<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 10-Q
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, 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 0-14991
-------
LIFE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 34-0431300
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
9800 MEDICAL CENTER DRIVE, ROCKVILLE, MD 20850
(Address of principal executive offices) (Zip Code)
--------------------------------
Registrant's telephone number, including area code: (301) 610-8000
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.
Class Outstanding at Aug. 3, 1998
----- ---------------------------
Common Stock, par value $.01 per share 23,620,400 shares
================================================================================
<PAGE>
PART I
------
FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
--------------------
CONSOLIDATED STATEMENT OF INCOME
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
----------------------- ------------------------
1998 1997 1998 1997
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Net sales $91,544 $84,556 $179,899 $164,724
Net royalties 689 463 1,126 807
------- ------- -------- --------
92,233 85,019 181,025 165,531
Operating expenses:
Cost of sales 42,701 39,069 83,777 75,185
Marketing and 29,368 27,276 58,403 54,035
administrative
Research and development 5,489 5,454 10,681 10,630
------- ------- -------- --------
Total operating expenses 77,558 71,799 152,861 139,850
------- ------- -------- --------
Operating income 14,675 13,220 28,164 25,681
Other income (expense):
Investment income 127 85 274 174
Interest expense (7) (23) (18) (32)
------- ------- -------- --------
Total other income 120 62 256 142
------- ------- -------- --------
Income before income taxes 14,795 13,282 28,420 25,823
Income taxes 5,178 4,781 9,947 9,296
------- ------- -------- --------
Income before minority 9,617 8,501 18,473 16,527
interests
Minority interests (170) (163) (401) (351)
------- ------- -------- --------
Net income $ 9,447 $ 8,338 $ 18,072 $ 16,176
======= ======= ======== ========
Earnings per share:
Basic $0.40 $0.36 $0.77 $0.70
Diluted $0.39 $0.35 $0.75 $0.68
Average shares outstanding
Basic 23,575 23,137 23,511 23,061
Diluted 24,122 23,872 24,076 23,834
Dividends declared per share $ 0.05 $ 0.04 $ 0.10 $ 0.08
</TABLE>
Amounts are unaudited.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
Part I - Financial Statements (continued)
CONSOLIDATED BALANCE SHEET
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 20,363 $ 19,076
Accounts receivable, net 70,134 58,096
Inventories:
Materials and supplies 12,058 12,082
In process and finished 56,825 57,614
LIFO reserve (1,492) (1,633)
-------- --------
Total inventory 67,391 68,063
Prepaid expenses 5,051 4,485
Current deferred tax assets 5,675 5,738
-------- --------
Total current assets 168,614 155,458
Property, plant and equipment 160,099 151,369
Less accumulated depreciation (55,099) (51,271)
-------- --------
Total property, plant and equipment 105,000 100,098
Investments and other assets 13,539 12,353
Excess of cost over net assets of
businesses acquired, net 11,544 12,365
-------- --------
Total assets $298,697 $280,274
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 1,398 $ 2,976
Accounts payable 24,098 21,420
Accrued and deferred income taxes 8,287 7,237
Accrued liabilities and expenses 23,062 22,898
-------- --------
Total current liabilities 56,845 54,531
Long-term debt - 4,564
Pension liabilities 7,179 5,768
Deferred income taxes 3,719 3,695
Minority interests 3,287 2,992
Stockholders' equity:
Common stock 236 234
Additional paid-in capital 58,879 54,503
Retained earnings 177,404 161,689
Accumulated other comprehensive income (8,852) (7,702)
-------- --------
Total stockholders' equity 227,667 208,724
-------- --------
Total liabilities and stockholders' equity $298,697 $280,274
======== ========
</TABLE>
Amounts as of June 30, 1998 are unaudited.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
Part I - Financial Statements (continued)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(amounts in thousands)
<TABLE>
<CAPTION>
Six months ended
June 30
-------------------
1998 1997
-------- --------
<S> <C> <C> <C> <C>
CASH INFLOWS (OUTFLOWS)
Operations:
Net income $ 18,072 $ 16,176
Non-cash items:
Depreciation and amortization 7,093 5,976
Other (423) (166)
Changes in assets and liabilities (5,181) (4,295)
-------- --------
19,561 17,691
Investments:
Capital expenditures (17,430) (13,870)
Acquisitions (1,047) (914)
-------- --------
(18,477) (14,784)
Financing:
Dividends paid (2,345) (1,838)
Proceeds from exercise of stock options 3,168 2,434
Short-term borrowings (net) (1,371) 1,508
Long-term loan repayments (23) (461)
-------- --------
(571) 1,643
Effect of exchange rate changes on cash 774 (737)
-------- --------
Increase in cash and cash equivalents 1,287 3,813
Cash and cash equivalents at beginning of period 19,076 15,326
-------- --------
Cash and cash equivalents at end of period $ 20,363 $ 19,139
======== ========
Amounts are unaudited.
</TABLE>
STATEMENT OF COMPREHENSIVE INCOME
(amounts in thousands)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
----------------- -------------------
1998 1997 1998 1997
------- ------ -------- --------
<S> <C> <C> <C> <C>
Net income $ 9,447 $8,338 $ 18,072 $ 16,176
Other comprehensive income
Currency translation effects (1,649) 760 (1,150) (3,712)
------- ------ -------- --------
Comprehensive income $ 7,798 $9,098 $ 16,922 $ 12,464
======= ====== ======== ========
Amounts are unaudited.
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
Notes To Financial Statements:
- -----------------------------
Basic earnings per common share have been computed by dividing net income by the
weighted-average number of common shares outstanding during the period. Diluted
earnings per common share have been computed by dividing net income by the
weighted-average number of common shares outstanding plus an assumed increase in
common shares outstanding for dilutive securities.
The following table reconciles the weighted average number of common shares
outstanding during each period for basic earnings per share with the comparable
amount for diluted earnings per share.
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, June 30,
------------------ ----------------
(amounts in thousands) 1998 1997 1998 1997
===================================================================================
<S> <C> <C> <C> <C>
Weighted average shares outstanding-basic 23,575 23,137 23,511 23,061
Stock options 547 735 565 773
- -----------------------------------------------------------------------------------
Weighted average shares outstanding-diluted 24,122 23,872 24,076 23,834
===================================================================================
</TABLE>
Included in capital expenditures as of June 30, 1998 is $4,635 for the exercise
of an option to purchase land under a capital lease.
As of January 1, 1998, the Company adopted SFAS No. 130, Reporting Comprehensive
Income, which requires additional disclosures with respect to certain changes in
assets and liabilities that previously were not required to be reported as
results of operations for the period.
U.S. and international withholding taxes have not been provided on undistributed
earnings of foreign subsidiaries. The Company remits only those earnings which
are considered to be in excess of the reasonably anticipated working capital
needs of the foreign subsidiaries, with the balance considered to be permanently
reinvested in the operations of such subsidiaries. It is impractical to
estimate the total tax liability, if any, until such a distribution is made.
The following are included as components of Accumulated Other Comprehensive
Income.
(amounts in thousands) Foreign currency translation
============================================================================
Beginning balance (January 1, 1998) (7,702)
Current period change (1,150)
- ----------------------------------------------------------------------------
Ending balance (June 30, 1998) (8,852)
============================================================================
In the opinion of the Company's management, the unaudited financial statements
reflect all adjustments (which consist of normal recurring adjustments)
necessary to present a fair statement of the results for the interim periods.
The results for the six-month period ended June 30, 1998 are not necessarily
indicative of the results for the year ending December 31, 1998.
On July 9, 1998, there was a public announcement by The Dexter Corporation
("Dexter"), the beneficial owner of approximately 52% of the Company's
outstanding common stock, of its intent to acquire the approximately 11.3
million shares of
5
<PAGE>
Part I - (continued)
the Company common stock that Dexter does not currently own, at a price of $37
per share in cash.
Certain amounts for the 1997 year period have been reclassified to conform to
and be consistent with the 1998 presentation.
The financial data included herein have been reviewed by the Company's
independent public accountants, PricewaterhouseCoopers LLP, and their report is
attached.
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations
-----------------------------------
Any statements in this quarterly report concerning the Company's business
outlook or future economic performance; anticipated profitability, revenues,
expenses or other financial items; together with other statements that are not
historical facts, are "forward-looking statements" as that term is defined under
the Federal Securities Laws. Forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results to differ
materially from those stated in such statements. Such risks, uncertainties and
factors include, but are not limited to, changes in government funding for life
sciences research, changes in pricing or availability of fetal bovine serum,
changes in currency exchange rates, changes and delays in new product
introduction, customer acceptance of new products, changes in government
regulations, changes in pricing or other actions by competitors and general
economic conditions, as well as other risks detailed in the Company's filings
with the Securities and Exchange Commission.
RESULTS OF OPERATIONS
SECOND QUARTER RESULTS
Revenues were $92.2 million in the second quarter of 1998, representing an
increase of 8% over the second quarter of 1997. Net sales were $91.5 million in
the second quarter of 1998, an increase of $7.0 million, or 8%, compared with
the second quarter of 1997. Net sales of products other than fetal bovine serum
(FBS) increased by $9.5 million, or 13%, when comparing the second quarter of
1998 with the comparable period of 1997 and excluding the effect of changes due
to different currency translation rates. Second quarter 1998 FBS net sales were
unchanged from the second quarter of 1997 on a currency comparable basis as a 3%
unit sales increase was offset by a similar decline in average unit selling
prices. FBS sales represented 12% of net sales in the second quarter of 1998
and 13% in the second quarter of 1997. Net sales in the second quarter of 1998
were $2.5 million, or 3%, lower than they would have been at the exchange rates
in effect in the second quarter of 1997. Royalty income was $0.7 million in the
second quarter of 1998 compared with $0.5 million in the second quarter of 1997.
Gross margins were 53.4% of net sales in the second quarter of 1998 compared
with 53.8% in the second quarter of 1997. The strength of the U.S. dollar and
the British pound sterling relative to the Asian and Continental European
6
<PAGE>
Part I - (continued)
currencies when comparing the second quarter of 1998 with the second quarter of
1997 unfavorably affected the comparison of gross margins in these two periods.
Marketing and administrative expenses were 32.1% of net sales in the second
quarter of 1998 and 32.3% in the second quarter of 1997. Income taxes were 35%
of income before taxes in the second quarter of 1998 compared with 36% of
income before taxes in the second quarter of 1997. The effective income
tax rate was lower in the 1998 period principally due to the realization of a
higher proportion of taxable income in countries with lower tax rates as well as
greater benefits from tax credits recognized in the 1998 period.
Net income of $9.4 million in the second quarter of 1998 increased 13% over the
second quarter of 1997. Diluted earnings per share of $0.39 in the second
quarter of 1998 were 11% greater than diluted earnings per share of $0.35 in the
comparable period of 1997.
SIX MONTHS RESULTS
Revenues in the first half of 1998 were $181.0 million, representing an increase
of 9% compared with revenues of $165.5 million in the first six months of 1997.
Net sales for the first half of 1998 were $179.9 million, an increase of $15.2
million, or 9%, over the first half of 1997. Net sales of products other than
FBS in the first half of 1998 increased $20.0 million, or 14%, compared with the
first half of 1997 and excluding the effect of changes due to different currency
translation rates. FBS net sales increased $0.6 million, or 2%, on a currency
comparable basis as unit sales increased 5% and average unit selling prices
decreased 3%. FBS sales represented 12% of net sales in the first six months of
1998 compared with 13% of net sales in the comparable period of 1997. The effect
of changes in currency exchange rates reduced net sales in the first half of
1998 by $5.4 million, or 3%, when compared with the first half of 1997. Royalty
income was $1.1 million for the first six months of 1998 compared with $0.8
million in last year's first half.
Gross margins were 53.4% in the first half of 1998 compared with 54.4% in the
comparable 1997 period. Unfavorable currency exchange rate comparisons were the
primary reason that gross margins declined. FBS gross margins improved slightly
in the first half of 1998 compared with the first half of 1997 as unit costs
decreased at a greater rate than unit selling prices. Marketing and
administrative expenses were 32.5% of net sales in the first six months of 1998
and 32.8% in the comparable period of 1997. Income taxes were 35% of income
before taxes in the first half of 1998 compared with 36% of income before taxes
in the first half of 1997.
For the first six months of 1998, net income of $18.1 million increased 12% over
1997. Diluted earnings per share for the first half of 1998 were $0.75, an
increase of 10% compared with the first half of 1997.
LIQUIDITY AND CAPITAL RESOURCES
Operating activities provided $19.6 million in cash during the first six months
of 1998. Net income after adjustments for depreciation and amortization was
7
<PAGE>
Part I - (continued)
the principal source of cash from operations in 1998. Working capital increases
were the principal use of cash from operations.
The Company paid $17.4 million for capital expenditures in the first six months
of 1998. Capital expenditures included $4.6 million for the exercise of an
option to purchase land under a capital lease. The Company also paid $1.0
million in deferred purchase payments related to the 1996 acquisition of Custom
Primers Inc.
Cash used for financing activities included $2.3 million for quarterly dividend
payments in the first six months of 1998. The Company paid $1.4 million to
reduce outstanding loans to several banks and reduce the principal balance on a
capital lease. The Company received $3.2 million from the exercise of stock
options.
The Company is in the process of replacing its core financial, order
entry/distribution, and manufacturing systems at its major locations worldwide.
The Company has been advised by its software vendor that the release/version of
the software being implemented by the Company is Year 2000 compliant. The
Company is also conducting a review of other internal and external systems which
may require modification or upgrade to be made Year 2000 compliant. The Company
is in the process of working with its customers and suppliers to identify,
modify or upgrade its existing systems which are not currently Year 2000
compliant. The Company believes that the cost of completing the modifications
necessary to become Year 2000 compliant will not be material. There can be no
assurance, however, that the Company will be able to identify all aspects of its
business that are subject to Year 2000 problems, or identify Year 2000 problems
of customers or suppliers that affect the Company's business. There also can be
no assurance that the Company's software vendors are correct in their assertions
that the software is Year 2000 compliant or that the Company's estimate of the
cost of systems preparation for Year 2000 compliance will prove ultimately to be
accurate.
Capital expenditures in 1998 are expected to range from $30-35 million. The
Company is contemplating additional facility upgrades and expansions of $20-25
million with the balance of expected 1998 capital expenditures for new and
replacement machinery, equipment and management information systems.
The Company is actively evaluating licensing possibilities, as well as
acquisition candidates which complement the Company's core cell and molecular
biology and cell culture product lines. The Company believes it will be able to
generate sufficient cash from its operations and its existing credit facility to
meet all its anticipated cash requirements in 1998 apart from any significant
business acquisition which may occur and which may be financed using cash from
operations, debt, equity, or other sources.
NEW ACCOUNTING PRONOUNCEMENT
The Financial Accounting Standards Board has issued, SFAS No. 131, Disclosures
about Segments of an Enterprise and Related Information, which became effective
for reporting periods beginning after December 15, 1997. Interim reporting is
8
<PAGE>
Part I - (continued)
not required under SFAS No. 131 prior to adoption. SFAS No. 131, Disclosures
about Segments of an Enterprise and Related Information, requires financial and
descriptive information with respect to "operating segments" of an entity based
on the way management disaggregates the entity for making internal operating
decisions. The Company will begin making the disclosures required by SFAS No.
131 with financial statements for the period ending December 31, 1998. There
will be no financial impact from the adoption of SFAS No. 131. SFAS No. 131 has
a disclosure impact, as there will be further disclosures, as results are
disaggregated.
The Financial Accounting Standards Board has issued, SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities, which becomes effective for
years beginning after June 15, 1999. SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, requires that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at its
fair value. The statement requires that changes in the derivative's fair value
be recognized in earnings unless specific hedge accounting criteria are met.
The Company believes that the effect of adoption of SFAS No. 133 will not be
material.
Item 3. Quantitative and Qualitative Disclosures About Market Risks - Not
-----------------------------------------------------------
Applicable.
9
<PAGE>
PART II - OTHER INFORMATION
------- -----------------
Item 1. Legal Proceedings - On July 9, 1998, following the public announcement
-----------------
by The Dexter Corporation ("Dexter"), the beneficial owner of approximately 52%
of the Company's outstanding common stock, of its intent to acquire the
approximately 11.3 million shares of Company common stock that Dexter does not
currently own, at a price of $37 per share in cash (approximately $420 million,
excluding payment for vested stock options), subject to certain conditions, a
lawsuit purporting to be brought as a class action on behalf of the Company's
public stockholders was filed against the Company, Dexter and the Company's
directors in the Court of Chancery of the State of Delaware (Civil Action No.
16513NC), by Ellis Investments, Ltd. ("Ellis"), which claims to be a stockholder
of the Company. Ellis' complaint alleges, among other things, that the
defendants have breached and/or may breach their respective fiduciary duties and
seeks to enjoin, preliminarily and permanently, the proposed action and to
recover monetary damages and costs. Several additional lawsuits were
subsequently filed in the same court as purported stockholder class actions and
make similar claims. Counsel for plaintiffs in the Ellis lawsuit and the
additional lawsuits have advised the Company that they will seek to consolidate
the additional lawsuits with the Ellis lawsuit and to designate the Ellis
complaint as the operative complaint in the consolidated litigation.
Item 2. Changes in Securities and Use of Proceeds - Not applicable.
-----------------------------------------
Item 3. Defaults Upon Senior Securities - Not applicable.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The Annual Meeting of Stockholders of the Company was held on April 14, 1998,
where the following actions were taken:
(1) Kathleen Burdett, J. Stark Thompson and George M. Whitesides were elected
as directors in the class whose term will expire at the 2001 annual meeting
of stockholders, pursuant to the following vote tabulation:
<TABLE>
<CAPTION>
Name Votes For Votes Withheld
---- ---------- --------------
<S> <C> <C>
Burdett 22,153,479 38,923
Thompson 22,167,414 24,988
Whitesides 22,151,210 41,192
</TABLE>
In addition, the following directors continue in office for terms expiring as
indicated: Thomas H. Adams (1999), Frank E. Samuel, Jr. (1999), Iain C. Wylie
(1999), Bruce H. Beatt (2000), Rita R. Colwell (2000), K. Grahame Walker (2000).
Subsequent to the April 14, 1998 Annual Meeting of Stockholders, Rita R. Colwell
resigned effective as of August 3, 1998 and Peter G. Kelley was appointed by the
Board of Directors' to fill the vacancy created by the resignation of Rita R.
Colwell.
(2) A proposal to adopt a stock repurchase program of one million shares was
approved with 20,586,204 shares voted in favor, 339,102 shares voted
against, 26,088 shares abstaining and 1,241,008 broker non-votes.
10
<PAGE>
Part II - continued
(3) A proposal to amend the Certificate of Incorporation to authorize the Board
of Directors to repurchase shares without stockholder approval was approved
with 20,384,089 shares voted in favor, 538,206 shares voted against, 29,098
shares abstaining and 1,241,009 broker non-votes.
(4) The selection of Coopers & Lybrand L.L.P. as auditors of the Company for the
year 1998 was ratified with 22,174,781 shares voted in favor, 664 shares
voted against, 16,957 shares abstaining and zero broker non-votes.
Subsequent to the voting, Coopers & Lybrand L.L.P. merged with Price
Waterhouse L.L.P. and the legal company name is now PricewaterhouseCoopers
LLP.
Item 5. Other Information - Pursuant to newly adopted rules of the Securities
-----------------
and Exchange Commission, any stockholder who intends to present a
proposal at the Company's 1999 annual meeting of stockholders without
requesting the Company to include such proposal in the Company's proxy
statement should be aware that he must notify the Company not later
than January 30, 1999 of his intention to present the proposal.
Otherwise, the Company may exercise discretionary voting with respect
to such stockholder proposal pursuant to authority conferred on the
Company by proxies to be solicited by the Board of Directors of the
Company and delivered to the Company in connection with the meeting.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
3(A). Certificate of Incorporation, as amended.
15. Letter re unaudited interim financial statements.
27. Financial data schedule
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed for the three months ended
June 30, 1998.
11
<PAGE>
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.
LIFE TECHNOLOGIES, INC.
Date: Aug. 7, 1998 By: /s/ Joseph C. Stokes, Jr.
------------------------------
Joseph C. Stokes, Jr.
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer
and Authorized Signatory)
By:/s/ C. Eric Winzer
----------------------------
C. Eric Winzer
Controller
(Principal Accounting
Officer)
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors
Life Technologies, Inc.
We have reviewed the accompanying consolidated balance sheet of Life
Technologies, Inc. and its subsidiaries as of June 30, 1998 and the related
consolidated statements of income and comprehensive income for the three-month
and six-month periods ended June 30, 1998 and 1997, and the related condensed
consolidated statement of cash flows for the six-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 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 as of December 31, 1997 and the
related consolidated statements of income, stockholders' equity and cash flows
for the year then ended (not presented herein), and in our report dated January
23, 1998 we expressed an unqualified opinion on those consolidated financial
statements.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
McLean, Virginia
July 9, 1998
13
<PAGE>
EXHIBIT INDEX
-------------
Exhibit 3(A) Certificate of Incorporation, as amended.
Exhibit 15 Letter re unaudited interim financial information
Exhibit 27 Financial data schedule
<PAGE>
Exhibit 3(A)
CERTIFICATE OF INCORPORATION
OF
LIFE TECHNOLOGIES, INC.
FIRST: The name of the Corporation is Life Technologies, Inc.
SECOND: The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is FIFTY-ONE-MILLION (51,000,000)
shares, consisting of ONE MILLION (1,000,000) shares of Preferred Stock, par
value $0.01 per share (hereinafter, the "Preferred Stock"), and FIFTY MILLION
(50,000,000) shares of Common Stock, par value $0.01 per share (hereinafter, the
"Common Stock").
Shares of Preferred Stock may be issued from time to time in one or more
series as may from time to time be determined by the Board of Directors. Each
series shall be distinctly designated. All shares of any one series of the
Preferred Stock shall be alike in every particular, except that there may be
different dates from which dividends thereon, if any, shall be cumulative, if
made cumulative. The powers, preferences and relative, participating, optional
and other rights of each such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other series
at any time outstanding. The Board of Directors of this Corporation is hereby
expressly granted authority to fix by resolution or resolutions adopted prior to
the issuance of any shares of each particular series of Preferred Stock, the
designation, powers, preferences and relative, participating, optional and other
rights, and the qualifications, limitations and restrictions thereof, if any, of
such series.
FIFTH: The name and mailing address of the sole incorporator is as
follows:
Name Mailing Address
---- ---------------
John D. Thompson 8717 Grovemont Circle
Gaithersburg, Maryland 20877
SIXTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors of the Corporation is expressly authorized to
adopt, alter or repeal the Bylaws of the Corporation.
SEVENTH: The Corporation may at any time, when authorized by the Board of
Directors, purchase shares of any class issued by it.
EIGHTH: The affirmative vote of the holders of not less than sixty-seven
percent (67%) of the outstanding shares of Common Stock of the Corporation shall
be required for the approval or authorization of any "Business Combination" (as
hereinafter defined) and the affirmative vote of the holders of not less than
<PAGE>
eighty percent (80%) of the outstanding shares of Common Stock of the
Corporation shall be required for the approval of any "Business Combination with
a Related Person" (as hereinafter defined); provided, however, that such eighty
percent (80%) voting requirement shall not be applicable, and any "Business
Combination with a Related Person" shall require the affirmative vote of the
holders of not less than sixty-seven percent (67%) of the outstanding shares of
Common Stock of the Corporation, if the conditions in (1), (2) or (3) have been
met:
(1) The Business Combination with a Related Person is solely between the
Corporation and another entity, one hundred percent (100%) of the Common
Stock of which is owned directly or indirectly by the Corporation; or
(2) All of the following conditions have been met:
(A) The aggregate amount of cash and the Fair Market Value of the
property, securities or other consideration to be received per
share by holders of Common Stock of the Corporation in the Business
Combination with a Related Person is at least equal to the highest
of the following:
(a) The sum of the market price of the Common Stock immediately
prior to the announcement of such Business Combination with
a Related Person plus a percentage of such price based on
the ratio of:
(i) the highest per share price (including brokerage
commissions, transfer taxes and soliciting dealers'
fees) which such Related Person has paid for any
shares of Common Stock acquired by it within a two-
year period prior to the Business Combination with
a Related Person, to
(ii) the market price of the Common Stock immediately
prior to the initial acquisition by such Related
Person of any Common Stock;
(b) The highest per share price (including brokerage
commissions, transfer taxes and soliciting dealer's fees
and with appropriate adjustment for recapitalizations and
for stock splits, stock dividends and like distributions)
paid by such Related Person for any shares of Common Stock
acquired by it prior to the Business Combination with a
Related Person;
(c) The Fair Market Value per share of Common Stock on the date
of the first public announcement of the proposal of the
Business Combination with a Related Person ("Announcement
Date") or on the date on which the Related Person became a
Related Person, whichever is higher; and
(d) The per share book value of the Common Stock at the end of
the fiscal month immediately preceding the Announcement
Date of such Business Combination with a Related Person.
<PAGE>
(B) The consideration to be received by holders of Common Stock shall
be in cash or in the same form as the Related Person has previously
paid for shares of Common Stock. If the Related Person has paid for
shares of Common Stock with varying forms of consideration, the
form of consideration for such Common Stock shall be either cash or
the form used to acquire the largest number of shares previously
acquired by it.
(C) After such Related Person has become a Related Person and prior to
the consummation of such Business Combination with a Related
Person: (a) there shall have been (i) no reduction in the annual
rate of dividends paid on Common Stock (except as necessary to
reflect any subdivision of the Common Stock), expect as approved by
two-thirds of the Continuing Directors (as hereinafter defined),
and (ii) an increase in such annual rate of dividends as necessary
to reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or similar transactions
which has the effect of reducing the number of outstanding shares
of Common Stock, unless the failure so to increase such annual rate
is approved by two-thirds of the Continuing Directors, and (b) such
Related person shall not have become the beneficial owner of any
additional shares of voting stock of the Company except as part of
the transaction which results in such Related Person becoming a
Related Person.
(D) After such Related Person has become a Related Person, such Related
Person shall not have received the benefit, directly or indirectly
(except proportionally as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credit
or other tax advantages provided by the Corporation, whether in
anticipation of or in connection with such Business Combination
with a Related Person or otherwise.
(E) A proxy or information statement describing the proposed Business
Combination with a Related Person and complying with the
requirements of the Securities Exchange Act of 1934 and the rules
and regulations thereunder (or any subsequent provision replacing
such Act, rules or regulations) shall be mailed to the public
stockholders of the Corporation at last thirty (30) days prior to
the consummation of such Business Combination with a Related Person
(whether or not such proxy or information statement is required to
be mailed pursuant to such Act or subsequent provision).
(3) A majority of the members of the Board of Directors acting upon such
transaction are Continuing Directors, and at least seventy-five percent
(75%) of the members of the Board of Directors of the Corporation shall
have approved the Business Combination with the Related Person.
For the purposes of this section:
(i) The term "Business Combination" shall mean (a) the consolidation of
the Corporation with or its merger into another corporation, (b)
the sale, lease, exchange, mortgage, pledge, transfer or other
disposition, by the Corporation of all or any "Substantial Part"
(as hereinafter defined) of its assets or business, (c) the merger
into the Corporation of
<PAGE>
another corporation or corporations, (d) a "Combination" or
"Majority Share Acquisition" in which the Corporation is the
"Acquiring Corporation" (as such terms are hereinafter defined),
and its Common Stock is issued or transferred in connection with
such Combination or Majority Share Acquisition, and (e) any
agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination.
(ii) The term "Business Combination with a Related Person" shall mean
(a) the consolidation or merger of the Corporation or any
Subsidiary with or into any "Related Person" (as hereinafter
defined) or any other corporation (whether or not itself a Related
Person) which is, or after such merger or consolidation would be,
an Affiliate (as hereinafter defined) of a Related Person, (b) any
sales, lease, exchange, mortgage, pledge, transfer or other
disposition (in one or a series of transactions) to or with any
Related Person or any Affiliate of a Related Person of any
Substantial Part of the assets or business of the Corporation or
any Subsidiary, (c) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition, of all or any Substantial Part of
the assets of a Related Person or an Affiliate of a Related Person
to the Corporation or a Subsidiary, (d) the issuance or transfer by
the Corporation or a Subsidiary (in one transaction or a series of
transactions) of any securities of the Corporation or any
Subsidiary to any Related Person or any Affiliate of any Related
Person, except the issuance of shares of Common Stock of the
Corporation to The Dexter Corporation pursuant to the terms of a
Merger Agreement, dated September 1, 1983 between the Corporation
and Bethesda Research Laboratories, Inc., (e) any reclassification
of securities (including any reverse stock split), or
recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving a
Related Person), which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any
class of equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any Related
Person or any Affiliate of any Related Person, (f) a Combination or
Majority Share Acquisition involving a Related Person in which the
Corporation is the Acquiring Corporation and its Common Stock is
issued or transferred in connection with such Combination or
Majority Share Acquisition, and (g) any agreement, contract or
other arrangement providing for any of the transactions described
in this definition of Business Combination with a Related Person.
(iii) The term "Continuing Director" shall mean any Director of the
Corporation who is unaffiliated with the Related Person and was a
director prior to the time the Related Person became a Related
Person and any successor of a Continuing Director who is
unaffiliated with the Related Person and was recommended to succeed
a Continuing Director by at least seventy-five percent (75%) of the
Continuing Directors.
<PAGE>
(iv) The terms "Combination", "Majority Share Acquisition" and
"Acquiring Corporation" shall have the following meanings:
"Combination" means a transaction, other than a merger
or consolidation, wherein either: (1) Voting shares of a domestic
corporation are issued or transferred in consideration whole or
foreign, of all or substantially all the assets of one or more
corporations, domestic or foreign, with or without good will or
the assumption of liabilities, (2) Voting shares of a foreign
parent corporation are issued or transferred in consideration in
whole or in part for the transfer of such assets to one or more
of its domestic subsidiaries.
"Majority share acquisition" means the acquisition of
shares of a corporation, domestic or foreign, entitling the
holder of the shares to exercise a majority of the voting power
in the election of directors of such corporation without regard
to voting power which may thereafter exist upon a default
failure, or other contingency, either: (1) By a domestic
corporation in consideration in whole or in part for the issuance
or transfer of its voting shares; (2) By a domestic or foreign
subsidiary in consideration in whole or in part for the issuance
or transfer of voting shares of its domestic parent.
"Acquiring corporation" in a combination means the
domestic corporation whose voting shares are issued or
transferred by it or its subsidiary or subsidiaries to the
transferor corporation or corporations or the shareholders
thereof; and "acquiring corporation" in a majority share
acquisition means the domestic corporation whose voting shares
are issued or transferred by it or its subsidiary in
consideration for shares of a domestic or foreign corporation
entitling the holder thereof to exercise a majority of the voting
power in the election of directors of such corporation.
(v) The term "Related Person" shall mean and include: (1) any
individual, corporation, partnership or other person or entity
(other than the Corporation or any Subsidiary) which, together
with its "Affiliates" and "Associates (as defined on June 1, 1983
in Rule 12b-2 under the Securities Exchange Act of 1934), is the
Beneficial Owner (as defined on June 1, 1983 in rule 13d-3 under
the Securities Exchange Act of 1934), directly or indirectly, in
the aggregate of twenty percent (20%) or more of the outstanding
Common Stock of the Corporation; (2) any Affiliate or Associate
of any such individual, corporation, partnership or other person
or entity; and (3) any individual, corporation, partnership or
other person or entity which at any time has been the Beneficial
Owner, directly or indirectly, of more than twenty percent (20%)
of the outstanding Common Stock of the Corporation
notwithstanding the fact that such individual, corporation,
partnership or other person or entity has reduced its
stockholdings below twenty percent (20%) if, as of the record
date for the determination of stockholders, entitled to notice of
and to vote on the Business Combination with a
<PAGE>
Related Person, such individual, corporation, partnership or
other person or entity is an Affiliate of the Corporation.
(vi) The term "Substantial Part" shall mean more than thirty percent
(30%) of the Fair Market Value of the total assets of the
corporation in question, as of the end of its most recent fiscal
year ending prior to the time the determination is being made.
(vii) Without limitation, any share of Common Stock of the Corporation
that any Related Person has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants or
options, or otherwise, shall be deemed beneficially owned by the
Related Person.
(viii) For the purpose of subparagraph (2) of this Article EIGHTH, the
term "other consideration to be received" shall include, without
limitation, Common Stock of the Corporation retained by its
existing public stockholders in the event of a business
combination with a Related Person in which the Corporation is the
surviving corporation.
(ix) The term "Subsidiary" shall mean any corporation of which a
majority of any class of equity security is owned, directly or
indirectly, by the Corporation.
(x) "Fair Market Value" shall mean: (a) in the case of stock, the
highest closing sale price during the thirty (30) day period
immediately preceding the date in question of a share of such
stock on the Composite Tape for the New York Stock Exchange
Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act
of 1934 on which such stock is listed, or if such stock is not
listed on any such exchange, the highest closing bid quotation
with respect to a share of such stock during the thirty (30) day
period immediately preceding the date in question on the National
Association of Securities Dealers, Inc., Automated Quotations
Systems, or any system then in use, or if no such quotations are
available, the Fair Market Value on the date in question of a
share of such stock as determined by the Continuing Directors in
good faith; or (b) in the case of property other than cash or
stock, the Fair Market Value of such property on the date in
question as determined by the Continuing Directors in good faith.
(xi) The majority of the Continuing Directors shall have the power and
duty to determine for the purposes of this reasonable inquiry,
(a) whether a person is a Related Person, (b) the number of
shares of voting stock of the Company beneficially owned by any
person, (c) whether a person is an Affiliate or an Associate of
another, and (d) what the Fair Market Value is of the
consideration to be received for the issuance or transfer of
securities by the Corporation or any
<PAGE>
Subsidiary in any Business Combination or Business Combination
with a Related Person.
NINTH: No holders of any class of shares of the Corporation
shall have any pre-emptive right to purchase or have offered to them
for purchase any shares or other securities of the Corporation.
TENTH: The Directors of the Corporation shall be divided into
three classes. Each class of Directors shall consist of not fewer
than three nor more than five Directors (provided that the whole
number of Directors of any class shall not exceed the whole number of
Directors of any other class by more than one). The number of
Directors in each class may from time to time be determined by the
vote of at least seventy-five percent (75%) of the Directors. The
term of each class shall expire in different years. At each annual
meeting the successors to the Directors of each class whose term shall
expire in that year shall be elected to hold office for a term of
three (3) years from the date of their election and until the election
of their successors. In case of any increase in the number of
Directors of any class, any additional Directors elected to such class
shall hold office for a term which shall coincide with the term of
such class. The affirmative vote of the holders of not less than
eighty percent (80%) of the Common Stock of the Corporation shall be
required to remove from office any or all of such classified
Directors, or all of the Directors of a particular class. A Director
may be removed from office only for cause. As used in this Article
TENTH, the term "cause" means fraud, criminal conduct or gross abuse
of office amounting to a breach of trust. Any stockholder proposing
to remove a director shall (i) request, in accordance with the
requirements of the Bylaws of the corporation, that a special meeting
of the stockholders be called, or notify the corporation that such
proposal shall be presented at the annual meeting of stockholders, and
(ii) state, in the request for such a meeting or in such notification,
in detail all the particular reasons and circumstances as a result of
which such removal for cause is justified. Any director proposed to
be so removed shall be permitted an opportunity to be heard by the
stockholders to rebut such charges before any vote for removal is
taken.
ELEVENTH: The affirmative vote of the holders of not less than
eighty percent (80%) of the outstanding shares of Common Stock of the
Corporation shall be necessary to alter, change or repeal any
provision contained in this Certificate of Incorporation, or to adopt
a new Certificate of Incorporation.
TWELFTH: Meetings of the stockholders may be held within or
without the State of Delaware, as the Bylaws may provide. The books
of the Corporation may be kept (subject to any provisions contained in
the statutes) outside the State of Delaware at such place or places as
may be designated from time to time by the Board of Directors or in
the Bylaws of the Corporation. Elections of directors need not be by
written ballot unless the Bylaws of the Corporation shall so provide.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore
named, for the purpose of forming a corporation pursuant to the
General Corporation Law of the State of Delaware, do make this
<PAGE>
certificate, hereby declaring and certifying that this is my act and
deed and the facts stated herein are true, and accordingly have
hereunto set my hand this 14th day of May, 1986.
---- ----
/s/ John D. Thompson
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK
BE IT REMEMBERED that on this 14th day of May, 1986, personally
----
came before me, a Notary Public in and for the County and State
aforesaid, John D. Thompson, the party executing the foregoing
certificate of incorporation as incorporator, known to me
personally to be such, and duly acknowledged the said certificate
to be the act and deed of the signer and that the facts stated
therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand the day and
year aforesaid.
/s/ Roy B. Simpson, Jr.
Notary Public, State of New York
No. 31-4647683
Qualified in New York County
Commission Expires March 30, 1987
<PAGE>
CERTIFICATE OF AMENDMENT OF
THE CERTIFICATE OF INCORPORATION OF
LIFE TECHNOLOGIES, INC.
LIFE TECHNOLOGIES, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of the Corporation
held on February 18, 1987, said Board of Directors adopted resolutions proposing
and declaring advisable a new Article THIRTEENTH to the Certificate of
Incorporation of the Corporation as follows:
"THIRTEENTH: No director of the Corporation shall be personally
liable to the Corporation or any of its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, as the same exists or hereafter may be amended, or (iv) for any
transaction from which the director derived an improper personal benefit. If
the Delaware General Corporation Law hereafter is amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the Corporation in addition to the limitation on
personal liability provided herein, shall be limited to the fullest extent
permitted by the amended Delaware General Corporation Law. Any repeal or
modification of this paragraph by the stockholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the corporation existing at the time of such repeal
or modification."
SECOND: That hereafter, pursuant to resolution of its Board of
Directors, the annual meeting of stockholders of said Corporation was duly
called and held, at which meeting the necessary number of stockholders as
required by statute voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
applicable provisions of Sections 211 and 242 of the General Corporation Law of
Delaware, as amended.
IN WITNESS WHEREOF, LIFE TECHNOLOGIES, INC. has caused its corporation
seal to be hereunto affixed and this certificate to be signed by its President
and attested by its Secretary this 17th day of April, 1987.
LIFE TECHNOLOGIES
By: /s/ M. James Barrett
President
ATTEST:
/s/ John D. Thompson
Secretary
<PAGE>
CERTIFICATE OF AMENDMENT OF
THE CERTIFICATE OF INCORPORATION OF
LIFE TECHNOLOGIES, INC.
LIFE TECHNOLOGIES, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of the Corporation
held on February 10, 1998, the Board of Directors of the Corporation duly
adopted a resolution setting forth a proposed amendment to Article EIGHTH of the
Certificate of Incorporation, as amended, of the Corporation (the
"Certificate"), declaring said amendment to be advisable and directing that the
proposed amendment be placed before the stockholders of the Corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:
RESOLVED, that Article EIGHTH, subsection (3)(ii), of the
Certificate be amended to read in its entirety in the form
attached hereto as Attachment A;
SECOND: That thereafter, pursuant to resolution of the Board of
Directors of the Corporation, the annual meeting of stockholders of the
Corporation was duly called and held, at which meeting the necessary number of
stockholders as required by statute and by the Certificate voted in favor of and
approved said amendment to the Certificate.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, LIFE TECHNOLOGIES, INC. has caused this
certificate to be signed by its President and attested by its Secretary, who
hereby affirm, under penalties of perjury, that this certificate is the act and
deed of the Corporation and that the facts stated herein are true.
Date: April 14, 1998 /s/ J. Stark Thompson
-----------------------------------
J. Stark Thompson
President
ATTEST:
/s/ Joseph C. Stokes, Jr
- ------------------------
Joseph C. Stokes, Jr.
Secretary
<PAGE>
ATTACHMENT A
(ii) The term "Business Combination with a Related Person" shall mean (a) the
consolidation or merger of the Corporation or any Subsidiary with or into any
"Related Person" (as hereinafter defined) or any other corporation (whether or
not itself a Related Person) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of a Related Person, (b) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one
or a series of transactions) to or with any Related Person or any Affiliate of a
Related Person of any Substantial Part of the assets or business of the
Corporation or any Subsidiary, (c) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition, of all or any Substantial Part of the assets of a
Related Person or an Affiliate of a Related Person to the Corporation or a
Subsidiary, (d) the issuance or transfer by the Corporation or a Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Related Person or any Affiliate of any
Related Person, except the issuance of shares of Common Stock of the Corporation
to The Dexter Corporation pursuant to the terms of a Merger Agreement, dated
September 1, 1983, between the Corporation and Bethesda Research Laboratories,
Inc., (e) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving a Related Person), which has
the effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by any
Related Person or any Affiliate of any Related Person, except as a result of
immaterial changes due to fractional share adjustments or as a result of any
purchase or redemption of any shares of stock by the Corporation, (f) a
Combination or Majority Share Acquisition involving a Related Person in which
the Corporation is the Acquiring Corporation and its Common Stock is issued or
transferred in connection with such Combination or Majority Share Acquisition,
and (g) any agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination with a Related
Person.
<PAGE>
Exhibit 15
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We are aware that our report dated July 9, 1998 on our review of interim
financial information of Life Technologies, Inc. (the Company) for the three-
month and six-month periods ended June 30, 1998 and 1997, included in this Form
10-Q is incorporated by reference in the Company's registration statements on
Form S-8, Registration No. 333-28607, Registration No. 333-03773, Registration
No. 33-59741, Registration No. 33-21807 and Registration No. 33-956, and the
Company's registration statement on Form S-3, Registration No. 33-29536.
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 Section 7 and 11 of that Act.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
McLean, Virginia
August 5, 1998
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet and Income Statement 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> JUN-30-1998
<CASH> 20,363
<SECURITIES> 0
<RECEIVABLES> 71,570
<ALLOWANCES> 1,436
<INVENTORY> 67,391
<CURRENT-ASSETS> 168,614
<PP&E> 160,099
<DEPRECIATION> 55,099
<TOTAL-ASSETS> 298,697
<CURRENT-LIABILITIES> 56,845
<BONDS> 0
0
0
<COMMON> 236
<OTHER-SE> 227,431
<TOTAL-LIABILITY-AND-EQUITY> 298,697
<SALES> 179,899
<TOTAL-REVENUES> 181,025
<CGS> 83,777
<TOTAL-COSTS> 83,777
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18
<INCOME-PRETAX> 28,420
<INCOME-TAX> 9,947
<INCOME-CONTINUING> 18,072
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,072
<EPS-PRIMARY> 0.77
<EPS-DILUTED> 0.75
</TABLE>
