-----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, TB3UMRq/7TApoMl8c31Z3zNcXaw3NaLqpFD+AQimttPJuHyRE4DXkrgvK9x6uGXI Tkz0/GziSYPsOqSjX+gCqg== 0000950135-04-003690.txt : 20040729 0000950135-04-003690.hdr.sgml : 20040729 20040729095738 ACCESSION NUMBER: 0000950135-04-003690 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20040729 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FISHER SCIENTIFIC INTERNATIONAL INC CENTRAL INDEX KEY: 0000880430 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PROFESSIONAL & COMMERCIAL EQUIPMENT & SUPPLIES [5040] IRS NUMBER: 020451017 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: 1934 Act SEC FILE NUMBER: 001-10920 FILM NUMBER: 04937601 BUSINESS ADDRESS: STREET 1: LIBERTY LANE CITY: HAMPTON STATE: NH ZIP: 03842 BUSINESS PHONE: 6039265911 MAIL ADDRESS: STREET 1: LIBERTY LANE CITY: LIBEHAMPTON STATE: NH ZIP: 03842 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FISHER SCIENTIFIC INTERNATIONAL INC CENTRAL INDEX KEY: 0000880430 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PROFESSIONAL & COMMERCIAL EQUIPMENT & SUPPLIES [5040] IRS NUMBER: 020451017 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: LIBERTY LANE CITY: HAMPTON STATE: NH ZIP: 03842 BUSINESS PHONE: 6039265911 MAIL ADDRESS: STREET 1: LIBERTY LANE CITY: LIBEHAMPTON STATE: NH ZIP: 03842 425 1 b51348f2e425.htm FISHER SCIENTIFIC INTERNATIONAL, INC. 425 Fisher Scientific International, Inc. 425
 

Filed by Fisher Scientific International Inc.
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities and Exchange Act of 1934, as amended

Subject Company: Fisher Scientific International Inc.
Commission File No.: 1-10920

This filing relates to a planned merger (the “Merger”) between Fisher Scientific International Inc. (“Fisher”) and Apogent Technologies Inc. (“Apogent”) pursuant to the terms of an Amended and Restated Agreement and Plan of Merger, dated as of March 17, 2004, as amended April 16, 2004 (the “Merger Agreement”), by and among Fisher, Fox Merger Corporation and Apogent. The Merger Agreement is on file with the U.S. Securities and Exchange Commission (the “SEC”) as an exhibit to the Current Report on Form 8-K, as amended, filed by Fisher on April 16, 2004, and is incorporated by reference into this filing.

* * *

 


 

     
(FISHER SCIENTIFIC INTERNATIONAL INC. LOGO)
 
 
   
NEWS RELEASE
   
     
Media Contact:
  Investor Contact:
Gia L. Oei, 603-929-2489
  Carolyn Miller, 603-929-2381
E-mail: Gia.Oei@nh.fishersci.com
  E-mail: Carolyn.Miller@nh.fishersci.com

Fisher Scientific Reports Record Second-Quarter Sales, Earnings and Cash Flow;

Company Narrows 2004 EPS Guidance to High End of Range, $2.80 to $2.87;
Reiterates 2005 EPS Guidance of $3.45 to $3.65

HAMPTON, N.H., July 28, 2004 — Fisher Scientific International Inc. (NYSE: FSH), a world leader in serving science, today reported record second-quarter sales, earnings and cash flow for the three months ended June 30, 2004, reflecting robust demand for its scientific products and services and continued solid sales growth to healthcare customers.

     “Our organic sales growth remained strong this quarter, and we achieved record earnings,” said Paul M. Montrone, chairman and chief executive officer. “Our results demonstrate continued growth in the academic and pharmaceutical sectors, increased demand for safety products and improving trends in the industrial markets.”

Second-Quarter Reported Results

     Sales for the second quarter increased 22.3 percent to $1,057.6 million compared with $864.5 million in the corresponding period of 2003. Excluding the effect of foreign exchange, sales totaled $1,041.2 million in the second quarter, a 20.4 percent increase over the same quarter in 2003, with seven points of this increase from organic growth. Including nonrecurring inventory step-up costs related to the Oxoid and Dharmacon acquisitions, integration costs related to the Apogent transaction and other non-recurring costs, totaling $6.3 million, net of tax ($9.4 million pre tax), second-quarter net income was $44.7 million, or 65 cents per diluted share, compared with $33.0 million, or 57 cents per diluted share, in the second quarter of 2003.

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Fisher Scientific Reports Record Sales and Earnings — Page 2

     For the six months ended June 30, 2004, sales totaled $2,068.6 million, a 21.8 percent increase from sales of $1,697.9 million in the corresponding period last year. Excluding the $43.9 million favorable effect of foreign exchange, sales totaled $2,024.7 million, a 19.2 percent increase compared with the first six months of 2003. Net income for the six months ended June 30, 2004, was $79.3 million, or $1.16 per diluted share. Net income in the corresponding period of 2003 was $32.1 million, or 55 cents per diluted share.

     For the first half of 2004, Fisher generated $136.9 million in cash from operations, reflecting an increase in earnings and continued improvements in working-capital management. Capital expenditures during the period were $30.9 million, related to facility expansions at Oxoid and Perbio. In the first six months, free-cash flow, defined as cash from operations less capital expenditures, totaled $106.0 million.

Pro Forma Financial Results

     The following discussion excludes inventory step-up amounts related to the acquisitions of Perbio, Oxoid and Dharmacon, nonrecurring charges related to the Apogent integration, and other one-time costs in 2004 and debt-refinancing and acquisition-related costs in 2003. In the attached supplementary information tables, these items are reconciled to the most directly comparable financial measures computed in accordance with accounting principles generally accepted in the United States (GAAP).

     Income from operations for the second quarter increased 38.5 percent to $92.8 million compared with $67.0 million in the same quarter of 2003.

     Second-quarter net income increased 44.5 percent to $51.0 million compared with net income of $35.3 million in the corresponding period of 2003, reflecting an improvement in operating income and a reduction in the effective tax rate. Diluted earnings per share (EPS) were 74 cents in the second quarter compared with 61 cents in the second quarter of 2003.

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Fisher Scientific Reports Record Sales and Earnings — Page 3

     Income from operations for the six-month period increased 34.0 percent to $171.3 million compared with $127.8 million during the same period in the prior year. Net income for the first six months of 2004 increased 46.1 percent to $92.2 million compared with $63.1 million in the same period of 2003. Year-to-date earnings were $1.35 per diluted share compared with $1.08 per diluted share in the corresponding period of 2003.

Business-Segment Results

     Excluding the effect of foreign exchange, sales of scientific products and services in the second quarter totaled $774.7 million, a 29.2 percent increase compared with the same period in 2003, with 12 points of this increase from organic growth. Organic sales growth was driven by robust sales in the United States, including sales of safety-related products, as well as growth in international markets. Operating income increased 40.3 percent to $76.2 million from $54.3 million in the corresponding period of 2003 reflecting contributions from recent acquisitions and margin improvement in our distribution business, partially offset by increased investments in product development and sales and marketing activities.

     Year to date, excluding the effect of foreign exchange, sales of scientific products and services increased 27.2 percent to $1,490.2 million compared with $1,171.6 million in the first six months of 2003. Operating income grew in the six-month period to $142.8 million, a 38.9 percent increase over the same period in 2003.

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Fisher Scientific Reports Record Sales and Earnings — Page 4

     Excluding the effect of foreign exchange, sales of healthcare products and services totaled $227.9 million in the second quarter, a 6.7 percent increase compared with $213.6 million in the prior year’s quarter, with approximately three points of this increase from organic growth. The organic sales growth reflects our ongoing efforts to drive operating income improvement in this segment, notwithstanding the impact on revenue growth. Operating income increased 70 percent to $15.3 million compared with $9.0 million in the second quarter last year, reflecting the benefits of this margin improvement program and contributions from the medical device business of Perbio.

     For the first six months, sales of healthcare products and services, excluding the effect of foreign exchange, totaled $462.4 million compared with $429.6 million in the first six months of 2003. Year-to-date operating income increased to $27.4 million from $18.8 million in the corresponding period last year.

     As expected, second-quarter sales in the laboratory-workstations segment decreased to $43.4 million from $55.8 million in the prior year. The segment reported operating income of $1.3 million in the quarter. The decline in sales and operating income was primarily due to timing of projects and slower market demand for smaller projects. Order activity in the laboratory-workstations segment improved during the second quarter with backlog at approximately $125 million at the end of the quarter, compared with $109 million at the corresponding period of 2003.

     Year-to-date sales in the laboratory-workstations segment were $81.8 million compared with $105.7 million in the prior-year period. Operating income for the six-month period was $1.1 million compared with $6.4 million in the prior year.

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Fisher Scientific Reports Record Sales and Earnings — Page 5

Special Developments

Ø   On Aug. 2, Fisher Scientific and Apogent Technologies Inc. (NYSE: AOT) will hold shareholder meetings to vote on the proposed merger of the two companies. The transaction is expected to close promptly after the shareholder meetings on Aug. 2.
 
Ø   On July 22, in a private placement, Fisher issued $300 million of senior subordinated notes due 2014. The notes were issued at a dollar price of 100.0 to yield 63/4 percent. The company intends to use the proceeds from the issue to fund the tender offer for Apogent’s 61/2 percent senior subordinated notes due 2013. The issuance of the new notes is subject to the closing of Fisher’s merger with Apogent.

Company Outlook

     Fisher is narrowing its 2004 EPS guidance to the high end of the previously announced range of $2.75 to $2.87 and holding its 2005 EPS guidance, including the dilutive effect of the outstanding convertible notes for both years. Fisher expects full-year 2004 and 2005 EPS to be $2.80 to $2.87 and $3.45 to $3.65, respectively. Guidance for both years includes the effect of the Apogent transaction, which the company expects will be neutral to 2004 EPS and 15 cents accretive in 2005.

     We have adjusted 2004 sales and operating margin guidance to reflect the August close date for the Apogent merger and our current positive outlook for the scientific research and healthcare segments. Fisher has increased its 2004 organic growth rate, excluding the effect of foreign exchange, to 6 to 7 percent for the year. Our 2004 guidance also includes increased spending on new product development, an acceleration of investments in sales and marketing initiatives and short-term softness in our lab workstations segment.

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Fisher Scientific Reports Record Sales and Earnings — Page 6

     The company is increasing its 2004 operating cash flow guidance by $20.0 million, reflecting continued improvements in working capital management.

     The company’s detailed guidance for 2004 and 2005 is as follows:

                 
    2004
  2005
Revenue growth (excluding foreign exchange)
    27.5% - 29.5 %     20.0% - 22.0 %
Operating margins
    10.0% - 10.2 %     13.3% - 13.5 %
Earnings per share
    $2.80 - $2.87       $3.45 - $3.65  
Diluted share count
  91.5 million   125.0 million
Operating cash flow
  $350 - $370 million   $510 - $540 million
Capital expenditures
  $125 million   $130 million

     Based on preliminary estimates of cost allocations, the company’s guidance by segment for 2004 is as follows:

                 
Segment
  Revenue Growth Rate
  Operating Margin
    (excluding foreign exchange)        
Scientific products and services
    34% -37 %     10.6% - 11.0 %
Healthcare products and services
    18% - 22 %     8.3% - 8.8 %
Lab workstations
    (14%)-(16 %)     2.0% - 3.0 %

     Fisher anticipates one-time costs for the Apogent transaction in 2004 and 2005 of $180 million and $60 million respectively, related to inventory step-up amounts, merger expenses, restructuring and other integration costs. These one-time costs include cash charges of approximately $60 million and $40 million for 2004 and 2005, respectively. In addition, in 2004, we expect one-time charges of approximately $27 million primarily associated with the Perbio, Oxoid and Dharmacon transactions. These one-time costs are excluded from the operating margin and EPS guidance for 2004 and 2005.

     The estimated diluted share count in 2004 and 2005 includes the effect of outstanding convertible notes based on the treasury stock method. Guidance for 2005 includes Apogent integration savings of $55 million which, on a quarterly basis, will increase throughout the year, with roughly $20 million realized in the first half.

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Fisher Scientific Reports Record Sales and Earnings — Page 7

     Fisher Scientific expects third-quarter EPS to be in the range of 72 cents to 75 cents, assuming a diluted share count of approximately 105.5 million and based on an effective tax rate of approximately 32.5 percent to bring the company’s full-year effective tax rate to 30 percent.

Upcoming Presentations

Fisher Scientific will present at the following events:

  UBS East Coast Biotechnology Bus Tour, Aug. 9, in Boston
 
  Merrill Lynch Global Drug, Biotech & Medical Devices Conference, Sept. 21 at the Merrill Lynch Financial Centre in London.

Conference Call Scheduled

     Fisher will host a teleconference on Thursday, July 29, to discuss its second-quarter financial results and 2004 guidance. Details are provided below:

Live conference call
Date: Thursday, July 29
Time: 10 a.m. Eastern Daylight Time (EDT)
Within United States: 800-299-8538
International: (+1) 617-786-2902

Audio replay (available for 10 days):
Within United States: 888-286-8010
International: (+1) 617-801-6888
Conference replay code: 85603722

     The conference call will also be webcast on Fisher’s Web site (www.fisherscientific.com) and will be archived until Aug. 29.

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Fisher Scientific Reports Record Sales and Earnings — Page 8

About Fisher Scientific International Inc.

As a world leader in serving science, Fisher Scientific International Inc. (NYSE: FSH) offers more than 600,000 products and services to more than 350,000 customers located in approximately 145 countries. Fisher’s customers include pharmaceutical and biotech companies; colleges and universities; medical-research institutions; hospitals and reference labs; quality-control, process-control and R&D labs in various industries; as well as government and first responders. As a result of its broad product offering, electronic-commerce capabilities and integrated global logistics network, Fisher serves as a one-stop source of products, services and global solutions for its customers. The company primarily serves the scientific-research, clinical-laboratory and safety markets. Additional information about Fisher is available on the company’s Web site at www.fisherscientific.com.

Forward-looking Statements

This announcement includes forward-looking statements. Fisher Scientific has based these forward-looking statements on its current expectations and projections about future events. Although Fisher Scientific believes that its assumptions made in connection with the forward-looking statements are reasonable, no assurances can be given that its assumptions and expectations will prove to have been correct. These forward-looking statements are subject to various risks, uncertainties and assumptions. Fisher Scientific undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this announcement might not occur.

#

 


 

Table 1

Fisher Scientific International Inc.
Statement of Operations
(in millions, except per share data)

(UNAUDITED)

                                 
    Three Months Ended   Six Months Ended
    June 30,
  June 30,
    2004
  2003
  2004
  2003
Sales
  $ 1,057.6     $ 864.5     $ 2,068.6     $ 1,697.9  
Cost of sales
    749.7       636.7       1,484.9       1,251.6  
Selling, general and administrative expense
    222.3       160.8       429.8       318.5  
 
   
 
     
 
     
 
     
 
 
Income from operations
    85.6       67.0       153.9       127.8  
Interest expense
    23.0       16.6       45.0       38.9  
Other expense, net
    1.1       3.2       0.4       47.6  
 
   
 
     
 
     
 
     
 
 
Income before income taxes
    61.5       47.2       108.5       41.3  
Income tax provision
    16.8       14.2       29.2       9.2  
 
   
 
     
 
     
 
     
 
 
Net income
  $ 44.7     $ 33.0     $ 79.3     $ 32.1  
 
   
 
     
 
     
 
     
 
 
Net income per common share:
                               
Basic
  $ 0.70     $ 0.60     $ 1.24     $ 0.59  
 
   
 
     
 
     
 
     
 
 
Diluted
  $ 0.65     $ 0.57     $ 1.16     $ 0.55  
 
   
 
     
 
     
 
     
 
 
Weighted average common shares outstanding:
                               
Basic
    64.2       54.8       63.9       54.8  
 
   
 
     
 
     
 
     
 
 
Diluted
    68.9       58.3       68.5       58.2  
 
   
 
     
 
     
 
     
 
 

 


 

Table 2

Fisher Scientific International Inc.
Segment Results
(in millions)

(UNAUDITED)

                                                 
    Three Months Ended   Six Months Ended
    June 30,
  June 30,
            Growth                   Growth    
    2004
  Rate
  2003
  2004
  Rate
  2003
Revenue
                                               
Scientific Products and Services
  $ 790.6       31.9 %   $ 599.4     $ 1,532.6       30.8 %   $ 1,171.6  
Healthcare Products and Services
    228.4       6.9 %     213.6       463.8       8.0 %     429.6  
Laboratory Workstations
    43.4       -22.2 %     55.8       81.8       -22.6 %     105.7  
Eliminations
    (4.8 )             (4.3 )     (9.6 )             (9.0 )
 
   
 
             
 
     
 
             
 
 
Total
  $ 1,057.6       22.3 %   $ 864.5     $ 2,068.6       21.8 %   $ 1,697.9  
 
   
 
             
 
     
 
             
 
 
                                                                 
    Three Months Ended   Six Months Ended
    June 30,
  June 30,
            Operating           Operating           Operating           Operating
    2004
  Margin
  2003
  Margin
  2004
  Margin
  2003
  Margin
Operating Income
                                                               
Scientific Products and Services
  $ 76.2       9.6 %   $ 54.3       9.1 %   $ 142.8       9.3 %   $ 102.8       8.8 %
Healthcare Products and Services
    15.3       6.7 %     9.0       4.2 %     27.4       5.9 %     18.8       4.4 %
Laboratory Workstations
    1.3       3.0 %     3.8       6.8 %     1.1       1.3 %     6.4       6.1 %
Eliminations
                  (0.1 )                           (0.2 )        
 
   
 
             
 
             
 
             
 
         
Segment sub-total
    92.8       8.8 %     67.0       7.8 %     171.3       8.3 %     127.8       7.5 %
 
   
 
             
 
             
 
             
 
         
Inventory step-up
    (5.7 )                           (15.9 )                      
Non-recurring integration related costs
    (1.5 )                           (1.5 )                      
 
   
 
             
 
             
 
             
 
         
Operating income
  $ 85.6             $ 67.0             $ 153.9             $ 127.8          
 
   
 
             
 
             
 
             
 
         

The information for the three and six months ended June 30, 2003 has been reclassified to conform with the current presentation of reportable segments.

 


 

Table 3

Fisher Scientific International Inc.
Condensed Balance Sheet
(in millions)

                 
    June 30,   December 31,
    2004
  2003
    (UNAUDITED)        
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 52.5     $ 83.8  
Accounts receivable, net
    477.8       432.7  
Inventories
    384.4       355.4  
Other current assets
    158.2       138.9  
 
   
 
     
 
 
Total current assets
    1,072.9       1,010.8  
Property, plant and equipment
    474.9       440.9  
Goodwill
    1,268.1       1,006.9  
Other assets
    520.3       400.8  
 
   
 
     
 
 
Total assets
  $ 3,336.2     $ 2,859.4  
 
   
 
     
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Short-term debt
  $ 10.6     $ 12.0  
Accounts payable
    432.1       377.7  
Accrued and other current liabilities
    276.0       258.8  
 
   
 
     
 
 
Total current liabilities
    718.7       648.5  
Long-term debt
    1,632.6       1,386.1  
Other liabilities
    304.7       249.4  
 
   
 
     
 
 
Total liabilities
    2,656.0       2,284.0  
 
   
 
     
 
 
Total stockholders’ equity
    680.2       575.4  
 
   
 
     
 
 
Total liabilities and stockholders’ equity
  $ 3,336.2     $ 2,859.4  
 
   
 
     
 
 

Note: $20.6 million was outstanding through the Accounts Receivable Securitization as of June 30, 2004.

 


 

Table 4

Fisher Scientific International Inc.
Condensed Statement of Cash Flows
(in millions)

(UNAUDITED)

                 
    Six Months Ended
    June 30,
    2004
  2003
Cash flows from operating activities:
               
Net income
  $ 79.3     $ 32.1  
Depreciation and amortization
    51.3       38.2  
Other adjustments to reconcile net income to cash provided by operating activities
    10.1       53.1  
Changes in working capital and other assets and liabilities
    (3.8 )     (23.4 )
 
   
 
     
 
 
Cash provided by operating activities
    136.9       100.0  
 
   
 
     
 
 
Cash flows from investing activities:
               
Acquisitions, net of cash acquired
    (418.3 )      
Capital expenditures
    (30.9 )     (31.0 )
Other investing activity
    (2.4 )     (9.2 )
 
   
 
     
 
 
Cash used in investing activities
    (451.6 )     (40.2 )
 
   
 
     
 
 
Cash flows from financing activities:
               
Proceeds from stock options exercised
    27.2       4.2  
Net change in debt
    245.7       (15.8 )
Changes in the accounts receivable securitization, net
    20.6        
Other financing activity
    (8.8 )     (40.0 )
 
   
 
     
 
 
Cash provided by (used) in financing activities
    284.7       (51.6 )
 
   
 
     
 
 
Effect of exchange rate changes on cash
    (1.3 )     2.3  
Net change in cash and cash equivalents
    (31.3 )     10.5  
Cash and cash equivalents — beginning of period
    83.8       38.8  
 
   
 
     
 
 
Cash and cash equivalents — end of period
  $ 52.5     $ 49.3  
 
   
 
     
 
 

 


 

Table 5

Fisher Scientific International Inc.
Statement of Operations
Supplementary Information
(in millions, except per share data)

(UNAUDITED)

                                                 
    Three Months Ended
    June 30, 2004
  June 30, 2003
    As           As   As           As
    Reported
  Adjustments
  Adjusted
  Reported
  Adjustments
  Adjusted
Sales
  $ 1,057.6     $     $ 1,057.6     $ 864.5     $     $ 864.5  
Cost of sales
    749.7       (5.7 ) (a)     744.0       636.7             636.7  
Selling, general and administrative expense
    222.3       (1.5 ) (b)     220.8       160.8             160.8  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Income from operations
    85.6       7.2       92.8       67.0             67.0  
Interest expense
    23.0             23.0       16.6             16.6  
Other (income) expense, net
    1.1       (2.2 ) (c)     (1.1 )     3.2       (3.7 )(e)     (0.5 )
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Income before income taxes
    61.5       9.4       70.9       47.2       3.7       50.9  
Income tax provision
    16.8       3.1 (d)     19.9       14.2       1.4 (f)     15.6  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Net income
  $ 44.7     $ 6.3     $ 51.0     $ 33.0     $ 2.3     $ 35.3  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Diluted net income per common share
  $ 0.65     $ 0.09     $ 0.74     $ 0.57     $ 0.04     $ 0.61  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Diluted weighted average common shares outstanding
    68.9               68.9       58.3               58.3  
 
   
 
             
 
     
 
             
 
 

(a)   Represents charges associated with the step-up of inventory to fair value at the dates of acquisition.
 
(b)   Represents charges associated with integration.
 
(c)   Represents a charge associated with the termination of a foreign currency contract.
 
(d)   Represents an adjustment for the incremental tax benefit associated with items (a), (b) and (c).
 
(e)   Represents charges associated with call premiums and deferred financing fees.
 
(f)   Represents an adjustment for the incremental tax benefit associated with item (e).

Reconciliation of Net Income to EBITDA

                 
    Three Months Ended
    June 30,
    2004
  2003
Net income
  $ 44.7     $ 33.0  
Adjustments to reconcile net income to adjusted EBITDA:
               
Income tax provision
    16.8       14.2  
Interest expense
    23.0       16.6  
Depreciation and amortization
    27.2       18.7  
Amortization of deferred financing fees
    (0.8 )     (0.6 )
Inventory step-up
    5.7        
Non-recurring integration related costs
    1.5        
Termination of foreign currency contract
    2.2        
Call premiums and deferred financing fees
          3.7  
 
   
 
     
 
 
Adjusted EBITDA
  $ 120.3     $ 85.6  
 
   
 
     
 
 

 


 

Table 6

Fisher Scientific International Inc.
Statement of Operations
Supplementary Information
(in millions, except per share data)

(UNAUDITED)

                                                 
    Six Months Ended
    June 30, 2004
  June 30, 2003
    As           As   As           As
    Reported
  Adjustments
  Adjusted
  Reported
  Adjustments
  Adjusted
Sales
  $ 2,068.6     $     $ 2,068.6     $ 1,697.9     $     $ 1,697.9  
Cost of sales
    1,484.9       (15.9 ) (a)     1,469.0       1,251.6             1,251.6  
Selling, general and administrative expense
    429.8       (1.5 )(b)     428.3       318.5             318.5  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Income from operations
    153.9       17.4       171.3       127.8             127.8  
Interest expense
    45.0             45.0       38.9             38.9  
Other (income) expense, net
    0.4       (2.2 )(c)     (1.8 )     47.6       (49.3 ) (e)     (1.7 )
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Income before income taxes
    108.5       19.6       128.1       41.3       49.3       90.6  
Income tax provision
    29.2       6.7 (d)     35.9       9.2       18.3 (f)     27.5  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Net income
  $ 79.3     $ 12.9     $ 92.2     $ 32.1     $ 31.0     $ 63.1  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Diluted net income per common share
  $ 1.16     $ 0.19     $ 1.35     $ 0.55     $ 0.53     $ 1.08  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Diluted weighted average common shares outstanding
    68.5               68.5       58.2               58.2  
 
   
 
             
 
     
 
             
 
 

(a)   Represents charges associated with the step-up of inventory to fair value at the dates of acquisition.
 
(b)   Represents charges associated with integration.
 
(c)   Represents a charge associated with the termination of a foreign currency contract.
 
(d)   Represents an adjustment for the incremental tax benefit associated with items (a), (b) and (c).
 
(e)   Represents charges associated with call premiums and deferred financing fees.
 
(f)   Represents an adjustment for the incremental tax benefit associated with item (e).

Reconciliation of Net Income to EBITDA

                 
    Six Months Ended
    June 30,
    2004
  2003
Net income
  $ 79.3     $ 32.1  
Adjustments to reconcile net income to adjusted EBITDA:
               
Income tax provision
    29.2       9.2  
Interest expense
    45.0       38.9  
Depreciation and amortization
    51.3       38.2  
Amortization of deferred financing fees
    (1.6 )     (1.6 )
Inventory step-up
    15.9        
Non-recurring integration related costs
    1.5        
Termination of foreign currency contract
    2.2        
Call premiums and deferred financing fees
          49.3  
 
   
 
     
 
 
Adjusted EBITDA
  $ 222.8     $ 166.1  
 
   
 
     
 
 

 


 

FORWARD LOOKING STATEMENTS

This communication contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on Fisher’s and Apogent’s current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that (1) the companies may be unable to obtain stockholder or regulatory approvals required for the Merger; (2) problems may arise in successfully integrating the businesses of the two companies; (3) the acquisition may involve unexpected costs; (4) the combined company may be unable to achieve cost-cutting synergies; (5) the businesses may suffer as a result of uncertainty surrounding the acquisition; and (6) the industry may be subject to future regulatory or legislative actions and other risks that are described in SEC reports filed by Fisher and Apogent. Because forward-looking statements involve risks and uncertainties, actual results and events may differ materially from results and events currently expected by Fisher and Apogent. Fisher and Apogent assume no obligation and expressly disclaim any duty to update the information contained herein except as required by law.

ADDITIONAL INFORMATION ABOUT THE MERGER
AND WHERE TO FIND IT

In connection with the proposed Merger, Fisher and Apogent have on file relevant materials with the SEC, including an effective registration statement on Form S-4 that contains a prospectus and a joint proxy statement. Investors and security holders are urged to read these documents and any other relevant documents filed with the SEC, as well as any amendments or supplements to those

 


 

documents, because they will contain important information about Fisher, Apogent and the Merger. Investors and security holders may obtain these documents (and any other documents filed by Fisher or Apogent with the SEC) free of charge at the SEC’s website at www.sec.gov. In addition, the documents filed with the SEC by Fisher may be obtained free of charge by directing such request to: Corporate Secretary, One Liberty Lane, Hampton, NH 03842 or from Fisher’s website at www.fisherscientific.com. The documents filed with the SEC by Apogent may be obtained free of charge by directing such request to: Director of Investor Relations, 30 Penhallow Street, Portsmouth, NH 03801 or from Apogent’s website at www.apogent.com. Investors and security holders are urged to read the joint proxy statement/prospectus and the other relevant materials before making any voting or investment decision with respect to the proposed Merger.

Fisher, Apogent and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Fisher and Apogent in favor of the acquisition. Information about the executive officers and directors of Fisher and their ownership of Fisher common stock is set forth in the joint proxy statement/prospectus filed on Form S-4 which was declared effective by the SEC on May 21, 2004. Information about the executive officers and directors of Apogent and their ownership of Apogent common stock is set forth in the proxy statement for Apogent’s 2004 Annual Meeting of Shareholders, which was filed with the SEC on December 23, 2003. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of Fisher, Apogent and their respective executive officers and directors in the Merger by reading the joint proxy statement/prospectus regarding the Merger.

 

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