EX-99.1 3 b48199peexv99w1.txt PRESS RELEASE DATED OCTOBER 22, 2003 Exhibit 99.1 [LOGO]PERKINELMER(R) PERKINELMER, INC. precisely. 45 William Street Wellesley, MA 02481-4078 USA Phone: 781-431-4306 Fax: 781-431-4255 www.perkinelmer.com FOR IMMEDIATE RELEASE --------------------- October 22, 2003 PERKINELMER ANNOUNCES Q3 2003 RESULTS o NET INCOME FROM CONTINUING OPERATIONS INCREASES BY 45% o OPERATING MARGINS EXPAND BY 460 BASIS POINTS o CONVERTIBLE REDEMPTION DRIVES $177M GROSS DEBT REDUCTION BOSTON -- PerkinElmer, Inc. (NYSE: PKI) today announced third quarter 2003 GAAP earnings per share from continuing operations of $.11 on revenue of $367.1 million, compared to GAAP earnings per share from continuing operations of $.08 and revenue of $366.0 million in the third quarter of 2002. Earnings per share excluding intangibles amortization were $.15 for the third quarter of 2003, which exceed by $.01 the Thomson First CallTM consensus earnings per share estimate of $.14, which also excludes intangibles amortization. Amortization of intangibles for the quarter was $7.0 million, or $.04 per share. Revenue from continuing operations for the third quarter of 2003 was $367.1 million, slightly above 2002, with revenue growth in Optoelectronics and Life and Analytical Sciences of 4% and 1%, respectively, offset by a 10% decline in Fluid Sciences' revenue during the quarter. GAAP operating margins during the third quarter of 2003 doubled to 9.2% from 4.6% for the same period of 2002. Third quarter 2003 operating margins, excluding intangibles amortization, were 11.2% compared to 6.5% for the third quarter of 2002. This margin expansion compared to the 2002 quarter was driven by benefits we derived from the integration of Life and Analytical Sciences, and other productivity initiatives across the Company. "We were pleased with the benefits of our cost productivity initiatives, which are reflected in our lower SG&A and higher gross margins," said Gregory L. Summe, Chairman and CEO of the Company. "We believe that our improved cost structure as well as investments in new products positions the Company well." The Company generated operating cash flow of $28.7 million in the third quarter of 2003 and $89.6 million for the first nine months of 2003. This compares with operating cash flow of $70.9 million and $55.5 million for the third quarter and first nine months of 2002, respectively. Third quarter 2003 operating cash flow includes a $10 million benefit due to increased sales of receivables under our accounts receivable securitization program. The Company paid down $20 million of its long-term debt during the third quarter, and has reduced long-term debt by $50 million year to date. As previously announced, during the third quarter of 2003, the Company retired its remaining zero coupon convertible debentures, which contributed to a $177 million gross debt reduction since the second quarter of 2003. "We remained focused on driving strong cash flow and improving our working capital turns as this both strengthens our balance sheet and forces greater rigor and quality in our processes," added Summe. Net income for the third quarter of 2002 comprised $.08 earnings per share from continuing operations and a loss of ($.02) per share from discontinued operations. Third quarter 2002 results included $.03 per share resulting from the effects of two discrete events, a gain from the retirement of debt partially offset by certain divestiture-related costs. Financial overview by reporting segment: LIFE AND ANALYTICAL SCIENCES reported revenue of $235.1 million for the third quarter of 2003, up 1% from $232.9 million for the third quarter of 2002. Revenue growth in reagents, consumables and service was partially offset by declines in instruments sales compared to the third quarter of 2002. By market segment, the Company experienced growth in revenue during the third quarter in the environmental and chemical markets, due to strong market acceptance of our recently introduced new products into these end markets. Sales into the biopharma markets were down compared to the third quarter of 2002, however, we believe the end market demand appears to be improving, particularly for the Company's high-end instruments. Genetic screening revenue during the third quarter of 2003 was down compared to the same period of 2002, due to the timing of certain customer order patterns compared to the same period of 2002. We believe that genetic screening revenues continue to track to double-digit growth for the full year 2003. The segment's GAAP operating profit for the third quarter of 2003 was $21.3 million versus $9.6 million in the same period of 2002. As a percentage of sales, operating profit for the third quarter of 2003 and 2002 was 9.1% and 4.1%, respectively. This 500 basis point increase in operating margin reflects the benefits from the Life and Analytical Sciences integration, cost productivity actions across the business and a shift in product mix to higher margin products. The results for the third quarters of 2003 and 2002 include intangibles amortization of $6.5 million and $6.6 million, respectively. Operating margins excluding intangibles amortization, were 11.8% and 6.9%, for the third quarters of 2003 and 2002, respectively. OPTOELECTRONICS reported revenue of $88.1 million for the third quarter of 2003, an increase of 4% from revenue of $84.3 million for the third quarter of 2002. Growth in revenue from imaging and specialty lighting was offset by lower sensors revenue during the third quarter of 2003 compared to the same period of 2002. Both biotech and medical imaging revenues grew double-digits during the quarter. The segment's GAAP operating profit was $10.9 million for the third quarter of 2003, versus an operating profit of $6.2 million for the comparable period in 2002. As a percentage of sales, operating profit for the third quarters of 2003 and 2002 was 12.3% and 7.3%, respectively. Operating margins excluding intangibles amortization, were 12.7% and 7.7%, for the third quarters of 2003 and 2002, respectively. FLUID SCIENCES reported revenue of $43.9 million for the third quarter of 2003, representing a decline of 10% compared to revenue of $48.8 million for the third quarter of 2002, largely attributable to continued softness in the aerospace and semiconductor end markets. Despite lower revenue quarter over quarter, the segment's GAAP operating profit for the third quarter of 2003 increased to $5.6 million versus $5.4 million in the third quarter of 2002. As a percentage of sales, operating profit for the third quarter of 2003 and 2002 was 12.8% and 11.2%, respectively. Operating margins excluding intangibles amortization, were 13.3% and 11.6%, for the third quarter of 2003 and 2002, respectively. "We are entering the fourth quarter with good momentum on improving our cost position, driving cash flow, fueling our new product pipeline, and expanding the service business to improve our customers' productivity," added Summe. "We believe we are on track to achieve the upper end of our original guidance for full year 2003 earnings per share of between $.37 to $.43 on a GAAP basis, and between $.52 to $.58 per share excluding $.15 per share of intangibles amortization," concluded Summe. The Company will discuss its third quarter results in a conference call on Thursday October 23, 2003 at 10:00 a.m. Eastern Time (ET). To listen to the call live, please tune into the webcast at the Investor Relations section of our website, www.perkinelmer.com. A playback of this conference call will be available from 1:00 p.m. ET, Thursday, October 23, 2003 until our next quarterly earnings call becomes available. The playback phone number is 719-457-0820 and the code number is 717288. The playback will also be available at the Investor Relations section of our website, www.perkinelmer.com. USE OF NON-GAAP FINANCIAL MEASURES In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release also contains non-GAAP financial measures of earnings per share and operating margin, in each case excluding amortization of acquisition-related intangible assets. We exclude the amortization of acquisition-related intangibles in calculating these non-GAAP measures because such amortization is outside of our normal operations. We believe that the inclusion of these non-GAAP financial measures in this press release helps investors to gain a meaningful understanding of our core operating results and future prospects, consistent with how management measures and forecasts the company's performance, especially when comparing such results to previous periods or forecasts. PerkinElmer's management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the company's core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making. The non-GAAP financial measures included in this press release are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this press release may be different from, and therefore may not be comparable to, similar measures used by other companies. Reconciliations of the non-GAAP financial measures used in this press release to the most directly comparable GAAP financial measures are set forth in the accompanying exhibits to this press release. FACTORS AFFECTING FUTURE PERFORMANCE This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that relate to prospective events or developments, including, without limitation, statements regarding our estimates for 2003 results of operations and growth rates are deemed to be forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "projects," "forecasts," "will" and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by these forward-looking statements, including risks related to our debt levels, our ability to comply with the financial covenants contained in our credit agreements, a further downturn in our customers' markets, our failure to introduce new products in a timely manner, regulatory changes, risks related to our international operations, our inability to integrate acquired businesses into our existing business and to successfully combine our Life and Analytical Sciences businesses and competition, as well as other factors which we describe under the caption "Forward-Looking Information and Factors Affecting Future Performance" in our most recently filed annual report on Form 10-K and in our most recently filed quarterly report on Form 10-Q. We disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release. PerkinElmer, Inc. is a global technology leader focused in the following businesses - Life and Analytical Sciences, Optoelectronics and Fluid Sciences. Combining operational excellence and technology expertise with an intimate understanding of our customers' needs, PerkinElmer provides products and services in health sciences and other advanced technology markets that require innovation, precision and reliability. The Company serves customers in more than 125 countries, and is a component of the S&P 500 Index. Additional information is available through www.perkinelmer.com or 1-877-PKI-NYSE. # # # For further information: Investor Contact: Dan Sutherby PerkinElmer, Inc. (781) 431-4306 PERKINELMER, INC. AND SUBSIDIARIES INCOME STATEMENTS
THREE MONTHS ENDED NINE MONTHS ENDED ------------------ ----------------- (In thousands except per share data) 28-Sep-03 29-Sep-02 28-Sep-03 29-Sep-02 ------------------------------------ ----------- ----------- ----------- ----------- 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, net (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) ----------- ----------- ----------- ----------- NET INCOME (LOSS) FROM CONTINUING OPERATIONS 14,131 9,750 28,161 (4,833) Loss From Discontinued Operations, Net of Income Tax -- (2,604) (1,597) (15,711) Gain (Loss) on Disposition of Discontinued Operations, Net of Income Tax 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 Tax -- -- -- (117,800) ----------- ----------- ----------- ----------- NET INCOME (LOSS) $ 14,269 $ 7,146 $ 25,029 $ (149,310) =========== =========== =========== =========== 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 Diluted Shares of Common Stock Outstanding 128,034 126,775 127,568 125,335
PREPARED IN ACCORDANCE WITH GAAP ADDITIONAL SUPPLEMENTAL INFORMATION AND RECONCILIATION OF GAAP TO NON-GAAP MEASURES (per share, continuing operations) GAAP Diluted EPS $ 0.11 $ 0.08 $ 0.22 $ (0.04) Intangibles Amortization 0.04 0.04 0.11 0.11 ----------- ----------- ----------- ----------- EPS excluding Intangibles Amortization $ 0.15 $ 0.11 $ 0.33 $ 0.08 =========== =========== =========== =========== Thomson First Call(TM) EPS $ 0.14 ===========
PerkinElmer, Inc. and Subsidiaries Consolidated Statements of Cash Flows
THREE MONTHS ENDED NINE MONTHS ENDED ------------------------------ ------------------------------ SEPTEMBER 28, SEPTEMBER 29, SEPTEMBER 28, SEPTEMBER 29, 2003 2002 2003 2002 ---------- ---------- ---------- ---------- (IN THOUSANDS) (IN THOUSANDS) OPERATING ACTIVITIES: Net income (loss) $ 14,269 $ 7,146 $ 25,029 $ (149,310) (Gain) loss from discontinued operations, net (138) 2,604 3,132 26,677 Less effect of accounting change, net of income taxes -- -- -- 117,800 ---------- ---------- ---------- ---------- Net income (loss) from continuing operations 14,131 9,750 28,161 (4,833) ---------- ---------- ---------- ---------- Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used in) continuing operations: Restructuring credits, net of expense 179 -- (2,994) 9,224 Stock based compensation 4,541 2,136 5,941 6,631 Amortization of debt discount and issuance costs 2,066 5,239 8,245 15,694 Depreciation and amortization 19,470 17,980 58,014 55,849 Gains on dispositions and sales of investments, net (369) (119) (2,057) (5,335) Net gain on purchase of debt -- 1,470 -- 1,470 Changes in operating assets and liabilities: Accounts receivable 5,078 11,975 56,652 38,822 Inventories (1,582) 3,969 14,380 30,326 Accounts payable 398 10,852 (8,798) 10,560 Accrued restructuring costs (5,109) (1,804) (16,292) (28,856) Accrued expenses and other (12,475) 12,944 (55,517) (67,590) ---------- ---------- ---------- ---------- NET CASH PROVIDED BY CONTINUING OPERATIONS 26,328 74,392 85,735 61,962 ---------- ---------- ---------- ---------- Net Cash Provided by (Used in) Discontinued Operations 2,333 (3,450) 3,837 (6,495) ---------- ---------- ---------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 28,661 70,942 89,572 55,467 ---------- ---------- ---------- ---------- INVESTING ACTIVITIES: Cash held in escrow 154,968 -- 187,477 -- Capital expenditures (2,915) (5,489) (11,194) (31,751) Proceeds from disposition of businesses, PP&E, net -- 6,884 3,295 34,942 Settlement of the disposition of business, net 20 -- (846) 90,894 Proceeds (cost) related to acquisitions, net of cash acquired -- (2,900) 534 (39,208) Proceeds from sale of investments, net -- 858 -- 3,242 ---------- ---------- ---------- ---------- NET CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS 152,073 (647) 179,266 58,119 ---------- ---------- ---------- ---------- Net Cash Provided by (Used in) Discontinued Operations 1,150 (6) 1,400 (5,200) ---------- ---------- ---------- ---------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 153,223 (653) 180,666 52,919 ---------- ---------- ---------- ---------- FINANCING ACTIVITIES: Payment of debt issuance costs -- -- (1,725) -- Prepayment of short-term debt -- -- -- (123,683) Prepayment of Zero Coupon Convertible Notes (157,392) (84,440) (189,901) (84,440) Prepayment of term loan debt (20,000) -- (50,000) -- (Decrease) increase in other credit facilities (711) (27,000) (1,737) 65,202 Purchases of common stock -- 4,289 -- (1,636) Proceeds from issuance of common stock for employee benefit plans 1,738 1,047 2,355 10,054 Cash Dividends (8,871) (8,842) (26,531) (26,436) ---------- ---------- ---------- ---------- NET CASH USED IN FINANCING ACTIVITIES (185,236) (114,946) (267,539) (160,939) ---------- ---------- ---------- ---------- Effect of Exchange Rate Changes on Cash and Cash Equivalents 45 (1,137) 8,002 11,852 ---------- ---------- ---------- ---------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (3,307) (45,794) 10,701 (40,701) Cash and Cash Equivalents at Beginning of Period 144,623 143,343 130,615 138,250 ---------- ---------- ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 141,316 $ 97,549 $ 141,316 $ 97,549 ========== ========== ========== ==========
PREPARED IN ACCORDANCE WITH GAAP PERKINELMER, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
SEPTEMBER 28, 2003 JUNE 29, 2003 DECEMBER 29, 2002 SEPTEMBER 29, 2002 ------------------ ------------- ----------------- ------------------ (In thousands) Current assets: Cash and cash equivalents $ 141,316 $ 144,623 $ 130,615 $ 97,549 Restricted cash (note 1) -- 154,865 186,483 -- Accounts receivable 264,261 269,820 304,647 294,651 Inventories 199,155 197,186 205,455 221,536 Other current assets 157,786 157,802 152,137 168,457 Current assets of discontinued operations 9,573 11,790 12,006 10,212 ----------- ----------- ----------- ----------- Total Current Assets 772,091 936,086 991,343 792,405 Property, plant and equipment: At cost 614,046 618,935 598,048 556,280 Accumulated depreciation (336,528) (327,216) (294,026) (280,006) ----------- ----------- ----------- ----------- Net property, plant and equipment 277,518 291,719 304,022 276,274 Investments 11,578 11,927 14,298 14,293 Intangible assets 1,445,783 1,452,801 1,439,774 1,446,689 Other assets 80,194 80,452 83,835 62,497 Long-term assets of discontinued operations 2,160 2,158 2,967 7,157 ----------- ----------- ----------- ----------- Total assets $ 2,589,324 $ 2,775,143 $ 2,836,239 $ 2,599,315 =========== =========== =========== =========== Current liabilities: Short-term debt $ 4,591 $ 4,791 $ 5,008 $ 153,218 Convertible debt (note 1) -- 156,813 186,483 -- Accounts payable 133,703 131,018 146,290 138,260 Accrued restructuring costs 16,953 25,046 40,748 31,970 Accrued expenses 292,310 303,069 316,427 345,697 Current liabilities of discontinued operations -- 539 2,718 3,684 ----------- ----------- ----------- ----------- Total current liabilities 447,557 621,276 697,674 672,829 Long-term debt 564,745 584,483 614,053 438,792 Long-term liabilities 276,155 273,739 270,031 272,599 Long-term liabilities of discontinued operations 2,235 2,166 2,137 2,158 ----------- ----------- ----------- ----------- Total liabilities 1,290,692 1,481,664 1,583,895 1,386,378 Commitment and contingencies Total stockholders' equity 1,298,632 1,293,479 1,252,344 1,212,937 ----------- ----------- ----------- ----------- Total liabilities and stockholders' equity $ 2,589,324 $ 2,775,143 $ 2,836,239 $ 2,599,315 =========== =========== =========== ===========
Note 1: Convertible debt was called and was repaid with restricted cash on August 7, 2003 PREPARED IN ACCORDANCE WITH GAAP PERKINELMER, INC. AND SUBSIDIARIES Sales and Operating Profit (Loss)
THREE MONTHS ENDED NINE MONTHS ENDED ----------------------------- ------------------------------ SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER (In thousands) 28, 2003 29, 2002 28, 2003 29, 2002 -------------- -------- -------- -------- -------- LIFE AND ANALYTICAL SCIENCES Sales $ 235,085 $ 232,867 $ 713,317 $ 718,074 OP$ reported 21,312 9,556 53,611 30,264 OP% reported 9.1% 4.1% 7.5% 4.2% Amortization expense 6,487 6,608 19,461 19,639 OP$ excl. amortization 27,799 16,164 73,072 49,903 OP% excl. amortization 11.8% 6.9% 10.2% 6.9% OPTOELECTRONICS Sales 88,114 84,349 260,807 236,472 OP$ reported 10,862 6,164 30,654 (11,654) OP% reported 12.3% 7.3% 11.8% -4.9% Amortization expense 312 312 936 1,030 OP$ excl. amortization 11,174 6,476 31,590 (10,624) OP% excl. amortization 12.7% 7.7% 12.1% -4.5% FLUID SCIENCES Sales 43,886 48,795 128,534 140,854 OP$ reported 5,613 5,446 11,126 12,715 OP% reported 12.8% 11.2% 8.7% 9.0% Amortization expense 220 200 860 600 OP$ excl. amortization 5,833 5,646 11,986 13,315 OP% excl. amortization 13.3% 11.6% 9.3% 9.5% OTHER OP$ reported (3,870) (4,472) (12,183) (12,118) CONTINUING OPERATIONS Sales $ 367,085 $ 366,011 $ 1,102,658 $ 1,095,400 =========== =========== =========== =========== OP$ reported $ 33,917 $ 16,694 $ 83,208 $ 19,207 =========== =========== =========== =========== OP% reported 9.2% 4.6% 7.5% 1.8% Amortization expense $ 7,019 $ 7,120 $ 21,257 $ 21,269 =========== =========== =========== =========== OP$ excl. amortization $ 40,936 $ 23,814 $ 104,465 $ 40,476 =========== =========== =========== =========== OP% excl. amortization 11.2% 6.5% 9.5% 3.7%
SALES AND OPERATING PROFIT PREPARED IN ACCORDANCE WITH GAAP