<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
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 1 - 5542
DEXTER CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CONNECTICUT 06 - 0321410
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE ELM STREET, WINDSOR LOCKS, CONNECTICUT 06096
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(860) 292-7675
- --------------
(Registrant's telephone number, including area code)
The Dexter Corporation
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
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 / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS Outstanding at April 30, 1998
----- -----------------------------
<S> <C>
COMMON STOCK, PAR VALUE $1 23,227,567 SHARES
</TABLE>
<PAGE> 2
PART I
FINANCIAL INFORMATION
Item 1 - Financial Statements
Reference is made to the following consolidated financial statements
which are incorporated herein by reference:
(a) Exhibit 99a - Condensed Statement of Income for the three
months ended March 31, 1998 and 1997.
(b) Exhibit 99b - Condensed Statement of Financial Position as of
March 31, 1998, December 31, 1997, and March 31, 1997.
(c) Exhibit 99c - Condensed Statement of Cash Flows for the three
months ended March 31, 1998 and 1997.
(d) Exhibit 99d - Statement of Comprehensive Income (Loss) for the
three months ended March 31, 1998 and 1997.
(e) Exhibit 99e - Net Sales by Market for the three months ended
March 31, 1998 and 1997.
(f) Exhibit 99f - Notes to Consolidated Financial Statements.
The unaudited financial data included herein as of March 31, 1998 and
1997, and for the three-month periods then ended, have been reviewed by
the registrant's independent public accountants, Coopers & Lybrand
L.L.P., and their report is attached.
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
Analysis of Operations
The Company reported record first quarter 1998 net income of $14.2 million, or
$.61 per share on a diluted basis, compared with $12.9 million, or $.54 per
share diluted for the first quarter of 1997. Net income increased 11% while both
basic earnings per share and diluted earnings per share improved 13% in the
first quarter.
Sales in 1998 were a first quarter record at $289.9 million, an increase of 6%
compared with sales of $272.3 million in the first quarter of 1997. A 7%
increase in unit volume and a 3% increase due to acquisitions were partially
offset by a 3% unfavorable effect of currency translation rates and price
decreases averaging 1%.
<PAGE> 3
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations, continued
Products with strong performance in the first quarter include aerospace
adhesives and coatings, liquid encapsulant materials serving the electronics
market, magnetic materials, food and specialty can coatings serving
international markets, and sales of products at Life Technologies, Inc. Products
with weaker performance in the quarter include beer and beverage can coatings
serving international markets, nonwoven materials serving the food packaging
market, and printed wiring board products serving the electronics market.
Consolidated gross margin of 36.3% for the first quarter of 1998, stated as a
percentage of sales, increased .7 percentage points from 35.6% in the first
quarter of 1997. This improvement came from wholly owned Dexter operations,
primarily due to volume increases, productivity improvements, and favorable
product mix.
Marketing and administrative cost increased $5 million, or 9%, in the first
quarter of 1998 primarily due to increased cost at Life Technologies, Inc. and
marketing and administrative costs associated with businesses acquired
subsequent to the first quarter of 1997.
Other income of $2.3 million in the first quarter of 1998 decreased $1.9 million
from the first quarter of 1997. This decrease was primarily due to lower equity
income resulting from the divestiture of D & S Plastics International, which was
effective April 1, 1997. The negative impact of lower equity income was offset
by lower interest expense, a lower effective tax rate of 35% in the first
quarter of 1998 compared with 36% in 1997, and lower minority interest expense
in 1998.
Analysis of Financial Condition
Excess acquisition cost as of March 31, 1998 was $97.8 million, an increase of
$17.4 million, compared with $80.4 million as of March 31, 1997. This was
primarily due to an increase of $24.1 million due to the impact of businesses
acquired subsequent to the first quarter of 1997 which was partially offset by
$6.1 million of amortized costs.
Other assets as of March 31, 1998 were $74 million, a decrease of $15.5 million
compared with $89.5 million as of March 31, 1997. This decrease was primarily
due to the divestiture of the Company's 50% equity interest in D & S Plastics
International of $43.2 million, which was effective April 1, 1997. Partially
offsetting this decrease was an increase of 28.6 million for patents,
technology, formulas and covenants related to businesses acquired subsequent to
the first quarter of 1997.
<PAGE> 4
PART II
OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
The annual meeting of the shareholders of the Company was held on April
23, 1998, where the following actions were taken:
(a) The re-election to the Board of Directors of Mr. Robert M. Furek,
chairman of the State Board of Trustees for the Hartford, Connecticut
public school system and a partner in Resolute Partners; Mrs. Martha
Clark Goss, vice president and chief financial officer of Booz, Allen &
Hamilton Inc.; and Mr. Edgar G. Hotard, president and chief operating
officer of Praxair, Inc.
The votes for each director were as follows:
<TABLE>
<CAPTION>
Director For Against
-------- --- -------
<S> <C> <C>
Robert M. Furek 20,640,815 173,612
Martha Clark Goss 20,653,315 161,112
Edgar G. Hotard 20,637,056 177,371
</TABLE>
In addition, the following directors continue in office for the
terms expiring as indicated: Ms. Henrietta Holsman Fore (1999), Mr.
Bernard M. Fox (1999), Mr. K. Grahame Walker (1999), George M.
Whitesides, Ph.D. (1999), Mr. Charles H. Curl (2000), Mr. Peter G.
Kelly (2000), and Mr. Jean-Francois Saglio (2000).
(b) The selection of Coopers & Lybrand L.L.P. as auditors of the Company
for the year 1998 was ratified.
The votes for selection of Coopers & Lybrand L.L.P. were as follows:
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
20,780,101 8,497 25,829
</TABLE>
(c) An amendment to the Company's Restated Certificate of Incorporation to
change the Company's name to "Dexter Corporation" was approved.
The votes for the approval of the amendment were as follows:
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
20,534,844 239,067 57,515
</TABLE>
<PAGE> 5
Item 5 - Other Information
(a) Glen L. Urban, Ph.D., whose term as director expired on April 23, 1998,
did not stand for re-election. Dr. Urban had served on the Board of
Directors since 1989.
(b) The Board of Directors elected Mr. Jeffrey W. McClelland and Mr. David
Woodhead to serve as vice presidents of the Company. In addition, Mr.
McClelland is president of Adhesive & Coating Systems and Mr. Woodhead
is president of Magnetic Technologies.
Item 6 - Exhibits and Reports on Form 8 - K
(a) Exhibit 3A(1) - Amendment to the Restated Certificate of Incorporation
of the registrant, filed with the Secretary of the State of Connecticut
on April 23, 1998, for the purposes of changing the Company's name to
Dexter Corporation.
Exhibit 15 of Part 1 - Letter to Securities and Exchange Commission
re: Incorporation of Accountants' Report
Exhibit 27 of Part 1 - Financial Data Schedule for the period ending
March 31, 1998. Restated Financial Data
Schedules for the periods ended from December
31, 1995 through September 30, 1997 to include
earnings per share - diluted due to the adoption
of SFAS No. 128, Earnings Per Share.
Exhibit 99 of Part 1 - First Quarter 1998 Financial Statements and
Notes
(b) No reports on Form 8 - K were filed during the quarter for which this
report was filed.
<PAGE> 6
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.
DEXTER CORPORATION
(Registrant)
Date May 8, 1998
/s/ Kathleen Burdett
-------------------------------
Kathleen Burdett
Vice President and
Chief Financial Officer
(Principal Financial Officer)
<PAGE> 7
INDEX TO EXHIBITS
Exhibit No.
3A(1) Amendment to the Restated Certificate of Incorporation of the
registrant, filed with the Secretary of the State of Connecticut on
April 23, 1998.
15 Letter to Securities and Exchange Commission re: Incorporation of
Accountants' Report
27 Financial Data Schedule for the period ending March 31, 1998.
Restated Financial Data Schedules for the periods ended December 31,
1995 through September 30, 1997 to include earnings per share
-diluted due to the adoption of SFAS No. 128, Earnings Per Share.
99 First Quarter 1998 Financial Statements and Notes
<PAGE> 1
Exhibit 3A(1)
CERTIFICATE OF AMENDMENT
STOCK CORPORATION
Office of the Secretary of the State 30 Trinity Street
/ P.O. Box 150470 / Hartford, CT 06115-0470 / new / 1-97
- --------------------------------------------------------------------------------
1. NAME OF CORPORATION:
THE DEXTER CORPORATION
- --------------------------------------------------------------------------------
2. THE CERTIFICATE OF INCORPORATION IS (CHECK A, B OR C):
/XX/ A. AMENDED.
/ / B. AMENDED AND RESTATED
/ / C. RESTATED
- --------------------------------------------------------------------------------
3. TEXT OF EACH AMENDMENT / RESTATEMENT:
ARTICLE I
The name of the corporation is "Dexter Corporation."
<PAGE> 2
Exhibit 3A(1) continued
- --------------------------------------------------------------------------------
4. VOTE INFORMATION (CHECK A, B OR C)
/XX/ A. THE RESOLUTION WAS APPROVED BY SHAREHOLDERS AS FOLLOWS:
(SET FORTH ALL VOTING INFORMATION REQUIRED BY CONN. GEN. STAT. SECTION 33-800 AS
AMENDED IN THE SPACE PROVIDED BELOW)
See Attachment A for voting information.
- --------------------------------------------------------------------------------
/ / B. THE AMENDMENT WAS ADOPTED BY THE BOARD OF DIRECTORS WITHOUT
SHAREHOLDER ACTION. NO SHAREHOLDER VOTE WAS REQUIRED FOR ADOPTION.
/ / C. THE AMENDMENT WAS ADOPTED BY THE INCORPORATORS WITHOUT SHAREHOLDER
ACTION. NO SHAREHOLDER VOTE WAS REQUIRED FOR ADOPTION.
- --------------------------------------------------------------------------------
5. EXECUTION
- --------------------------------------------------------------------------------
Dated this 23rd day of April, 1998
- --------------------------------------------------------------------------------
Mary Anne B. Tillona Assistant Secretary /s/ Mary Anne B. Tillona
- --------------------------------------------------------------------------------
PRINT OR TYPE NAME OF CAPACITY OF SIGNATORY SIGNATURE
SIGNATORY
- -------------------------------------------------------------------------------
<PAGE> 3
Exhibit 3A(1) continued
ATTACHMENT A
CERTIFICATE OF AMENDMENT
THE DEXTER CORPORATION
The foregoing amendment was passed by an affirmative vote of 20,534,844 votes
cast at the annual meeting of shareholders of The Dexter Corporation held on
April 23, 1998, at which a quorum was present, which vote is greater than a
majority of the votes cast at such meeting and which was sufficient for approval
of the amendment under the Connecticut Business Corporations Act.
The only outstanding securities of The Dexter Corporation are the shares of its
common stock, $1 par value, 23,179,597 of which were outstanding as of February
27, 1998. Only shareholders of record as of the close of business on that date
were entitled to vote at the annual meeting. There were 20,776,911 votes
indisputably represented at the meeting. 20,534,844 votes were cast in favor and
239,067 votes were cast against the amendment.
<PAGE> 1
Exhibit 15
Securities and Exchange Commission
450 5th Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
We are aware that our report dated April 15, 1998, on our review of the interim
financial information of Dexter Corporation as of March 31, 1998 and 1997, and
for the three month periods then ended, and included in this Form 10 - Q is
incorporated by reference in the company's registration statements on Form S -
8, Registration Nos. 2 - 63959, 33 - 27597, 33 - 53307, 33 - 53309, 333 - 02985,
333 - 04081, and 333 - 42663. Pursuant to Rule 436(c) under the Securities Act
of 1933, this report should not be considered a part of the registration
statements prepared or certified by us within the meaning of Sections 7 and 11
of that Act.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Springfield, Massachusetts
May 8, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 68,509
<SECURITIES> 0
<RECEIVABLES> 194,797
<ALLOWANCES> 7,018
<INVENTORY> 169,466
<CURRENT-ASSETS> 467,860
<PP&E> 724,444
<DEPRECIATION> 373,860
<TOTAL-ASSETS> 990,274
<CURRENT-LIABILITIES> 239,959
<BONDS> 185,420
0
0
<COMMON> 24,984
<OTHER-SE> 357,719
<TOTAL-LIABILITY-AND-EQUITY> 990,274
<SALES> 289,915
<TOTAL-REVENUES> 292,201
<CGS> 184,564
<TOTAL-COSTS> 184,564
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,308
<INCOME-PRETAX> 27,209
<INCOME-TAX> 9,523
<INCOME-CONTINUING> 14,230
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,230
<EPS-PRIMARY> .62
<EPS-DILUTED> .61
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 86,501
<SECURITIES> 0
<RECEIVABLES> 196,585
<ALLOWANCES> 5,966
<INVENTORY> 160,851
<CURRENT-ASSETS> 483,245
<PP&E> 701,220
<DEPRECIATION> 357,919
<TOTAL-ASSETS> 952,037
<CURRENT-LIABILITIES> 249,409
<BONDS> 168,459
0
0
<COMMON> 24,984
<OTHER-SE> 342,652
<TOTAL-LIABILITY-AND-EQUITY> 952,037
<SALES> 852,413
<TOTAL-REVENUES> 861,688
<CGS> 545,300
<TOTAL-COSTS> 545,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,585
<INCOME-PRETAX> 84,557
<INCOME-TAX> 30,441
<INCOME-CONTINUING> 43,112
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,112
<EPS-PRIMARY> 1.87
<EPS-DILUTED> 1.84
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 100,529
<SECURITIES> 0
<RECEIVABLES> 200,504
<ALLOWANCES> 5,876
<INVENTORY> 156,835
<CURRENT-ASSETS> 497,100
<PP&E> 686,772
<DEPRECIATION> 350,244
<TOTAL-ASSETS> 959,847
<CURRENT-LIABILITIES> 248,011
<BONDS> 188,807
0
0
<COMMON> 24,984
<OTHER-SE> 335,687
<TOTAL-LIABILITY-AND-EQUITY> 959,847
<SALES> 565,485
<TOTAL-REVENUES> 572,411
<CGS> 362,542
<TOTAL-COSTS> 362,542
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,298
<INCOME-PRETAX> 56,465
<INCOME-TAX> 20,328
<INCOME-CONTINUING> 28,869
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,869
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 1.23
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 62,120
<SECURITIES> 0
<RECEIVABLES> 187,389
<ALLOWANCES> 5,652
<INVENTORY> 155,980
<CURRENT-ASSETS> 444,594
<PP&E> 675,255
<DEPRECIATION> 342,935
<TOTAL-ASSETS> 946,752
<CURRENT-LIABILITIES> 226,410
<BONDS> 208,339
0
0
<COMMON> 24,984
<OTHER-SE> 331,225
<TOTAL-LIABILITY-AND-EQUITY> 946,752
<SALES> 272,260
<TOTAL-REVENUES> 276,484
<CGS> 175,302
<TOTAL-COSTS> 175,302
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,809
<INCOME-PRETAX> 25,982
<INCOME-TAX> 9,353
<INCOME-CONTINUING> 12,872
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,872
<EPS-PRIMARY> .55
<EPS-DILUTED> .54
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 103,420
<SECURITIES> 0
<RECEIVABLES> 172,288
<ALLOWANCES> 6,620
<INVENTORY> 148,911
<CURRENT-ASSETS> 460,411
<PP&E> 677,836
<DEPRECIATION> 343,570
<TOTAL-ASSETS> 953,804
<CURRENT-LIABILITIES> 217,482
<BONDS> 209,952
0
0
<COMMON> 24,984
<OTHER-SE> 349,131
<TOTAL-LIABILITY-AND-EQUITY> 953,804
<SALES> 1,100,185
<TOTAL-REVENUES> 1,112,365
<CGS> 720,980
<TOTAL-COSTS> 720,980
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,500
<INCOME-PRETAX> 98,252
<INCOME-TAX> 34,880
<INCOME-CONTINUING> 48,722
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,722
<EPS-PRIMARY> 2.06
<EPS-DILUTED> 2.03
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED STATEMENT OF FINANCIAL POSITION AND CONDENSED STATEMENT OF INCOME AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 82,356
<SECURITIES> 0
<RECEIVABLES> 189,515
<ALLOWANCES> 5,489
<INVENTORY> 143,031
<CURRENT-ASSETS> 457,815
<PP&E> 655,272
<DEPRECIATION> 333,360
<TOTAL-ASSETS> 938,107
<CURRENT-LIABILITIES> 210,197
<BONDS> 208,839
0
0
<COMMON> 24,984
<OTHER-SE> 344,793
<TOTAL-LIABILITY-AND-EQUITY> 938,107
<SALES> 832,421
<TOTAL-REVENUES> 840,800
<CGS> 547,278
<TOTAL-COSTS> 547,278
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,671
<INCOME-PRETAX> 74,933
<INCOME-TAX> 26,601
<INCOME-CONTINUING> 37,282
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,282
<EPS-PRIMARY> 1.57
<EPS-DILUTED> 1.55
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Statement of Financial Position and Condensed Statement of Income and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 75,058
<SECURITIES> 0
<RECEIVABLES> 187,050
<ALLOWANCES> 5,811
<INVENTORY> 147,899
<CURRENT-ASSETS> 458,578
<PP&E> 635,561
<DEPRECIATION> 323,683
<TOTAL-ASSETS> 926,305
<CURRENT-LIABILITIES> 211,072
<BONDS> 208,660
0
0
<COMMON> 24,984
<OTHER-SE> 334,941
<TOTAL-LIABILITY-AND-EQUITY> 926,305
<SALES> 562,928
<TOTAL-REVENUES> 568,125
<CGS> 370,281
<TOTAL-COSTS> 370,281
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,742
<INCOME-PRETAX> 51,409
<INCOME-TAX> 18,250
<INCOME-CONTINUING> 25,541
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,541
<EPS-PRIMARY> 1.07
<EPS-DILUTED> 1.06
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Statement of Financial Position and Condensed Statement of Income and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 57,222
<SECURITIES> 0
<RECEIVABLES> 189,535
<ALLOWANCES> 5,612
<INVENTORY> 162,323
<CURRENT-ASSETS> 464,005
<PP&E> 649,626
<DEPRECIATION> 325,148
<TOTAL-ASSETS> 944,980
<CURRENT-LIABILITIES> 225,434
<BONDS> 214,874
0
0
<COMMON> 24,984
<OTHER-SE> 336,820
<TOTAL-LIABILITY-AND-EQUITY> 944,980
<SALES> 277,227
<TOTAL-REVENUES> 279,402
<CGS> 182,525
<TOTAL-COSTS> 182,525
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,366
<INCOME-PRETAX> 22,431
<INCOME-TAX> 7,963
<INCOME-CONTINUING> 11,148
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,148
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Statement of Financial Position and Condensed Statement of Income and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 65,542
<SECURITIES> 0
<RECEIVABLES> 183,076
<ALLOWANCES> 5,851
<INVENTORY> 157,034
<CURRENT-ASSETS> 456,721
<PP&E> 642,239
<DEPRECIATION> 317,036
<TOTAL-ASSETS> 934,161
<CURRENT-LIABILITIES> 208,098
<BONDS> 215,839
0
0
<COMMON> 24,984
<OTHER-SE> 344,631
<TOTAL-LIABILITY-AND-EQUITY> 934,161
<SALES> 1,088,905
<TOTAL-REVENUES> 1,099,044
<CGS> 742,206
<TOTAL-COSTS> 742,206
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,931
<INCOME-PRETAX> 79,824
<INCOME-TAX> 28,337
<INCOME-CONTINUING> 40,578
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,578
<EPS-PRIMARY> 1.67
<EPS-DILUTED> 1.66
</TABLE>
<PAGE> 1
EXHIBIT 99a
DEXTER CORPORATION
CONDENSED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Three Months Ended March 31
In thousands of dollars -------------------------------------
(except per share amounts) 1998 1997 Change
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Net sales $289,915 $272,260 + 6%
Other income 2,286 4,224 - 46%
-------- --------
292,201 276,484 + 6%
EXPENSES
Cost of sales 184,564 175,302 + 5%
Marketing and administrative 62,044 57,050 + 9%
Research and development 14,076 13,341 + 6%
Interest 4,308 4,809 - 10%
-------- --------
INCOME BEFORE TAXES 27,209 25,982 + 5%
Income taxes 9,523 9,353 + 2%
-------- --------
INCOME BEFORE MINORITY INTERESTS 17,686 16,629 + 6%
Minority interests 3,456 3,757 - 8%
-------- --------
NET INCOME $ 14,230 $ 12,872 + 11%
======== ========
NET INCOME PER SHARE - BASIC $ 0.62 $ 0.55 + 13%
NET INCOME PER SHARE - DILUTED $ 0.61 $ 0.54 + 13%
DIVIDENDS DECLARED PER SHARE $ 0.24 $ 0.24
AVERAGE SHARES OUTSTANDING (000) 22,946 23,275 - 1%
</TABLE>
See accompanying notes to the consolidated financial statements.
Amounts are unaudited.
<PAGE> 2
EXHIBIT 99b
DEXTER CORPORATION
CONDENSED STATEMENT OF FINANCIAL POSITION
<TABLE>
<CAPTION>
MARCH 31 December 31 March 31
In thousands of dollars -------------------------------------------
(except per share amounts) 1998 1997 1997
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and short-term securities $ 68,509 $ 68,306 $ 62,120
Accounts receivable, net 199,416 185,257 192,099
Inventories
Materials and supplies 59,875 61,233 58,662
In process and finished 128,236 117,467 116,721
LIFO reserve (18,645) (18,799) (19,403)
--------- --------- ---------
169,466 159,901 155,980
Prepaid and deferred expenses 30,469 26,988 34,395
--------- --------- ---------
Total current assets 467,860 440,452 444,594
Property, plant and equipment, at cost, net 350,584 348,172 332,320
Excess of cost over net assets of
businesses acquired 97,812 97,507 80,366
Other assets 74,018 75,645 89,472
--------- --------- ---------
$ 990,274 $ 961,776 $ 946,752
========= ========= =========
LIABILITIES & SHAREHOLDERS' EQUITY
Short-term debt $ 29,962 $ 35,361 $ 5,500
Current installments of long-term debt 12,924 13,340 11,914
Accounts payable 100,514 91,155 97,904
Accrued liabilities and taxes 88,851 89,076 103,416
Current environmental reserves 2,200 2,099 2,117
Dividends payable 5,508 5,505 5,559
--------- --------- ---------
Total current liabilities 239,959 236,536 226,410
Long-term debt 185,420 180,030 208,339
Deferred items 57,494 54,197 49,900
Long-term environmental reserves 13,556 13,726 14,278
Minority interests 111,142 104,426 91,616
Shareholders' equity
Common stock and paid-in capital 38,333 38,158 37,303
Retained earnings 418,565 409,844 382,788
Treasury stock (51,479) (52,216) (46,713)
Accumulated other comprehensive
income (22,716) (22,925) (17,169)
--------- --------- ---------
Total shareholders' equity 382,703 372,861 356,209
--------- --------- ---------
$ 990,274 $ 961,776 $ 946,752
========= ========= =========
EQUITY PER SHARE $ 16.67 $ 16.26 $ 15.41
</TABLE>
See accompanying notes to the consolidated financial statements.
Amounts as of March 31, 1998 and March 31, 1997 are unaudited.
<PAGE> 3
EXHIBIT 99c
DEXTER CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended March 31
----------------------------
In thousands of dollars 1998 1997
- ---------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net income $ 14,230 $ 12,872
Noncash items
Depreciation and amortization 12,939 10,993
Income taxes not due 8,092 5,379
Minority interests 3,456 3,757
LIFO inventory credit (154) (433)
Equity in net income of affiliates (827) (2,351)
Other (254) 402
Operating working capital increase (24,314) (26,756)
-------- ---------
13,168 3,863
-------- ---------
INVESTMENTS
Property, plant and equipment (17,069) (11,629)
Acquisitions (1,047) (17,002)
Joint ventures 1,153 (449)
Proceeds from exercise of LTI stock options 2,775 615
Other 1,757 2,066
-------- ---------
(12,431) (26,399)
-------- ---------
FINANCING
Long-term debt 10,193 (705)
Short-term debt, net (5,423) 605
Dividends paid (5,506) (5,175)
LTI dividends paid to minority interest shareholders (555) (428)
Purchase of treasury stock (11,317)
Other 521 13
-------- ---------
(770) (17,007)
-------- ---------
DECREASE IN CASH AND SHORT-TERM SECURITIES $ (33) $ (39,543)
======== =========
RECONCILIATION OF DECREASE IN CASH AND
SHORT-TERM SECURITIES
Cash and short-term securities at beginning of period $ 68,306 $ 103,420
Cash and short-term securities at end of period 68,509 62,120
-------- ---------
Increase (Decrease) in cash and short-term securities
per Statement of Financial Position 203 (41,300)
Currency translation effects (236) 1,757
-------- ---------
$ (33) $ (39,543)
======== =========
INTEREST PAID $ 4,118 $ 3,715
TAXES PAID $ 1,431 $ 3,974
</TABLE>
Property, plant and equipment for the three months ended March 31, 1998 includes
$4,635 related to the exercise of an option to purchase land under a capital
lease by Life Technologies, Inc.
See accompanying notes to the consolidated financial statements.
Amounts are unaudited.
<PAGE> 4
EXHIBIT 99d
DEXTER CORPORATION
STATEMENT OF COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
In thousands of dollars 1998 1997
- -------------------------------------------------------------------------------
<S> <C> <C>
NET INCOME $ 14,230 $ 12,872
-------- --------
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Currency translation effects 247 (14,604)
Unrealized losses on investments (38)
-------- --------
OTHER COMPREHENSIVE INCOME (LOSS) 209 (14,604)
-------- --------
COMPREHENSIVE INCOME (LOSS) $ 14,439 $ (1,732)
======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
Amounts are unaudited.
<PAGE> 5
EXHIBIT 99e
DEXTER CORPORATION
NET SALES BY MARKET
<TABLE>
<CAPTION>
Three Months Ended March 31
-----------------------------------
In thousands of dollars 1998 1997 Change
- -----------------------------------------------------------------
<S> <C> <C> <C>
AEROSPACE $ 17,056 $ 13,471 + 27%
ELECTRONICS (1) 55,073 49,831 + 11%
FOOD PACKAGING (2) 65,835 64,824 + 2%
MEDICAL 112,912 105,403 + 7%
OTHER 39,039 38,731 + 1%
-------- --------
CONSOLIDATED $289,915 $272,260 + 6%
======== ========
</TABLE>
(1) The effect of businesses acquired increased net sales to the Electronics
market by $2 million, or 4%.
(2) The effect of businesses acquired increased net sales to the Food
Packaging market by $6.3 million, or 10%.
Amounts are unaudited.
<PAGE> 6
Exhibit 99f
Dexter Corporation
Notes to Consolidated Financial Statements
Note 1 - In the opinion of the Company's management, the unaudited financial
statements reflect adjustments of a normal recurring nature which
are necessary to present a fair statement of the results for the
interim periods. The notes to the consolidated financial statements
including management's discussion in Part 1, Item 2 of this Form
10-Q are incorporated as part of these consolidated financial
statements. The year-end condensed balance sheet data was derived
from the audited financial statements.
Note 2 - Presented below is the reconciliation between basic earnings per
share and diluted earnings per share for the three months ended
March 31, 1998 and 1997:
<TABLE>
<CAPTION>
Three Months ended March 31
Amounts in thousands ---------------------------
(except per share data) 1998 1997
------------------------------------------------------------------
<S> <C> <C>
Earnings per share - basic:
Net income $14,230 $ 12,872
Weighted average shares
outstanding 22,946 23,275
Earnings per share - basic $.62 $.55
Earnings per share - diluted:
Net income $14,230 $ 12,872
Effect of subsidiary dilutive
options on net income (109) (142)
------- --------
$14,121 $ 12,730
======= ========
Weighted average shares
outstanding 22,946 23,275
Weighted average effect of
common stock equivalents 285 162
------- --------
23,231 23,437
======= ========
Earnings per share - diluted $.61 $.54
</TABLE>
<PAGE> 7
Exhibit 99f
Dexter Corporation
Notes to Consolidated Financial Statements (continued)
Note 3 - In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income, which became effective for financial
statements for periods beginning after December 15, 1997. This
statement requires that the company (a) report upon comprehensive
income (net income and other comprehensive income) in a financial
statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and paid-in
capital in the shareholders' equity section of the statement of
financial position.
In February 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 132,
Employers' Disclosures About Pensions and Other Postretirement
Benefits, which becomes effective for financial statements for
fiscal years beginning after December 15, 1997. The Company is
currently evaluating the impact of SFAS No. 132 on its financial
reporting practices.
Note 4 - The following are included as components of Common Stock and Paid-in
Capital.
<TABLE>
<CAPTION>
COMMON STOCK & PAID-IN CAPITAL MARCH 31, DECEMBER 31, MARCH 31,
(IN THOUSANDS OF DOLLARS) 1998 1997 1997
- ------------------------------ ------- ------- -------
<S> <C> <C> <C>
Common stock $24,984 $24,984 $24,984
Paid-in capital 17,021 17,482 14,714
Unearned compensation on
restricted stock (3,672) (4,308) (2,395)
------- ------- -------
$38,333 $38,158 $37,303
======= ======= =======
</TABLE>
Note 5 - The following are included as components of Accumulated Other
Comprehensive Income.
<TABLE>
<CAPTION>
ACCUMULATED OTHER COMPREHENSIVE MARCH 31, DECEMBER 31, MARCH 31,
INCOME (IN THOUSANDS OF DOLLARS) 1998 1997 1997
- -------------------------------- -------- -------- -------
<S> <C> <C> <C>
Currency translation effects ($22,228) ($22,475) ($16,791)
Unrealized losses on investments (464) (426) (174)
Pension liability adjustment (24) (24) (204)
-------- -------- -------
($22,716) ($22,925) ($17,169)
======== ======== ========
</TABLE>
<PAGE> 8
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Dexter Corporation
We have reviewed the accompanying condensed statement of financial position of
Dexter Corporation as of March 31, 1998 and 1997, and the related condensed
statements of income, comprehensive income and cash flows for the three month
periods then ended. These 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 accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated statement of financial position of Dexter
Corporation as of December 31, 1997, and the related consolidated statements of
income, cash flows, and changes in shareholders' equity for the year then ended
(not presented herein); and in our report dated February 3, 1998, we expressed
an unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed statement of
financial position as of December 31, 1997, is fairly stated, in all material
respects, in relation to the consolidated statement of financial position from
which it has been derived.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Springfield, Massachusetts
April 15, 1998
