-----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, SrNIhqlRD71CbSb6YZgSxUNCv968OOg7smtmZA+IOGiEdcdLX5hon3kohNB107+o tNZQY/uVu7Vmz5nCGj1FMg== 0000840467-99-000010.txt : 19990811 0000840467-99-000010.hdr.sgml : 19990811 ACCESSION NUMBER: 0000840467-99-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990803 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BECKMAN COULTER INC CENTRAL INDEX KEY: 0000840467 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 951040600 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10109 FILM NUMBER: 99676427 BUSINESS ADDRESS: STREET 1: 4300 N HARBOR BLVD STREET 2: PO BOX 3100 CITY: FULLERTON STATE: CA ZIP: 92834-3100 BUSINESS PHONE: 7148714848 MAIL ADDRESS: STREET 1: 4300 N HARBOR BLVD STREET 2: PO BOX 3100 CITY: FULLERTON STATE: CA ZIP: 92834-3100 FORMER COMPANY: FORMER CONFORMED NAME: BECKMAN INSTRUMENTS INC DATE OF NAME CHANGE: 19920703 10-Q 1 10-Q REPORT TO SEC FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 (Mark One) (X)Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 1999 OR ( )Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ Commission File Number 001-10109 BECKMAN COULTER, INC. (Exact name of registrant as specified in its charter) Delaware 95-104-0600 (State of Incorporation) (I.R.S. Employer Identification No.) 4300 N. Harbor Boulevard, Fullerton, California 92834-3100 (Address of principal executive offices) (Zip Code) (714) 871-4848 (Registrant's telephone number including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ). APPLICABLE ONLY TO CORPORATE ISSUERS: Outstanding shares of common stock, $0.10 par value, as of July 26, 1999: 28,711,122 shares. PART I FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statements of Operations for the three and six month periods ended June 30, 1999 and 1998 Condensed Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998 Condensed Consolidated Statements of Cash Flows for the six month periods ended June 30, 1999 and 1998 Notes to Condensed Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes In Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security-Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K PART I FINANCIAL INFORMATION BECKMAN COULTER, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in Millions, Except Amounts Per Share) Unaudited
Three Months Six Months Ended Ended June 30, June 30, 1999 1998 1999 1998 ---- ---- ---- ---- Sales $446.2 $434.7 $851.3 $834.1 Cost of sales 234.1 236.5 445.4 466.3 ------ ------ ------ ------ Gross profit 212.1 198.2 405.9 367.8 Operating costs and expenses: Selling, general and administrative 115.5 123.6 227.3 243.3 Research and development 42.5 42.2 81.2 83.8 ------ ------ ------ ------ Total operating cost and expenses 158.0 165.8 308.5 327.1 ------ ----- ------ ------ Operating income 54.1 32.4 97.4 40.7 Nonoperating (income)and expense: Interest income (1.8) (4.0) (3.8) (7.1) Interest expense 18.9 22.9 37.1 49.1 Other, net (1.1) (0.5) 1.0 (2.9) ------ ------ ------ ------ Total nonoperating (income) and expense 16.0 18.4 34.3 39.1 ------ ------ ------ ------ Earnings before income taxes 38.1 14.0 63.1 1.6 Income taxes 12.2 4.5 20.2 0.5 ------ ------ ------ ------ Net earnings $ 25.9 $ 9.5 $ 42.9 $ 1.1 ====== ====== ====== ====== Basic earnings per share $ 0.91 $0.34 $ 1.51 $ 0.04 Weighted average number of shares outstanding (in 28,584 27,892 28,525 27,801 thousands) Diluted earnings per share $ 0.87 $ 0.32 $ 1.45 $ 0.04 Weighted average number of shares and dilutive shares outstanding (in thousands) 29,611 29,395 29,588 29,126 Dividends declared per share $ 0.16 $ 0.15 $ 0.32 $ 0.30
See accompanying Notes to Condensed Consolidated Financial Statements. BECKMAN COULTER, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in Millions, Except Amounts per Share) Unaudited
June 30, December 31, 1999 1998 ---- ---- Assets Current assets: Cash and equivalents $ 13.0 $ 24.7 Trade and other receivables 532.8 540.2 Inventories 318.2 302.8 Deferred income taxes 54.7 60.5 Other current assets 32.2 28.4 -------- -------- Total current assets 950.9 956.6 Property, plant and equipment, net 304.3 309.4 Intangibles, less accumulated amortization of $37.3 in 1999 and $27.6 in 1998 409.4 419.1 Goodwill, less accumulated amortization of $19.6 in 1999 and $14.9 in 1998 351.1 356.1 Other assets 94.3 92.1 -------- -------- Total assets $2,110.0 $2,133.3 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Notes payable and current maturities of long-term debt $ 109.1 $ 135.1 Accounts payable, accrued expenses and other liabilities 448.3 523.0 Income taxes 72.4 61.2 -------- -------- Total current liabilities 629.8 719.3 Long-term debt, less current maturities 995.4 982.2 Other liabilities 324.0 304.9 -------- -------- Total liabilities 1,949.2 2,006.4 Stockholders' equity: Preferred stock, $0.10 par value; authorized 10.0 shares; none issue - - Common stock, $0.10 par value; authorized 75.0 shares; shares issued 29.1 at 1999 and 1998; shares outstanding 28.7 at 1999 and 28.4 at 1998 2.9 2.9 Additional paid-in capital 134.0 131.9 Retained earnings 69.2 35.4 Accumulated other comprehensive loss: Cumulative foreign currency translation adjustment (25.9) (13.9) Treasury stock, at cost (19.4) (29.4) -------- -------- Total stockholders' equity 160.8 126.9 -------- -------- Total liabilities and stockholders' $2,110.0 $2,133.3 equity ======== ========
See accompanying Notes to Condensed Consolidated Financial Statements. BECKMAN COULTER, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Millions) Unaudited
Six Months Ended June 30, 1999 1998 ---- ---- Cash Flows from Operating Activities Net earnings $ 42.9 $ 1.1 Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Depreciation and amortization 74.5 68.1 Net deferred income taxes (0.3) (5.8) Proceeds from sale of sales-type lease receivables 27.6 36.8 Changes in assets and liabilities: Trade and other receivables (14.6) 25.3 Inventories (16.9) (5.2) Accounts payable, accrued expenses and other liabilities (62.0) (171.5) Accrued restructuring costs (11.2) (5.0) Income taxes payable 11.4 (8.8) Other 9.0 (27.2) ------ ------ Net cash provided (used) by operating 60.4 (92.2) activities ------ ------ Cash Flows from Investing Activities Additions to property, plant and equipment (66.2) (82.6) Net disposals of property, plant and 2.7 44.0 equipment Sale of investments - 3.6 Proceeds from sale-leaseback of real estate - 242.8 ------ ------ Net cash (used) provided by investing (63.5) 207.8 activities ------ ------ Cash Flows from Financing Activities Dividends to stockholders (9.1) (8.3) Proceeds from issuance of stock 12.4 7.5 Notes payable reductions (24.7) (0.6) Long-term debt borrowings 21.0 418.2 Long-term debt reductions (8.1) (535.8) ------ ------ Net cash used by financing activities (8.5) (119.0) ------ ------ Effect of exchange rates on cash and (0.1) 0.9 equivalents ------ ------ Decrease in cash and equivalents (11.7) (2.5) Cash and equivalents - beginning of period 24.7 33.5 ------ ------ Cash and equivalents - end of period $ 13.0 $ 31.0 ====== ====== Supplemental Disclosures of Cash Flow Information Cash paid during the period for: Interest $ 36.6 $ 50.7 Income taxes $ 9.6 $ 9.4 Non-cash investing and financing activities: Purchase of equipment under capital lease $ 0.6 $ 4.0
See accompanying Notes to Condensed Consolidated Financial Statements. BECKMAN COULTER, INC. Notes To Condensed Consolidated Financial Statements June 30, 1999 Unaudited 1. Report by Management We prepared the accompanying Condensed Consolidated Financial Statements following the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information normally required by generally accepted accounting principles (GAAP) have been condensed or omitted. In addition, we have reclassified certain prior year data to conform to the 1999 presentation. The financial statements include all normal and recurring adjustments that we consider necessary for the fair presentation of our financial position and operating results. To obtain a more detailed understanding of our results, these Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes in our annual report on Form 10-K for the year ended December 31, 1998. Revenues, expenses, assets, and liabilities can vary between the quarters of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year. 2. Use of Estimates In preparing the financial statements in accordance with GAAP, we have made estimates and assumptions that affect the following: - - reported amounts of assets and liabilities at the date of the financial statements; - - disclosure of contingent assets and liabilities at the date of the financial statements; and - - reported amounts of sales and expenses during the reporting period. Actual results could differ from these estimates. 3. Comprehensive Income (Loss) We adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130), in the first quarter of 1998. SFAS 130 establishes standards for the reporting and display of comprehensive income (loss). Components of comprehensive income (loss) include net income and foreign currency translation adjustments. The components of comprehensive income (loss) are as follows (in millions):
Three Months Ended Six Months Ended June June 30, 30, 1999 1998 1999 1998 ---- ---- ---- ---- Net income $ 25.9 $ 9.5 $ 42.9 $ 1.1 Foreign currency translation adjustment (0.7) (2.1) (12.0) (7.9) ------ ----- ------ ----- Comprehensive income (loss) $ 25.2 $ 7.4 $ 30.9 $(6.8) ====== ===== ====== =====
4. Net Earnings Per Share We continue to follow Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128) to determine earnings per share. SFAS 128 simplifies the computation of earnings per share (EPS), where: - "basic earnings per share" includes only actual weighted average shares outstanding; and - "diluted earnings per share" includes the effect of any items that are dilutive, such as stock options. The following table summarizes the computation of EPS (in millions, except amounts per share):
Three Months Ended June 30, 1999 1998 ---- ---- Per Per Net Share Net Share Earnings Shares Amount Earnings Shares Amount Basic EPS: Net earnings $ 25.9 28.6 $ 0.91 $ 9.5 27.9 $ 0.34 Effect of dilutive stock options - 1.0 (0.04) - 1.5 (0.02) ------ ---- ------ ----- ----- ------ Diluted EPS: Net earnings $ 25.9 29.6 $ 0.87 $ 9.5 29.4 $ 0.32 ====== ==== ====== ===== ==== ======
Six Months Ended June 30, 1999 1998 ---- ---- Per Per Net Share Net Share Earnings Shares Amount Earnings Shares Amount Basic EPS: Net earnings $ 42.9 28.5 $ 1.51 $ 1.1 27.8 $ 0.04 Effect of dilutive stock options - 1.1 (0.06) - 1.3 - ------ ---- ------ ----- ---- ------ Diluted EPS: Net earnings $ 42.9 29.6 $ 1.45 $ 1.1 29.1 $ 0.04 ====== ==== ====== ===== ==== ======
5. Sale of Receivables In the first half of 1999 we sold certain financial assets (primarily consisting of customer lease receivables) as part of our plan to reduce debt and provide funds for integration purposes. The net book value of financial assets sold was $26.8 million for which we received approximately $27.6 million in cash proceeds. In the first half of 1998, we sold similar assets with a net book value of $31.9 million for cash proceeds of $36.8 million. Under the provisions of Statement of Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities", the transactions were accounted for as sales and as a result the related receivables have been excluded from the accompanying Condensed Consolidated Balance Sheets. We have established a reserve for potential losses, since the sales are subject to certain recourse provisions. 6. Inventories Inventories consisted of the following (in millions):
June 30, 1999 December 31, 1998 ------------- ----------------- Finished products $ 192.5 $ 183.2 Raw materials, parts and 102.9 95.1 assemblies 22.8 24.5 Work in process ------- ------- $ 318.2 $ 302.8 ======= =======
7. Provision for Restructuring Operations We recorded a restructuring charge of $19.1 million, $11.2 million after taxes, in the fourth quarter of 1998. The following table details the activity within the provision for the six months ended June 30, 1999 (in millions):
Facility Consolidation and Personnel Asset related and Other Write-offs Total --------- ------------- ----- Balance at December 31, 1998: Consolidation of sales, general administrative and technical functions $10.1 $ - $10.1 Changes in manufacturing/production 3.2 5.8 9.0 ---- ---- ---- Remaining provision included in accrued expenses 13.3 5.8 19.1 1999 year-to-date activity: Consolidation of sales, general administrative and technical functions (0.3) - (0.3) Changes in manufacturing/production (0.3) (0.3) (0.6) ----- ----- ----- Total 1999 year-to-date activity (0.6) (0.3) (0.9) ----- ----- ----- Balance at June 30, 1999: Consolidation of sales, general administrative and technical functions 9.8 - 9.8 Changes in manufacturing/production 2.9 5.5 8.4 ----- ----- ----- Balance at June 30, 1999 $12.7 $5.5 $18.2 ===== ===== =====
In the fourth quarter of 1997 we recorded a restructuring charge of $59.4 million, $36.4 million after taxes. The following table details the activity in the first half of 1999 and the balances of the major components of the 1997 restructuring provision (in millions):
Facility Consolidation and Personnel Asset related and Other Write-offs Total --------- ------------- ----- Balance at December 31, 1998: Consolidation of sales, general administrative and technical functions $12.8 $3.9 $16.7 Changes in manufacturing/production 1.9 3.9 5.8 ----- ---- ----- Remaining provision included in accrued expenses 14.7 7.8 22.5 1999 year-to-date activity: Consolidation of sales, general administrative and technical functions (8.7) (1.5) (10.2) Changes in manufacturing/production - (0.1) (0.1) ----- ----- ----- Total 1999 year-to-date activity (8.7) (1.6) (10.3) ----- ----- ----- Balance at June 30, 1999: Consolidation of sales, general administrative and technical functions 4.1 2.4 6.5 Changes in manufacturing/production 1.9 3.8 5.7 ----- ----- ----- Balance at June 30, 1999 $ 6.0 $6.2 $12.2 ===== ==== =====
8. Debt Financing and Guarantor Subsidiaries In March 1998, we issued $160.0 million of 7.10% Senior Notes due 2003 and $240.0 million of 7.45% Senior Notes due 2008 (the "Offering"). We used the net proceeds of $394.3 million to reduce borrowings and commitments under our bank facilities and for operating purposes. In connection with the Offering, certain of our subsidiaries (the "Guarantor Subsidiaries") jointly, fully, severally, and unconditionally guaranteed such notes. We present below the supplemental condensed financial information (in millions) of the Company, Guarantor Subsidiaries and Non- Guarantor Subsidiaries. Please note that in this footnote, we used the equity method of accounting for our investments in subsidiaries and the Guarantor Subsidiaries' investments in Non- Guarantor Subsidiaries. This financial information should be read in conjunction with the Condensed Consolidated Financial Statements.
Non- Guarantor Guarantor Subsi- Subsi- Elimina- Consoli- Parent diaries diaries tions dated ------ ------- ------- ------- ------- Condensed Consolidated Balance Sheet at June 30, 1999 Assets: Cash and equivalents $ (35.3) $ (0.9) $ 49.2 $ - $ 13.0 Trade and other receivables 241.0 8.4 283.4 - 532.8 Inventories 177.8 61.2 120.3 (41.1) 318.2 Other current assets 260.1 565.0 74.0 (812.2) 86.9 -------- ------- ------- -------- -------- Total current assets 643.6 633.7 526.9 (853.3) 950.9 Property, plant and equipment, net 143.5 88.8 142.4 (70.4) 304.3 Intangibles, net 31.8 374.0 3.6 - 409.4 Goodwill, net 9.7 332.3 9.1 - 351.1 Other assets 1,385.5 120.8 278.1 (1,690.1) 94.3 -------- -------- -------- -------- -------- Total assets $2,214.1 $1,549.6 $ 960.1 $(2,613.8) $2,110.0 ======== ======== ======== ========= ======== Liabilities: Notes payable and current maturities of long-term debt $ 35.1 $ 1.6 $ 72.4 $ - $ 109.1 Accounts payable and accrued expenses 319.0 51.9 77.4 - 448.3 Other current liabilities 197.3 595.9 115.2 (836.0) 72.4 -------- --------- -------- -------- -------- Total current liabilities 551.4 649.4 265.0 (836.0) 629.8 Long-term debt, less current maturities 946.4 0.8 48.2 - 995.4 Other long-term liabilities 555.5 276.7 208.3 (716.5) 324.0 -------- --------- -------- -------- -------- Total liabilities 2,053.3 926.9 521.5 (1,552.5) 1949.2 Total stockholders' equity 160.8 622.7 438.6 (1,061.3) 160.8 -------- --------- -------- -------- -------- Total liabilities and stockholders' equity $2,214.1 $ 1,549.6 $ 960.1 $(2,613.8) $2,110.0 ======== ========= ======== ======== ========
[CAPTION] Non- Guarantor Guarantor Subsi- Subsi- Elimina- Consoli- Parent diaries diaries tions dated ------ ------- ------- ------- ------- Condensed Consolidated Balance Sheet December 31, 1998 Assets: Cash and equivalents $ 4.2 $ (0.1) $ 20.6 $ - $ 24.7 Trade and other receivables 199.9 50.4 289.9 - 540.2 Inventories 146.5 52.6 134.6 (30.9) 302.8 Other current assets 149.0 396.4 86.7 (543.2) 88.9 ------ ------ ------ ------- ------- Total current assets 499.6 499.3 531.8 (574.1) 956.6 Property, plant and equipment, net 120.7 89.1 156.3 (56.7) 309.4 Intangibles, net 33.0 384.8 1.3 - 419.1 Goodwill, net 15.0 329.5 11.6 - 356.1 Other long-term assets 1,357.1 176.0 253.2 (1,694.2) 92.1 ------- ------- ------ -------- ------- Total assets $2,025.4 $1,478.7 $954.2 $(2,325.0) $2,133.3 ======= ======= ====== ======= ======= Liabilities: Notes payable and current maturities of long-term debt $ 19.6 $ 2.6 $112.9 $ - $ 135.1 Accounts payable and accrued expenses 219.5 199.7 103.8 - 523.0 Other current liabilities 176.0 323.9 83.2 (521.9) 61.2 ------- ------ ------ ------- ------- Total current liabilities 415.1 526.2 299.9 (521.9) 719.3 Long-term debt, less current maturities 950.8 0.8 30.6 - 982.2 Other long-term liabilities 532.6 279.6 214.4 (721.7) 304.9 ------- ------ ------ ------- ------- Total liabilities 1,898.5 806.6 544.9 (1,243.6) 2,006.4 Total stockholders' equity 126.9 672.1 409.3 (1,081.4) 126.9 ------- ------ ------ ------- ------- Total liabilities and stockholders' equity $2,025.4 $1,478.7 $ 954.2 $(2,325.0) $2,133.3 ======= ======= ====== ======== =======
Non- Guarantor Guarantor Subsi- Subsi- Elimina- Consoli- Parent diaries diaries tions dated ----- ------- ------- ------- -------- Condensed Consolidated Statement of Operations Quarter ended June 30, 1999 Sales $300.6 $100.9 $284.2 $(239.5) $446.2 Operating costs and expenses: Cost of sales 212.0 60.6 204.8 (243.3) 234.1 Selling, general and administrative 56.8 12.7 46.0 - 115.5 Research and development 27.3 13.3 1.9 - 42.5 ------ ------ ------ ------ ------ Operating income 4.5 14.3 31.5 3.8 54.1 Nonoperating (income) expense (33.9) 1.4 (1.3) 49.8 16.0 ------ ------ ------ ------ ------ Earnings (loss) before income taxes 38.4 12.9 32.8 (46.0) 38.1 Income tax expense (benefit) 19.9 3.2 17.3 (28.2) 12.2 ------ ------ ------ ------ ------ Net earnings (loss) $18.5 $ 9.7 $ 15.5 $ (17.8) $ 25.9 ====== ====== ====== ====== ======
Non- Guarantor Guarantor Subsi- Subsi- Elimina- Consoli- Parent diaries diaries tions dated ------ ------- ------- ------- ------- Condensed Consolidated Statement of Operations Quarter ended June 30, 1998 Sales $190.2 $132.5 $203.1 $(91.1) $434.7 Operating costs and expenses: Cost of sales 117.8 77.1 132.7 (91.1) 236.5 Selling, general and administrative 40.3 33.3 50.0 - 123.6 Research and development 24.9 16.0 1.3 - 42.2 Restructuring charge (3.8) - 3.8 - - ------ ------ ------ ------ ------ Operating income 11.0 6.1 15.3 - 32.4 Nonoperating expense (income) 19.9 (9.2) 7.7 - 18.4 ------ ------ ------ ------ ------ (Loss) earnings before income taxes (8.9) 15.3 7.6 - 14.0 Income tax (benefit) expense (3.1) 5.5 1.4 0.7 4.5 ------ ------ ------ ------ ------ Net (loss) earnings $ (5.8) $ 9.8 $ 6.2 $ (0.7) $ 9.5 ====== ====== ====== ====== ======
Non- Guarantor Guarantor Subsi- Subsi- Elimina- Consoli- Parent diaries diaries tions dated ------ ------- ------- -------- -------- Condensed Consolidated Statement of Operations six months ended June 30, 1999 Sales $582.6 $189.1 $500.7 $(421.1) $851.3 Operating costs and expenses: Cost of sales 393.3 117.2 356.0 (421.1) 445.4 Selling, general and administrative 108.3 26.7 92.3 - 227.3 Research and development 51.9 26.0 3.3 - 81.2 ------ ------ ------ ------ ------ Operating income 29.1 19.2 49.1 - 97.4 (loss) Nonoperating (income) expense (5.4) (1.1) (0.2) 41.0 34.3 ------ ------ ------ ------ ------ Earnings (loss) before income taxes 34.5 20.3 49.3 (41.0) 63.1 Income tax expense (benefit) 17.9 4.3 24.4 (26.4) 20.2 ------ ------ ------ ------ ------ Net earnings (loss) $16.6 $ 16.0 $ 24.9 $ (14.6) $ 42.9 ====== ====== ====== ====== ======
Non- Guarantor Guarantor Subsi- Subsi- Elimina- Consoli- Parent diaries diaries tions dated ------ ------- ------- ------ ------- Condensed Consolidated Statement of Operations six months ended June 30, 1998 Sales $380.0 $273.6 $358.9 $(178.4) $834.1 Operating costs and expenses: Cost of sales 238.7 165.4 240.6 (178.4) 466.3 Selling, general and administrative 82.5 67.4 93.4 - 243.3 Research and development 48.2 33.1 2.5 - 83.8 Restructuring charge - - 4.4 (4.4) - ------ ------ ------ ------ ------ Operating income 10.6 7.7 18.0 4.4 40.7 Nonoperating expense (income) 40.5 (17.3) 15.9 - 39.1 ------ ------ ------ ------ ------ (Loss) earnings before income taxes (29.9) 25.0 2.1 4.4 1.6 Income tax (benefit) expense (10.4) 8.9 0.5 1.5 0.5 ------ ------ ------ ------ ------ Net (loss) earnings $(19.5) $ 16.1 $ 1.6 $ 2.9 $ 1.1 ====== ====== ====== ====== ======
Non- Guarantor Guarantor Subsi- Subsi- Consoli- Parent diaries diaries dated ------ ------- ------- ------- Condensed Consolidated Statement of Cash Flows six months ended June 30, 1999 Net cash (used) provided $ 1.8 $ (28.4) $ 87.0 $ 60.4 by operating activities Cash flows from investing activities: Additions to property, plant and equipment (29.2) (2.5) (34.5) (66.2) Net disposals of property, plant and equipment 0.1 - 2.6 2.7 ------ ------ ------ ------ Net cash used by investing activities (29.1) (2.5) (31.9) (63.5) Cash flows from financing activities: Dividends to (9.1) - - (9.1) stockholders Proceeds from issuance of stock 12.4 - - 12.4 Notes payable (reductions) 16.4 - (41.1) (24.7) Net intercompany (reductions) (26.8) 30.1 (3.3) - borrowings Long-term debt (reductions) (5.1) - 18.0 12.9 borrowings ------ ------ ------ ------ Net cash provided (used) by financing activities (12.2) 30.1 (26.4) (8.5) ------ ------ ------ ------ Effect of exchange rates - - (0.1) (0.1) on cash and ------ ------ ------ ------ equivalents (Decrease) increase in cash and equivalents (39.5) (0.8) 28.6 (11.7) Cash and equivalents - beginning of period 4.2 (0.1) 20.6 24.7 ------ ------ ------ ------ Cash and equivalents - end of period $(35.3) $(0.9) $ 49.2 $ 13.0 ====== ====== ====== ======
Non- Guarantor Guarantor Subsi- Subsi- Eliminat- Consoli- Parent diaries diaries ions dated ------ ------- ------- -------- -------- Condensed Consolidated Statement of Cash Flows six months ended June 30, 1998 Net cash (used) provided $(42.7) $(51.8) $ 2.3 $ - $ (92.2) by operating ------ ------ ------ ------ ------ activities Cash flows from investing activities: Additions to property, plant and equipment (22.7) (9.2) (50.7) - (82.6) Net disposals of property, plant and equipment 13.1 0.7 30.2 - 44.0 Proceeds from sales- leaseback transactions 186.1 - - 56.7 242.8 Investments and acquisitions 3.6 (0.4) 0.4 - 3.6 ------ ------ ------ ------ ------ Net cash provided (used) by investing activities 180.1 (8.9) (20.1) 56.7 207.8 ------ ------ ------ ------ ------ Cash flows from financing activities: Dividends to stockholders (8.3) - - - (8.3) Proceeds from issuance of stock 7.5 - - - 7.5 Notes payable (reductions) borrowings - (1.3) 0.7 - (0.6) Long-term debt (reductions) borrowings (122.0) 56.4 4.7 (56.7) (117.6) ------ ------ ------ ------ ------ Net cash (used) provided by financing activities (122.8) 55.1 5.4 (56.7) (119.0) Effect of exchange rates on cash and equivalents 0.4 - 0.5 - 0.9 ------ ------ ------ ------ ------ Increase (decrease) in cash and equivalents 15.0 (5.6) (11.9) - (2.5) Cash and equivalents - beginning of period 13.9 7.3 12.3 - 33.5 Cash and equivalents ------ ------ ------ ------ ------ - end of period $ 28.9 $1.7 $ 0.4 $ - $ 31.0 ====== ====== ====== ====== ======
9. Contingencies We are involved in a number of lawsuits, which we consider normal in view of our size and the nature of our business. We do not believe that any liability resulting from any such lawsuits will have a material adverse effect on our operations, financial position or liquidity. 10. Business Segment Information We adopted Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("SFAS 131"), beginning with the 1998 annual report. SFAS 131 requires segments to be determined and reported based on how management measures performance and makes decisions about allocating resources. We are engaged primarily in the design, manufacture and sale of laboratory instrument systems and related products. Our organization has two reportable segments: (1) clinical diagnostics and (2) life science research. The clinical diagnostics segment encompasses diagnostic applications, principally in hospital laboratories. The life science research segment includes life sciences and drug discovery applications in universities, medical schools, and pharmaceutical and biotechnology companies. All corporate activities including financing transactions are captured in a central services "Center", which is reflected in the table below. We evaluate performance based on profit or loss from operations. Although primarily operating in the same industry, reportable segments are managed separately, since each business requires different marketing strategies and has different customers.
(in millions) For the quarters ended For the six months June 30, ended June 30, 1999 1998 1999 1998 ---- ---- ---- ---- Net sales Clinical diagnostics $ 353.4 $ 342.3 $ 680.1 $ 663.7 Life science research 92.8 92.4 171.2 170.4 Center - - - - ------- ------- ------- ------- Consolidated $ 446.2 $ 434.7 $ 851.3 $ 834.1 ------- ------- ------- ------- Operating income (loss) Clinical diagnostics $ 53.1 $ 39.7 $ 108.0 $ 68.4 Life science research 10.5 11.5 16.8 11.8 Center (9.5) (18.8) (27.4) (39.5) ------- ------- ------- ------- Consolidated $ 54.1 $ 32.4 $ 97.4 $ 40.7 ------- ------- ------- ------- Interest income Clinical diagnostics $ (0.5) $ (3.2) $ (1.5) $ (5.8) Life science research - - - - Center (1.3) (0.8) (2.3) (1.3) ------- ------- ------- ------- Consolidated $ (1.8) $ (4.0) $ (3.8) $ (7.1) ------- ------- ------- ------- Interest expense Clinical diagnostics $ - $ - $ - $ - Life science research - - - - Center 18.9 22.9 37.1 49.1 ------- ------- ------- ------- Consolidated $ 18.9 $ 22.9 $ 37.1 $ 49.1 ------- ------- ------- -------
June 30, December 31, 1999 1998 ---- ---- Total assets Clinical diagnostics $1,490.3 $1,519.2 Life science research 172.2 199.2 Center 447.5 414.9 -------- -------- Consolidated $2,110.0 $2,133.3 -------- --------
Geographic areas (in millions) For the quarters ended For the six months June 30, ended June 30, 1999 1998 1999 1998 ---- ---- ---- ---- Sales to external customers North America $249.1 $223.2 $476.9 $463.2 Europe 133.9 132.8 254.9 239.3 Asia and other areas 63.2 78.7 119.5 131.6 ------ ------ ------ ------ Consolidated $446.2 $434.7 $851.3 $834.1 ====== ====== ====== ======
June 30, December 31, 1999 1998 ---- ---- Long-lived assets North America $ 778.3 $ 814.7 Europe 301.4 273.3 Asia and other areas 79.4 88.7 -------- -------- Consolidated $1,159.1 $1,176.7 ======== ========
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview We are Beckman Coulter, Inc. (formerly known as Beckman Instruments, Inc. and renamed Beckman Coulter, Inc. after the acquisition of Coulter Corporation), a world leader in providing systems that simplify and automate laboratory processes. We design, manufacture and service a broad range of laboratory systems consisting of instruments, reagents and related products that customers use to conduct basic scientific research, drug discovery research and diagnostic analysis of patient samples. Our strategy is to solidify our position as a leading provider of laboratory systems. On October 31, 1997, we achieved a significant milestone in accomplishing this strategy when we acquired Coulter Corporation ("Coulter"). Through this acquisition we added Coulter's leading market position in hematology and number two position in flow cytometry to our existing market position. The next milestone towards our global strategy, "One Face to the Customer", offering our customers a single sales source, a single sales contact and a single organization for service to meet all their testing needs, was fully operational in the first quarter of 1999. We believe that the success of our integration programs has allowed us to meet our profitability targets, while our combined clinical diagnostics portfolio is providing important sales synergy and competitive wins in a constrained market. However, we do not guarantee the extent to which we will continue to realize the benefits of the integration, or the timing of any such realization. Results of operations Sales in the second quarter of 1999 grew 2.6% (2.4% excluding the effect of foreign currency rate changes) compared to the same period in the prior year. Sales in North America increased 11.6% and sales in Europe increased 0.8% during the second quarter compared to the same period in the prior year, but were offset by a decrease of 19.7% in Asia and other international markets. European sales were dampened by softness in the German market along with a slow down at one of our European distributors. In North America, increased instrument sales under sales-type lease arrangements in the current period resulted in an increase in reported revenues, as revenues on the instrument portion of sales- type leases are recognized immediately. Decreased sales in Asia are primarily attributable to Japan's troubled economy and China's national reorganization of its life science research infrastructure. Sales in the first half of 1999 grew 2.1% (1.6% excluding the effect of foreign currency rate changes) compared to the first half of 1998. The increase in sales was due to the factors mentioned previously as well as: - inclusion of six months of Coulter international sales in the first half of 1999 compared to only five months in the first half of 1998 due to the lagging of Coulter international results of operations; offset by - inclusion of higher sales in the first half of 1998 from what would have traditionally been the fourth quarter for the old Coulter business (Coulter's fiscal year previously ended on March 31). Gross profit as a percentage of sales in the second quarter of 1999 was 47.5%, 1.9 percentage points higher than the same period in the prior year primarily due to synergies associated with the integration of the Beckman and Coulter organizations. For the first half of 1999, gross profit as a percentage of sales was 47.7%, 3.6 percentage points higher than the same period in 1998. In 1998 gross margins were lower due to a one-time increase in cost of sales of $5.7 million related to inventory revaluation from the Coulter acquisition. The absence of this one-time charge in 1999, combined with the synergies from the combination of Beckman and Coulter organizations contributed to higher gross margins in 1999. Selling, general and administrative expenses ("SG&A") declined in absolute dollars and as a percentage of sales both in the three and six month periods ended June 30, 1999 as compared to the same periods in the prior year due to continuing progress with the integration activities. SG&A declined $8.1 million to $115.5 million or 25.9% of sales in the second quarter of 1999 from $123.6 million or 28.4% of sales in the second quarter of 1998. In the first half of 1999, SG&A was $227.3 million or 26.7% of sales compared to $243.3 million or 29.2% of sales in the first half of 1998 representing a decrease of $16.0 million or 6.6% from the prior period. In accordance with our integration plans, during the second quarter of 1999, we began moving the manufacturing of certain products from our manufacturing operations in Germany and the United States to Ireland. We expect the additional expenses associated with these moves to be offset by the potential tax savings which should result from manufacturing in a more tax- advantaged location. In addition to the tax savings, the move is expected to expand the manufacturing and technical knowledge base for these products in Ireland, and to accommodate future Far East volume requirements for the same products with minimal incremental expenditure. As part of our integration efforts, we intend to continue to make further opportunistic changes in the second half of 1999 and beyond. Net income for the second quarter of 1999 was $25.9 million or $0.87 per diluted share compared to $9.5 million or $0.32 per diluted share. For the first half of 1999, net income amounted to $42.9 million or $1.45 per diluted share, compared to $1.1 million or $0.04 per diluted share during the same period in 1998. The increase in net income is primarily due to the various reasons discussed previously. In addition, a lower average debt balance as well as slightly lower interest rates in 1999 contributed to a decrease in interest expense from 1998 to 1999, which in turn contributed to the increase in net income. Financial Condition As discussed in greater detail in our 1998 annual report, we are a highly leveraged company. Although the debt-to-capital ratio has declined, as planned, from 89.8% at December 31, 1998 to 87.3% at June 30, 1999, among other things, our high level of debt: - - increases our vulnerability to general adverse economic and industry conditions; - - could limit our ability to obtain additional financing on favorable terms; and - - requires the dedication of a substantial portion of our cash flow from operations to the payment of principal and interest on indebtedness. In addition, our agreements with our lenders contain a number of covenants, which, among other things, require us to comply with specified financial ratios and tests. At June 30, 1999, we are in compliance with such financial ratios and tests. We have and will continue to evaluate opportunities to provide additional cash flow by monetizing assets during 1999 and beyond, including sales of certain financial assets (primarily consisting of equipment subject to customer leases and sales-type lease receivables) and real estate assets. If remaining sales are consummated as expected, we believe the total proceeds generated for 1999 will be approximately $30.0 million, less any costs to complete the transactions. Operating activities provided net cash of $60.4 million in the first half of 1999 compared to net cash usage of $92.2 million in the first half of the prior year. The primary reasons were: - net earnings were $42.9 million in 1999 compared to $1.1 million in 1998; and - payments towards costs accrued as part of the Coulter purchase liability in 1999 were $24.0 million compared to $112.2 million in 1998. In 1999, investing activities used approximately $63.5 million of net cash primarily for capital purchases, whereas in 1998, investing activities provided $207.8 million of net cash, which included approximately $242.8 million representing net proceeds from the sale and leaseback of four of our properties. Net cash used by financing activities was $8.5 million in 1999 compared to $119.0 million in 1998. Cash generated from the sale- leaseback of our properties mentioned previously was used to reduce our debt in 1998. In addition to the decline in our debt-to-capital ratio mentioned above, the ratio of current assets to current liabilities improved to 1.5 at June 30, 1999 from 1.3 at December 31, 1998. Based upon current levels of operations and anticipated cost savings and future growth, we believe that our cash flow from operations, together with available borrowings under the credit facility and other sources of liquidity will be adequate to meet our anticipated requirements until the maturity of the credit facility in 2002. However, we cannot give any assurance that our business will continue to generate cash flows at or above current levels or that estimated cost savings or growth can be achieved. Our future operating performance and ability to service or refinance our existing indebtedness, including the credit facility, will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. On June 3, 1999, we paid a quarterly cash dividend of $0.16 per share of common stock for a total of $4.5 million. Year 2000 We believe we have implemented a comprehensive Year 2000 program that is on schedule for completion by the end of 1999, and that there will be no material impact on our business, results of operations, financial position or liquidity as a result of Year 2000 issues. Our Year 2000 program, implemented worldwide, is directed by our senior management and includes six main projects: 1. products and services; 2. management information systems; 3. suppliers (materials and services); 4. engineering and manufacturing processes; 5. office equipment; and 6. facilities and utilities. These projects generally include five phases: 1. inventory; 2. assessment; 3. remediation; 4. testing/validation; and 5. implementation. The following table is a summary of our Year 2000 program schedule target dates (1): Testing/ Implement- Inventory Assessment Remediation validation ation --------- ---------- ----------- ---------- --------- Products & Complete Complete Complete Complete Complete (2) services Management information Complete Complete Complete Q3 1999 (4) Q3 1999 (4) systems Suppliers (materials Complete Complete Complete Q3 1999 (4) Q3 1999 (4) & services) Engineering & Complete Complete Complete Q3 1999 Q3 1999 manufact- uring processes Office Complete Complete Complete Complete (4) Q3 1999 equipment Facilities Complete Complete Q3 1999 (4) Q3 1999 Q3 1999 and Utilities Complete Q3 1999 (4) (3) (3) (3) Notes: (1) The target dates are the ends of the quarters referred to. For example Q3 1999 refers to the end of the third quarter of 1999. (2) Implementation phase for products is defined as the availability of necessary software and/or hardware upgrades. (3) These phases will not be performed for utilities, but will be considered as part of the contingency planning. (4) Reflects one quarter extension; procedures in process, only minor issues remain. A number of our products include computer hardware and software, including substantial custom software. During 1998, we began providing our customers information about the Year 2000 status of our products, and made all upgrades available by the end of the first quarter of 1999 (see table above). At the beginning of the second quarter of 1999, we put into practice a new plan to manage the field implementation of these upgrades, which will extend into the fourth quarter of 1999. We believe there are no significant Year 2000 product performance issues with respect to products that we will continue to support after January 1, 2000. We believe the impact to our business based on Year 2000 product performance issues or litigation related to those issues will not be material. However, we cannot give any assurances to that effect until our entire inventory, assessment, and remediation activities are completed for all projects in the table above. We believe our Year 2000 program will be completed on schedule. But the schedule is based on a number of factors and assumptions, such as: - the accuracy and completeness of responses to our inquiries; and - the availability of skilled personnel to complete the program. The program schedule could be adversely impacted if any of the factors and assumptions is incorrect. We cannot give assurance that our Year 2000 program will be completed on schedule or that we will not uncover Year 2000 issues that could create a material impact on our performance. We do not believe that we have a material relationship with any single third party supplier or customer. Although a significant interruption in our suppliers' and customers' activities (due to Year 2000 issues) is unlikely, we could experience a material impact in our financial results if such an interruption occurs. Also, a portion of our revenues is indirectly dependent upon our customers' reimbursement from federal, state, municipal and foreign government agencies, and the state of readiness of those government agencies is of concern. At this time we believe the most reasonably likely worst case scenario involves a significant interruption in the ability of one or more government agencies to reimburse those customers, which could lead to a significant interruption in cash received from affected customers. We are unable to estimate either the likelihood or the potential cost of such an occurrence. We do not expect that the cost of our Year 2000 program will be material to our business, results of operations, financial position or liquidity. We anticipate that the total cost for our Year 2000 program through 1999 will be approximately $9.0 million. Through June 30, 1999 we have spent approximately $5.7 million on our Year 2000 program. The majority of these costs are for the remediation or replacement of management information systems. Most of the funding for our Year 2000 program is separately budgeted, but a portion of the funding is part of our management information systems budget. Year 2000 program funding has delayed the implementation of certain other management information systems changes, but this delay will have only a minor impact on managing the Company. We have established and are implementing a contingency planning process with respect to Year 2000 issues (including most reasonably likely worse case Year 2000 scenarios). Although several plans have been developed, we continue to determine the extent and depth necessary for each aspect of our business. Euro - the new European currency Eleven countries of the European Union have adopted a single currency known as the "euro". The euro came into existence on January 1, 1999, and is the official currency for the countries of the Economic and Monetary Union (Austria, Belgium, Finland, France, Germany, Holland, Ireland, Italy, Luxembourg, Portugal and Spain) with national currencies expressed as a denomination (national currency units) of the euro. During the three-year transition period following its introduction, countries will be allowed to transact business both in the euro and in their own currencies at fixed conversion rates. On January 1, 2002, the euro will be the only currency in Economic and Monetary Union countries. We conduct business in more than 120 countries, generating approximately 50% of revenues outside the United States. A significant portion of our business is conducted in Europe. The introduction of the euro requires that we make modifications to our internal operations as well as to our external business arrangements. For example, product pricing and sales proposals are now available in the euro. Similarly, our billing and disbursement functions have been modified to reflect the use of the euro. Early in 1997, we established a six-member task force reporting to the chief financial officer to identify the issues related to the introduction of the euro and to develop and implement a plan to address those issues. The task force has developed a detailed plan for the euro implementation addressing all areas of operations, both internal and external. Major initiatives resulting from the recommendations of the task force are: - create a "Beckman Coulter Euro Information Center" to facilitate worldwide communication related to the euro; - accommodate our customers' preferences for their national currency or the euro during the transition period; - operate in a multi-currency environment (including the euro, national currency and the U.S. dollar), during the transition period, in all the European countries in which we do business; and - adopt use of the euro for internal systems and reporting as of December 1, 2001. We do not expect the cost of this effort to have a material effect on our business, results of operations, financial position or liquidity. However, we cannot guarantee that all problems will be foreseen and corrected, or that no material disruption of our business will occur. There is also likely to be competitive implications on our pricing and marketing strategies related to the conversion to the euro; however, we do not know the effects of any such impact at this time. Business Climate In the U.S., the life science research market continues to show signs of improvement, stimulated by the general economy. The clinical diagnostic market is under pressure from significant cost containment efforts and the overall restructuring of the industry, compounded by the uncertainty of the future direction of healthcare reforms. In 1999, portions of these markets served by us are expected to grow in the low single digits. The Asia Pacific market, including Japan, continues to be severely impacted by economic uncertainty. The two key factors are: 1.the recession in Japan, which is limiting the release of life science research funding; and 2.the currency crisis which has affected most countries in Southeast Asia. In general, the European clinical diagnostics and life science research markets continue to be dampened by cost containment initiatives as part of governmental fiscal management policies. These policies are driven in large part by the requirements for the ongoing European monetary union. Forward Looking Statements All statements contained in this quarterly report, or in any document we file with the Securities and Exchange Commission, or in any press release or other written or oral communication by or on behalf of our company, that do not directly and exclusively relate to historical facts constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. This 10-Q report contains such forward-looking statements, including statements regarding, among other items: 1. anticipated benefits, including potential tax savings, from integration of manufacturing operations; 2. anticipated proceeds from the sale of assets; 3. anticipated trends in our business and market growth; 4. our cash flow, liquidity requirements, and our ability to service debt; and 5. the impact of Year 2000 issues on our operations. These forward-looking statements are based on our expectations and are subject to a number of risks and uncertainties, some of which are beyond our control. These risks and uncertainties include, but are not limited to: 1. complexity and uncertainty regarding development of new high- technology products; 2. loss of market share through aggressive competition in the clinical diagnostics and life science research markets; 3. our dependence on capital spending policies and government funding; 4. the effect of potential healthcare reforms; 5. general economic conditions in countries in which we do business, such as, Japan and Germany; 6. fluctuations in foreign exchange rates and interest rates; 7. reliance on patents and other intellectual property; 8. difficulties, delays or failure in effectively integrating worldwide operations; 9. unanticipated Year 2000 or euro problems; and 10. other factors that cannot be identified at this time. Although we believe we have the product offerings and resources required to achieve our objectives, actual results could differ materially from those anticipated by these forward-looking statements. There can be no assurance that events anticipated by these forward-looking statements will in fact transpire as expected. PART II OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes In Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security-Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K a) Exhibits 11. Statement re Computation of Per Share Earnings: This information is set forth in Note 4, Net Earnings Per Share of the Condensed Consolidated Financial Statements included in Part I herein. 15. Independent Accountants' Review Report, July 21, 1999. 27. Financial Data Schedule for the six month period ended June 30, 1999. b) Reports on Form 8-K None. 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. BECKMAN COULTER, INC. (Registrant) Date: August 2, 1999 by WILLIAM H. MAY _______________________________ William H. May Vice President, General Counsel and Secretary Date: August 2, 1999 by JAMES T. GLOVER _______________________________ James T. Glover Vice President and Controller EXHIBIT INDEX FORM 10-Q, SECOND QUARTER, 1999 Exhibit Number Description - ------- ----------- 11. Statement re Computation of Per Share Earnings: This information is set forth in Note 4, Net Earnings Per Share, of the Condensed Consolidated Financial Statements included in Part I herein. 15. Independent Accountants' Review Report, July 21, 1999. 27. Financial Data Schedule for the six month period ended June 30, 1999. EX-15 2 INDEPENDENT ACCOUNTANTS' REVIEW REPORT Exhibit 15 KPMG LLP Center Tower 650 Town Center Drive Costa Mesa, CA 92626 Independent Accountants' Review Report The Stockholders and Board of Directors Beckman Coulter, Inc.: We have reviewed the condensed consolidated balance sheet of Beckman Coulter, Inc. and subsidiaries as of June 30, 1999, and the related condensed consolidated statements of operations for the three-month and six-month periods ended June 30, 1999 and 1998, and the Condensed Consolidated Statements of cash flows for the six-month periods ended June 30, 1999 and 1998. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Beckman Coulter, Inc. and subsidiaries as of December 31, 1998, and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated January 22, 1999, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1998, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. (KPMG LLP) Orange County, California July 21, 1999 EX-27 3 SUMMARY FINANCIAL INFORMATION 6-30-99
5 This schedule contains summary financial information extracted from the Condensed Consolidated Balance Sheet and the Condensed Consolidated Statement of Earnings and is qualified in its entirety by reference to such financial statements. 1,000,000 6-MOS DEC-31-1999 JUN-30-1999 13 0 557 24 318 951 628 323 2110 630 1104 0 0 3 158 2110 851 851 445 445 309 5 37 63 20 43 0 0 0 43 1.51 1.45
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