-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UV3Nniqk/mJDIVrTPiu5d3ABm2YiG1OwYr5qO6J0eKJJz52b00FjugthzMUj78n8 f/l3IfAQ2xeG7Sz5q4cDkw== 0000071241-05-000035.txt : 20051109 0000071241-05-000035.hdr.sgml : 20051109 20051109162849 ACCESSION NUMBER: 0000071241-05-000035 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051001 FILED AS OF DATE: 20051109 DATE AS OF CHANGE: 20051109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW BRUNSWICK SCIENTIFIC CO INC CENTRAL INDEX KEY: 0000071241 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY APPARATUS & FURNITURE [3821] IRS NUMBER: 221630072 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06994 FILM NUMBER: 051190409 BUSINESS ADDRESS: STREET 1: 44 TALMADGE RD STREET 2: PO BOX 4005 CITY: EDISON STATE: NJ ZIP: 08818-4005 BUSINESS PHONE: 9082871200 MAIL ADDRESS: STREET 1: 44 TALMADGE ROAD STREET 2: PO BOX 4005 CITY: EDISON STATE: NJ ZIP: 08818-4005 10-Q 1 form10q3q05.txt FORM 10-Q 3Q05 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarter Ended October 1, 2005 Commission File No. 0-6994 ------ NEW BRUNSWICK SCIENTIFIC CO., INC. State of Incorporation - New Jersey E. I. #22-1630072 ---------- ----------- 44 Talmadge Road, Edison, N.J. 08818-4005 Registrant's Telephone Number: 732-287-1200 ------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days. Yes X No __ -- Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes No X - Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X - There are 9,002,973 Common shares outstanding as of October 26, 2005. 1 NEW BRUNSWICK SCIENTIFIC CO., INC. Index
PART I - FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Consolidated Balance Sheets - October 1, 2005 and December 31, 2004 3 Consolidated Statements of Operations - Three and Nine Months Ended October 1, 2005 and October 2, 2004 4 Consolidated Statements of Cash Flows - Nine Months Ended October 1, 2005 and October 2, 2004 5 Consolidated Statements of Comprehensive Income (Loss) - Three and Nine Months Ended October 1, 2005 and October 2, 2004 6 Notes to Unaudited Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 13 Item 3. Qualitative and Quantitative Disclosures about Market Risk 20 Item 4. Controls and Procedures 20 PART II Item 5. Other Information 21 Item 6. Exhibits and Reports and Form 8-K 21 Signatures 22 Exhibit 31(a) 23 Exhibit 31(b) 24 Exhibit 32 25
FORWARD-LOOKING STATEMENTS This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will" or words of similar meaning and include, but are not limited to, statements about the expected future business and financial performance of the Company. The forward-looking statements involve a number of risks and uncertainties, including but not limited to, changes in economic conditions, demand for the Company's products, pricing pressures, intense competition in the industries in which the Company operates, the need for the Company to keep pace with technological developments and timely respond to changes in customer needs, the Company's dependence on third party suppliers, the effect on foreign sales of currency fluctuations, acceptance of new products, the labor relations of the Company and its customers and other factors identified in the Company's Securities and Exchange Commission filings. Forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from these expectations and assumptions due to changes in global political, economic, business, competitive, market, regulatory and other factors. The Company undertakes no obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise. 2 PART I - FINANCIAL INFORMATION NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) (Unaudited) ASSETS ------ October 1, December 31, 2005 2004 ----------- ---------- Current Assets: Cash and cash equivalents $11,171 $10,846 Accounts receivable, net 9,672 11,332 Inventories: Raw materials and sub-assemblies 8,157 6,914 Work-in-process 2,664 1,366 Finished goods 3,314 3,859 ------- ------- Total inventories 14,135 12,139 Deferred income taxes 1,071 1,089 Prepaid expenses and other current assets 1,623 1,143 ------- ------- Total current assets 37,672 36,549 ------ ------ Property, plant and equipment, net 6,010 6,495 Goodwill 8,062 8,769 Other assets 1,878 1,982 ------ ----- Total assets $53,622 $53,795 ======= ====== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Current Liabilities: Current installments of long-term debt $ 1,687 $ 1,759 Accounts payable and accrued expenses 8,868 7,592 ------- ------- Total current liabilities 10,555 9,351 ------ ------- Long-term debt, net of current installments 5,438 6,022 Other liabilities 1,677 2,467 ------- ------- Total liabilities 17,670 17,840 Commitments and contingencies Shareholders' equity: Common stock, $0.0625 par; authorized 25,000,000 shares; issued and outstanding, 2005 - 9,001,120 and 2004 - 8,866,262 563 554 Capital in excess of par 53,390 52,793 Accumulated deficit (16,019) (17,263) Accumulated other comprehensive loss (1,970) (106) Notes receivable from exercise of stock options (12) (23) ------ ------ Total shareholders' equity 35,952 35,955 ------ ------ Total liabilities and shareholders' equity $53,622 $53,795 ====== ====== See notes to unaudited consolidated financial statements. 3 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
Three Months Ended Nine Months Ended Oct. 1, Oct. 2, Oct. 1, Oct. 2, 2005 2004 2005 2004 --------- ------------ --------- ------------ Restated(1) Restated(1) Net sales $ 16,137 $ 15,192 $ 47,425 $ 44,719 Operating costs and expenses: Cost of sales 9,352 9,223 28,425 26,797 Selling, general and administrative expenses 4,279 4,540 13,402 13,243 Research, development and engineering expenses 1,170 902 3,546 2,778 --------- ------------ --------- ------------ Total operating costs and expenses 14,801 14,665 45,373 42,818 --------- ------------ --------- ------------ Income from operations 1,336 527 2,052 1,901 Other income (expense): Interest income 69 22 180 57 Interest expense (86) (173) (267) (328) Other, net 34 (1) 55 (70) --------- ------------ --------- ------------ 17 (152) (32) (341) --------- ------------ --------- ------------ Income before income tax expense 1,353 375 2,020 1,560 Income tax expense 520 146 776 619 --------- ------------ --------- ------------ Net income $ 833 $ 229 $ 1,244 $ 941 ========= ============ ========= ============ Basic income per share $ 0.09 $ 0.03 $ 0.14 $ 0.11 ========= ============ ========= ============ Diluted income per share $ 0.09 $ 0.03 $ 0.14 $ 0.11 ========= ============ ========= ============ Basic weighted average number of shares outstanding 8,996 8,768 8,945 8,709 ========= ============ ========= ============ Diluted weighted average number of shares outstanding 9,048 8,899 9,003 8,857 ========= ============ ========= ============ (1)See Note 2, "Restatement of Consolidated Financial Statements" of the Notes to Unaudited Consolidated Financial Statements.
4 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Nine Months Ended Oct. 1, Oct. 2, 2005 2004 --------- ------------ Cash flows from operating activities: Restated(1) Net income $ 1,244 $ 941 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 959 1,052 Deferred income taxes 72 69 Change in fair value of interest rate swaps (187) (172) Change in related balance sheet accounts: Accounts and notes receivable 1,096 (182) Inventories (2,387) (1,554) Prepaid expenses and other current assets (541) (37) Other assets and goodwill (349) 75 Accounts payable and accrued expenses 1,224 281 Advance payments from customers 476 118 Other liabilities (675) (555) --------- ------------ Net cash provided by operating activities 932 36 --------- ------------ Cash flows used in investing activities: Additions to property, plant and equipment (592) (748) Proceeds from sale of equipment - 32 --------- ------------ Net cash used in investing activities (592) (716) --------- ------------ Cash flows from financing activities: Repayments of long-term debt (469) (620) Proceeds from issue of shares under stock purchase and option plans 500 538 Payments on notes receivable related to exercised stock options 11 11 --------- ------------ Net cash provided by (used in) financing activities 42 (71) --------- ------------ Net effect of exchange rate changes on cash (57) (3) --------- ------------ Net increase (decrease) in cash and cash equivalents 325 (754) Cash and cash equivalents at beginning of period 10,846 10,536 --------- ------------ Cash and cash equivalents at end of period $ 11,171 $ 9,782 ========= ============ Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 411 $ 488 Income taxes $ 750 $ 1,118 (1)See Note 2, "Restatement of Consolidated Financial Statements" of the Notes to Unaudited Consolidated Financial Statements.
5 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) (Unaudited)
Three Months Ended Nine months Ended Oct. 1, Oct. 2, Oct. 1, Oct. 2, 2005 2004 2005 2004 ------ ------------ -------- ------------ Restated(1) Restated(1) Net income $ 833 $ 229 $ 1,244 $ 941 Other comprehensive (loss) income: Foreign currency translation adjustment (198) (12) (1,884) 330 Change in fair value of interest rate swaps 21 - 20 - ------ ------------ -------- ------------ Comprehensive income (loss) $ 656 $ 217 $ (620) $ 1,271 ====== ============ ======== ============ (1)See Note 2, "Restatement of Consolidated Financial Statements" of the Notes to Unaudited Consolidated Financial Statements.
See notes to unaudited consolidated financial statements. 6 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Interim results: In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly, the financial position of the Company as of October 1, 2005 and the results of its operations for the three and nine months ended October 1, 2005 and October 2, 2004 and its cash flows for the nine months ended October 1, 2005 and October 2, 2004. Interim results may not be indicative of the results that may be expected for the year. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2004. Note 2 - Restatement of consolidated financial statements: On March 21, 2005, the Company announced that certain of its historical financial statements required restatement. Specifically, the Company determined that the restatement was required because of a misapplication of SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" as it applies to three interest rate swaps that were entered into in 1999 and 2004 to fix the interest rates on variable rate debt incurred primarily for acquisitions in 1999 and 2003. The interest rate swaps were not previously disclosed or accounted for and were not properly designated as effective cash flow hedges, as defined by SFAS No. 133 which went into effect on January 1, 2001. The accounting rules require that changes in the fair value of swaps not properly designated as effective cash flow hedges be recorded as a part of interest expense in each period's statement of operations. The required changes affected the previously filed financial statements for the years ended December 31, 2001, 2002 and 2003, as well as for the 2003 quarters and the 2004 quarters through October 2, 2004. The foregoing restatement adjustments did not affect the Company's reported cash and cash equivalents or income (loss) from operations in any of the above periods. 7 The following table presents the impact of the financial statement adjustments on the Company's previously reported consolidated statements of operations for the three and nine months ended October 2, 2004 (in thousands):
Three Months Ended October 2, 2004 Nine Months Ended October 2, 2004 reviously As Previously As Reported Adjustments(1) Restated Reported Adjustments(1) Restated ---------- --------------- ---------- ---------- --------------- ------------- Income from operations $ 527 $ - $ 527 $ 1,901 $ - $ 1,901 Other income (expense): Interest income 22 - 22 57 - 57 Interest expense (165) (8) (173) (500) 172 (328) Other expense, net (1) - (1) (70) - (70) --------- --------------- ---------- ---------- ------------- ------------ (144) (8) (152) (513) 172 (341) --------- --------------- ---------- --------- ------------- ------------ Income before income tax expense (benefit) 383 (8) 375 1,388 172 1,560 Income tax expense (benefit) 149 (3) 146 550 69 619 ---------- --------------- ---------- --------- ------------- ------------ Net income $ 234 $ (5) $ 229 $ 838 $ 103 $ 941 ========== =============== ========== ========= =============== ============= Basic income per share $ 0.03 $ 0.00 $ 0.03 $ 0.10 $ 0.01 $ 0.11 ========== =============== ========== ========== =============== ============= Diluted income per share $ 0.03 $ 0.00 $ 0.03 $ 0.09 $ 0.01 $ 0.11 ========== =============== ========== ========== =============== ============= Basic weighted average number of shares outstanding 8,768 8,768 8,768 8,709 8,709 8,709 ========== =============== ========== ========== =============== ============= Diluted weighted average number of shares outstanding 8,899 8,899 8,899 8,857 8,857 8,857 ========== =============== ========== ========== =============== ============= (1) Reflects adjustments to interest expense and related deferred tax benefit to correct for the misapplication of SFAS No. 133 as it applies to interest rate swaps entered into in 1999 and 2004 primarily to fix the interest rates on variable rate debt incurred for acquisitions in 1999 and 2003.
Note 3 - Interest rate swaps: On April 1, 2005 the Company put in place the required documentation as prescribed by SFAS No. 133 and designated its three interest rate swaps referred to in Note 2 above as effective interest rate hedges and will therefore avail itself of the hedge accounting rules for the remainder of the lives of the swaps. As such, the negative fair values of the swaps as of the designation date, which aggregated $146,000, will ultimately be recognized into income over the remaining lives of the interest rate swaps as ineffectiveness. Since April 1, 2005, the Company has measured and will continue to measure the ineffectiveness of the hedges based on the hypothetical derivative method as described in DIG Issue G-7. Hedge ineffectiveness measured each quarter will be recognized in operations. The effective changes in the fair value of the swaps subsequent to April 1, 2005 are shown as an increase or decrease in other comprehensive income on the Company's balance sheet in accordance with the requirements of SFAS No. 133. 8 At October 1, 2005 the remaining negative fair values of the swaps aggregated $76,000. During the three and nine months ended October 1, 2005 and October 2, 2004, respectively, the change in the fair value of the swap agreements recorded as an increase or (decrease) to interest expense amounted to $50,000 and $167,000, respectively, for the 2005 periods and $(8,000) and $172,000, respectively, for the 2004 periods. Note 4 - Income per share: Basic income per share is calculated by dividing net income by the weighted average number of shares outstanding. Diluted income per share is calculated by dividing net income by the sum of the weighted average number of shares outstanding plus the dilutive effect of stock options which have been issued by the Company using the treasury stock method. Antidilutive options are excluded from the calculation of diluted income per share. The dilutive effect of stock options for the three and nine month periods ended October 1, 2005 and October 2, 2004 is 52,000 and 58,000 shares, respectively, for the 2005 periods and 131,000 and 148,000 shares, respectively, for the 2004 periods. Stock options to purchase 154,000 shares of common stock are excluded from the income per share calculation for the three and nine month periods ended October 1, 2005, respectively, and stock options to purchase 15,000 shares of common stock are excluded from the income per share calculation for the three and nine month periods ended October 2, 2004, respectively, because their inclusion would be antidilutive. Note 5 - Long-term debt and credit agreement: The Company and Wachovia Bank, National Association (the "Bank") are parties to an agreement, which has had a number of amendments (the "Bank Agreement"), which has been extended to May 31, 2008, and which provides the Company with a credit facility for acquisitions, equipment loans, working capital and letters of credit, and foreign exchange transactions. The maturity of the outstanding debt incurred related to the acquisition portion of the credit facility with respect to a 1999 acquisition is December 1, 2006, and with respect to a 2003 acquisition is November 1, 2008. The maturity date of the outstanding debt incurred related to the equipment loan portion of the credit facility is November 1, 2008. There are no compensating balance requirements and any borrowings under the Bank Agreement bear interest at the Bank's prime rate less 125 basis points or LIBOR plus 125 basis points, at the discretion of the Company. At October 1, 2005, the Bank's prime rate was 6.75% and LIBOR was 3.86%. All of the Company's domestic assets, which are not otherwise subject to lien, have been pledged as security for any borrowings under the Bank Agreement. The Bank Agreement contains various business and financial covenants including among other things, a debt service ratio, a net worth covenant and a ratio of total liabilities to tangible net worth. The Company is in compliance with its covenants pursuant to the Bank Agreement at October 1, 2005. 9 The following amounts were outstanding and available under the Bank Agreement (in thousands): October 1, 2005 December 31, 2004 ------------------------ ------------------- Total Line Available Outstanding Outstanding ------- --------- ----------- ----------- Acquisitions $10,000 $ 4,739 $5,261 (a) $5,634(a) Equipment loans 2,500 1,978 522 (b) 646(b) Working capital and letters of credit 5,000 4,971 29 (c) 9(c) Foreign exchange transactions 10,000 10,000 - - ------ ------ ------ ------ $27,500 $21,688 $5,812 $6,289 ====== ====== ===== ===== _____________________ (a) $4,154,000 in 2005 and $4,366,000 in 2004 at fixed interest of 8% per annum and $1,107,000 in 2005 and $1,268,000 in 2004 at fixed interest of 4.46% per annum through the use of interest rate swap agreements (b) Interest fixed at 4.14% per annum through the use of an interest rate swap agreement (c) Letters of credit At October 1, 2005 and December 31, 2004, the interest rate swaps referred to above had aggregate negative fair values of $76,000 and $264,000, respectively, and are included in Other Liabilities in the accompanying consolidated balance sheets. The interest rate swaps have the same notional values as the related debt and expire on the same dates as the related debt. In November 1999, the Company issued notes in the amount of 250,000 ($392,500 at the date of acquisition) in connection with the acquisition of DJM Cryo-Research Group. The notes bear interest at 6%. Accrued interest is payable annually and principal is payable in five equal annual installments which commenced in November 2003. At October 1, 2005 and December 31, 2004, the balance due on the notes was 150,000 ($265,000) and 150,000 ($288,000), respectively. In November 2003, the Company issued notes in the amount of 975,000 ($1,645,000 at the date of acquisition) in connection with the acquisition of RS Biotech. The notes bear interest, payable semi-annually at the lower of 6% or the base rate of the Bank of Scotland. Principal is payable 487,500 on the first and second anniversary, respectively, of the acquisition. At October 1, 2005 and December 31, 2004, the balance due on the notes was 487,500 ($860,000) and 487,500 ($936,000), respectively. The Company is a party to first and second mortgages on the facility of the Company's Netherlands subsidiary, which bear interest of 5.50% and 5.45%, respectively, per annum. During the terms of the mortgages, the Company is obligated to make monthly payments of interest and quarterly payments of principal. At October 1, 2005, $89,000 and $115,000 was outstanding under the first and second mortgages, respectively, and at December 31, 2004, $124,000 and $153,000 was outstanding under the first and second mortgages, respectively. Each mortgage requires 80 equal quarterly payments of principal. 10 Note 6 - Shareholders' Equity: At October 1, 2005, the Company has stock-based employee compensation plans, which it accounts for in accordance with the provisions of Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations. As such, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeds the exercise price. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The Company has adopted the disclosure standards of Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation", which requires the Company to provide pro forma net income and pro forma earnings per share disclosures for employee stock option grants made in 1995 and future years as if the fair-value-based method of accounting for stock options as defined in SFAS No. 123 had been applied. The following table illustrates the effect on net income and per share amounts if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation (in thousands, except per share amounts):
Three Months Ended Nine Months Ended Oct. 1, Oct. 2, Oct. 1, Oct. 2, 2005 2004 2005 2004 ----- ------------ ------ ------------ Restated(1) Restated(1) Net income as reported $ 833 $ 229 $1,244 $ 941 Deduct: Total stock-based employee compensation expense determined under fair value based method, net of related tax effects 59 61 232 218 ----- ------------ ------ ------------ Pro forma net income $ 774 $ 168 $1,012 $ 723 ===== ============ ====== ============ Income per share: Basic-as reported $0.09 $ 0.03 $ 0.14 $ 0.11 ===== ============ ====== ============ Basic-pro forma $0.09 $ 0.02 $ 0.11 $ 0.08 ===== ============ ====== ============ Diluted-as reported $0.09 $ 0.03 $ 0.14 $ 0.11 ===== ============ ====== ============ Diluted-pro forma $0.09 $ 0.02 $ 0.11 $ 0.08 ===== ============ ====== ============ (1)See Note 2, "Restatement of Consolidated Financial Statements" of the Notes to Unaudited Consolidated Financial Statements. 11
The fair value of each stock option granted during the period is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:
Three Months Ended Nine Months Ended Oct. 1, Oct. 2, Oct. 1, Oct. 2, 2005 2004 2005 2004 ---- ---- ------- ------- Expected life (years) N/A N/A 6.0 6.0 Expected volatility N/A N/A 40.35% 51.07% Expected dividend yield N/A N/A - - Risk-free interest rate N/A N/A 3.99% 4.85% Weighed average fair value of options granted during the period N/A N/A $ 6.14 $ 6.07
Note 7 - Pension plan: Components of net periodic benefit cost for the three and nine months ended October 1, 2005 and October 2, 2004 are as follows (in thousands):
Three Months Ended Nine Months Ended Oct. 1, Oct. 2, Oct. 1, Oct. 2, 2005 2004 2005 2004 ------ ------ ------ ------ Service cost $ 88 $ 95 $ 264 $ 285 Interest cost 124 120 372 360 Expected return on plan assets (132) (118) (396) (351) Amortization of net obligation 5 5 15 15 Amortization of prior service costs (1) (1) (3) (3) Amortization of net loss 48 54 144 162 ------ ------ ------ ------ Net periodic pension cost $ 132 $ 155 $ 396 $ 468 ====== ====== ====== ======
The Company previously disclosed in its financial statements for the year ended December 31, 2004, that it expects to contribute $1,022,000 to its pension plan in 2005. As of October 1, 2005, $767,000 of contributions have been made. The Company has a defined contribution plan for its U.S. employees, with a specified matching Company contribution. The expense to the Company for the three and nine months ended October 1, 2005 and October 2, 2004 was $35,000 and $118,000, respectively, for the 2005 periods and $34,000 and $107,000, respectively, for the 2004 periods. 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following is Management's Discussion and Analysis of significant factors that have affected the Company's operating results and financial condition during the three and nine month periods ended October 1, 2005 and October 2, 2004, respectively, which should be read in conjunction with the Company's December 31, 2004 Form 10-K. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS As further described in Note 2 of the Notes to Unaudited Consolidated Financial Statements, on March 21, 2005, the Company announced that certain of its historical 2004 and earlier financial statements required restatement. Consequently, Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended October 2, 2004 reflect these restated results. Specifically, the Company determined that the restatement was required because of a misapplication of SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" as it applies to three interest rate swaps that were entered into in 1999 and 2004 to fix the interest rates on variable rate debt incurred primarily for acquisitions in 1999 and 2003. The required changes affected the previously filed financial statements for the years ended December 31, 2001, 2002 and 2003 as well as for the 2003 quarters and the 2004 quarters through October 2, 2004. The foregoing restatement adjustments did not affect the Company's reported cash and cash equivalents, or related cash flows, or income (loss) from operations in any of the above periods. Results of Operations --------------------- EXECUTIVE OVERVIEW - ------------------- The Company is a leading provider of a wide variety of research equipment and scientific instruments for the life sciences used to create, maintain and control the physical and biochemical conditions required for the growth, detection and storage of microorganisms. The Company's products are used for medical, biological, chemical and environmental research and for the commercial development of antibiotics, proteins, hormones, enzymes, monoclonal antibodies, agricultural products, fuels, vitamins, vaccines and other substances. The Company sells its equipment to pharmaceutical companies, agricultural and chemical companies, other industrial customers engaged in biotechnology, and to medical schools, universities, research institutes, hospitals, private 13 laboratories and laboratories of federal, state and municipal government departments and agencies in the United States. While only a small percentage of the Company's sales are made directly to United States government departments and agencies, its domestic business is significantly affected by government expenditures and grants for research to educational research institutions and to industry. The Company also sells its equipment both directly (primarily in Western Europe) and through scientific equipment dealers to foreign companies, institutions and governments. Foreign sales may be affected by U.S. export control regulations applicable to scientific equipment. Fisher Scientific, the Company's largest customer, is the exclusive U.S. distributor of the Company's C-Line and I-Series biological shakers and is the exclusive dealer for the Company's CO2 incubators in the U.S. Fisher Scientific is also the exclusive distributor of the Company's C-Line shakers in certain European countries and has a broader distribution arrangement with the Company in Canada and in France. NET SALES - ---------- The following table summarizes consolidated backlog, net orders and net sales for the three and nine months ended October 1, 2005 and October 2, 2004 (in thousands of dollars):
Three Months Ended October 1, October 2, (Decrease) % 2005 2004 Increase Change ------- ------- ---------- ------- Backlog - beginning $ 9,005 $ 9,714 $ (709) (7.3) Add net orders received 17,967 14,800 3,167 21.4 Less net sales 16,137 15,192 945 6.2 ------- ------- ---------- Backlog - ending $10,835 $ 9,322 $ 1,513 16.2 ======= ======= ==========
Nine Months Ended October 1, October 2, (Decrease) % 2005 2004 Increase Change ------- ------- ---------- ------- Backlog - beginning $ 8,376 $ 9,018 $ (642) (7.1) Add net orders received 49,884 45,023 4,861 10.8 Less net sales 47,425 44,719 2,706 6.1 ------- ------- ---------- Backlog - ending $10,835 $ 9,322 $ 1,513 16.2 ======= ======= ==========
Net sales increased $945,000 or 6.2% to $16,137,000 for the three months ended October 1, 2005 from $15,192,000 in the prior year period with international sales increasing 11.8% while domestic sales remained flat. Due to the strengthening of the dollar during the quarter, the effect of foreign currency translation negatively affected sales during the quarter by $78,000 when compared with the third quarter of 2004. For the nine months ended October 1, 2005, net sales increased $2,706,000 or 6.1% to $47,425,000 from $44,719,000 for the first nine months of 2004. The overall increase in sales for the 2005 quarter and nine month periods was due principally to higher shipments of fermentation equipment, ultra low temperature freezers and CO2 incubators. Also, the effect of foreign currency translation increased sales by $342,000 during 14 the 2005 nine month period. For the 2005 nine month period sales in the U.S. declined 1.6% due to the slowdown during the first half of the year in purchases of research equipment by industry and government funded enterprises while international sales increased 12.3%. Orders during the 2005 three and nine month periods increased 21.4% and 10.8%, respectively, and backlog increased 16.2%. The increase in backlog is attributable to an increase in orders for the Company's fermentation and freezer products during the last three months. GROSS MARGIN - ------------- The following table shows gross profit and gross margin for the three and nine months ended October 1, 2005 and October 2, 2004 (in thousands of dollars):
Three Months Ended Nine Months Ended October 1, October 2, October 1, October 2, 2005 2004 2005 2004 -------- -------- -------- -------- Net sales $16,137 $15,192 $47,425 $44,719 Cost of sales 9,352 9,223 28,425 26,797 -------- -------- -------- -------- Gross profit $ 6,785 $ 5,969 $19,000 $17,922 ======== ======== ======== ======== Gross margin 42.0% 39.3% 40.1% 40.1% ======== ======== ======== ========
The increase in gross margin to 42.0% for the 2005 third quarter from 39.3% in the third quarter of 2004 was due primarily to (i) a more favorable product mix; (ii) most of the sales increase being direct sales to end-users for which the Company realizes greater margins than on sales to distributors and (iii) greater absorption of overhead due to the increase in volume. For the nine months, gross margin of 40.1% equaled the margin realized for the comparable 2004 period. However, margins of the Company's U.S. operations declined slightly due to the higher level of export sales through dealer organizations which carry lower margins than direct sales and competitive discounting, offset by higher margins realized by the Company's European sales subsidiaries and greater absorption of overhead due to the increase in volume. SELLING, GENERAL AND ADMINISTRATIVE - -------------------------------------- Selling, general and administrative expenses decreased $261,000 or 5.7% to $4,279,000 during the 2005 quarter from $4,540,000 during the third quarter of 2004 and increased $159,000 or 1.2% to $13,402,000 during the nine months ended October 1, 2005 from $13,243,000 for the first nine months of 2004. The decrease during the third quarter of 2005 was primarily due to the fact that expenses for the third quarter of 2004 included approximately $346,000 of severance costs related to the Company's European Managing Director. The increase for the nine month period ended October 1, 2005 from the comparable period of 2004 of $159,000 was primarily due to increases of $206,000 related to complying with SOX 404 and $187,000 due to the effect of foreign currency translation, offset by the reduction from the 2004 $346,000 severance described above. 15 RESEARCH, DEVELOPMENT AND ENGINEERING - ---------------------------------------- Research, development and engineering expenses increased $268,000 or 29.7% to $1,170,000 during the 2005 third quarter from $902,000 during the comparable 2004 quarter. For the 2005 nine months, expenses increased $768,000 or 27.6% to $3,546,000 from $2,778,000 for the first nine months of 2004. The increases for both periods are due to the Company's new product development program, primarily the cost of outsourcing of certain engineering efforts, the cost of prototypes and the addition of personnel in order to meet an aggressive development schedule. INTEREST INCOME - --------------- Interest income increased to $69,000 during the 2005 quarter from $22,000 during the third quarter of 2004 and increased to $180,000 during the 2005 nine months from $57,000 for the first nine months of 2004 due primarily to rising interest rates on invested cash. INTEREST EXPENSE - ----------------- Interest expense decreased to $86,000 during the quarter ended October 1, 2005 from $173,000 for the third quarter of 2004 due to a lower level of average outstanding debt during the 2005 quarter as well as the positive effect of the change in the fair value of interest rate swaps of $8,000 in 2004 (increase in interest expense) versus $50,000 decrease in interest expense in the 2005 quarter. For the nine month period ended October 1, 2005 interest expense decreased to $267,000 from $328,000 for the comparable 2004 period due to a lower level of average outstanding debt. The positive effect of interest rate swaps amounted to $167,000 in the 2005 nine month period compared with $172,000 in the 2004 period. OTHER INCOME (EXPENSE), NET - ------------------------------ The following table details other income (expense), net for the three and nine month periods ended October 1, 2005 and October 2, 2004 (in thousands):
Three Months Ended Nine Months Ended Oct. 1, Oct. 2, Oct. 1, Oct. 2, 2005 2004 2005 2004 ------ ------ ------ ------ Gain on foreign currency transactions (a) $ 45 $ 10 $ 93 $ - Bank fees (9) (11) (30) (34) Gain (loss) on sale of fixed assets - 2 - (28) Other, net (2) (2) (8) (8) ------ ------ ------ ------ Total other income (expense), net $ 34 $ (1) $ 55 $ (70) ====== ====== ====== ====== (a) Realized foreign exchange gains and losses which relate primarily to the settlement of purchases in the normal course of business between the Company's United States and European operating companies. 16
INCOME TAX EXPENSE - -------------------- For the quarter and nine months ended October 1, 2005, the Company's expected effective tax rate for the year, based on projected U.S. and foreign results, amounted to 38.4%. The decrease in the Company's effective income tax rate from 38.9% and 39.7% for the quarter and first nine months of 2004, respectively, is due to the higher ratio of income in 2005 from the Company's European subsidiaries to its total income and the related effect of lower foreign income tax rates than the Company's effective U.S. income tax rate. FINANCIAL CONDITION ------------------- LIQUIDITY AND CAPITAL RESOURCES ------------------------------- CONTRACTUAL OBLIGATIONS The Company's contractual obligations and commitments principally include obligations associated with its outstanding indebtedness and future minimum operating lease obligations as set forth in the following table:
Payments Due by Period (In thousands) -------------- Contractual obligations: Less than 1-3 4-5 More than Total 1 Year Years Years 5 Years ------- ------- ------ ------ -------- Long-term debt, obligations (a) $ 7,125 $ 1,687 $5,427 $ 11 $ - Operating lease obligations (b) 3,397 843 1,417 565 572 Purchase obligations(c) 6,592 6,185 407 - - Other long-term liabilities (d) 265 - 265 - - ------- ------- ------ ------ -------- Total contractual cash Obligations $17,379 $ 8,715 $7,516 $ 576 $ 572 ======= ======= ====== ====== ======== (a) Consists primarily of debt incurred for acquisitions financed under the Company's Bank Agreement and of notes due to the sellers of businesses acquired by the Company. (b) Primarily reflects (on a gross basis before sublet income) lease obligations for five premises in the United Kingdom, two of which have been sublet. Both of the subleased premises have been sublet for the entire terms of their leases. One has a lease expiration date of 2014 and an annual rental of 99,750 ($176,000 at October 1, 2005). The second sublet premises has a lease expiration date of September 28, 2009 and an annual rental of 45,000 ($79,000 at October 1, 2005). (c) Primarily includes commitments for raw materials and services related to the Company's production of equipment at its various manufacturing facilities. (d) Represents a contingent liability for an earnout related to the acquisition of RS Biotech provided a minimum number of units of CO2 Incubators are sold. The Company believes that the payment of such additional consideration is determinable beyond a reasonable doubt and as such has previously recorded the amount as a liability and as additional purchase price.
17 OPERATING ACTIVITIES - -------------------- Cash and cash equivalents increased $325,000 to $11,171,000 at October 1, 2005 from $10,846,000 at December 31, 2004. Net cash provided by operating activities amounted to $932,000. The overall factors primarily affecting operating cash flows during the nine month period ended October 1, 2005 were (i) actual net income of $1,244,000, which gets adjusted for non-cash items such as depreciation and amortization, deferred income taxes and a gain from the change in fair value of interest rate swaps, (ii) a decrease in accounts and notes receivable, (iii) an increase in accounts payable and accrued expenses and (iv) an increase in advance payments from customers partially offset by (i) an increase in inventories due primarily to preparation for the release of new products and to support the large increase in sales of CO2 incubators, (ii) an increase in prepaid expenses and other current assets, primarily insurance and taxes, and (iii) a decrease in other liabilities, primarily reduction in pension liability and a payment related to an earnout pertaining to the acquisition of R.S. Biotech in 2003. During the quarter ended October 1, 2005, the required number of units shipped in the first tier of the earnout was achieved. Accordingly, a payment of 150,000 (approximately $265,000) was made during the quarter. INVESTING ACTIVITIES - -------------------- In the 2005 period, net cash used in investing activities of $592,000 was as a result of normal additions to property, plant and equipment. FINANCING ACTIVITIES - --------------------- In the 2005 period, cash flows provided by financing activities totaled $42,000 and primarily consisted of proceeds from the issue of shares under stock purchase and option plans that totaled $500,000, which was partially offset by repayments of long-term debt of $469,000. BANK AGREEMENT - --------------- The Company and Wachovia Bank, National Association (the "Bank") are parties to an agreement, which has had a number of amendments (the "Bank Agreement"), which has been extended to May 31, 2008, and which provides the Company with a credit facility for acquisitions, equipment loans, working capital and letters of credit, and foreign exchange transactions. The maturity of the outstanding debt incurred related to the acquisition portion of the credit facility with respect to a 1999 acquisition is December 1, 2006, and with respect to a 2003 acquisition is November 1, 2008. The maturity date of the outstanding debt incurred related to the equipment loan portion of the credit facility is November 1, 2008. There are no compensating balance requirements and any borrowings under the Bank Agreement bear interest at the Bank's prime rate less 125 basis points or LIBOR plus 125 basis points, at the discretion of the Company. At October 1, 2005, the Bank's prime rate was 6.75% and LIBOR was 3.86%. 18 Since the Bank Agreement requires that all borrowings be at variable interest rates, the Bank provides the Company with a mechanism to fix interest rates on borrowings by use of interest rate swaps. At October 1, 2005 the Company had three interest rate swaps in place to fix the interest rates, primarily for debt incurred for acquisitions in 1999 and 2003. All of the Company's domestic assets, which are not otherwise subject to lien, have been pledged as security for any borrowings under the Bank Agreement. The Bank Agreement contains various business and financial covenants including among other things, a debt service ratio, a net worth covenant and a ratio of total liabilities to tangible net worth. The Company is in compliance with its covenants pursuant to the Bank Agreement at October 1, 2005 and currently anticipates to be in compliance with such covenants during the next 12 months. CRITICAL ACCOUNTING POLICIES - ------------------------------ No changes have been made in the Company's critical accounting policies during the nine months ended October 1, 2005. RECENTLY ISSUED ACCOUNTING STANDARD - ----------------------------------- In December, 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS No. 123R"). SFAS No. 123R addresses the accounting for transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise's equity instruments or that may be settled by the issuance of such equity instruments. SFAS No. 123R supersedes APB No. 25 and requires that such transactions be accounted for using a fair-value based method. SFAS No. 123R requires companies to recognize an expense for compensation cost related to share-based payment arrangements including stock options and employee stock purchase plans. The Company was required to implement the proposed standard no later than July 1, 2005. The cumulative effect of adoption, applied on a modified prospective basis, would be measured and recognized on July 1, 2005. On April 14, 2005, the Securities and Exchange Commission deferred the effective date of SFAS No. 123R to annual periods beginning after June 15, 2005, which would require the Company to adopt SFAS No. 123R effective January 1, 2006. The Company is currently evaluating option valuation methodologies and assumptions related to its stock compensation plans. Current estimates of option values using the Black Scholes method may not be indicative of results from valuation methodologies ultimately adopted. 19 Item 3. Quantitative and Qualitative Disclosures about Market Risk - ------------------------------------------------------------------- The information required by Item 3 has been disclosed in Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2004. There has been no material change in the disclosures regarding market risk. Item 4. Controls and Procedures ----------------------------------- The Company's Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report. There has been no change in the Company's internal control over financial reporting that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. 20 PART II - OTHER INFORMATION Item 5. Other Information - ---------------------------- Samuel Eichenbaum, Vice President, Finance, Chief Finanacial Officer and Treasurer, who will be 66 years old in November 2005, has indicated his intention to retire from the Company by the end of 2005 or early in 2006. Mr. Eichenbaum was appointed Chief Financial Officer in February 1985, Vice President, Finance in May 1990 and Treasurer in September 2003. The impact of Mr. Eichenbaum's planned retirement will not be material to the Company's financial position, results of operations or cash flows. Item 6. Exhibits and Reports on Form 8-K - ------------------------------------------ a) Exhibits: (3a) Restated Certificate of Incorporation, as amended is incorporated herein by reference to Exhibit (4) to the Registrant's Registration Statement on Form S-8 on file with the commission (No. 33-15606), and with respect to two amendments to said Restated Certificate of Incorporation, to Exhibit (4b) of Registrant's Registration Statement on Form S-8 (No. 33-16024). (3b) Restated By-Laws of the Company, as amended and restated is incorporated herein by reference to Exhibit (3b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2004. (3c) Rights Agreement dated as of October 31, 1999 between New Brunswick Scientific Co., Inc. and American Stock Transfer & Trust Company, as Rights Agent, which includes the Form of Right Certificate as Exhibit A and the Summary of Terms of the Rights Agreement as Exhibit B is incorporated herein by reference to Registrant's Current Report on Form 8-K filed on October 29, 1999. (3d) Amendment to the Restated Certificate of Incorporation of the Company is incorporated herein by reference to Item 2 of Registrant's Proxy Statement filed with the Commission on or about April 13, 1999. (4) See the provisions relating to capital structure in the Restated Certificate of Incorporation, amendment thereto, incorporated herein by reference from the Exhibits to the Registration Statements identified in Exhibit (3) above. (10) New Brunswick Scientific Co., Inc. Employee Stock Purchase Plan, as amended, is incorporated herein by reference to Item 2 of Registrant's Proxy Statement filed with the Commission on April 17, 2005 21 31(a) Section 302 Certification - CEO 31(b) Section 302 Certification - CFO 32 Section 906 Certifications b) Reports on Form 8-K during the quarter ended October 1, 2005: i) Earnings press release for the three and nine months ended October 1, 2005. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NEW BRUNSWICK SCIENTIFIC CO., INC. ---------------------------------- (Registrant) Date: November 4, 2005 /s/ David Freedman ------------------ David Freedman Chairman and Chief Executive Officer Date: November 4, 2005 /s/ Samuel Eichenbaum --------------------- Samuel Eichenbaum Vice President, Finance, Chief Financial Officer and Treasurer (Principal Accounting Officer) 22 EX-31.1 2 ex31_1.txt EXHIBIT 31.1 - CEO SEC 302 CERTIFICATION EXHIBIT 31(A) CERTIFICATION I, David Freedman, certify that: 1. I have reviewed this quarterly report on Form 10-Q of New Brunswick Scientific Co., Inc. (the "Registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: November 4, 2005 /s/ David Freedman -------------------- Chairman and Chief Executive Officer 23 EX-31.2 3 ex31_2.txt EXHIBIT 31.1 CFO SEC 302 CERTIFICATION EXHIBIT 31(B) CERTIFICATION I, Samuel Eichenbaum, certify that: 1. I have reviewed this quarterly report on Form 10-Q of New Brunswick Scientific Co., Inc. (the "Registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: November 4, 2005 /s/ Samuel Eichenbaum ----------------------- Vice President, Finance, Chief Financial Officer and Treasurer 24 EX-32 4 ex32.txt EXHIBIT 32 CEO & CFO SEC 906 CERTIFICATION EXHIBIT 32 CERTIFICATIONS -------------- I, David Freedman, hereby certify that the periodic report being filled herewith containing financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (16 U.S. C. 78m or 78o(d)) and that the information contained in said periodic report fairly presents, in all material respects, the financial condition and results of operations of New Brunswick Scientific Co., Inc. for the period covered by said periodic report. November 4, 2005 /s/ David Freedman -------------------- Name: David Freedman Chairman and Chief Executive Officer I, Samuel Eichenbaum, hereby certify that the periodic report being filled herewith containing financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (16 U.S. C. 78m or 78o(d)) and that the information contained in said periodic report fairly presents, in all material respects, the financial condition and results of operations of New Brunswick Scientific Co., Inc. for the period covered by said periodic report. November 4, 2005 /s/ Samuel Eichenbaum --------------------- Name: Samuel Eichenbaum Vice President, Finance, Chief Financial Officer and Treasurer A signed original of this written statement required by Section 906 has been provided to New Brunswick Scientific Co., Inc. and will be retained by New Brunswick Scientific Co., Inc. and furnished to the Securities and Exchange Commission or its staff upon request. 25 -----END PRIVACY-ENHANCED MESSAGE-----