented herein); and in our report dated February 3, 1998, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed statement of financial position as of December 31, 1997, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived. /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Springfield, Massachusetts April 15, 1998 -----END PRIVACY-ENHANCED MESSAGE-----