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Article Excerpt
HAMPTON, N.H. -- Fisher Scientific International Inc. (NYSE: FSH), a world leader in serving science, today reported record sales and earnings for the second quarter ended June 30, 2005, reflecting strong demand from healthcare customers and continued growth in sales of scientific products and services.
"We concluded the first half of the year on a strong note -- setting new records for both sales and earnings," said Paul M. Montrone, chairman and chief executive officer. "Our scientific research and healthcare business segments performed well, and our integration of the Apogent businesses is on track. In addition to the acquisition of McKesson BioServices, which we completed last week, we have signed definitive agreements to acquire two other companies that will further expand our pharmaceutical service offering and enhance our portfolio of products for the life-science marketplace."
Second-Quarter Reported Results
Sales for the second quarter increased 33 percent to $1,391.3 million compared with $1,048.6 million in the corresponding period of 2004. Excluding the effect of foreign exchange, sales totaled $1,377.6 million in the second quarter, a 31 percent increase over the same quarter in 2004, with 5.2 points of this increase from organic growth.
Income from continuing operations for the second quarter increased to $85.4 million, or 67 cents per diluted share, from $43.5 million, or 62 cents per diluted share, in the same period of 2004. Income from continuing operations includes $30.2 million, net of tax ($46.9 million pre-tax) of nonrecurring costs and special items, which are excluded from the pro forma financial results discussed below.
Second-quarter net income increased to $101.4 million, or 80 cents per diluted share, compared with net income of $44.7 million, or 64 cents per diluted share, in the same period of 2004. Net income for the second quarter includes $16.0 million, net of tax, associated with discontinued operations and the gain on the sale of Atos Medical AB. Atos was sold by Fisher Scientific in April 2005 and has been reflected as a discontinued operation for all periods presented.
For the six months ended June 30, 2005, sales totaled $2,742.5 million, a 34 percent increase over sales of $2,051.7 million in the corresponding period last year. Excluding the favorable effect of foreign exchange, sales totaled $2,714.8 million, a 32 percent increase compared with the first six months of 2004. Net income for the first six months was $178.4 million, or $1.41 per diluted share. In 2004, net income for the corresponding six-month period was $79.3 million, or $1.15 per diluted share.
During the first six months of 2005, Fisher generated $218.1 million in cash from operations, primarily reflecting growth in earnings. Capital expenditures during the same period were $72.4 million, related to facility expansions and the integration of Apogent. In the first six months, free cash flow, defined as cash from operations less capital expenditures, was $145.7 million.
Pro Forma Financial Results
The following discussion excludes nonrecurring costs and special items in 2004 and 2005. In the attached supplemental information tables, these items are reconciled to the most directly comparable financial measures computed in accordance with generally accepted accounting principles in the United States (GAAP).
Operating income for the second quarter doubled to $183.7 million compared with $91.2 million in the same quarter of 2004, reflecting organic margin improvement, contributions from the Apogent businesses and the benefit of integration synergies.
Second-quarter net income increased 127 percent to $115.6 million compared with net income of $51.0 million in the corresponding period of 2004, reflecting an improvement in operating income and a reduction in the effective tax rate, partially offset by an increase in interest expense. Diluted earnings per share increased to 91 cents in the second quarter compared with 73 cents in the same period in 2004.
Operating income for the six-month period increased 112 percent to $356.3 million compared with $168.0 million during the same period in the prior year. Net income for the first six months of 2005 increased 134 percent to $216.1 million compared with $92.2 million in the same period of 2004. Year-to-date earnings were $1.71 per diluted share compared with $1.33 per diluted share in the corresponding period of 2004.
Business-Segment Results
Sales of scientific products and services in the second quarter increased to $1,030.4 million, a 30...
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