8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 14, 2006

MILLIPORE CORPORATION

(Exact name of registrant as specified in its charter)

MASSACHUSETTS	001-09781 (0-1052)	04-2170233
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

290 Concord Road, Billerica, Massachusetts 01821

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone number, including area code: (978) 715-4321

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This Current Report on Form 8-K/A is filed as an amendment (Amendment No. 1) to the Current Report on Form 8-K filed by Millipore Corporation on July 18, 2006 (the “Original Form 8-K”) to provide the historical and pro forma financial information required pursuant to Item 9.01 of Form 8-K. All other items of the Original Form 8-K are unchanged and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The audited financial statements and the unaudited interim financial statements of Serologicals Corporation required to be filed pursuant to Item 9.01(a) of Form 8-K are included as Exhibit 99.1 and Exhibit 99.2, respectively, of this Current Report on Form 8-K/A.

(b) Pro Forma Financial Information.

The pro forma financial information required to be filed pursuant to Item 9.01(b) of Form 8-K is included as Exhibit 99.3 of this Current Report on Form 8-K/A.

(d) Exhibits.

Exhibit No.	Description
23.1	Consent of Deloitte & Touche LLP
99.1	Audited consolidated financial statements of Serologicals Corporation as of January 1, 2006 and January 2, 2005 and for each of the three years in the period ended January 1, 2006
99.2	Unaudited condensed consolidated financial statements of Serologicals Corporation as of April 2, 2006 and January 1, 2006 and for the three month periods ended April 2, 2006 and April 3, 2005
99.3	Unaudited pro forma condensed consolidated financial data

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MILLIPORE CORPORATION
By:	/S/    KATHLEEN B. ALLEN
	Kathleen B. Allen Vice President and Chief Financial Officer

Date: August 8, 2006

Exhibit No.	Description
23.1	Consent of Deloitte & Touche LLP
99.1	Audited consolidated financial statements of Serologicals Corporation as of January 1, 2006 and January 2, 2005 and for each of the three years in the period ended January 1, 2006
99.2	Unaudited condensed consolidated financial statements of Serologicals Corporation as of April 2, 2006 and January 1, 2006 and for the three month periods ended April 2, 2006 and April 3, 2005
99.3	Unaudited pro forma condensed consolidated financial data

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 2-91432, 2-72124, 2-85698, 2-97280, 33-37319, 33-37323, 33-59005, 33-55613, 33-10801, 33-11790, 333-90127, 333-79227, 333-30918, 333-103844, 333-134384 and 333-134387 on Form S-8; 2-84252, 33-9706, 33-22196, 33-47213, 333-23025 and 333-80781 on Form S-3; and 33-58117 and 33-48960 on Form S-4 of Millipore Corporation of our report dated March 14, 2006, relating to the financial statements of Serologicals Corporation and Subsidiaries, appearing in this Current Report on Form 8-K/A of Millipore Corporation.

/s/ Deloitte & Touche LLP

Atlanta, Georgia

August 8, 2006

EX-99.1

SEROLOGICALS CORPORATION

Exhibit 99.1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Serologicals Corporation:

We have audited the accompanying consolidated balance sheets of Serologicals Corporation and Subsidiaries (the “Company”) as of January 1, 2006 and January 2, 2005, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended January 1, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Serologicals Corporation and Subsidiaries as of January 1, 2006 and January 2, 2005, and the results of its operations and its cash flows for each of the three years in the period ended January 1, 2006, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2, in 2005, the Company changed the presentation of its consolidated statements of cash flows to present separate disclosure of the cash flows from operating, investing and financing activities of discontinued operations and retroactively revised the statements of cash flows for the years ended January 2, 2005 and December 28, 2003, for the change.

/s/ Deloitte & Touche LLP

Atlanta, Georgia

March 14, 2006

1

SEROLOGICALS CORPORATION

CONSOLIDATED BALANCE SHEETS

January 1, 2006 and January 2, 2005

(in thousands, except share amounts)

	2005			2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	21,227		$	33,024
Short-term investments		17,225			29,030
Trade accounts receivable, less allowance for doubtful accounts of $1,435 and $953 at January 1, 2006 and January 2, 2005, respectively		64,172			46,899
Inventories		59,418			49,846
Other current assets		15,798			15,226
Total current assets		177,840			174,025
PROPERTY AND EQUIPMENT, NET		70,015			96,887
GOODWILL		239,520			241,038
INTANGIBLE ASSETS, NET		120,027			119,612
OTHER ASSETS		16,217			8,245
Total assets	$	623,619		$	639,807
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	17,377		$	11,827
Accrued liabilities		41,757			37,336
Current maturities of long-term debt		1,081			2,419
Total current liabilities		60,215			51,582
CONVERTIBLE SUBORDINATED DEBENTURES (Note 8)		129,905			130,395
LONG TERM DEBT LESS CURRENT MATURITIES (Note 9)		476			2,194
DEFERRED INCOME TAXES (Note 11)		25,736			38,012
OTHER LIABILITIES		910			1,093
Total liabilities		217,242			223,276
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS’ EQUITY:
Preferred stock, $.01 par value; 1,000,000 shares authorized, no shares issued		—			—
Common stock, $.01 par value; 115,000,000 and 50,000,000 shares authorized, 38,567,881 and 37,752,120 shares issued at January 1, 2006 and January 2, 2005, respectively		385			377
Additional paid-in capital		347,183			334,429
Retained earnings		94,077			91,378
Accumulated other comprehensive income		8,854			11,046
Less:
Common stock held in treasury; 4,462,964 and 3,288,000 shares at January 1, 2006 and January 2, 2005, respectively		(43,472	)		(20,347	)
Deferred compensation		(650	)		(352	)
Total stockholders’ equity		406,377			416,531
Total liabilities and stockholders’ equity	$	623,619		$	639,807

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

2

SEROLOGICALS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

For the Years Ended January 1, 2006, January 2, 2005 and December 28, 2003

(in thousands, except per share amounts)

	2005			2004			2003
NET REVENUES	$	274,945		$	195,923		$	146,915
COSTS AND EXPENSES:
Cost of revenues		122,798			87,482			64,741
Selling, general and administrative		85,141			59,293			44,602
Research and development		17,199			10,144			6,214
Amortization of intangibles		7,206			3,771			2,175
Purchased in-process research and development (Note 3)		—			3,263			—
Impairment and exiting costs (Note 5)		38,025			—			2,778
OPERATING INCOME		4,576			31,970			26,405
Other expense (income), net		597			(54	)		180
Write-off of deferred financing costs (Note 9)		—			965			4,492
Interest expense		7,361			6,052			4,384
Interest income		(1,782	)		(587	)		(255	)
INCOME (LOSS) BEFORE INCOME TAXES		(1,600	)		25,594			17,604
PROVISION (BENEFIT) FOR INCOME TAXES		(2,416	)		7,933			5,537
INCOME FROM CONTINUING OPERATIONS		816			17,661			12,067
Income (loss) from discontinued operations (Note 4)		1,883			—			(10,561	)
NET INCOME	$	2,699		$	17,661		$	1,506
BASIC EARNINGS (LOSS) PER SHARE:
Continuing operations	$	0.02		$	0.68		$	0.49
Discontinued operations		0.06			—			(0.43	)
Net income	$	0.08		$	0.68		$	0.06
DILUTED EARNINGS (LOSS) PER SHARE, (Note 2):
Continuing operations	$	0.02		$	0.59		$	0.47
Discontinued operations		0.06			—			(0.37	)
Net income	$	0.08		$	0.59		$	0.10
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		34,729			26,148			24,549
Diluted (Note 2)		35,195			35,525			28,134

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

3

SEROLOGICALS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Years Ended January 1, 2006, January 2, 2005 and December 28, 2003 (in thousands)

	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated other Comprehensive Income (Loss)		Treasury Stock					Deferred Compensation			Total
	Shares	Amount								Shares		Amount
BALANCE, December 29, 2002	27,730	$	277	$	118,116	$	72,211	$	731	(3,288	)	$	(20,347	)	$	—		$	170,988
Comprehensive income:
Net income	—		—		—		1,506		—	—			—			—			1,506
Foreign currency translation adjustments	—		—		—		—		5,994	—			—			—			5,994
Comprehensive income	—		—		—		1,506		5,994	—			—			—			7,500
Exercise of stock options	288		3		1,956		—		—	—			—			—			1,959
Shares issued through employee stock purchase plans	42		1		352		—		—	—			—			—			353
Deferred and other compensation	2		—		83		—		—	—			—			—			83
Tax effect of stock option exercise	—		—		623		—		—	—			—			—			623
BALANCE, December 28, 2003	28,062		281		121,130		73,717		6,725	(3,288	)		(20,347	)		—			181,506
Comprehensive income:
Net income	—		—		—		17,661		—	—			—			—			17,661
Foreign currency translation adjustments	—		—		—		—		4,321	—			—			—			4,321
Comprehensive income	—		—		—		17,661		4,321	—			—			—			21,982
Shares issued in connection with business combination	4,333		43		102,456		—		—	—			—			—			102,499
Stock issued in equity offering, net	4,830		48		104,730		—		—	—			—			—			104,778
Exercise of stock options	473		4		3,976		—		—	—			—			—			3,980
Shares issued through employee stock purchase plans	39		1		482		—		—	—			—			—			483
Deferred and other compensation	15		—		394		—		—	—			—			(352	)		42
Tax effect of stock option exercise	—		—		1,261		—		—	—			—			—			1,261
BALANCE, January 2, 2005	37,752		377		334,429		91,378		11,046	(3,288	)		(20,347	)		(352	)		416,531

4

SEROLOGICALS CORPORATION

	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated other Comprehensive Income (Loss)			Treasury Stock					Deferred Compensation			Total
	Shares	Amount									Shares		Amount
Comprehensive income:
Net income	—		—		—		2,699		—		—			—			—			2,699
Foreign currency translation adjustments	—		—		—		—		(2,192	)	—			—			—			(2,192	)
Comprehensive income	—		—		—		2,699		(2,192	)	—			—			—			507
Exercise of stock options	703		7		6,423		—		—		—			—			—			6,430
Shares issued through employee stock purchase plans	74		1		1,348		—		—		—			—			—			1,349
Deferred and other compensation	39		—		839		—		—		—			—			(298	)		541
Tax effect of stock option exercise	—		—		4,144		—		—		—			—			—			4,144
Stock acquired though stock repurchase program	—		—		—		—		—		(1,175	)		(23,125	)		—			(23,125	)
BALANCE, January 1, 2006	38,568	$	385	$	347,183	$	94,077	$	8,854		(4,463	)	$	(43,472	)	$	(650	)	$	406,377

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

5

SEROLOGICALS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended January 1, 2006, January 2, 2005 and December 28, 2003 (in thousands)

	2005			2004			2003
CONTINUING OPERATIONS:
OPERATING ACTIVITIES:
Net income	$	2,699		$	17,661		$	1,506
Income (loss) from discontinued operations		1,883			—			(10,561	)
Net income from continuing operations		816			17,661			12,067
Adjustments to reconcile net income from operations to net cash provided by operating activities:
Depreciation and amortization		15,543			11,021			9,477
Tax benefit from exercise of stock options		4,144			1,238			623
Deferred and other compensation		533			43			83
Deferred income tax (benefit) provision		(9,280	)		5,538			(1,257	)
Impairment of property plant and equipment		33,348			—			800
Non-cash exiting costs, write off of deferred financing costs and purchased in process research and development		4,917			4,228			5,602
Other, net		1,364			2,040			—
Changes in operating assets and liabilities, net of acquisition of business:
Trade accounts receivable, net		(17,686	)		(5,860	)		(6,518	)
Inventories		(9,655	)		(5,772	)		(6,552	)
Prepaid and other current assets		(1,092	)		(1,004	)		961
Accounts payable		5,514			397			(1,185	)
Accrued liabilities		(3,598	)		8,703			4,895
Other, net		(50	)		(621	)		(891	)
Total adjustments		24,002			19,951			6,038
Net cash provided by operating activities		24,818			37,612			18,105
INVESTING ACTIVITIES:
Purchases of short-term investments		(70,310	)		(121,330	)		(40,285	)
Proceeds from sale of short-term investments		82,115			119,385			17,800
Purchases of property and equipment and intangible assets		(16,475	)		(19,482	)		(19,644	)
Proceeds from collection of principal portion of note receivable		7,249			—			—
Purchase of businesses, net of cash acquired		(6,752	)		(117,680	)		(97,344	)
Restricted cash held in escrow		(14,505	)		—			—
Other, net		(283	)		254			(246	)
Net cash used in investing activities		(18,961	)		(138,853	)		(139,719	)
FINANCING ACTIVITIES:
Proceeds from issuance of convertible debentures		—			—			130,000
Proceeds from term loan		—			80,000			82,500
Repayment of term loan		—			(80,000	)		(82,500	)
Proceeds from equity offering, net of offering expenses		—			104,777			—
Proceeds (payments) on capital lease obligations		(2,952	)		1,986			(387	)
Proceeds from issuance of common shares under stock plans		7,786			4,486			2,312
Payment of debt issuance costs		—			(1,454	)		(8,931	)
Purchase of common shares		(23,125	)		—			—
Net cash (used in) provided by financing activities		(18,291	)		109,795			122,994
DISCONTINUED OPERATIONS (Revised—See Note 2):
OPERATING ACTIVITIES		1,883			(3,479	)		9,174
INVESTING ACTIVITIES		—			5,613			2,288
FINANCING ACTIVITIES		—			(172	)		(180	)
Net cash provided by discontinued operations:		1,883			1,962			11,282
Effects of exchange rate changes on cash and cash equivalents		(1,246	)		1,029			(1,825	)
Net (decrease) increase in cash and cash equivalents		(11,797	)		11,545			10,837
Cash and cash equivalents, beginning of period		33,024			21,479			10,642
Cash and cash equivalents, end of period	$	21,227		$	33,024		$	21,479
SUPPLEMENTAL DISCLOSURE:
Cash paid during the period for:
Income taxes , net of refunds	$	5,121		$	2,370		$	3,214
Interest paid, net of amounts capitalized		5,694			5,741			2,269
Non-cash investing and financing activities:
Accrued acquisition consideration		92			956			—
Accrued purchase of property and equipment		1,138			—			1,235
Fair market value of stock issued for acquisition		—			102,499			—

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

6

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

January 1, 2006, January 2, 2005 and December 28, 2003

1.    ORGANIZATION AND BUSINESS OPERATIONS

Serologicals Corporation, a Delaware corporation, (together with its subsidiaries, “we”, “our”, the “Company” or “Serologicals”), with facilities in North America, Europe and Australia, is a global leader in developing and commercializing consumable biological products, enabling technologies and services in support of biological research, drug discovery and the bioprocessing of life-enhancing products. Our customers include major life science companies and leading research institutions involved in key disciplines, such as neurology, oncology, hematology, immunology, cardiology, proteomics, infectious diseases, cell signaling and stem cell research. In addition, we are the world’s leading provider of monoclonal antibodies for the blood typing industry.

We report operating results in two business segments, “Research” and “Bioprocessing.” The operations of Celliance represent the Bioprocessing segment and the operations of Chemicon and Upstate represent the Research segment. Prior to 2005, we reported operating results in three business segments: Research, Cell Culture and Diagnostics. These segments were based primarily on the differing production, manufacturing and other value-added processes that we performed with respect to our products and, to a lesser extent, the differing nature of the ultimate end use of our products. All amounts in this Annual Report on Form 10-K reflect the restatement of the pre-2005 segments so that they are consistent with the current year presentation. Prior to 2003, we reported a fourth segment, Therapeutic Products. The Therapeutic Products segment is accounted for as discontinued operations for all periods presented as discussed in Note 4.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ACCOUNTS

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s fiscal period-end for financial reporting purposes is the last Sunday of each period and the fiscal year ends on the Sunday closest to December 31 of each year. Fiscal years 2005 and 2003 included 52 weeks while fiscal year 2004 included 53 weeks. All references to years relate to fiscal years rather than calendar years. Certain amounts for prior years have been reclassified to conform with the current year presentation.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates and assumptions.

Cash and Cash Equivalents and Marketable Securities

The Company considers all cash held in banks and highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents at January 1, 2006, January 2, 2005 and December 28, 2003, consisted primarily of overnight money market accounts, time deposits, commercial paper, demand notes and bonds with maturities of less than three months.

7

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The Company invests its excess cash in marketable securities, principally auction rate securities (ARS), corporate notes and government securities.

In accordance with Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”), the Company has classified all short-term investments as available-for-sale.

Financial Instruments

The carrying values of cash and cash equivalents, short-term investments, accounts receivable, other assets, accounts payable, accrued expenses, capital lease obligations and loans payable to financial and lending institutions included in the Company’s consolidated balance sheets approximate their fair values at January 1, 2006 and January 2, 2005.

The fair value of the Company’s 4.75% Convertible Senior Subordinated Dentures (the “Debentures”) was approximately $193.7 million and $224.0 million at January 1, 2006 and January 2, 2005, respectively. The Debentures had a carrying amount of $129.9 million and $130.4 million at January 1, 2006 and January 2, 2005, respectively.

Disclosure about the estimated fair value of financial instruments is based on pertinent information available to the Company as of January 1, 2006 and January 2, 2005. Although the Company is not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since the periods presented and current estimates of fair value may differ significantly from the amounts presented herein.

Accounts Receivable and Allowances

The Company provides an allowance for doubtful accounts equal to estimated uncollectible accounts. The Company’s estimate is based on a regular review of individual account balances over 90 days, historical collection experience and consideration of other factors such as a customer’s financial status and other business risk. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. Write-offs of uncollectible accounts receivable, net of recoveries, were $0.4 million, $0.6 million and $0.7 million in 2005, 2004 and 2003, respectively.

Inventories

Inventories are stated at the lower of cost or market on a first-in, first-out basis. Cost includes materials, labor and overhead. Market, with respect to all inventories, is replacement cost or net realizable value. The Company regularly reviews inventory on hand for slow-moving, obsolete or impaired inventory and records appropriate reserves or writes off inventory balances for permanent loss of value. Finished goods and work-in-process inventory acquired in connection with business acquisitions typically includes purchase price adjustments that record a write-up in value to estimated selling prices less costs to complete, costs to dispose and a reasonable profit allowance for the distribution of products.

8

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

Inventories at January 1, 2006 and January 2, 2005 consisted of the following (in thousands):

	2005		2004
Raw materials	$	7,157	$	10,950
Work in process		21,999		12,995
Finished goods		30,262		25,901
	$	59,418	$	49,846

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Major property additions, replacements, and betterments are capitalized, while maintenance and repairs which do not extend the useful lives of these assets are expensed as incurred. When assets are sold or otherwise disposed of, the cost and associated accumulated depreciation is removed from the accounts and a resulting gain or loss is included in the operating results for the period. Depreciation is provided using the straight-line method over the estimated useful lives for financial reporting purposes. For income tax purposes, the Company uses accelerated depreciation methods. Depreciable lives for equipment, furniture and fixtures generally range from three to ten years. Purchased software and capitalized software project costs are depreciated over five years. Leasehold improvements are amortized over the shorter of the lease term or the economic lives of the assets. Buildings and improvements are depreciated over lives ranging from twenty to thirty-five years.

Interest is capitalized as part of the historical cost of certain property, plant and equipment constructed by the Company for its use. The amount of interest capitalized is based upon a weighted average of the interest rates of outstanding borrowings during the construction period.

Software developed or acquired for internal use is accounted for in accordance with Statement of Position 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use” (“SOP 98-1”), issued by the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants. During 2005 and 2004, the Company capitalized costs associated with various software projects totaling approximately $3.2 million and $1.3 million, respectively. As of January 1, 2006 and January 2, 2005, the net book value of capitalized software project costs was approximately $5.6 and $3.4 million, respectively. Software is included in furniture, fixtures and equipment.

Included in construction in progress at January 1, 2006 is $1.1 million related to expenditures and capitalized interest on the implementation costs of the enterprise resource planning (“ERP”) system at Upstate, $1.0 million related to a facility improvement project in Temecula, California and $1.1 million related to a new distribution center in Kankakee, Illinois. The Company estimates completion of these currently underway system implementations in the second quarter of 2006.

9

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

Property and equipment at January 1, 2006 and January 2, 2005 consisted of the following (in thousands):

	2005			2004
Land, buildings and improvements	$	17,411		$	37,128
Leasehold improvements		12,130			10,371
Furniture, fixtures and equipment		70,337			76,733
Construction in progress		4,888			2,779
Total property and equipment		104,766			127,011
Accumulated depreciation and amortization		(34,751	)		(30,124	)
Property and equipment, net	$	70,015		$	96,887

Depreciation and amortization expense was $8.3 million, $7.3 million and $6.6 million in 2005, 2004 and 2003, respectively. During the fourth quarter of 2005, the Company recorded an impairment loss related to property plant and equipment of $33.3 million (Note 5).

Goodwill and Other Intangible Assets

Goodwill represents the excess of cost over fair value of the net assets of businesses acquired. Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) required companies to cease amortizing goodwill and establish a new method for testing goodwill for impairment on an annual basis or an interim basis if an event occurs that might reduce the fair value of a reporting unit below its carrying value. SFAS 142 also requires that an identifiable intangible asset which is determined to have an indefinite useful economic life not be amortized, but be tested separately for impairment using a fair value based approach.

The changes in the carrying amount of goodwill during 2005 and 2004 are summarized as follows (in thousands):

	Research			Bioprocessing			Total
Balance as of December 28, 2003	$	63,976		$	29,601		$	93,577
Goodwill acquired		134,907			10,933			145,840
Acquisition earn-out payments		—			1,621			1,621
Balance as of January 2, 2005		198,883			42,155			241,038
Goodwill acquired (Note 3)		6,030			—			6,030
Acquisition earn-out payments		—			466			466
Purchase accounting adjustment (Note 3)		(7,969	)		(45	)		(8,014	)
Balance as of January 1, 2006	$	196,944		$	42,576		$	239,520

The Company evaluates the long-lived assets, including other intangibles and goodwill, of identifiable business activities for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The Company tested goodwill and intangible assets with indefinite useful lives for impairment, utilizing a combination of valuation techniques including the expected present value of future cash flows, a market multiple approach, and a comparable transaction approach. The Company completed its annual goodwill and indefinite lived intangible assets test, for the year ended January 1, 2006, on July 3, 2005, as required by SFAS 142 and determined that there was no impairment for fiscal 2005.

10

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

Developed products, patents and proprietary know-how, customer relationships, and other intangibles are initially measured based on their fair values and amortized over their estimated economic lives. The Company does not amortize trademarks unless certain products have been specifically identified for phase out. The following table sets forth the gross balance and accumulated amortization of all intangible assets as of January 1, 2006 and January 2, 2005 (in thousands):

	Weighted Average Life	2005					2004
		Gross		Accumulated Amortization			Gross		Accumulated Amortization
Finite lived intangible assets:
Developed products	17.5 years	$	29,089	$	(5,221	)	$	80,670	$	(4,221	)
Patents and proprietary know-how	15 years		63,496		(6,835	)		11,362		(2,333	)
Customer relationships	15.6 years		20,200		(1,887	)		14,700		(588	)
Other intangibles	6.5 years		3,707		(1,322	)		2,272		(1,050	)
			116,492		(15,265	)		109,004		(8,192	)
Indefinite lived intangible assets:
Trademarks			18,800		—			18,800		—
Total intangible assets		$	135,292	$	(15,265	)	$	127,804	$	(8,192	)

The amortization expense of intangible assets was approximately $7.2 million, $3.8 million and $2.9 million in 2005, 2004 and 2003, respectively. Amortization expense is expected to be $7.3 million per year through 2009 and $7.1 million in 2010.

Other Assets

Included in other assets at January 1, 2006 is $14.5 million in restricted cash placed in escrow against the Company’s commitment to purchase two buildings in Temecula, California. On January 3, 2006, the Company disbursed the entire amount of restricted cash and completed the acquisition of these buildings.

Accrued Liabilities

Accrued liabilities at January 1, 2006 and January 2, 2005 consisted of the following (in thousands):

Description	2005		2004
Accrued payroll, bonuses, severance and related benefits	$	18,803	$	11,955
Accrued taxes		1,057		3,067
Accrued exiting costs		5,186		4,248
Accrued royalties		533		4,278
Accrued interest		2,358		2,104
Accrued purchase of property and equipment		1,138		—
Accrued accounts payable		2,709		900
Accrued inventory purchases		1,715		642
Deferred revenue		323		3,270
Other		7,936		6,872
	$	41,758	$	37,336

11

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

Revenue Recognition and Deferred Revenue

The Company generally recognizes product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectibility is probable. In instances where final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. Cash payments received in advance are recorded as deferred revenue. In certain situations, the Company permits returns of products, in accordance with contractual agreements with certain customers, if returned in a timely manner, in good condition, from normal channels of distribution. The Company records an allowance for estimated future returns, price concessions, and other discounts based upon an analysis of the Company’s historical pattern of returns matched against the sales from the period in which they originated. The allowance is recognized in the same period revenue is recorded in accordance with Statement of Financial Accounting Standards No. 48, “Revenue Recognition When Right of Return Exists.” When the Company grants specific customer credit for such items, the allowance is reflected as a reduction to accounts receivable. The Company’s allowance was approximately $1.4 million and $1.0 million at January 1, 2006 and January 2, 2005, respectively.

Shipping and Handling Costs

Shipping and handling fees charged to customers are included in net revenues in accordance with EITF 00-10, “Accounting for Shipping and Handling Fees and Costs.” The shipping and handling costs incurred by the Company are included in “Cost of revenues.”

Research and Development Costs

Research and development costs are charged to operations as incurred. Research and development activities generally relate to creating new products, improving or creating variations of existing products, or modifying existing products to meet new applications.

Foreign Currency Translation

The financial statements of the Company’s manufacturing operations located in the United Kingdom, Australia, and Canada have been translated into U.S. dollars from their local functional currencies in accordance with Statement of Financial Accounting Standards No. 52, “Foreign Currency Translation” (“SFAS 52”). Under SFAS 52, all assets and liabilities are translated at year-end exchange rates. Income statement items are translated at average exchange rates for the year. Translation adjustments are not included in determining net income, but are accumulated and reported as a component of stockholders’ equity as accumulated other comprehensive income. Realized and unrealized gains and losses, which result from foreign currency translations, are included in “Other expenses, net.” Realized foreign currency gains and losses were immaterial in all periods presented.

The Company generates significant sales outside the United States and is subject to risks generally associated with international operations. Our operations in the United Kingdom, Australia and Canada, which accounted for approximately 29.1% of our net sales in 2005, generate certain net sales and incur expenses in foreign currencies. Accordingly, our financial results from international operations may be affected by fluctuations in currency exchange rates.

12

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

Earnings Per Share

Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. The calculation of the Company’s diluted earnings per share is similar to basic earnings per share, except that net income is adjusted by the after-tax interest expense on convertible indebtedness that is dilutive and the weighted average number of shares includes the dilutive effect of stock options, stock awards, convertible indebtedness and similar instruments.

The following table sets forth the calculation of basic and diluted earnings per share in accordance with SFAS 128 (in thousands, except per share amounts):

	2005		2004		2003
Numerator:
Income from continuing operations	$	816	$	17,661	$	12,067
Income (loss) from discontinued operations		1,883		—		(10,561	)
Net income		2,699		17,661		1,506
Add back: interest expense on convertible debentures, net of income taxes		—		3,320		1,269
Numerator for diluted earnings per share	$	2,699	$	20,981	$	2,775
Denominator:
Basic earnings per share—weighted average shares outstanding		34,729		26,148		24,549
Effect of dilutive securities:
Stock options		381		554		388
Convertible debentures		—		8,790		3,174
Common stock awards		85		33		23
Diluted earnings per share—weighted average shares outstanding		35,195		35,525		28,134
Basic earnings (loss) per share
Continued operations	$	0.02	$	0.68	$	0.49
Discontinuing operations		0.06		—		(0.43	)
Net income	$	0.08	$	0.68	$	0.06
Diluted earnings (loss) per share
Continued operations	$	0.02	$	0.59	$	0.47
Discontinuing operations		0.06		—		(0.37	)
Net income	$	0.08	$	0.59	$	0.10

13

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The following shares issuable under stock option agreements and the Debentures were excluded from the calculation of diluted earnings per share for the periods presented because either the option price exceeded the average market price for the Company’s stock or the conversion of the Debentures would have been antidilutive (in thousands):

	2005	2004	2003
Stock options	40	300	100
Convertible debentures	8,790	—	—

Stock-Based Compensation Plan

The Company has a stock-based compensation plan, which is described more fully in Note 7. The Company accounts for this plan under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. Excluding amortization of restricted stock and compensation expense related to performance shares (Note 7), no other stock-based employee compensation cost was reflected in net income as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of grant.

The following table illustrates the effect on net income and earnings (loss) per share if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” (“SFAS 123”) to stock-based employee compensation (in thousands, except per share amounts):

	2005			2004			2003
Net income as reported	$	2,699		$	17,661		$	1,506
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects		666			163			226
Deduct: Total stock-based employee compensation expense determined under fair value-based method for all awards, net of related tax effects		(2,950	)		(2,111	)		(2,708	)
Pro forma net income (loss)	$	415		$	15,713		$	(976	)
Earnings (loss) per share:
Basic—as reported	$	0.08		$	0.68		$	0.06
Basic—pro forma	$	0.01		$	0.60		$	(0.04	)
Diluted—as reported	$	0.08		$	0.59		$	0.10
Diluted—pro forma	$	0.01		$	0.54		$	(0.04	)

Convertible debentures are antidilutive and excluded from the pro forma diluted earnings per share calculation for the year ended January 1, 2006.

Under SFAS 123, the fair value of stock-based awards is calculated through the use of option-pricing models, even though such models were developed to estimate the fair value of freely tradable, fully

14

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

transferable options without vesting restrictions, which differ significantly from the Company’s stock option grants. These models also require subjective assumptions, including future stock price volatility and expected lives of each option grant. The fair value for each option grant was estimated on the grant date using the Lattice option-pricing model for grants made during 2005 and 2004 and the Black-Scholes option-pricing model for all grants made prior to 2004 using the following assumptions:

	2005	2004	2003
Expected life (weighted-average in years)	4.4	4.7	4.3
Dividend yield	0%	0%	0%
Expected stock price volatility	29% to 37%	25% to 37%	65%
Risk-free interest rates (weighted-average in 2003)	3.35% to 3.85%	1.31% to 4.18%	2.06%

Using these assumptions, the fair value of options calculated under the Lattice method ranged from $5.72 to $7.68 per share. The weighted average fair value per share of options granted in 2003 calculated under the Black-Scholes method was $6.10. Had the Black-Scholes method been used to compute the fiscal 2004 and 2005 stock-based compensation expense, the fiscal 2004 and 2005 pro forma net income would not have been materially different.

Income Taxes

The Company accounts for income taxes under the provisions of Financial Accounting Standards Board Statement No. 109, “Accounting for Income Taxes” (“SFAS 109”). Under SFAS 109, the Company recognizes liabilities or assets for the deferred tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. These differences will result in taxable or deductible amounts in future periods when the reported amounts are recovered or settled, using enacted tax rates in effect for the year in which the differences are expected to reverse.

The Company’s effective tax rate differs from the statutory rate primarily as a result of tax credits and the extraterritorial income tax regime. Because the Company operates in a number of domestic and foreign jurisdictions, the statutory rates within these various jurisdictions are considered in determining the overall effective tax rate.

Comprehensive Income

In accordance with Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income” (“SFAS 130”) comprehensive income (loss) is reported on the Consolidated Statements of Stockholders’ Equity and accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. Other comprehensive income includes certain changes to stockholders’ equity that are excluded from net income and includes the effect of foreign currency translation adjustments of the Company’s foreign operations.

Statement of Cash Flows

During 2005, the Company changed the presentation of cash flows from discontinued operations to present separate disclosure of the cash flows from operating, investing, and financing activities.

15

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards No. 123R (revised 2004) “Share-Based Payment,” (“SFAS 123R”) which is a revision or SFAS No 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). SFAS 123R supersedes APB 25, “Accounting for Stock issued to Employees,” and amends SFAS No. 95, “Statement of Cash Flows.” The approach in SFAS 123R is generally similar to the approach described in SFAS 123. However, SFAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the earnings statements based on their fair values. Pro forma disclosure will no longer be an alternative.

We adopted SFAS 123R as of January 2, 2006 using the modified prospective method. Under this transition method, compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123R for all share based payments granted after the effective date and (b) based on the requirements of SFAS 123 for all awards granted to employees prior to the effective date of SFAS 123R that remain unvested on the effective date. As permitted by SFAS 123, through January 1, 2006 we accounted for share based payments to employees using APB 25’s intrinsic value method and, as such, generally have not recognized compensation cost for employee stock options. We estimate that pretax compensation expense for stock options will result in an additional compensation expense of approximately $3.3 million in 2006 excluding the effect of any grants issued in 2006.

SFAS 123R also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as previously required This requirement will reduce net operating cash flows and increase net financing cash flows. While we can not estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), the amounts of operating cash flows recognized in prior periods for such excess tax deductions were $4.1 million, $1.2 million and $0.6 million in 2005, 2004 and 2003, respectively.

In November 2004, the FASB issued SFAS No. 151 “Inventory Costs, an amendment of Accounting Research Bulletin No. 43, Chapter 4” (“SFAS 151”). SFAS 151 requires that abnormal amounts of idle facility expense, freight, handling costs and spoilage be recognized as current period charges, and it requires the allocation of fixed production overhead costs to the costs of conversion based upon the normal capacity of the production facility. SFAS 151 is effective for fiscal years beginning after June 14, 2005. As required by SFAS 151, the Company adopted this new accounting standard on January 2, 2006. The adoption of SFAS 151 is not expected to have a material impact on the Company’s financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153 (“SFAS 153”), “Exchanges of Non-monetary Assets—an amendment of APB Opinion No. 29.” SFAS 153 addresses the measurement of exchanges of non-monetary assets. It eliminates the exception from fair value measurement for non-monetary exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29 “Accounting for Non-monetary Transactions” and replaces it with an exception for exchanges that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. As required by SFAS 153, the Company adopted this new accounting standard effective July 1, 2005. The adoption of SFAS 153 did not have a material impact on the Company’s financial statements.

16

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

In March 2005, the FASB Issued FIN 47, “Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143, Accounting for Asset Retirement Obligations.” FIN 47 clarifies that SFAS 143 requires accrual of the fair value of legally required asset retirement obligations if sufficient information exists to reasonably estimate the fair value. The Company adopted this new accounting standard during the fourth quarter of 2005. See Note 5 for the effect of FIN 47 on the Company’s financial statements.

In June 2005, the FASB issued Statement of Financial Accounting Standards No. 154 (“SFAS 154”), “Accounting Changes and Error Corrections.” SFAS 154 changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle unless it is impracticable. In addition, this Statement requires that a change in depreciation, amortization, or depletion for long-lived, non-financial assets be accounted for as a change in accounting estimate effected by a change in accounting principle. This new accounting standard is effective January 1, 2006. The Company will apply the provision of SFAS 154 when applicable.

3.    ACQUISITIONS

Specialty Media

On February 22, 2005, Chemicon acquired Specialty Media, a division of Cell & Molecular Technologies, Inc., wholly owned by Sentigen Holding Corporation. Specialty Media, based in Phillipsburg, New Jersey, develops and supplies a variety of specialty stem cell culture media formulations and supplements, cells and research reagent tools to the life sciences industry. Serologicals acquired all of the assets of Specialty Media for $6.5 million in cash and assumption of certain liabilities. The Specialty Media acquisition provides a number of important strategic product offerings for our Research segment; most significantly, its products extend Chemicon’s stem cell product portfolio.

The components of the purchase price were (in thousands):

Cash paid	$	6,500
Direct costs		84
Mortgage debt assumed		245
Other liabilities assumed		340
	$	7,169

The Company has completed its valuation of the fair market value of the underlying assets acquired and the allocation of assets acquired was as follows (in thousands):

			Weighted Average Useful Life
Current assets	$	630
Property and equipment		509
Intangibles, principally goodwill		6,030	Indefinite
	$	7,169

17

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The Company believes the depreciation expense on the fair value assigned to property and equipment and the amortization of intangible assets and goodwill will be deductible for federal income tax purposes.

The results of Specialty Media were not material to the results of operations for the twelve months ended January 1, 2006 or January 2, 2005; accordingly, no pro forma disclosure is presented.

Acquisition of Upstate Group, Inc.

Effective October 1, 2004, Serologicals completed the acquisition of Upstate, a privately held company headquartered in Charlottesville, Virginia with operations in the United States and Scotland. Upstate is a leading supplier of innovative cell signaling products, technologies, platforms and services. Upstate provides pharmaceutical and biotechnology companies, universities and government agencies with advanced tools to accelerate life science research and drug discovery. The acquisition extended and expanded the Company’s strategic position in the research market and provided an entry into the growing market for drug screening and target validation services. The results of operations of Upstate have been included in the Research segment since the effective date of acquisition.

The Company acquired 100% of the outstanding preferred and common shares of Upstate for total consideration of $203.3 million. The acquisition was financed through a combination of Serologicals common stock, cash on hand and proceeds from a new credit agreement. In addition, Serologicals paid approximately $4.0 million in related transaction costs, primarily for investment banking and professional services in connection with the acquisition.

The Company issued approximately 4.3 million unregistered shares of its common stock at an average price of $23.6539 per share, based on the average trading price on NASDAQ during the 20 trading days between September 14, 2004 and October 11, 2004, to stockholders of Upstate. The remaining purchase price was paid through a combination of cash on hand and proceeds from an $80.0 million term loan available under a $125.0 million credit agreement. The term loan was subsequently repaid in December 2004 from proceeds received from a secondary public offering of common stock. (Notes 6 and 9).

The excess of purchase price over the fair value of assets acquired and liabilities assumed was $135.1 million, and has been recorded as goodwill. None of the goodwill related to the acquisition is expected to be deductible for tax purposes.

During 2005, the Company finalized its evaluation of the purchase price allocation based on the fair market value of the assets and liabilities assumed as of the date of purchase. The components of the purchase price are presented below (in thousands):

	As Originally Reported		Adjustments			Final Purchase Price
Stock issued and cash paid to shareholders	$	203,325	$	—		$	203,325
Direct costs of acquisition		3,998		—			3,998
Liabilities assumed		34,781		(1,308	)		33,473
Total consideration and acquisition costs	$	242,104	$	(1,308	)	$	240,796

18

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

During 2005, the Company completed its analysis of the fair market value at the date of acquisition of the finished goods inventory, certain intangible assets, deferred income taxes and preacquisition liabilities of Upstate, resulting in a net decrease in goodwill of $8.0 million. The adjusted allocation of purchase price to the underlying assets is as follows (in thousands):

	As Originally Reported		Adjustments			Adjusted Allocation		Intangible Weighted Average Useful Life
Cash and cash equivalents	$	1,238	$	—		$	1,238
Accounts receivable, net		6,403		—			6,403
Inventory		9,420		2,361			11,781
Other current assets		1,907		—			1,907
Property and equipment		9,515		—			9,515
Developed products		53,200		(1,200	)		52,000	17 years
Trademarks and trade name		9,800		—			9,800	Indefinite
Other intangible assets		12,200		5,500			17,700	15 years
Purchased in-process research and development		3,263		—			3,263	Expensed in 2004
Goodwill		135,158		(7,969	)		127,189	Indefinite
	$	242,104	$	(1,308	)	$	240,796

The Company is continuing its plan of integration of certain activities at Upstate. These activities are accounted for in accordance with EITF 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination” (“EITF 95-3”). They primarily include the closure of facilities, the abandonment or redeployment of equipment, employee terminations and other activities in the United States. Such costs have been recognized as liabilities assumed in the acquisition. During 2005, the Company recorded a $2.2 million liability as a result of severance costs and relocation costs related to the acquisition with a corresponding adjustment to goodwill and $0.2 million in accrued retention bonuses with the corresponding adjustment to current period expense. At January 1, 2006, the Company had $2.5 million in accrued expenses and other current liabilities in the accompanying consolidated balance sheet related to this integration.

Changes in accrued acquisition and business integration costs for all periods presented subsequent to the acquisition date are as follows (in thousands):

	Original amount recorded		Prior year amounts paid			Balance at January 2, 2005		Additional accruals		Amounts paid			Balance at January 1, 2006
Severance and relocation cost	$	293	$	(185	)	$	108	$	1,916	$	(1,014	)	$	1,010
Facility closure		1,470		(10	)		1,460		136		(430	)		1,166
Other		530		—			530		121		(375	)		276
	$	2,293	$	(195	)	$	2,098	$	2,173	$	(1,819	)	$	2,452

19

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

Acquisition of Chemicon International, Inc.

Effective April 1, 2003, Serologicals completed the acquisition of 100% of the outstanding common stock of Chemicon. During the first quarter of 2004, the Company completed its evaluation of a restructuring of certain components of Chemicon’s operations, which was contemplated at the date of acquisition. As a result, the Company accrued $1.8 million related to lease terminations and site relocation costs. This amount was recorded to goodwill in the first quarter of 2004 as an adjustment to the purchase price of Chemicon in accordance with EITF 95-3. At January 1, 2006, the Company had $1.7 million remaining in accrued expenses and other current liabilities in the accompanying consolidated balance sheet related to this integration. The Company expects to complete the activities associated with this restructuring in 2006. Activity of accrued acquisition and business integration costs for all periods presented subsequent to the acquisition date is as follows (in thousands):

	Original amount recorded		Prior year amounts paid			Balance at January 2, 2005		Amounts paid			Balance at January 1, 2006
Facility closure	$	1,250	$	(46	)	$	1,204	$	—		$	1,204
Other		503		(46	)		457		(3	)		454
	$	1,753	$	(92	)	$	1,661	$	(3	)	$	1,658

4.    DISCONTINUED OPERATIONS

On July 10, 2003, the Company announced its intention to exit the therapeutic plasma business, which consisted of a network of ten plasma collection centers and a central testing laboratory. The divestiture was completed with the sale of these operations on January 15, 2004, effective December 28, 2003, with Life Therapeutics, a company based in Sydney, Australia (the “Buyer”). Under the provisions of Statement of Financial Accounting Standards No. 144, “Impairment of Long-Lived Assets and Discontinued Operations” (“SFAS 144”) this business was classified as a discontinued operation. The results of operations for this business have been classified as discontinued operations in all periods presented.

20

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

In October 2005, the Company received $3.1 million as settlement of a contractual claim with a customer of the Company’s former therapeutic plasma business. The payment, net of income taxes and collection expenses totaling approximately $1.2 million, is included in “Income from discontinued operations” in the accompanying consolidated income statement for the twelve months ended January 1, 2006. During 2004 the Company did not incur any income or expenses as a result of discontinued operations. The following table contains results of operations from discontinued operations for the twelve months ended December 28, 2003 (in thousands):

	2003
Net revenues	$	29,736
Cost of revenues		26,676
Gross profit		3,060
Selling, general and administrative		3,772
Research and development		550
Amortization of intangibles		13
Impairment loss		12,554
Special charges		1,657
Operating loss		(15,486	)
Other expenses, net		(110	)
Loss before taxes		(15,596	)
Income tax benefit		5,035
Loss from discontinued operations	$	(10,561	)

During 2003, the Company recorded an impairment loss of $12.6 million, based on the total consideration received for this transaction, which is included as a component of “Loss from discontinued operations.” No additional gain or loss was recorded in 2004 at the time of closing.

Part of the sale proceeds consisted of secured promissory notes, which were recorded at their estimated net realizable value of $7.9 million. In December 2004, the Company renegotiated the terms of the promissory notes, combining them into one secured promissory note (“new note”) with a stated face value of $7.8 million. The new note receivable was payable in variable quarterly installments through December 2007. The Company recorded an imputed interest charge on this new note in December 2004 because the stated interest rate on the new note was considered below market.

In September 2005, the Buyer prepaid the entire remaining outstanding principal balance on the note. Under the terms of the transaction, the remaining debt balance of $6.8 million was settled for $6.0 million in cash and a royalty-bearing, non-exclusive commercial license to a purification technology. The amount of the discount, less unamortized imputed interest income, was reported as a $0.5 million charge and is included as “Other expense, net” in the accompanying consolidated income statement for the year ended January 1, 2006.

The current portion, $1.9 million, and long term portion, $5.3 million, of the note were included in “Other current assets” and “Other assets”, respectively, in the January 2, 2005 consolidated balance sheet.

21

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The Company has guaranteed real estate lease obligations totaling approximately $3.3 million related to the therapeutic plasma business. If the buyer defaults on the lease payments, the Company would be required to assume these leases. The Company has accrued a stand ready obligation of $0.1 million in accordance with FASB Interpretation No. 45, “Guarantor Accounting and Disclosure Requirement for Guarantees” for these guarantees.

5.    IMPAIRMENT AND EXITING COSTS

2005

As a result of the Company’s ongoing plant consolidation and rationalization initiatives, in January 2006 the Company announced a plan to rationalize, integrate and align the resources of the Company’s Bioprocessing segment. This rationalization program includes workforce reduction, impairment of certain facilities, and other charges. The expected completion of the program is anticipated for late 2006.

As a result of the rationalization plan, the Company decided to close the Celliance manufacturing facilities in Toronto, Ontario, Canada and to dispose of the plant assets, machinery and equipment at the facilities. The Company expects that the final sale and disposal of the assets will be completed in 2006. In connection with the plan of disposal, the Company determined that the carrying values of some of the underlying assets exceeded their fair values. Consequently the Company recorded an impairment loss of $16.0 million, which represents the amounts by which the carrying values of these assets exceeded their estimated fair values determined by their estimated future discounted cash flows. The impairment loss is included in the “Impairment and exiting costs” line item in the accompanying consolidated income statement for 2005. The remaining value of the impaired assets is included in the “Property and equipment, net” line item in the accompanying consolidated balance sheet for the period ended January 1, 2006 since the operations will continue until at least mid 2006.

In January 2006, management committed to a plan to not commence operations at its manufacturing facility in Lawrence, Kansas and to dispose of the plant assets, machinery and equipment at this facility. The Company expects that the final sale and disposal will be completed in 2006. In connection with the plan of disposal, the Company determined that the carrying values of some of the underlying assets exceeded their fair values. Consequently the Company recorded an impairment loss of $17.1 million, which represents the excess of the carrying values of the assets over their fair values, less cost to sell. The impairment loss is included in the “Impairment and exiting costs” line item in the accompanying consolidated income statement for 2005. The remaining value of impaired assets is included in the “Property and equipment, net” line item in the accompanying consolidated balance sheet for the period ended January 1, 2006.

In conjunction with the decision to close these facilities the Company identified an asset retirement cost of $1.2 million. Under the provisions of FIN 47 and SFAS 143 the entire amount of identified asset retirement costs is included in “Impairment and exiting costs” and the associated liability of $1.2 million is included in “Accrued liabilities” in the accompanying consolidated financial statements for the period ended January 1, 2006. None of the recorded liability was settled in the period ended January 1, 2006.

During 2005, the Company incurred certain other impairment charges related to the disposition of certain other assets in the Bioprocessing segment of $0.2 million.

The rationalization program resulted in certain non-impairment related costs expected to be incurred primarily for workforce reduction, abandonment of excess facilities relating to lease terminations, inventory write-off and miscellaneous costs.

22

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

A summary of the impairment and exiting costs recognized for the year ended January 1, 2006 are as follows (in thousands):

	Impairment		Workforce Reduction		Lease Termination Costs		Other Exit Costs		Subtotal		Inventory Write-off		Grand Total
Amounts expensed in 2005	$	33,348	$	1,016	$	946	$	2,715	$	38,025	$	1,336	$	39,361
Additional amounts expected to be incurred	$	—	$	1,393	$	150	$	80	$	1,623	$	—	$	1,623

At January 1, 2006, the accrued liability associated with the exiting plan consisted of the following (in thousands):

	Impairment			Workforce Reduction		Lease Termination Costs			Other Exit Costs		Subtotal			Inventory Write-off			Grand Total
Charges in 2005	$	33,348		$	1,016	$	946		$	2,715	$	38,025		$	1,336		$	39,361
Payments and non-cash charges in 2005		(32,098	)		—		(741	)		—		(32,839	)		(1,336	)		(34,175	)
Accrued liability at January 1, 2006	$	1,250		$	1,016	$	205		$	2,715	$	5,186		$	—		$	5,186

The remaining accruals at January 1, 2006 of $5.2 million are expected to be paid through December 31, 2006.

The workforce reduction, impairment, lease termination and other exit costs are included in “Impairment and exiting costs” in the accompanying consolidated income statement. Inventory write off costs are included in “Costs of revenues” in the accompanying consolidated income statement. All impairment and exiting costs discussed above relate to the Bioprocessing segment.

During 2005, the Company incurred certain other employee termination costs related to a closure of its Lake Placid plant included in the Research segment of $1.4 million, of which $0.9 million is included in “Cost of revenues” and $0.5 million in “Selling, general and administrative” expenses in the January 1, 2006 consolidated income statement. None of these costs were paid in 2005 and the entire amount of accrued liabilities of $1.4 million associated with the closure of the Lake Placid plant is included in “Accrued liabilities” in the accompanying consolidated balance sheet as of January 1, 2006.

2003

During 2003, the Company transferred the responsibility for manufacturing and distribution of research products produced at a Maryland facility to Chemicon. The Company reduced its workforce at various locations and recorded $2.8 million in impairment and exiting costs. The components of these charges included approximately $0.6 million for employee severance, $0.8 million related to the impairment of certain long-lived assets at Gaithersburg, Maryland, a charge of $0.9 million for a temporary plant shutdown in Toronto due to a Bovine Spongiform Encephalopathy scare in Canada and $0.5 million of other miscellaneous costs.

23

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

6.    STOCKHOLDERS’ EQUITY

Preferred Stock

Under the terms of its amended and restated articles of incorporation, the Company is authorized to issue 1,000,000 shares of Preferred Stock that may contain such preferences, rights and restrictions as may be determined by the Company’s Board of Directors. There is no preferred stock outstanding.

Common Stock

On May 11, 2005, the Company’s shareholders approved an amendment to Article Four of the Company’s Amended and Restated Certificate of Incorporation that increased the number of authorized shares of Common Stock from 50,000,000 shares to 115,000,000 shares.

In December 2004, the Company completed a public equity offering in which 4.8 million shares of common stock were sold for a price of $22.80 per share. The net proceeds received from the sale were approximately $104.7 million after deducting underwriting discounts, commissions and other direct issuance costs. The Company used a portion of the proceeds to retire the $80.0 million term loan used to complete the Upstate purchase.

In November 2004, the Company completed the registration of the 4.3 million shares of its common stock issued in the Upstate acquisition under the terms of a registration rights agreement with the selling shareholders of Upstate.

In June 2004, the Company completed the registration of approximately 8.8 million shares of its common stock under the terms of its Debentures (Note 8). The Debentures are convertible into shares at an initial rate of 67.6133 shares of common stock per $1,000 principal amount of the Debentures. In January 2004, the Debentures became convertible (Notes 2 and 8).

Common Stock Repurchases

On June 10, 2005 the Company announced that its Board of Directors authorized a stock repurchase program to repurchase up to 2.0 million shares of the Company’s common stock over the next three years ending in June 2008. The program is intended to be implemented through purchases made from time to time in the open market or through private transactions in accordance with applicable securities laws. The timing, pricing and size of purchases will depend on market conditions, prevailing stock prices and other considerations. During 2005, the Company repurchased approximately 1.2 million shares of common stock for $23.1 million. Prior to 2005, the Company acquired 3.3 million shares of common stock at an aggregate cost of approximately $20.0 million. The Company records treasury shares at cost. The purchase of the shares was funded primarily through cash provided by operating activities.

Stockholder Rights Plan

On July 26, 1999, the Board of Directors adopted a stockholder rights plan, pursuant to which one preferred stock purchase right (a “Right”) was distributed for each outstanding share of common stock held of record on August 25, 1999. Each Right represents a right to purchase, under certain circumstances, one one-thousandth ( 1/1000) of a share of a new series of preferred stock at an exercise price of $45.00. If any person or group acquires 15% or more of the common stock of the Company

24

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

(except in transactions approved by the Board of Directors of the Company in advance), each Right will then entitle its holder, other than the person or group owning 15% or such other persons or groups, to acquire, at the exercise price, shares of the Company’s common stock with a market value equal to twice the exercise price. The Company may elect, however, to exchange a newly issued share of the Company’s common stock for each Right. If any person or group owns 15% or more of the Company’s common stock, and the Company is acquired in a merger or other business combination, or if 50% of its earning power or assets are sold, each Right will entitle its holder, other than the person or group owning 15%, to acquire, at the exercise price, shares of the acquiring company’s common stock with a market value of twice the exercise price.

Persons owning 15% or more of Company’s common stock on the date the plan was adopted were exempt, so long as they do not acquire an additional number of shares greater than 2% of the outstanding shares, other than in a transaction approved by the Board of Directors of the Company in advance. The Rights expire on August 2, 2009.

Common Shares Reserved for Issuance

Shares of common stock reserved for issuance at January 1, 2006 and January 2, 2005 consisted of the following (in thousands):

	2005	2004
Various stock option plans	10,131	3,746
Employee stock purchase plans	308	456
Convertible debentures	8,790	8,790
	19,229	12,992

7.    STOCK COMPENSATION PLANS

Serologicals Corporation 2005 Incentive Plan

On May 11, 2005, the Company’s shareholders approved the Serologicals Corporation 2005 Incentive Plan (the “2005 Incentive Plan”), under which 10,000,000 shares of Common Stock are reserved for issuance. The 2005 Incentive Plan provides specific limitations on the size of grants that any one participant in the 2005 Incentive Plan may be granted. Pursuant to the 2005 Incentive Plan, the Committee is authorized to issue awards consisting of stock options, deferred stock units, performance share units, restricted stock, restricted stock units, stock appreciation rights (“SARs”) and other stock-based awards and cash payments.

The exercise price of stock options is the fair market value of the common stock on the date of grant. Options granted in 2005 under the 2005 Incentive Plan vest ratably over a period of four years and have terms of seven years. Vested options held by terminated employees allow for exercise periods of three months following termination. As of January 1, 2006, options to purchase approximately 0.6 million shares were outstanding under the 2005 Incentive Plan, none of which were exercisable.

Under the 2005 Incentive Plan the Company granted performance shares to certain employees. The vesting of performance shares is based on achieving certain performance targets over the performance period ending December 31, 2006. Included in net income for the year ended January 1, 2006 is $0.3 million of compensation expense net of tax related to performance shares.

25

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The 2005 Incentive Plan replaced the Serologicals Corporation Stock Incentive Plan, which was approved by shareholders on May 8, 2001 (the “2001 Incentive Plan”) and is described in further detail below. The 2001 Incentive Plan automatically terminated as of the date the shareholders approved the 2005 Incentive Plan, except that such termination did not affect any grants or awards outstanding under the 2001 Incentive Plan or prior plans. Shares previously reserved for issuance under the 2001 Incentive Plan that remained available for grants under the 2001 Incentive Plan and any shares subject to awards under the 2001 Incentive Plan that subsequently are forfeited, cancelled or expire unexercised are available for issuance under the 2005 Incentive Plan.

2001 Incentive Plan

The Company’s 2001 Incentive Plan was replaced by the 2005 Incentive Plan described above. Upon approval, the 2001 Incentive Plan replaced prior plans described in further detail below. The exercise price of the options is the fair market value of the common stock on the date of grant. Options granted in 2004, 2003 and 2002 under the 2001 Incentive Plan vest ratably over a period of one year for directors and four years for employees, and have terms of six years. Vested options held by terminated employees allow for exercise periods of three months following termination. As of January 1, 2006, options to purchase approximately 1.6 million shares were outstanding under the 2001 Incentive Plan, approximately 0.8 million of which were exercisable. No further grants will be issued under the 2001 Incentive Plan.

Other Stock Compensation Plans

The Company’s Second Amended and Restated 1994 Omnibus Incentive Plan, as Amended and the Restated 1995 Non-Employee Directors’ Stock Option Plan, as Amended were replaced by the 2001 Incentive Plan. As of January 1, 2006, an immaterial number of options outstanding and/or exercisable was outstanding under these plans.

Stock Option Activity

The following table summarizes the activity for all stock options and performance shares outstanding (shares in thousands):

	2005				2004				2003
	Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
Outstanding at beginning of year	2,560		$	15.31	2,395		$	13.28	2,249		$	13.46
Granted	788			17.25	960			19.33	632			11.71
Exercised	(652	)		9.63	(473	)		8.42	(265	)		7.09
Forfeited or expired	(270	)		20.95	(321	)		22.47	(222	)		17.97
Outstanding at end of year	2,426			16.83	2,561			15.31	2,394			13.28
Options exercisable at end of year	940			16.34	1,176			12.81	1,317			13.58

26

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The following table summarizes information about all stock options and performance shares outstanding and exercisable at January 1, 2006 (shares in thousands):

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted- Average Remaining Contractual Life (years)	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
$0.00 - $5.00	200	5.3	$	0.00	59	$	0.00
$5.01 - $10.00	9	3.4		7.06	9		7.06
$10.01 - $15.00	413	3.2		11.92	201		12.03
$15.01 - $20.00	977	3.7		18.35	479		17.86
$20.01 - $25.00	797	5.4		21.35	162		21.16
$25.01 - $30.00	30	3.0		29.75	30		29.75
	2,426	4.3	$	16.83	940	$	16.34

Employee Stock Purchase Plan

Pursuant to the terms of the Company’s 1996 Employee Stock Purchase Plan (the “Purchase Plan”), eligible employees are able to purchase shares of the Company’s common stock through a payroll deduction program. The Company has reserved 0.6 million shares for issuance pursuant to the Purchase Plan. Employees may have up to 25% of their compensation withheld to purchase shares at a price equal to 85% of the lower of the closing price on the first or last day of each successive three-month purchase period. As of January 1, 2006, approximately 0.3 million shares had been acquired pursuant to the Purchase Plan.

Pursuant to the terms of the Company’s United Kingdom Share Incentive Plan (the “UK Plan”), eligible employees are able to purchase shares of the Company’s common stock through a payroll deduction program. The Company has reserved 0.1 million shares for issuance pursuant to the UK Plan. Employees may have up to 10% of their compensation withheld to purchase shares of the Company’s common stock at the lower of fair market value at the beginning of the accumulation period or the acquisition date, as defined in the UK Plan. The Company matches 1 share for every 6 shares purchased in an accumulation period. Employees are required to hold these matching shares for a period of at least 3 years. As of January 1, 2006, approximately 2,700 shares had been acquired pursuant to the UK Plan.

Restricted Stock

Periodically the Company has awarded restricted common stock and restricted stock units to eligible key employees and non-employee directors under the Company’s equity-based incentive plans. These awards have restriction periods tied primarily to service and attainment of specified performance goals. The awards are recorded at market value on the date of the grant to unearned compensation; compensation expense is recognized over the restriction period on a straight-line basis, net of forfeitures. In the twelve months ended January 1, 2006 the Company issued shares under this program to certain key employees and non-employee directors, which were recorded at their fair market value on the date of issue, $0.7 million. These restricted shares cliff vest over one to five years from date of issuance. The Company recorded these shares as outstanding with an offsetting entry to “Deferred compensation”, a component

27

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

of stockholders’ equity. Included in net income for the year ended January 1, 2006 is $0.3 million in net of tax compensation expense related to restricted stock. The net of tax compensation expense related to restricted shares for the two years in the period ended January 2, 2005 was immaterial.

8.    CONVERTIBLE SENIOR SUBORDINATED DEBENTURES

On August 20, 2003, the Company completed a private placement of 4.75% Convertible Senior Subordinate Debentures (“Debentures”) to certain institutional investors totaling $130.0 million, or $126.1 million after expenses. The offering costs of $3.9 million are recorded as “Other assets” and are being amortized over five years, which is the expected term of the Debentures. The Debentures are convertible into shares of Serologicals’ common stock at an initial rate of 67.6133 shares of common stock per $1,000 principal amount of the Debentures, or approximately 8.8 million shares of common stock at a conversion price of $14.79 per share. These Debentures became convertible in January 2004 under the conversion features in the Debenture Indenture. Interest on the Debentures is payable semi-annually on February 15th and August 15th.

The Debentures may be redeemed, in whole or in part, at the Company’s option on or after August 22, 2008 at 100% of the principal amount. In addition, the holders of the Debentures may require the Company to repurchase all or a portion of the Debentures for 100% of the principal amount, plus accrued interest, on August 15, 2008, August 15, 2010, August 15, 2013, August 15, 2018, August 15, 2023, August 15, 2028, or at any time prior to their maturity following a fundamental change in the business, as defined in the Indenture for the Debentures. For any Debentures that the holders require the Company to repurchase, other than on August 15, 2008, the Company may, at its option, pay the repurchase price in cash or shares of the Company’s common stock. The Company has established a policy that all repurchases will be in cash. The Debentures are unsecured obligations of the Company and are subordinated to all of the Company’s senior debt, including any debt incurred under its credit facility (Note 9).

In October 2003, the Company entered into interest rate swap agreements with the objective of converting $70.0 million principal amount of its Debentures to a variable interest rate based on the 6-months LIBOR rate at the end of each interest period plus a spread of 66 basis points. In June 2005, the Company terminated its interest rate swap agreements and received $0.1 million in cash proceeds.

The interest rate swaps were designated and qualified as fair value hedges in accordance with Statement of Financial Accounting Standards No. 133, “Accounting for Derivatives and Hedging Activities” and related interpretations and amendments. Accordingly, the portion of the Debentures hedged was adjusted by the fair value of the changes related to the swaps. In June, 2005, the Company adjusted the swap values by marking-to-market the swaps so that they equaled the net proceeds received on the termination. Simultaneously, the Company recorded a $0.2 million gain in hedge ineffectiveness. The resulting net adjustment to the carrying value of the Debentures of $0.1 million will be accreted as additional interest expense over the remaining estimated life of the Debentures.

At January 2, 2005, the fair market value of the interest rate swaps was an asset of $0.4 million and was included in “Other assets” in the accompanying consolidated balance sheet.

28

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The Company has presented the carrying value of the Debentures as of January 1, 2006 and January 2, 2005 as follows:

	2005			2004
Face value of Debentures	$	130,000		$	130,000
Mark-to-market value as a result of interest rate swap agreements		(95	)		395
Carrying value of Debentures	$	129,905		$	130,395

9.    LONG TERM DEBT AND CAPITAL LEASE OBLIGATIONS

In October 2004, the Company and a bank syndicate entered into a new $125.0 million credit agreement consisting of an $80.0 million seven-year term loan and a $45.0 million five-year revolving credit facility (“Revolver”), and terminated a previously existing $30.0 million revolving credit facility. In connection with the termination of the existing facility, the Company incurred a non-cash charge of $0.2 million associated with the write-off of the unamortized deferred financing costs in 2004. As of January 1, 2006 and January 2, 2005, there were no amounts outstanding under the Revolver. The Company used the proceeds of the $80.0 million term loan, less deferred financing costs of approximately $1.1 million, to fund a portion of the Upstate acquisition. (See Note 3)

As discussed in Note 6, the Company used a portion of the proceeds from its common stock offering to repay the $80.0 million term loan in December 2004. In 2004, the Company incurred a non-cash charge of $0.8 million associated with the write-off of the unamortized deferred financing costs which had been allocated to the term loan. The remaining deferred financing costs, $0.3 million, associated with the Revolver, were capitalized and included in other assets and are being amortized to interest expense over the five-year term of the Revolver.

Borrowings under the terms of the Revolver bear interest payable quarterly at the Company’s option at a rate of either the bank’s base rate plus a margin of .50% to 1.00%, or the prevailing Eurodollar rate plus a margin of 1.50% to 2.00%, depending on certain financial ratios. The Company is required to pay an annual commitment fee ranging from .375% to .500%, depending on the Company’s leverage and amounts borrowed under the Revolver. The applicable margins for the Revolver and commitment fees on the unused portion of the Revolver are subject to adjustment on future adjustment dates based on the consolidated leverage ratio of the Company on the adjustment dates. The credit agreement is secured by substantially all of the assets of the Company. Under the terms of the credit agreement, the Company is obligated to abide by certain affirmative and negative covenants, including but not limited to total leverage ratio, fixed charge coverage ratio, total indebtedness, restriction of acquisitions, disposition of property, repurchasing common stock and the Company’s ability to pay dividends.

In August 2003, the Company repaid in full and terminated the outstanding principal and interest due on an $82.5 million term loan and $35.0 million revolving credit facility. A non-cash charge of approximately $4.1 million related to the write-off of deferred financing costs associated with the terminated facilities was recorded. Additionally, during 2003, the Company recorded a charge of approximately $0.4 million related to the write-off of deferred financing costs related to the Company’s revolving credit facility that was in place prior to the $82.5 million term loan.

29

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

In July 2004, the Company entered into a two year lease for $3.6 million for production equipment at its new manufacturing facility in Lawrence, Kansas. The Company accounted for this transaction as a capital lease in accordance with Statement of Financial Accounting Standards No. 13, “Accounting for Leases.” In connection with the acquisition of Upstate, the Company assumed outstanding obligations under capital leases, primarily for production and office equipment with various terms and conditions.

Obligations under capital leases at January 1, 2006 and January 2, 2005 consisted of the following (in thousands):

	2005			2004
Equipment under capital leases	$	1,557		$	4,613
Less: current portion		(1,081	)		(2,419	)
Obligations under capital leases—non-current	$	476		$	2,194

The following table sets forth the cash payments, interest expense and capitalized interest during active construction periods of major capital projects for outstanding debt and capital leases (in thousands):

	2005		2004		2003
Interest payments made	$	6,320	$	5,741	$	2,269
Interest expense		6,574		6,052		4,384
Interest capitalized		129		1,094		443

10.    COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company has entered into non-cancelable operating lease agreements for its corporate headquarters, manufacturing facilities, laboratory equipment, and other equipment that expire at various dates. The information below includes commitment amounts related to vacated facilities associated with exited activities (Note 4). In addition, the Company entered into a sublease agreement for a vacated laboratory facility in 2003. Future minimum annual rental obligations and related sublease income under the non-cancelable portion of operating leases as of January 1, 2006 were as follows (in thousands):

	Obligation		Sublease Income
2006	$	2,750	$	274
2007		2,622		280
2008		2,121		285
2009		1,799		97
2010		1,468		—
2011 and thereafter		4,943		—
	$	15,703	$	936

Rent expense was approximately $4.5 million, $3.9 million and $2.6 million in 2005, 2004 and 2003, respectively. Sublease rental income was approximately $0.3 million in 2005 and 2004 and $0.1 million in 2003.

30

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

Litigation

The Company is involved in certain litigation arising from the ordinary course of business. In management’s opinion, the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position or results of operations.

Royalty Commitments

The Company has entered into various license agreements whereby the Company uses and sells certain technologies and products. Such license agreements call for royalties to be paid at 1% to 65% of net sales with minimum guarantees and advance payments. Royalty expense under these agreements, which is included in “Cost of sales,” was approximately $6.0 million, $4.9 million and $3.1 million in 2005, 2004 and 2003, respectively. Future annual minimum royalty commitments as of January 1, 2006, are as follows (in thousands):

2006	$	2,088
2007		1,176
2008		1,181
	$	4,445

11.    INCOME TAXES

The income tax provision for the years ended January 1, 2006, January 2, 2005 and December 28, 2003 consisted of the following (in thousands):

	2005			2004			2003
Income tax provision (benefit) from continuing operations:
Current:
US federal and state	$	3,119		$	(372	)	$	3,294
Foreign		3,745			2,767			3,500
		6,864			2,395			6,794
Deferred:
US federal and state		(6,908	)		5,396			(1,090	)
Foreign		(2,372	)		142			(167	)
		(9,280	)		5,538			(1,257	)
Income tax provision (benefit) — continuing operations	$	(2,416	)	$	7,933		$	5,537
Income tax provision (benefit) — discontinued operations	$	1,014		$	—		$	(5,035	)
Income tax provision (benefit)	$	(1,402	)	$	7,933		$	502

31

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The income tax provision from continuing operations as reported in the accompanying Consolidated Statements of Income differs from the amounts computed by applying federal statutory rates due to the following (in thousands):

	2005			2004			2003
Federal income tax (benefit) at statutory rates	$	(560	)	$	8,957		$	6,161
State income tax, net of federal income tax benefit		668			—			—
Impact of foreign tax rates and credits and permanent items		(2,450	)		(948	)		(1,108	)
Other tax (benefit)		(74	)		(76	)		484
	$	(2,416	)	$	7,933		$	5,537

Income (loss) from continuing operations before taxes summarized by region for the years ended January 1, 2006, January 2, 2005 and December 28, 2003 was as follows (in thousands):

	2005			2004		2003
United States	$	(4,478	)	$	17,199	$	6,998
Foreign		2,878			8,395		10,606
	$	(1,600	)	$	25,594	$	17,604

Deferred income tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting and income tax reporting purposes. Temporary differences which gave rise to deferred tax assets and liabilities at January 1, 2006 and January 2, 2005, were as follows (in thousands):

	2005			2004
Deferred tax assets:
Current deferred tax assets:
Accruals and reserves	$	5,697		$	1,738
Unearned compensation		1,286			750
Other		1,127			1,835
Total current deferred tax assets		8,110			4,323
Long-term deferred tax assets:
Excess book depreciation/impairment		2,916			—
Unearned Compensation		377			—
Net operating loss and credit carryforwards		17,426			10,292
Less valuation allowances		(6,012	)		(4,038	)
Total long-term deferred tax assets		14,707			6,254
Total deferred tax assets		22,817			10,577
Deferred tax liabilities:
Goodwill and intangible amortization		(39,989	)		(37,431	)
Other		(454	)
Excess tax depreciation		—			(4,824	)
Total long-term deferred tax liabilities		(40,443	)		(42,255	)
Net deferred tax liability	$	(17,626	)	$	(31,678	)

32

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The Company has approximately $10.5 million of US net operating loss (NOL) carryforwards resulting from acquisitions during 2004 which begin to expire in 2018. Although the utilization of these losses is subject to limitations pursuant to Section 382 of the Internal Revenue Code, the Company expects to fully utilize the acquired NOL’s prior to their expiration. As of January 1, 2006, the Company has NOL carryforwards of approximately $2.5 million in Canada with an indefinite expiration period; due to the Company’s intention to exit Canada in 2006, a full valuation allowance was recorded against the Canadian NOL deferred tax asset in 2005.

The Company had foreign tax credit carryovers of approximately $1.5 million and Research & Development Tax Credits of approximately $2.6 million in the U.S. as of January 1, 2006, which expire in 2014 and 2024, respectively. The Company has a $6.8 million capital loss carryover that expires in 2009. Management considers projected future taxable income and tax planning strategies in assessing the need for valuation allowances that reduce deferred tax assets. Based upon historical taxable income, management believes it is more likely than not that the Company will fully realize the benefits of the above US NOL, capital loss and tax credit carryforwards; accordingly, no valuation allowance has been recorded against these related deferred tax assets as of January 1, 2006.

As of January 1, 2006, the Company has state income tax NOL carryforwards totaling approximately $96.2 million, expiring in various amounts over the next 15 years. Due to the uncertainty over the Company’s ability to utilize a portion of these state NOLs prior to expiration, a valuation allowance was recorded against the deferred tax asset totaling $5.2 million and $3.5 million as of January 1, 2006 and January 2, 2005, respectively.

On October 22, 2004, the American Jobs Creation Act (“AJCA”) was enacted. The AJCA includes a one-time opportunity that allows US-based multinational corporations to repatriate foreign earnings at a reduced rate of tax. Subject to meeting certain conditions and restrictions, 85% of qualifying repatriated foreign earnings, as defined by the AJCA, can be excluded from US taxable income. The Company did not elect to apply this provision and did not repatriate any foreign earnings in 2005. The AJCA also provides a deduction for income from qualified domestic production activities, which will be phased in from 2005 through 2010 as the extraterritorial tax regime is phased-out. The Company did not obtain any tax benefit in 2005 from the deduction due to operating losses in the US. The impact, if any, on the Company’s future provision for income taxes is not expected to be material.

The Company has not provided for US federal income and foreign withholding taxes on approximately $50.4 million of undistributed earnings of foreign subsidiaries as of January 1, 2006. The Company considers these undistributed earnings as permanently invested in the operations of such subsidiaries. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to US income taxes, adjusted for foreign tax credits. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable because of the complexities associated with its hypothetical calculation.

The Company believes that its tax reserves are adequate to cover any additional tax liability that may result from any federal, state, or foreign audits for all years still subject to audit.

The Company made income tax payments of approximately $5.1 million, $3.9 million and $3.2 million during 2005, 2004 and 2003, respectively. As of January 1, 2006 and January 1, 2005 the Company had an income tax receivable of $ 0.1 million and income taxes payable of approximately $1.8 million, respectively. Income tax receivable is included in “Other current assets” and income tax payable is included in “Accrued liabilities” in the accompanying consolidated financial statements.

33

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

12.    CONCENTRATION OF CUSTOMERS AND SUPPLIERS

The Company’s ten largest customers accounted for approximately 31%, 38% and 45% of total net revenues for the years ended January 1, 2006, January 2, 2005 and December 28, 2003, respectively. Only one customer made up greater than 10% of net revenues of the Company during each period as follows:

	2005		2004		2003
Johnson & Johnson	10	%	15	%	17	%

At January 1, 2006 and January 2, 2005, the Company’s five largest customers represented 28% and 29%, respectively, of the Company’s accounts receivable balance.

At January 1, 2006, the Company purchased all of its bovine serum from a single vendor who sources from two abattoirs in the Midwestern United States. The Company has a long-term agreement with the supplier pursuant to which the Company is guaranteed certain minimum levels of serum. Additionally, the contract provides the Company with certain rights in the event of a change in control of this supplier.

At January 1, 2006, the Company purchased all of its recombinant human insulin from one vendor under a supply agreement which guarantees availability of minimum levels of insulin through the end of 2006. In March 2006 the Company and the vendor have concluded an extension of the supply agreement through 2009.

13.    EMPLOYEE RETIREMENT PLANS

The Company maintains a defined contribution 401(k) savings plan for all eligible employees. Under the plan, the Company matches a specified percentage of each participating employee’s compensation. Employees become immediately vested in the Company’s contributions as they are made. The Company’s contributions were approximately $1.5 million, $1.0 million and $0.7 million in 2005, 2004 and 2003, respectively.

14.    SEGMENT AND GEOGRAPHIC INFORMATION

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS No. 131”), defines operating segments to be those components of a business for which separate financial information is available that is regularly evaluated by management in making operating decisions and in assessing performance. SFAS No. 131 further requires that segment information be presented consistently with the basis and manner in which management internally disaggregates financial information for the purposes of assisting in making internal operating decisions.

We report operating results in two business segments, “Research” and “Bioprocessing.” The operations of Celliance represent the Bioprocessing segment and the operations of Chemicon and Upstate represent the Research segment.

Our Research segment sells a broad range of research products, including specialty reagents, kits, antibodies and molecular biology tools to research customers working in the areas of neuroscience, infectious disease, oncology, stem cell research and cell signaling. We are also a leading supplier of monoclonal antibodies, conjugates, antibody blends and molecular and cell biology-based detection kits for use in diagnostic laboratories. In addition, we are one of the leading suppliers of tools for kinase

34

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

research and one of the leading providers of drug discovery services to pharmaceutical companies targeting kinase biology-based drugs. We market our research products and services under our Chemicon^® and Upstate^® brand names.

Our Bioprocessing segment sells a variety of cell culture products, including highly purified proteins and tissue culture media components. These products are used primarily by biopharmaceutical and biotechnology companies as nutrient additives in cell culture media. One of our most significant products within the Bioprocessing segment is EX-CYTE^®, a patented serum-free solution of cholesterol, lipoproteins and fatty acids. EX-CYTE^® is used, in combination with other cell culture supplements, to reduce or replace animal serum in cell culture processes. We also provide a range of serum-based products in this segment, including Bovine Serum Albumin (“BSA”), under the brand name “Probumin™”, for which we are the world’s leading supplier. We also sell recombinant human insulin, under the brand name of “Incelligent™”, for use as a media supplement. This segment also manufactures and sells monoclonal antibodies, under the brand name “MonoSera™”, that are used in products such as blood typing reagents and in controls for diagnostic tests for certain infectious diseases. We believe these products comprise the world’s most comprehensive range of commercially available human monoclonal antibodies for blood grouping.

Prior to 2005, we reported operating results in three business segments: Research, Cell Culture and Diagnostics. These segments were based primarily on the differing production, manufacturing and other value-added processes that we performed with respect to our products and, to a lesser extent, the differing nature of the ultimate end use of our products. Prior to 2003, the Company reported a fourth segment, Therapeutic Products, which is accounted for as discontinued operations in all periods presented in the accompanying financial statements (Note 4). All amounts in the accompanying financial statements reflect the restatement of the pre-2005 segments so that they are consistent with the current year presentation.

The Company’s senior management utilizes multiple forms of analysis of operating and financial data to assess segment performance and to make operating decisions with respect to the segments.

35

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

The Company’s segment information for the years ended January 1, 2006, January 2, 2005 and December 28, 2003 is as follows (in thousands):

	2005			2004			2003
Net revenues:
Research	$	138,006		$	78,506		$	43,043
Bioprocessing		136,939			117,417			103,872
Total	$	274,945		$	195,923		$	146,915
Gross profit:
Research	$	84,838		$	50,828		$	26,677
Bioprocessing		67,309			57,613			55,497
Total		152,147			108,441			82,174
Reconciling items:
Selling, general and administrative expenses		85,141			59,293			44,602
Research and development		17,199			10,144			6,214
Amortization of intangibles		7,206			3,771			2,175
Purchased in process research and development		—			3,263			—
Impairment and exiting costs.		38,025			—			2,778
Other expense (income), net		597			(54	)		180
Write-off of deferred financing costs		—			965			4,492
Interest expense		7,361			6,052			4,384
Interest income		(1,782	)		(587	)		(255	)
Income from continuing operations, before tax	$	(1,600	)	$	25,594		$	17,604

36

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

Prior to 2005, the Company did not determine operating income and income before income taxes or segregate assets by segment because a significant portion of selling, general and administrative expenses, research and development expenses and assets were shared and not allocated to operating units. Beginning in 2005, with the decision to change from a company organized primarily by functional organizational units to a company with distinct operating units in two business segments and a separate corporate group, we are able to provide additional segment information for 2005; however, comparable information for 2004 is not available and as a result not presented. The additional segment information for the year ended January 1, 2006 is as follows (in thousands):

	2005
	Research		Bioprocessing			Corporate			Total
Gross profit	$	84,838	$	67,309		$	—		$	152,147
Selling, general and administrative expenses (excluding depreciation)		47,157		12,536			17,397			77,090
Research and development (excluding depreciation)		12,904		3,235			774			16,913
Depreciation		3,302		3,463			1,572			8,337
Amortization		6,159		1,047			—			7,206
Impairment and exiting costs		—		38,025			—			38,025
Operating income (loss)		15,316		9,003			(19,743	)		4,576
Other expense (income), net		287		(149	)		6,038			6,176
Income (loss) from continuing operations before income tax	$	15,029	$	9,152		$	(25,781	)	$	(1,600	)
Assets at January 1, 2006	$	386,744	$	180,568		$	56,307		$	623,619

Geographic Information

The Company markets its products and services to numerous countries worldwide and has manufacturing operations in the United States, Canada, the United Kingdom and Australia. Other than in the United States, the Company does not conduct business in any one country in which its revenues in that country are more than 10% of the Company’s consolidated net revenues. However, the majority of the Company’s remaining foreign sales are to Western Europe. Net revenues are attributed to regions based on the country to which the Company ships its products, which can differ from their ultimate destination. The composition of the Company’s net revenues to unaffiliated customers between those in the United States and other foreign locations and of the Company’s long-lived assets for the years ended

January 1, 2006, January 2, 2005 and December 28, 2003 are set forth below (in thousands):

37

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

	2005		2004		2003
Net revenues to unaffiliated customers:
United States	$	182,431	$	122,244	$	93,523
Other foreign		92,514		73,679		53,392
	$	274,945	$	195,923	$	146,915
Long-lived assets:
United States	$	433,133	$	433,046	$	191,040
Canada		2,398		22,999		17,166
United Kingdom		9,892		9,248		9,317
Australia		355		489		525
	$	445,778	$	465,782	$	218,048

15.    QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The quarterly results of operations for the years ended January 1, 2006 and January 2, 2005, respectively, are as follows (in thousands, except per share amounts):

2005	First		Second		Third		Fourth
Net revenues	$	56,635	$	64,208	$	66,969	$	87,133
Gross profit		30,839		36,713		38,226		46,369
Income (loss) from continuing operations(1)		1,904		4,846		7,654		(13,588	)
Income from discontinued operations (Note 4)		—		—		—		1,883
Net income(loss)		1,904		4,846		7,654		(11,705	)
Basic earnings (loss) per share(2)		0.06		0.14		0.22		(0.34	)
Diluted earnings per share(2)		0.05		0.14		0.20		(0.34	)
2004	First		Second		Third		Fourth
Net revenues	$	36,504	$	43,963	$	46,294	$	69,162
Gross profit		19,470		24,931		24,981		39,059
Net income(3)		2,983		5,398		5,739		3,541
Basic earnings per share(2)		0.12		0.22		0.23		0.12
Diluted earnings per share(2)		0.11		0.18		0.19		0.12

(1) Net income in the fourth quarter of 2005 includes pretax charges of $38.0 million for impairment and exiting costs and $1.3 million in inventory write off costs (Note 5).

(2) Basic and diluted earnings per share are computed independently for each of the quarters presented. As such, the summation of the quarterly amounts may not equal the total basic and diluted earnings per share reported for the year.

(3) Net income in the fourth quarter of 2004 includes a pretax charge of $3.3 million for purchased in-process research and development.

38

SEROLOGICALS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

January 1, 2006, January 2, 2005 and December 28, 2003

16.    SUBSEQUENT EVENTS

On January 13, 2006, the Company completed a sale of its diagnostic production facility and distribution warehouse based in Milford, Massachusetts for cash proceeds of $3.3 million. The Company expects to report a gain on the sale of approximately $1.2 million in the first quarter 2006.

On March 13, 2006, Serologicals UK Holding Company Limited, our wholly-owned subsidiary, entered into a definitive agreement to acquire the entire issued ordinary share capital of Cytomyx Limited for aggregate cash consideration of $7 million. The consideration will be subject to a post-closing working-capital adjustment. Cytomyx Limited, which is based in Cambridge, England, and is a wholly owned subsidiary of Cytomyx Holdings Plc, is a leading provider of ion channel cell lines and drug discovery services. The acquisition is subject to approval of the shareholders of Cytomyx Holdings Plc and to other customary closing conditions. Cytomyx Holdings Plc has obtained irrevocable written undertakings from the holders of approximately 40% of its voting shares to approve the sale. Following completion of the acquisition, which is expected to occur on March 31, 2006, Cytomyx Limited will operate as part of our Research segment.

39

EX-99.2

SEROLOGICALS CORPORATION

Exhibit 99.2

CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands)

	April 2, 2006			January 1, 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	43,061		$	21,227
Short-term investments		—			17,225
Trade accounts receivable, net		36,048			64,172
Inventories		67,715			59,418
Assets held for sale		22,017			695
Other current assets		13,260			15,103
Total current assets		182,102			177,840
PROPERTY AND EQUIPMENT, NET		66,327			70,015
GOODWILL		244,756			239,520
INTANGIBLE ASSETS, NET		117,275			120,027
OTHER ASSETS		3,289			16,217
Total assets	$	613,749		$	623,619
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	13,322		$	17,377
Accrued liabilities		29,733			41,757
Current maturities on capital lease obligations		792			1,081
Total current liabilities		43,847			60,215
CONVERTIBLE SUBORDINATED DEBENTURES		129,914			129,905
LONG TERM DEBT LESS CURRENT MATURITIES		447			476
DEFERRED INCOME TAXES		25,736			25,736
OTHER LIABILITIES		932			910
Total liabilities		200,875			217,242
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Preferred stock		—			—
Common stock		386			385
Additional paid-in capital		350,302			347,183
Retained earnings		96,919			94,077
Accumulated other comprehensive income		8,738			8,854
Less:
Common stock held in treasury		(43,472	)		(43,472	)
Deferred compensation		—			(650	)
Total stockholders’ equity		412,873			406,377
Total liabilities and stockholders’ equity	$	613,749		$	623,619

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

1

SEROLOGICALS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited and in thousands, except share and per share amounts)

	For the three months ended
	April 2, 2006			April 3, 2005
NET REVENUES	$	55,028		$	56,635
COST OF REVENUES		23,412			25,796
Gross profit		31,616			30,839
OPERATING EXPENSES:
Selling, general and administrative		19,888			20,293
Research and development		4,999			4,485
Amortization of intangibles		1,845			1,763
Impairment and exiting costs		845			—
Gain on sale of long-lived assets		(1,184	)		—
OPERATING INCOME		5,223			4,298
Other expenses (income), net		(223	)		101
Interest expense		1,812			1,803
Interest (income)		(312	)		(288	)
INCOME BEFORE INCOME TAXES		3,946			2,682
PROVISION FOR INCOME TAXES		1,105			778
NET INCOME	$	2,841		$	1,904
NET INCOME PER SHARE:
Basic	$	0.08		$	0.06
Diluted	$	0.08		$	0.05
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
Basic		34,129,372			34,580,700
Diluted		34,437,333			35,269,805

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

2

SEROLOGICALS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)

	For the three months ended
	April 2, 2006			April 3, 2005
OPERATING ACTIVITIES:
Net income	$	2,841		$	1,904
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,814			3,930
Gain on sale of long-lived assets		(1,184	)		—
Equity-based compensation		1,220			39
Tax benefit from exercise of stock options		—			2,223
Other, net		(196	)		68
Changes in operating assets and liabilities, net of acquisition of business:
Trade accounts receivable, net		28,220			13,068
Inventories		(8,642	)		(2,338	)
Other current assets		1,272			(1,140	)
Accounts payable		(4,492	)		(2,746	)
Accrued liabilities		(11,083	)		(14,551	)
Other, net		—			(214	)
Total adjustments		8,929			(1,661	)
Net cash provided by operating activities		11,770			243
INVESTING ACTIVITIES:
Purchase of business, net of cash acquired		(7,357	)		(6,830	)
Purchases of property and equipment and intangibles		(18,374	)		(2,904	)
Purchases of short-term investments		(23,925	)		(20,935	)
Proceeds from sale of short-term investments		41,150			15,835
Proceeds from sale of long-lived assets		3,312			—
Restricted cash held in escrow		14,505			—
Other, net		(167	)		—
Net cash provided by (used in) investing activities		9,144			(14,834	)
FINANCING ACTIVITIES:
Payments on capital lease obligations		(324	)		(813	)
Excess tax benefit from exercise of stock options		156			—
Proceeds from issuance of common stock under equity-based plans		1,305			2,005
Net cash provided by financing activities		1,137			1,192
Effects of exchange rate changes on cash and cash equivalents		(217	)		(46	)
Net increase (decrease) in cash and cash equivalents		21,834			(13,445	)
Cash and cash equivalents, beginning of period		21,227			33,024
Cash and cash equivalents, end of period	$	43,061		$	19,579
SUPPLEMENTAL DISCLOSURE:
Cash paid during the period for:
Interest paid, net of amounts capitalized	$	3,015		$	2,736
Income taxes paid	$	1,863		$	994
Non-cash investing and financing activities:
Accrued acquistion consideration	$	99		$	134
Accrued purchase of property and equipment	$	269		$	—

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

3

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 2, 2006 (UNAUDITED)

1.     ORGANIZATION AND BASIS OF PRESENTATION

Organization

Serologicals Corporation, a Delaware corporation, (together with its subsidiaries, “we”, “our”, the “Company” or “Serologicals”), with facilities in North America, Europe and Australia, is a global leader in developing and commercializing consumable biological products, enabling technologies and services in support of biological research, drug discovery and the bioprocessing of life-enhancing products. Our customers include major life science companies and leading research institutions involved in key disciplines, such as neurology, oncology, hematology, immunology, cardiology, proteomics, infectious diseases, cell signaling and stem cell research. In addition, we are the world’s leading provider of monoclonal antibodies for the blood typing industry. We report operating results in two business segments, “Research” and “Bioprocessing.” The operations of Celliance represent the Bioprocessing segment and the operations of Chemicon and Upstate represent the Research segment.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Serologicals and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, considered necessary to present fairly Serologicals’ financial position, results of operations and cash flows at the dates and for the periods presented. Interim results of operations are not necessarily indicative of results to be expected for the full year. The interim financial statements should be read in conjunction with the audited consolidated financial statements as of January 1, 2006 and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 1, 2006.

Inventories

Inventories are stated at the lower of cost or market, cost being determined on a first-in, first-out basis. Market for inventories is replacement cost for raw materials or net realizable value for all other categories.

Inventories at April 2, 2006 and January 1, 2006 consisted of the following (in thousands):

	April 2, 2006		January 1, 2006
Raw materials	$	7,545	$	7,157
Work in process		25,484		21,999
Finished goods		34,686		30,262
	$	67,715	$	59,418

4

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

Assets Held for Sale

Management classifies certain assets as held for sale based on criteria set forth in Statement of Financial Accounting Standards No. 144 “Accounting for Impairment or Disposal of Long-Lived Assets.” At April 2, 2006, certain assets were held for sale, were not in service and are carried at their estimated net realizable value at January 1, 2006.

Assets held for sale at April 2, 2006 and January 1, 2006 consisted of the following (in thousands):

	April 2, 2006		January 1, 2006
Facilities in Lawrence, KS	$	15,990	$	—
Facilities in Lake Placid, NY		6,027		—
Facilities in Milford, MA		—		695
	$	22,017	$	695

Facilities in Lawrence, KS and Milford, MA are held in our Bioprocessing segment; Lake Placid, NY is held in our Research segment. The Company has engaged real estate brokers to handle these sales and has had discussions with several interested parties. The Company continues to evaluate the value of these assets as well as to pursue an orderly disposition of its assets held for sale. There can be no assurance if or when sales will be completed or whether such sales will be completed on terms that will enable the Company to realize the full carrying value of these assets.

Derivative Financial Instruments

In October 2003, the Company entered into interest rate swap agreements with the objective of converting $70.0 million principal amount of its Debentures to a variable interest rate based on the 6-month LIBOR rate at the end of each interest period plus a spread of 66 basis points. In June 2005, the Company terminated its interest rate swap agreements and received $0.1 million in cash proceeds.

The interest rate swaps were designated and qualified as fair value hedges in accordance with Statement of Financial Accounting Standards No. 133, “Accounting for Derivatives and Hedging Activities” and related interpretations and amendments. Accordingly, the portion of the Debentures hedged was adjusted by the fair value of the changes related to the swaps. In June 2005, the Company adjusted the swap values by marking-to-market the swaps so that they equaled the net proceeds received on the termination. The resulting net adjustment to the carrying value of the Debentures of $0.1 million will be accreted as additional interest expense over the remaining estimated life of the Debentures.

The carrying value of the Debentures at April 2, 2006 and January 1, 2006 is as follows (in thousands):

	April 2, 2006			January 1, 2006
Face value of Debentures	$	130,000		$	130,000
Unamortized discount on sale of swaps		(86	)		(95	)
Carrying value of Debentures	$	129,914		$	129,905

5

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

Earnings per Share

Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding during the period. The calculation of diluted earnings per share is similar to basic earnings per share, except that net income is adjusted by the after-tax interest expense on the Debentures when they are dilutive and the weighted average number of shares includes the dilutive effect of stock options, stock awards, and the Debentures if converted. The Debentures were anti-dilutive for the three months ended April 2, 2006 and April 3, 2005 and, accordingly, were excluded from the calculation of diluted earnings per share.

The following table sets forth the calculation of basic and diluted earnings per share (in thousands, except per share amounts):

	April 2, 2006		April 3, 2005
Numerator:
Net income	$	2,841	$	1,904
Add back: interest expense on convertible debentures, net of income taxes		—	$	—
Numerator for diluted earnings per share attributable to common stockholders	$	2,841	$	1,904
Denominator:
Basic earnings per share—weighted average shares outstanding		34,129		34,581
Effect of dilutive securities:
Stock options		232		615
Convertible debentures		—		—
Common stock awards		76		74
Diluted earnings per share—weighted average shares outstanding		34,437		35,270
Basic earnings per share	$	0.08	$	0.06
Diluted earnings per share	$	0.08	$	0.05

The following shares issuable under stock option agreements and the Debentures were excluded from the calculation of diluted earnings per share for the periods indicated due to their anti-dilutive effect (in thousands):

	Quarter Ended
	April 2, 2006	April 3, 2005
Stock options	41	40
Convertible debentures	8,790	8,790

6

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

Comprehensive Income

The following table sets forth the calculation of comprehensive income for the periods indicated below (in thousands):

	Quarter Ended
	April 2, 2006			April 3, 2005
Net income, as reported	$	2,841		$	1,904
Other comprehensive income (loss):
Foreign currency translation adjustments		(116	)		720
Comprehensive income	$	2,726		$	2,624

2.    EQUITY—BASED COMPENSATION

On January 2, 2006, we adopted, using the modified prospective application, SFAS 123(R), “Share-Based Payment” (“SFAS 123(R)”). SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options and shares purchased under an employee stock purchase plan (if certain parameters are not met), to be recognized in the financial statements based on their fair values and did not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123, “Accounting for Stock Based Compensation” (“SFAS 123”), as originally issued and Emerging Issues Task Force (“EITF”) 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.”

Upon our adoption of SFAS 123(R), we began recording compensation cost related to the continued vesting of all stock options that remained unvested as of January 2, 2006, as well as for all new stock option grants after our adoption date. The compensation cost to be recorded is based on the fair value at the grant date. The adoption of SFAS 123(R) did not have a material effect on our recognition of compensation expense relating to the vesting of restricted stock grants or on our performance share awards, which are considered liability awards. SFAS 123(R) required the elimination of unearned compensation (contra-equity account) related to earlier awards against the appropriate equity accounts effective upon our adoption.

Prior to the adoption of SFAS 123(R), cash flows resulting from the tax benefit related to equity-based compensation was presented in our operating cash flows, along with other tax cash flows, in accordance with the provisions of EITF 00-15, “Classification in the Statement of Cash Flows of the Income Tax Benefit Received by a Company upon Exercise of a Nonqualified Employee Stock Option,” (“EITF 00-15”). SFAS 123(R) superseded EITF 00-15, amended SFAS 95, “Statement of Cash Flows,” and requires tax benefits relating to excess equity-based compensation deductions to be prospectively presented in our statement of cash flows as financing cash inflows.

7

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

The effect of adopting SFAS 123(R) on our income from operations, income before income taxes, net income, net cash provided by operating activities, net cash provided by financing activities, and basic and diluted earnings per share for the three-month period ended April 2, 2006, is as follows (in thousands, except per share data):

Income from operations, as reported	$	5,223
Effect of adopting SFAS 123(R)		944
Income from operations, excluding the effect of adopting SFAS 123(R)	$	6,167
Income before income taxes, as reported	$	3,946
Effect of adopting SFAS 123(R)		944
Income before income taxes, excluding the effect of adopting SFAS 123(R)	$	4,890
Net income, as reported	$	2,841
Effect of adopting SFAS 123(R)		680
Net income, excluding the effect of adopting SFAS 123(R)	$	3,521
Net cash provided by operating activities, as reported	$	11,480
Effect of adopting SFAS 123(R)		944
Net cash provided by operating activities, excluding the effect of adopting SFAS 123(R)	$	12,424
Net cash provided by financing activities, as reported	$	679
Effect of adopting SFAS 123(R)		290
Net cash provided by financing activities, excluding the effect of adopting SFAS 123(R)	$	969
Net income per share, as reported:
Basic	$	0.08
Diluted	$	0.08
Effect of adopting SFAS 123(R) on net income per share, basic and diluted	$	0.02
Net income per share, excluding the effect of adopting SFAS 123(R) :
Basic	$	0.10
Diluted	$	0.10

Prior to our adoption of SFAS 123(R), we accounted for equity-based compensation under the provisions and related interpretations of Accounting Principles Board 25, “Accounting for Stock Issued to Employees” (“APB 25”). Accordingly, we were not required to record compensation expense when stock options were granted to our employees as long as the exercise price was not less than the fair market value of the stock at the grant date. In addition, we were not required to record compensation expense when we issued common stock under the Serologicals Corporation 2005 Stock Incentive Plan (“2005 Incentive Plan”), and the various Plans that preceded it, as long as the purchase price was not less than 85% of the fair market value of our common stock on the grant date. In October 1995, FASB issued SFAS 123, which allowed us to continue to follow the guidelines of APB 25, but required pro-forma disclosures of net income and earnings per share as if we had adopted the provisions of SFAS 123. In December 2002, the FASB issued SFAS 148, “Accounting for Stock-Based Compensation — Transition and Disclosure — an Amendment of FASB 123,” which provided alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for equity-based employee compensation. We continued to account for equity-based compensation under the provisions of APB 25 using the intrinsic value method.

8

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

Had compensation cost for our equity-based compensation plans been determined based on the fair value at the grant dates for awards under those plans in accordance with the provisions of SFAS 123, our net income and net income per share for the three-month period ended April 3, 2005, would have been as follows (in thousands, except per share data):

	April 3, 2005
Net income as reported	$	1,904
Deduct: Total incremental stock-based employee compensation expense determined under fair value-based method for all awards, net of related tax effects		(872	)
Pro forma net income	$	1,032
Earnings per share:
Basic—as reported	$	0.06
Basic—pro forma	$	0.03
Diluted—as reported	$	0.05
Diluted—pro forma	$	0.03

Our net income for the three months ended April 2, 2006 includes $1.2 million of equity-based compensation expense and $0.4 million of income tax benefits related to these compensation arrangements. All of this expense was included in Selling, general and administrative expenses in the Consolidated Statement of Income. There were no equity-based awards made during the three months ended April 2, 2006. During the three months ended April 3, 2005, we did not recognize any material equity-based compensation in our statement of income.

As of January 2, 2006, we had four principal types of equity-based payment arrangements with our employees and non-employee directors: stock options, performance shares, restricted stock and employee stock purchase plans.

Stock Options

In the quarter ended April 2, 2006, we recognized equity-based compensation expense of approximately $0.8 million related to the vesting of stock options and the related tax benefit of approximately $0.3 million. As of April 2, 2006, we had approximately $9.6 million of nonvested stock options, which we will record in our statements of income over a weighted average recognition period of approximately 4.8 years. No stock option grants were awarded during the three months ended April 2, 2006. The following table summarizes the activity of stock options under our 2005 Incentive Plan, from January 2, 2006 to April 2, 2006:

	Number of Options		Weighted Average Remaining Term	Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding, January 2, 2006	2,212,663			$	16.83
Granted	—			$	—
Exercised	(61,482	)		$	16.88	$	445,976
Canceled	(155,858	)		$	18.97
Outstanding, April 2, 2006	1,995,323		3.98 years	$	18.33	$	12,231,330
Options exercisable at April 2, 2006	811,201		2.75 years	$	17.42	$	5,714,359

9

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

Performance Shares

We awarded performance share units to our senior management as part of their long-term, equity-based incentive compensation for fiscal 2005. We had not previously awarded performance share units. The units vest over two years, subject to our performance against pre-established targets, including the compound growth rate of consolidated revenues and earnings per share during the two-year period. Revenue growth comprises 55% of the performance goal and earnings per share comprise the remainder. The actual payout under these awards may vary based on our actual performance over the two-year performance period. The number of performance share units awarded was determined by dividing the value of the performance share units granted to each employee by the fair market value of a share of our common stock on May 11, 2005. These awards have been accounted for as liability awards under SFAS 123(R) because they are payable in either cash or common stock at the election of the participant. We record the liability for these awards at market value based on our best estimate of achieving the stated performance goal for the performance period at the end of each quarter in the performance period. During the first quarter ended April 2, 2006, no new performance shares were awarded. We recognized $0.2 million in equity-based compensation expense and $0.1 million of income tax benefits related to this compensation arrangement in the three months ended April 2, 2006. We have an accrued liability of $0.6 million at April 2, 2006, which if earned, would be payable in the first quarter of 2007. The following table summarizes the activity of equity-based payment arrangements under our performance share award plan, from January 2, 2006 to April 2, 2006:

	Number of Performance Shares		Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding, January 2, 2006	98,231
Granted	—
Exercised	—
Canceled	(6,609	)
Outstanding, April 2, 2006	91,622		$	21.39	$	2,241,074

10

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

Restricted Stock

Periodically the Company has awarded restricted common stock and restricted stock units to eligible key employees under our 2005 Incentive Plan. These awards have restriction periods tied primarily to employment and service. The awards are recorded at fair market value on the date of the grant as unearned compensation and compensation expense is recognized over the restriction period on a straight- line basis, net of forfeitures. In the three months ended April 2, 2006, equity-based compensation expense related to the vesting of restricted stock was immaterial. As of April 2, 2006, we had approximately $0.4 million of nonvested restricted stock which we will record in our statement of operations over a weighted average recognition period of approximately 2.9 years. The following table summarizes the activity of equity-based payment arrangements under restricted awards from January 2, 2006 to April 2, 2006:

	Number of Restricted Shares		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding, January 2, 2006	29,939		$	23.37
Granted	—		$	—
Vested	(1,623	)	$	22.56	$	39,699
Canceled	(6,377	)	$	22.62
Outstanding, April 2, 2006	21,939		$	23.66

Employee Stock Purchase Plans

The Company has two employee stock purchase plans, one for employees based in North America (the “US Purchase Plan”) and one for employees based in the United Kingdom (the “UK Plan”). Both plans allow employees to purchase shares of the Company’s common stock through a payroll deduction program. Participants in the US Purchase Plan may have up to 25% of their compensation withheld to purchase shares at a price equal to 85% of the lower of the closing price on the first or last day of each successive three-month purchase period. Participants in the UK Plan may have up to 10% of their compensation withheld to purchase shares of the Company’s common stock at the lower of fair market value at the beginning of the accumulation period or the acquisition date, as defined in the UK Plan. The Company matches 1 share for every 6 shares purchased in an accumulation period by participants in the UK Plan. Participants in the UK plan are required to hold these matching shares for a period of at least 3 years. During the three months ended April 2, 2006, in accordance with the provisions of SFAS 123(R), we recognized $0.1 million in equity-based compensation for these Plans. No equity-based compensation was recognized prior to the adoption of SFAS 123(R).

11

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

3.    ACQUISITIONS

Cytomyx, Ltd

On March 31, 2006, the Company completed the acquisition of Cytomyx Ltd., a wholly owned subsidiary of Cytomyx Holdings Plc (AIM: CYX). Based in Cambridge, U.K., Cytomyx Ltd. is a leading provider of ion channel cell lines and drug discovery services. With 23 distinct ion channel cell lines commercially available, and more in its pipeline, Cytomyx Ltd. offers the largest portfolio of distinct ion channel cell lines in the marketplace today. The Company acquired all of the outstanding stock of Cytomyx for $7.0 million in cash. The Cytomyx acquisition provides a number of important strategic additions for our Research segment; most significantly, its products extend the Company’s drug discovery profiling portfolio.

The results of Cytomyx were not material to the results of operations for the three months ended April 2, 2006 or April 3, 2005; accordingly, no pro forma disclosure is presented.

The components of the purchase price were (in thousands):

Cash paid	$	7,000
Direct costs		375
Other liabilities assumed		806
	$	8,181

The Company has not completed its valuation of the fair market value of the underlying assets acquired; however, at April 2, 2006 the preliminary summary allocation of assets acquired was as follows (in thousands):

Current assets	$	618
Property and equipment		931
Other assets		105
Intangibles, principally goodwill		6,527
	$	8,181

Changes in Goodwill arising from acquisition activity during the three months ended April 2, 2006 were as follows (in thousands):

Balance, January1, 2006	$	239,520
Cytomyx acquisition		6,505
Acquisition Earnout		99
Settlement of Chemicon indemnification claims		(1,368	)
Balance, April 2, 2006	$	244,756

12

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

The Company has accounted for its plans of integration and exiting of certain activities arising from its previous acquisitions of Chemicon and Upstate in accordance with EITF 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination”. Changes in accrued acquisition and business integration costs for these acquisitions during the three months ended April 2, 2006 were as follows (in thousands):

Chemicon:

	Original amount recorded		Prior year amounts paid			Balance at January 1, 2006		Amounts paid			Balance at April 2, 2006
Facility closure	$	1,250	$	(46	)	$	1,204	$	—		$	1,204
Other		503		(49	)		454		(57	)		397
	$	1,753	$	(95	)	$	1,658	$	(57	)	$	1,601

Upstate:

	Original amount recorded		Prior year amounts paid			Balance at January 1, 2006		Amounts paid			Balance at April 2, 2006
Severance and relocation cost	$	2,209	$	(1,199	)	$	1,010	$	(556	)	$	454
Facility closure		1,606		(440	)		1,166		(118	)		1,048
Other		651		(375	)		276		—			276
	$	4,466	$	(2,014	)	$	2,452	$	(674	)	$	1,778

4.    IMPAIRMENT AND EXITING COSTS

As a result of the Company’s ongoing plant consolidation and rationalization initiatives, in January 2006 the Company announced a plan to rationalize, integrate and align the resources of the Company’s Bioprocessing segment. This rationalization program includes workforce reduction, impairment of certain facilities, and other charges. The expected completion of the program is anticipated to occur in the first quarter of 2007. The Company recorded a charge for impairment and exiting costs in its statement of income for its fiscal year ended January 1, 2006. During the three months ended April 2, 2006, the rationalization program resulted in an additional charge of $0.8 million for certain non-impairment related costs incurred primarily for workforce reduction and other miscellaneous exit costs.

A summary of impairment and exiting costs recognized in the three months ended April 2, 2006 and the accrued liability associated with the exiting plan at April 2, 2006, consisted of the following (in thousands):

	Workforce Reduction			Lease Term. Costs			Other Exit Costs			Total
Balance at January 1, 2006	$	1,016		$	205		$	3,965		$	5,186
Additional charges in the three months ended April 2, 2006		643			—			201			844
Payments		(1,286	)		(205	)		(660	)		(2,151	)
Balance at April 2, 2006	$	373		$	—		$	3,506		$	3,879

13

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

The remaining accrued liabilities at April 2, 2006 are expected to be paid through the first quarter of 2007.

5.    GAIN ON SALE OF LONG-LIVED ASSETS

On January 13, 2006, the Company completed the sale of its diagnostic production facility and distribution warehouse based in Milford, MA for cash proceeds of $3.3 million. The Company recorded a gain on the sale of approximately $1.2 million in the first quarter of 2006.

6.    SEGMENT INFORMATION

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS No. 131”), defines operating segments to be those components of a business for which separate financial information is available that is regularly evaluated by management in making operating decisions and in assessing performance. SFAS No. 131 further requires that segment information be presented consistently with the basis and manner in which management internally disaggregates financial information for the purposes of assisting in making internal operating decisions.

We report operating results in two business segments, “Research” and “Bioprocessing.” The operations of Celliance represent the Bioprocessing segment and the operations of Chemicon and Upstate represent the Research segment.

Our Research segment sells a broad range of research products, including specialty reagents, kits, antibodies and molecular biology tools to research customers working in the areas of neuroscience, infectious disease, oncology, stem cell research and cell signaling. We are also a leading supplier of monoclonal antibodies, conjugates, antibody blends and molecular and cell biology-based detection kits for use in diagnostic laboratories. In addition, we are one of the leading suppliers of tools for kinase research and one of the leading providers of drug discovery services to pharmaceutical companies targeting kinase biology-based drugs. We market our research products and services under our Chemicon^® and Upstate^® brand names.

Our Bioprocessing segment sells a variety of cell culture products, including highly purified proteins and tissue culture media components. These products are used primarily by biopharmaceutical and biotechnology companies as nutrient additives in cell culture media. One of our most significant products within the Bioprocessing segment is EX-CYTE^®, a patented serum-free solution of cholesterol, lipoproteins and fatty acids. EX-CYTE^® is used, in combination with other cell culture supplements, to reduce or replace animal serum in cell culture processes. We also provide a range of serum-based products in this segment, including Bovine Serum Albumin (“BSA”), under the brand name “Probumin^™”, for which we are the world’s leading supplier. We also sell recombinant human insulin, under the brand name of “Incelligent^™”, for use as a media supplement. This segment also manufactures and sells monoclonal antibodies, under the brand name “MonoSera^™”, that are used in products such as blood typing reagents and in controls for diagnostic tests for certain infectious diseases. We believe these products comprise the world’s most comprehensive range of commercially available human monoclonal antibodies for blood typing.

14

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

The Company’s senior management utilizes multiple forms of analysis of operating and financial data to assess segment performance and to make operating decisions with respect to the segments. The Company’s segment information for the three months ended April 2, 2006 and April 3, 2005 was as follows (in thousands):

	Quarter ended April 2, 2006
	Research			Bioprocessing			Corporate			Total
Net revenues	$	34,920		$	20,108		$	—		$	55,028
Cost of revenues		13,582			9,830			—			23,411
Gross Profit		21,338			10,278			—			31,617
Selling, general and administrative expenses		12,695			2,884			4,309			19,888
Research and development		4,141			375			483			5,000
Amortization		1,592			253			—			1,845
Impairment and exiting costs		—			727			118			845
Gain on sale of long-lived assets		—			(1,184	)		—			(1,184	)
Operating income (loss)		2,910			7,223			(4,910	)		5,223
Other expense (income), net		(180	)		(45	)		2			(223	)
Interest expense(income), net		5			(23	)		1,518			1,500
Income (loss before income tax)	$	3,085		$	7,291		$	(6,430	)	$	3,946
Assets at April 2, 2006	$	409,132		$	162,724		$	41,893		$	613,749

	Quarter ended April 3, 2005
	Research		Bioprocessing			Corporate			Total
Net revenues	$	32,161	$	24,474		$	—		$	56,635
Cost of revenues		11,860		13,936			—			25,796
Gross Profit		20,301		10,538			—			30,839
Selling, general and administrative expenses		11,892		3,861			4,540			20,293
Research and development		3,430		815			240			4,485
Amortization		1,486		277			—			1,763
Operating income (loss)		3,493		5,585			(4,780	)		4,298
Other expense (income), net		88		13			—			101
Interest expense(income), net		28		(41	)		1,528			1,515
Income (loss before income tax)	$	3,376	$	5,613		$	(6,308	)	$	2,682
Assets at April 3, 2005	$	375,683	$	190,407		$	64,373		$	630,462

7.    SUBSEQUENT EVENTS

Acquisition of Serologicals by Millipore Corporation

On July 14, 2006, Millipore Corporation, located in Billerica, Massachusetts, through its wholly owned subsidiary, Charleston Acquisition Corp, acquired Serologicals. Shareholders of Serologicals received $31.55 in cash for each share of Serologicals common stock they owned. The total value of the transaction, including the assumption of Serologicals debt outstanding at closing, is approximately $1.5 billion.

15

SEROLOGICALS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

April 2, 2006 (UNAUDITED)

Linco Acquisition

On May 2, 2006, the Company acquired all the issued and outstanding common stock of Linco Research, Incorporated (“LRI”) and LINCO Diagnostic Services, Inc. (“LDS”). The acquisition of LRI and LDS was effected pursuant to that certain Stock Purchase Agreement, dated as of March 23, 2006 (the “Stock Purchase Agreement”), among the Company and The Ronald L. Gingerich Revocable Living Trust dated May 23, 1995 (the “Trust”) and Mr. Ronald L. Gingerich. Pursuant to the Stock Purchase Agreement, the Company paid the Trust approximately $47.9 million, representing the adjusted base purchase price of $65.2 million, less approximately $4.5 million, which was placed in escrow to secure the Trust’s indemnification obligations to the Company, and $12.8 million, which was applied to the repayment of the indebtedness of LRI and LDS and to payment of transaction costs.

Simultaneously with the closing of the acquisition of LRI and LDS, the Company purchased three parcels of improved real estate that were leased by LRI and LDS. We acquired the real estate pursuant to a definitive Purchase and Sale Agreement with Paragon Properties, L.C., and an affiliate of Mr. Ronald L. Gingerich. We paid approximately $10.3 million for this real estate.

New credit facility

On May 2, 2006, the Company entered into a new $100.0 million credit agreement with a bank syndicate consisting of a $50.0 million six-year term loan and a $50.0 million six-year revolving credit facility, which replaced our existing $45.0 million revolving credit facility. The Revolver has an on-demand commitment upsize, which would increase the total available to $100.0 million. The Company used the proceeds of the $50.0 million term loan, $25.0 million advanced pursuant to the revolving credit facility and cash on hand to finance the acquisition of LRI and LDS. The term loan is repayable in twenty-three consecutive quarterly principal installments commencing on September 30, 2006, as follows: three installments each in the amount of $1.7 million; four installments each for $1.3 million; eight installments each for $1.9 million; four installments each for $2.5 million; and four installments each for $3.8 million. Loans under the credit agreement bear interest payable quarterly at a floating rate of interest determined by reference to a base rate or to Eurodollar interest rates, plus a margin. The margin, determined from a price grid in the credit agreement, on base rate loans ranges from 0.0% to 0.875%. The margin on Eurodollar loans ranges from 1.0% to 1.875 %. Serologicals is required to pay a commitment fee with respect to the unused amount of the revolving credit facility ranging from 0.225% to 0.450 %. The applicable margins and commitment fees are subject to adjustment on future adjustment dates based on the consolidated leverage ratio of Serologicals on the adjustment dates. The Company’s obligations under the credit agreement have been guaranteed by all of its U.S. subsidiaries. The Company’s obligations and the subsidiaries’ guarantees are secured by substantially all of their respective personal property. The credit agreement contains certain financial covenants that require the maintenance of a minimum fixed charge coverage ratio and maximum leverage and senior debt ratios. Furthermore, under the terms of the credit agreement there are covenants imposing limitations on indebtedness, liens, acquisitions and other investments, disposition of property, repurchasing common stock and our ability to pay dividends.

The Company may prepay the indebtedness outstanding under the credit agreement at any time, in whole or in part, without premium or penalty. We believe the debt will be repaid simultaneously with the closing of the transaction contemplated by the Merger Agreement.

16

EX-99.3

Exhibit 99.3

Unaudited pro forma condensed consolidated financial data

The unaudited pro forma condensed consolidated financial data set forth below are based on the historical consolidated financial statements of Millipore Corporation (“Millipore”) and the historical consolidated financial statements of Serologicals Corporation (“Serologicals”), and adjustments described in the accompanying notes to the unaudited pro forma consolidated financial data. The unaudited pro forma condensed consolidated financial data is presented to give effect to (i) the issuance and sale of $565 million in aggregate principal amount of Millipore’s 3.75% convertible senior notes and €250 million ($303 million at an assumed exchange rate of $1.00 to €0.8255) in aggregate principal amount of Millipore’s 5.875% senior notes (collectively, the “Offerings”), and (ii) Millipore’s acquisition of Serologicals (the “Merger”). The unaudited pro forma condensed consolidated balance sheet combines the historical consolidated balance sheets of Millipore as of April 1, 2006 and Serologicals as of April 2, 2006, giving effect to the Offerings and the Merger as if they occurred on April 1, 2006. The unaudited pro forma condensed consolidated statements of operations combine the historical consolidated statements of operations of Millipore for the fiscal year ended December 31, 2005 and the fiscal quarter ended April 1, 2006 and of Serologicals for the fiscal year ended January 1, 2006 and the fiscal quarter ended April 2, 2006, giving effect to the Offerings and the Merger as if they occurred on January 1, 2005.

The pro forma condensed consolidated statements of operations reflect only pro forma adjustments expected to have a continuing impact on the combined results beyond 12 months from the consummation of the Offerings and the Merger and have not been adjusted to reflect any operating efficiencies that may be realized by Millipore as a result of the Merger. Millipore expects to incur certain charges and expenses related to integrating the operations of Millipore and Serologicals. Millipore is assessing the combined operating structure, business processes and circumstances that bear upon the operations, facilities and other assets of these businesses and is developing a combined strategic and operating plan. The objective of this plan will be to enhance productivity and efficiency of the combined operations. The nature of any integration-related charges and expenses may include provisions for severance and related costs, facility closures and other charges identified in connection with the development and implementation of the plan. The unaudited pro forma condensed consolidated statements of operations do not reflect such charges and expenses.

The unaudited pro forma condensed consolidated financial data are for illustrative purposes only, are hypothetical in nature and do not purport to represent what our results of operations, balance sheet or other financial information would have been if the Offerings and the Merger had occurred as of the dates indicated or what such results will be for any future periods. The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable, including an allocation of the purchase price based on an estimate of fair value, and exclude certain non-recurring charges as disclosed. These estimates are preliminary and are based on information currently available and could change significantly. The unaudited pro forma condensed consolidated financial data and accompanying notes should be read in conjunction with the historical consolidated financial statements, including the related notes, of Millipore included in our annual report on Form 10-K for the year ended December 31, 2005 and our quarterly report on Form 10-Q for the quarterly period ended April 1, 2006 and of Serologicals included in Exhibits 99.1 and 99.2 to this current report on Form 8-K/A.

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Unaudited pro forma condensed consolidated financial data

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(in thousands)

	Millipore April 1, 2006			Serologicals April 2, 2006			Pro forma
							Offerings Adjustments			Merger Adjustments			Total
Assets
Current assets
Cash and cash equivalents	$	566,299		$	43,061		$	860,877	(a)	$	(1,197,239	)(d)	$	256,592
											(13,600	)(e)
											(2,806	)(f)
Marketable securities		84,944			—									84,944
Accounts receivable, net		215,259			36,048									251,307
Inventories		166,249			67,715						32,700	(g)		266,664
Assets held for sale		—			22,017									22,017
Deferred income taxes and other current assets		77,780			13,260									91,040
Total current assets		1,110,531			182,101			860,877			(1,180,945	)		972,564
Property, plant and equipment, net		385,681			66,327						27,700	(t)		479,708
Intangible assets, net		42,516			117,275						(117,275	)(h)		452,516
											973,822	(i)
Goodwill		84,154			244,756						(244,756	)(h)		1,071,576
											973,822	(i)
											13,600	(e)
Deferred income taxes and other assets		77,333			3,290			16,682	(a)		2,806	(f)		97,701
											(2,410	)(k)
Total assets	$	1,700,215		$	613,749		$	877,559		$	(117,458	)	$	3,074,065
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	81,006		$	13,322		$	—		$	—		$	94,328
Accrued liabilities and other		119,609			29,733						26,000	(m)		179,232
											2,580	(n)
											1,310	(v)
Current debt and capital lease obligations		—			792						277,316	(k)		278,108
Total current liabilities		200,615			43,847			—			307,206			551,668
Long-term debt		562,750			129,914			877,559	(a)		(129,914	)(k)		1,440,309
Capital lease obligations		—			447						(447	)(s)		—
Deferred income taxes		6,002			25,736						119,433	(n)		151,171
Other liabilities		54,877			932						447	(s)		56,256
Total liabilities		824,244			200,876			877,559			296,725			2,199,404
Commitments and contingencies		—			—									—
Minority interest		3,765			—									3,765
Shareholders’ equity
Common stock		53,123			386						(386	)(o)		53,123
Additional paid-in capital		175,830			350,302						(350,302	)(o)		175,830
Retained earnings (deficit)		644,233			96,919						(96,919	)(o)		642,923
											(1,310	)(v)
Accumulated other comprehensive (loss) income		(980	)		(34,734	)					34,734	(o)		(980	)
Total shareholders’ equity		872,206			412,873			—			(414,183	)		870,896
Total liabilities and shareholders’ equity	$	1,700,215		$	613,749		$	877,559		$	(117,458	)	$	3,074,065

See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

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Unaudited pro forma condensed consolidated financial data

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

	Twelve Months Ended						Pro forma
	Millipore December 31, 2005			Serologicals January 1, 2006			Offerings Adjustments			Merger Adjustments			Total
Net sales	$	991,031		$	274,945		$	—		$	(1,088	)(r)	$	1,264,888
Cost of sales		472,023			122,798						(1,088	)(r)		596,098
											2,365	(u)
Selling, general and administrative		304,696			85,141						1,092	(u)		390,929
Research and development		66,052			17,199						182	(u)		83,433
Purchased intangibles amortization		4,333			7,206						57,715	(j)		62,048
											(7,206	)(h)
Purchased in-process research and development		3,149												3,149
Restructuring and other					38,025									38,025
Operating income		140,778			4,576			—			(54,148	)		91,206
Other income (expense)		—			(597	)								(597	)
Interest income		3,466			1,782						—			5,248
Interest expense		(6,711	)		(7,361	)		(39,744	)(b)		6,175	(l)		(51,397	)
								(2,761	)(c)		(995	)(f)
Income before income taxes and minority interest		137,533			(1,600	)		(42,505	)		(48,968	)		44,460
Provision for (benefit from) income taxes		57,365			(2,416	)		(16,364	)(p)		(18,853	)(p)		19,732
Net income	$	80,168		$	816		$	(26,141	)	$	(30,115	)	$	24,728
Earnings per share
Basic	$	1.57		$	0.02								$	0.49
Diluted	$	1.55		$	0.02								$	0.48
Weighted average shares outstanding
Basic		50,953			34,729						(34,729	)(q)		50,953
Diluted		51,659			35,195						(35,195	)(q)		51,659

See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

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Unaudited pro forma condensed consolidated financial data

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS — (CONTINUED)

(in thousands, except per share data)

	Three Months Ended						Pro forma
	Millipore April 1, 2006			Serologicals April 2, 2006			Offerings Adjustments			Merger Adjustments			Total
Net sales	$	268,415		$	55,028		$	—		$	(340	)(r)	$	323,103
Cost of sales		125,772			23,412						(340	)(r)		149,510
											666	(u)
Selling, general and administrative		80,854			19,888						307	(u)		101,049
Research and development		18,413			4,999						51	(u)		23,463
Purchased intangibles amortization		1,432			1,845						15,512	(j)		16,944
											(1,845	)(h)
Gain on sale of long-lived assets					(1,184	)								(1,184	)
Restructuring and other					845									845
Operating income		41,944			5,223			—			(14,691	)		32,476
Other income		—			223									223
Interest income		6,892			312						—			7,204
Interest expense		(4,193	)		(1,812	)		(9,937	)(b)		1,539	(l)		(15,261	)
								(690	)(c)		(168	)(f)
Income before income taxes and minority interest		44,643			3,946			(10,627	)		(13,320	)		24,642
Provision for income taxes		10,015			1,105			(4,091	)(p)		(5,128	)(p)		1,901
Minority interest		97			—									97
Net income	$	34,531		$	2,841		$	(6,536	)	$	(8,192	)	$	22,644
Earnings per share
Basic	$	0.66		$	0.08								$	0.43
Diluted	$	0.64		$	0.08								$	0.42
Weighted average shares outstanding
Basic		52,713			34,129						(34,129	)(q)		52,713
Diluted		53,883			34,437						(34,437	)(q)		53,883

See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

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Unaudited pro forma condensed consolidated financial data

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share data)

1.    On July 14, 2006, Millipore completed the acquisition of all of the outstanding shares of Serologicals common stock at a cash price of $31.55 per share. The total purchase price, including outstanding Serologicals debt assumed and estimated transaction costs, was $1,474,555. Under the purchase method of accounting, the assets and liabilities of Serologicals will be recorded at their fair values as of the acquisition date and added to those of Millipore. The reported financial condition and results of operations of Millipore after completion of the Merger will reflect these values, but will not be restated retroactively to reflect historical financial position or results of operations of Serologicals. For purpose of the pro forma purchase price calculation presented below, the 4.75% Convertible Senior Subordinated Debentures (“Serologicals Convertibles”) are reflected at closing at the conversion value of $31.55 for each share of Serologicals common stock represented by Serologicals Convertibles. The conversion value is payable currently, at the election of the holders thereof.

The purchase price is determined as follows:

Total cash consideration to be paid	$	1,464,741
Estimated transaction costs incurred by Millipore		9,814
Estimated total purchase price		1,474,555
Conversion value of Serologicals Convertibles		(277,316	)
Amount paid upon closing	$	1,197,239

For purpose of this pro forma presentation, the estimated purchase price has been allocated, on a preliminary basis, to the acquired tangible and intangible assets and liabilities based on their estimated fair values as of April 1, 2006 as follows:

Current assets	$	201,201
Property, plant and equipment and other long-term assets		94,907
Current liabilities		(72,427	)
Conversion value of Serologicals Convertibles		(277,316	)
Other long-term liabilities		(146,548	)
Goodwill and other intangible assets		1,397,422
Total	$	1,197,239

The amount allocated to acquired goodwill and other identifiable intangible assets has been attributed to the following categories based on preliminary valuation:

Patented and unpatented technology	$	118,200
Trademarks and trade names		88,200
Customer relationships		195,800
In-process research and development		7,800
Goodwill		987,422
Total	$	1,397,422

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Unaudited pro forma condensed consolidated financial data

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

(in thousands, except per share data)

The identifiable intangible assets, other than goodwill, will be amortized over their estimated useful lives ranging from five to twenty-five years in proportion to the anticipated economic benefits attributable to them.

The purchase price allocation above is preliminary and is presented for pro forma information only. Actual purchase price allocation will be based on the fair values of assets acquired, including current assets, fixed assets and identifiable intangible assets, and the fair values of the liabilities assumed as of July 14, 2006. The excess of the purchase price over the fair values of assets and liabilities acquired will be allocated to goodwill and will not be amortized in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.” The purchase price allocation will remain preliminary until Millipore’s advisors complete a valuation of inventories, property, plant and equipment and significant identifiable intangible assets acquired and determines the fair values of other assets and liabilities acquired. The final amounts allocated to assets and liabilities acquired could differ significantly from the amounts presented in the unaudited pro forma condensed consolidated financial statements.

2.    Millipore funded the Merger with a combination of cash on hand and proceeds from two private placement offerings pursuant to Rule 144A and Regulation S of the Securities Act of 1933. In June 2006, Millipore issued and sold $565,000 in aggregate principal amount of 3.75% convertible senior notes (“Millipore Convertibles”) that mature on June 1, 2026. Interest will be payable semi-annually in arrears on June 1 and December 1 of each year. Commencing with the six-month period beginning December 1, 2011, contingent interest will accrue at the rate of 0.175% of the average trading price of the Millipore Convertibles under certain conditions as specified in the indenture. The Millipore Convertibles will be convertible into cash for the principal amount and shares of Millipore common stock for the conversion premium, if any, based on an initial conversion rate of 11.0485 shares per $1,000 principal amount (which represents an initial conversion price of approximately $90.51 per share) under certain conditions. On or after December 1, 2011, Millipore will have the option to redeem the Millipore Convertibles, in whole or in part, for cash, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest. On each of December 1, 2011, June 1, 2016 and June 1, 2021, holders of the Millipore Convertibles will have the option to require Millipore to purchase all or a portion of their notes at a purchase price equal to 100% of the principal amount, plus accrued and unpaid interest. Total proceeds received from this offering were $551,639, net of initial purchasers’ discounts and other issuance costs and fees.

Also in June 2006, the Company completed the sale on the Regulated Market of the Irish Stock Exchange, pursuant to Rule 144A and Regulation S, of €250,000 ($302,847 at an exchange rate of $1.00 to €0.8255) of 5.875% senior notes (the “Euro Notes”) that mature on June 30, 2016. The Euro Notes were sold at a price equal to 99.611% of face value less the initial purchasers’ discounts. Holders of the Euro Notes have the right to require the Company to purchase all or a portion of their Euro Notes upon a change of control at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest. The Company may redeem the Euro Notes, in whole or in part at any time or from time to time, at a redemption price equal to 100% of the principal amount to be redeemed plus the applicable “make-whole premium.” Interest is payable semi-annually in arrears on June 30 and December 30. Total proceeds received from this offering were $309,238, net of discounts and other issuance costs and fees.

3.    The following describes the pro forma adjustments related to the Offerings and the Merger made in the accompanying unaudited pro forma condensed consolidated balance sheet as of April 1, 2006 and the unaudited condensed consolidated statements of operations for the fiscal year ended December 31, 2005 and the first fiscal quarter ended April 1, 2006:

a. To record the proceeds, the related deferred financing costs, and the debt, net of discounts, from the Offerings.

b. To record estimated interest expense on the Millipore Convertibles and the Euro Notes for the fiscal year ended December 31, 2005 and the first fiscal quarter ended April 1, 2006, respectively.

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Unaudited pro forma condensed consolidated financial data

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

(in thousands, except per share data)

c. To give effect to the amortization of deferred financing costs arising from the Offerings. Deferred financing costs of $13,361 for the Millipore Convertibles are amortized over 5.5 years, the term of the put option held by purchasers of the Millipore Convertibles. Deferred financing costs of $3,321 related to the Euro Notes are amortized over 10 years.

d. To record the cash purchase price, including estimated transaction costs incurred by Millipore, paid or otherwise due upon closing of the Merger.

e. To reduce Serologicals cash balance for estimated transaction costs incurred directly in connection with the Merger.

f. To reflect the payment of estimated fees associated with the amendment to Millipore’s existing revolving credit agreement in the pro forma balance sheet and to reflect the related amortization of such deferred financing costs in the pro forma statements of operations.

g. To record the estimated fair value adjustment to the carrying value of Serologicals inventory balance in purchase accounting. The related amortization expense has not been included as an adjustment to cost of sales in the pro forma statement of operations because its impact is not expected to extend beyond the next twelve months.

h. To eliminate the intangible asset and goodwill balances and related amortization expense from Serologicals historical consolidated balance sheet and statements of operations.

i. To record the estimated fair values of acquired identifiable intangible assets and goodwill. No pro forma expense has been included in the pro forma statements of operations for the write-off of in-process research and development cost as it is not considered a recurring item.

j. To reflect the estimated amortization expense related to the acquired identifiable intangible assets arising from the Merger.

k. To reclassify as current liabilities the conversion value of Serologicals Convertibles at the $31.55 per share conversion price which becomes payable at the option of the holders thereof as of the date of the Merger. In addition, the related unamortized deferred financing cost is written off as such debentures are payable upon demand by the holders.

l. To eliminate the interest expense on Serologicals Convertibles assuming that the debt is repaid as of January 1, 2005.

m. To accrue for projected costs in connection with projected Serologicals’ facility closures, employee terminations and change in control payments.

n. To record deferred tax liabilities in connection with fair value adjustments in purchase accounting.

o. To eliminate Serologicals historical shareholders’ equity account balances in purchase accounting.

p. To reflect the estimated income tax effect of pro forma adjustments at an estimated tax rate of 38.5%.

q. To eliminate weighted average shares of Serologicals common stock.

r. To eliminate sales from Millipore to Serologicals.

s. To reclassify Serologicals capital lease obligations balance to other long term liabilities to be consistent with Millipore’s condensed consolidated balance sheet presentation.

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MILLIPORE CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS — (CONTINUED)

(In thousands, except per share data)

t. To reflect estimated fair value adjustments for property, plant and equipment based on preliminary valuation using best available information.

u. To reflect estimated incremental depreciation expense from preliminary fair value adjustments for property, plant and equipment, assuming allocation of 65%, 30% and 5%, respectively, to cost of sales, selling, general and administrative expenses and research and development expenses.

v. To accrue for the commitment fees and expenses associated with a bridge loan commitment the Company secured in connection with the acquisition of Serologicals. This is not reflected in the pro forma statements of operations as they are not expected to recur.

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