-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ovYHdSw+ePC7tVoMWby8U6oiYRjBu4JjHgcmMeR7uu/rftKPk6gBZOKnieEkxn12 1uAEIjIOPjoC6wWXQLeHRg== 0000077551-94-000002.txt : 19940215 0000077551-94-000002.hdr.sgml : 19940215 ACCESSION NUMBER: 0000077551-94-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERKIN ELMER CORP CENTRAL INDEX KEY: 0000077551 STANDARD INDUSTRIAL CLASSIFICATION: 3826 IRS NUMBER: 060490270 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 001-04389 FILM NUMBER: 94507506 BUSINESS ADDRESS: STREET 1: 761 MAIN AVE CITY: NORWALK STATE: CT ZIP: 06859-0001 BUSINESS PHONE: 2037621000 MAIL ADDRESS: STREET 1: 761 MAIN AVENUE CITY: NORWALK STATE: CT ZIP: 06859-0001 10-Q 1 10-Q FILING FOR PERIOD ENDING DECEMBER 31, 1993 THE PERKIN-ELMER CORPORATION INDEX Page Part I. Financial Information Condensed Consolidated Statements of 1 Operations for the Three Months and Six Months Ended December 31, 1993 and January 31, 1993 Condensed Consolidated Statements of 2 Financial Position at December 31, 1993 and June 30, 1993 Condensed Consolidated Statements of Cash 3 Flows for the Six Months Ended December 31, 1993 and January 31, 1993 Notes to Unaudited Condensed Consolidated 4 Financial Statements Management's Discussion and Analysis of 6 Financial Condition and Results of Operations Part II. Other Information 9 THE PERKIN-ELMER CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS unaudited (Dollar amounts in thousands, except per share amounts) Three months ended Six months ended
December 31, January 31, December 31, January 31, 1993 1993 1993 1993 Net revenues $ 256,815 $ 270,215 $ 500,119 $ 521,131 Cost of sales 133,159 140,434 262,884 273,825 Gross margin 123,656 129,781 237,235 247,306 Selling, general and administrative 73,280 78,956 145,450 155,280 Research, development and engineering 23,196 21,282 45,361 42,678 Operating income 27,180 29,543 46,424 49,348 Interest expense (1,865) (4,087) (3,463) (7,710) Interest income 415 2,035 942 4,386 Other income, net 1,569 1,713 141 1,150 Income before income taxes 27,299 29,204 44,044 47,174 Income taxes 5,186 8,705 8,368 15,117 Income from continuing operations 22,113 20,499 35,676 32,057 Income (loss) from discontinued operations (net of income taxes) 405 (12,465) 2,259 Income before cumulative effect of changes in accounting principles 22,113 20,904 23,211 34,316 Loss from cumulative effect on prior years of changes in accounting principles (net of income taxes) (83,098) Net income (loss) $ 22,113 $ 20,904 $ 23,211 $ (48,782) Per share amounts: Income from continuing operations $ 0.50 $ 0.46 $ 0.80 $ 0.72 Income (loss) from discontinued operations 0.01 (0.28) 0.05 Income before cumulative effect of changes in accounting principles 0.50 0.47 0.52 0.77 Loss from cumulative effect on prior years of changes in accounting principles (1.85) Net income (loss) $ 0.50 $ 0.47 $ 0.52 $ (1.08) Dividends per share $ 0.17 $ 0.17 $ 0.34 $ 0.34
See accompanying Notes to Condensed Consolidated Financial Statements. -1- THE PERKIN-ELMER CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Dollar amounts in thousands) At December 31, At June 30, 1993 1993 Assets (unaudited) Current Assets Cash and cash equivalents $ 28,274 $ 28,582 Short-term investments 1,728 1,749 Accounts receivable, net 230,743 218,236 Inventories 192,569 179,082 Prepaid expenses and other current assets 51,508 47,275 Total current assets 504,822 474,924 Property, Plant and Equipment, net 158,182 162,689 Other Assets Other long-term assets 144,594 152,735 Net assets of discontinued operations 61,430 60,722 Total other assets 206,024 213,457 Total Assets $ 869,028 $ 851,070 Liabilities and Shareholders' Equity Current Liabilities Loans payable $ 103,550 $ 73,982 Accounts payable 67,038 66,172 Accrued salaries and wages 33,690 43,350 Accrued taxes on income 37,452 38,056 Other accrued expenses 140,744 152,435 Total current liabilities 382,474 373,995 Long-term debt 6,192 7,069 Other long-term liabilities 165,562 163,401 Shareholders' Equity Capital stock 45,600 45,600 Capital in excess of par value 178,739 178,739 Retained earnings 171,320 163,861 Cumulative translation adjustments (4,954) (3,931) Minimum pension liability (31,859) (31,859) Treasury stock, at cost (44,046) (45,805) Total shareholders' equity 314,800 306,605 Total Liabilities and Shareholders' Equity $ 869,028 $ 851,070 See accompanying Notes to Condensed Consolidated Financial Statements. -2- THE PERKIN-ELMER CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS unaudited (Dollar amounts in thousands) Six months ended
December 31, January 31, 1993 1993 Operating Activities Income from continuing operations $ 35,676 $ 32,057 Adjustments to reconcile income from continuing operations to net cash provided by operating activities Depreciation and amortization 22,254 22,581 Other, net (2,539) (132) Changes in operating assets and liabilities: Increase in accounts receivable (20,672) (13,435) Increase in inventories (16,154) (14,638) Increase in prepaid expenses and other assets (5,859) (6,678) Decrease in accounts payable and other liabilities (12,918) (21,520) Net Cash Used by Operating Activities (212) (1,765) Investing Activities Additions to property, plant and equipment (net of disposals of $1,659 and $1,364, respectively) (13,953) (14,387) Marketable securities and short-term investments 6,646 Investment in Lynx (9,581) Proceeds from notes receivable and the sale of assets 12,582 Discontinued operations (869) 4,450 Legal settlement (15,000) Other, net 32 Net Cash Used by Investing Activities (17,240) (12,840) Financing Activities Proceeds from long-term borrowings 866 198 Principal payments on long-term debt (866) (27,340) Net change in loans payable 30,621 53,554 Dividends paid (14,933) (11,423) Purchase of treasury stock (6,361) (4,430) Stock issued for stock plans, net of cancellations 7,471 8,620 Net Cash Provided by Financing Activities 16,798 19,179 Effect of Exchange Rate Changes on Cash 346 (4,505) Net change in cash and cash equivalents (308) 69 Cash and cash equivalents beginning of period 28,582 43,106 Cash and cash equivalents end of period $ 28,274 $ 43,175
See accompanying Notes to Condensed Consolidated Financial Statements. -3- THE PERKIN-ELMER CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - The condensed consolidated financial statements should be read in conjunction with the financial statements presented in The Perkin-Elmer Corporation's Transition Report on Form 10-K for the transition period from August 1, 1992 to June 30, 1993. Significant accounting policies disclosed therein have not changed. The financial statements have been restated to reflect the acquisition of Applied Biosystems, Inc. as a pooling of interests and to present the Company's Material Sciences segment as a discontinued operation. Effective June 30, 1993 the Company changed its fiscal year end from July 31 to June 30. Therefore, the financial statements included herein reflect the period from July 1, 1993 through December 31, 1993 for fiscal 1994 and the period from August 1, 1992 through January 31, 1993 for fiscal 1993. NOTE 2 - Inventories are stated at the lower of cost (on a first-in, first out basis) or market. Inventories are comprised of the following major components: (dollar amounts in millions) December 31, 1993 June 30, 1993 Raw materials and supplies $ 25.1 $ 27.9 Work-in-process 19.9 25.4 Finished products 147.6 125.8 $ 192.6 $ 179.1 NOTE 3 - Two major issues have been resolved and are included in the six month results. First, the Company paid $15 million to settle potential claims related to the Hubble Space Telescope mirror. In 1989, the Company had sold the unit which performed the work on the telescope to a subsidiary of Hughes Aircraft Company. This settlement resulted in an after-tax charge of $12.1 million and is recorded in discontinued operations in the six month results. In the second issue, the Company received a favorable ruling from the U.S. Tax Court upholding the Company's pricing method on intercompany sales with respect to its operations in Puerto Rico. NOTE 4 - During the first quarter of fiscal 1994 the Company sold the net assets of its Applied Science Operation to Orbital Sciences Corporation. The Company received cash proceeds of $600,000 and 320,000 shares of Orbital Sciences Corporation common stock which were subsequently disposed of in the second quarter. During the second quarter of fiscal 1994, the Company sold its minority equity investment in MRJ, Inc. -4- to MRJ Group, Inc. for $3.3 million in cash. In addition, two subordinated notes due from MRJ, Inc. were repaid. The gains from these sales are reflected in other income and were not significant to the Company's results of operations. NOTE 5 - The Company is required to implement Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" no later than fiscal year 1995. This statement requires investments in equity securities that have readily determinable fair values and all investments in debt securities to be classified in three categories: 1. held-to-maturity securities which are reported at amortized cost, 2. trading securities which are reported at fair value with unrealized gains and losses included in earnings and 3. available for sale securities which are reported at fair value with unrealized gains and losses excluded from earnings and reported as a separate component of shareholder's equity. The Company is currently analyzing the standard to determine the timing and impact, if any, on its financial statements. NOTE 6 - The unaudited condensed consolidated financial statements reflect, in the opinion of Registrant's management, all adjustments which are necessary for a fair statement of the results for the interim periods. All such adjustments are of a normal recurring nature. These results are, however, not necessarily indicative of the results to be expected for the full year. -5- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following comments should be read in conjunction with "Management's Discussion and Analysis" appearing on pages 19 - 21 of the Company's 1993 Annual Report to Shareholders. RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 1993 Consolidated net revenues were $256.8 million in the second quarter of fiscal 1994 compared with $270.2 million in the second quarter of fiscal 1993. The prior year included $10 million in revenues from the Company's Applied Science Operation which was sold in the first quarter of this fiscal year. The effects of foreign currency translation reduced revenues by approximately $7 million. Increased demand for life science products, primarily higher unit volumes of DNA sequencers and consumables continued during the second quarter. The U.S. and Far Eastern markets continued to show improvement in the quarter compared to a year ago, which helped offset the recessionary European markets for analytical instruments. Gross margin as a percentage of net revenues for the second quarter of fiscal 1994 was 48.1% compared with 48.0% in second quarter of fiscal 1993. Increased demand for life science products at favorable margins was offset by pricing strategies in the Far East, aimed at market share improvement. Decreases in unit volume sales in Europe also reduced margins in the quarter when compared with the prior year. Operating expenses were $96.5 million in the current quarter compared with $100.2 million a year ago. Selling, general and administrative (SG&A) expenses decreased by $5.7 million; favorable effects from currency and reductions in Europe were the primary contributors. Research, development and engineering (R&D) expenses increased $1.9 million in the current quarter. The increase primarily reflects higher spending in the life science business. Interest expense decreased from $4.1 million a year ago to $1.9 million in the current quarter. The decrease resulted from reduced short-term borrowing levels and lower interest rates. Interest income was $.4 million compared with $2.0 million a year ago. The decrease in interest income was the result of lower long-term notes receivable in fiscal 1994. Other income was $1.6 million in the current year compared with $1.7 million in fiscal 1993. During the second quarter, the Company sold its interest in MRJ, Inc. to MRJ Group, Inc. (see Note 4). The gain on the sale of MRJ was recorded in other income and was not significant to the results of operations. See Results of Operations for the six months ended December 31, 1993 for discussion of the effective income tax rate. -6- RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1993 Consolidated net revenues were $500.1 million in the first six months of fiscal 1994 compared with $521.1 million in fiscal 1993. This decrease of $21 million reflects the inclusion in the prior year of $19.5 million of revenues compared to $5 million this year from the Company's Applied Science Operation, which was sold in the first quarter of fiscal 1994, and the effect of currency translation which decreased fiscal 1994 net revenues by approximately $23 million. Operationally, the U.S. and Far Eastern markets improved during the first six months of fiscal 1994 as demand for life science products increased. In the Far East, growing economies helped support the strong demand for life science products and selective pricing strategies in analytical instrument product lines resulted in higher unit sales volumes from year to year. Net revenues in Europe continued to decline from the weak economy and competitive pricing pressures in traditional analytical instruments. Gross margin as a percentage of net revenues was 47.4% for the first six months of fiscal 1994 compared with 47.5% in fiscal 1993. Increased revenues for life science products at higher returns were offset by reduced volumes in Europe, the effects of currency and selective pricing strategies in the Far East. SG&A expenses were $145.5 million for the first six months of fiscal 1994 compared with $155.3 million a year ago. Favorable currency effects of approximately $6.7 million and reductions in administrative expenses in Europe were the primary contributors. R&D expenses increased $2.7 million year to year as increased expenditures for life science programs offset the favorable effects of currency translation overseas. Interest expense was $3.5 million in the six months ended December 31, 1993 compared with $7.7 million for the six months ended January 31, 1993. Reduced short-term borrowing levels and lower interest rates were the primary contributors. Interest income was $.9 million in the current year compared with $4.4 million in fiscal 1993. Reductions in long-term notes receivable was the primary reason for the decrease. The effective income tax rate was 19% compared with 32% in the first six months of the prior year. During the first quarter of this fiscal year the Company received a favorable ruling from the U.S. Tax Court upholding the Company's pricing method on intercompany sales with respect to its operations in Puerto Rico. Resolution of this long-standing dispute with the U.S. government and the additional tax benefits realized from the inclusion of Applied Biosystems' results for a full year reduced the Company's effective tax rate for fiscal 1994. DISCONTINUED OPERATIONS The Hubble Telescope pretax settlement of $15 million (see Note 3) and the results of the Company's Material Sciences discontinued operation accounted for an after-tax loss of $12.5 million for the six months ended December 31, 1993. -7- FINANCIAL RESOURCES AND LIQUIDITY The Registrant's cash and cash equivalents aggregated $28.3 million at December 31, 1993, approximately the same level on hand as fiscal year end. Net cash used for operating activities was $.2 million compared to $1.8 million in the prior year. The increase in loans payable of $29.6 million was primarily used to settle potential claims related to the Hubble Space Telescope mirror and to fund combination expenses associated with the Applied Biosystems merger. Capital expenditures were approximately $16 million in the current year which was approximately the same level of spending a year ago. RECENTLY ISSUED ACCOUNTING STANDARD See Note 5 to the Condensed Consolidated Financial Statements. -8- PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. 11. Computation of Net Income Per Share. (b) Reports on Form 8-K. The Company filed a Current Report on Form 8-K dated October 6, 1993 relating to the announcement of its settlement of potential claims related to the Hubble Space Telescope mirror and its receipt of a favorable ruling from the U.S. Tax Court with respect to its pricing practices involving its Puerto Rican operations. -9- 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. THE PERKIN-ELMER CORPORATION By:/s/ Gaynor N. Kelley Gaynor N. Kelley Chairman and Chief Executive Officer By:/s/ William F. Emswiler William F. Emswiler Vice President, Finance Dated: February 11, 1994 -10- EXHIBIT INDEX Exhibit No. Exhibit Page No. 11 Computation of Net Income Per Share EX-11 2 NET INCOME PER SHARE FOR 10-Q FILING THE PERKIN-ELMER CORPORATION COMPUTATION OF NET INCOME PER SHARE (Amounts in thousands, except per share amounts) Six months ended December 31, January 31, 1993 1993 Weighted average number of common shares 43,930 43,566 Common stock equivalents - stock options 899 1,214 Weighted average number of common shares used in calculating primary net income per share 44,829 44,780 Additional dilutive stock options under paragraph #42 APB #15 159 99 Shares used in calculating fully diluted net income per share 44,988 44,879 Calculation of primary and fully diluted net income per share: PRIMARY AND FULLY DILUTED: Income from continuing operations 35,676 32,057 Income (loss) from discontinued operations (12,465) 2,259 Income before cumulative effect of changes in accounting principles 23,211 34,316 Loss from cumulative effect on prior years of changes in accounting principles (83,098) Net income (loss) used in the calculations of primary and fully diluted net income per share 23,211 (48,782) PRIMARY per share amounts: Income from continuing operations 0.80 0.72 Income (loss) from discontinued operations (0.28) 0.05 Income before cumulative effect of changes in accounting principles 0.52 0.77 Loss from cumulative effect on prior years of changes in accounting principles (1.85) Net income (loss) 0.52 (1.08) FULLY DILUTED per share amounts: Income from continuing operations 0.79 0.71 Income (loss) from discontinued operations (0.28) 0.05 Income before cumulative effect of changes in accounting principles 0.52 0.76 Loss from cumulative effect on prior years of changes in accounting principles (1.84) Net income (loss) 0.52 (1.08) EXHIBIT 11 -----END PRIVACY-ENHANCED MESSAGE-----