THE PERKIN-ELMER CORPORATION
INDEX
Page
Part I. Financial Information
Condensed Consolidated Statements of 1
Operations for the Three Months and Six
Months Ended December 31, 1993 and January
31, 1993
Condensed Consolidated Statements of 2
Financial Position at December 31, 1993 and
June 30, 1993
Condensed Consolidated Statements of Cash 3
Flows for the Six Months Ended December 31,
1993 and January 31, 1993
Notes to Unaudited Condensed Consolidated 4
Financial Statements
Management's Discussion and Analysis of 6
Financial Condition and Results of
Operations
Part II. Other Information 9
<PAGE>
THE PERKIN-ELMER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
unaudited
(Dollar amounts in thousands, except per share amounts)
<TABLE>
Three months ended Six months ended
<CAPTION>
December 31, January 31, December 31, January 31,
1993 1993 1993 1993
<S> <C> <C> <C> <C>
Net revenues $ 256,815 $ 270,215 $ 500,119 $ 521,131
Cost of sales 133,159 140,434 262,884 273,825
Gross margin 123,656 129,781 237,235 247,306
Selling, general and administrative 73,280 78,956 145,450 155,280
Research, development and engineering 23,196 21,282 45,361 42,678
Operating income 27,180 29,543 46,424 49,348
Interest expense (1,865) (4,087) (3,463) (7,710)
Interest income 415 2,035 942 4,386
Other income, net 1,569 1,713 141 1,150
Income before income taxes 27,299 29,204 44,044 47,174
Income taxes 5,186 8,705 8,368 15,117
Income from continuing operations 22,113 20,499 35,676 32,057
Income (loss) from discontinued operations
(net of income taxes) 405 (12,465) 2,259
Income before cumulative effect of
changes in accounting principles 22,113 20,904 23,211 34,316
Loss from cumulative effect on prior years of
changes in accounting principles
(net of income taxes) (83,098)
Net income (loss) $ 22,113 $ 20,904 $ 23,211 $ (48,782)
Per share amounts:
Income from continuing operations $ 0.50 $ 0.46 $ 0.80 $ 0.72
Income (loss) from discontinued operations 0.01 (0.28) 0.05
Income before cumulative effect of changes
in accounting principles 0.50 0.47 0.52 0.77
Loss from cumulative effect on prior years of
changes in accounting principles (1.85)
Net income (loss) $ 0.50 $ 0.47 $ 0.52 $ (1.08)
Dividends per share $ 0.17 $ 0.17 $ 0.34 $ 0.34
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
-1-
<PAGE>
THE PERKIN-ELMER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Dollar amounts in thousands)
At December 31, At June 30,
1993 1993
Assets
(unaudited)
Current Assets
Cash and cash equivalents $ 28,274 $ 28,582
Short-term investments 1,728 1,749
Accounts receivable, net 230,743 218,236
Inventories 192,569 179,082
Prepaid expenses and other current assets 51,508 47,275
Total current assets 504,822 474,924
Property, Plant and Equipment, net 158,182 162,689
Other Assets
Other long-term assets 144,594 152,735
Net assets of discontinued operations 61,430 60,722
Total other assets 206,024 213,457
Total Assets $ 869,028 $ 851,070
Liabilities and Shareholders' Equity
Current Liabilities
Loans payable $ 103,550 $ 73,982
Accounts payable 67,038 66,172
Accrued salaries and wages 33,690 43,350
Accrued taxes on income 37,452 38,056
Other accrued expenses 140,744 152,435
Total current liabilities 382,474 373,995
Long-term debt 6,192 7,069
Other long-term liabilities 165,562 163,401
Shareholders' Equity
Capital stock 45,600 45,600
Capital in excess of par value 178,739 178,739
Retained earnings 171,320 163,861
Cumulative translation adjustments (4,954) (3,931)
Minimum pension liability (31,859) (31,859)
Treasury stock, at cost (44,046) (45,805)
Total shareholders' equity 314,800 306,605
Total Liabilities and Shareholders' Equity $ 869,028 $ 851,070
See accompanying Notes to Condensed Consolidated Financial Statements.
-2-
<PAGE>
THE PERKIN-ELMER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
unaudited
(Dollar amounts in thousands)
<TABLE>
Six months ended
<CAPTION>
December 31, January 31,
1993 1993
<S> <C> <C>
Operating Activities
Income from continuing operations $ 35,676 $ 32,057
Adjustments to reconcile income from continuing
operations to net cash provided by operating activities
Depreciation and amortization 22,254 22,581
Other, net (2,539) (132)
Changes in operating assets and liabilities:
Increase in accounts receivable (20,672) (13,435)
Increase in inventories (16,154) (14,638)
Increase in prepaid expenses and other assets (5,859) (6,678)
Decrease in accounts payable and other liabilities (12,918) (21,520)
Net Cash Used by Operating Activities (212) (1,765)
Investing Activities
Additions to property, plant and equipment
(net of disposals of $1,659 and $1,364, respectively) (13,953) (14,387)
Marketable securities and short-term investments 6,646
Investment in Lynx (9,581)
Proceeds from notes receivable and the sale of assets 12,582
Discontinued operations (869) 4,450
Legal settlement (15,000)
Other, net 32
Net Cash Used by Investing Activities (17,240) (12,840)
Financing Activities
Proceeds from long-term borrowings 866 198
Principal payments on long-term debt (866) (27,340)
Net change in loans payable 30,621 53,554
Dividends paid (14,933) (11,423)
Purchase of treasury stock (6,361) (4,430)
Stock issued for stock plans, net of cancellations 7,471 8,620
Net Cash Provided by Financing Activities 16,798 19,179
Effect of Exchange Rate Changes on Cash 346 (4,505)
Net change in cash and cash equivalents (308) 69
Cash and cash equivalents beginning of period 28,582 43,106
Cash and cash equivalents end of period $ 28,274 $ 43,175
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
-3-
<PAGE>
THE PERKIN-ELMER CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - The condensed consolidated financial statements should
be read in conjunction with the financial statements presented
in The Perkin-Elmer Corporation's Transition Report on Form 10-K
for the transition period from August 1, 1992 to June 30, 1993.
Significant accounting policies disclosed therein have not
changed. The financial statements have been restated to reflect
the acquisition of Applied Biosystems, Inc. as a pooling of
interests and to present the Company's Material Sciences segment
as a discontinued operation. Effective June 30, 1993 the
Company changed its fiscal year end from July 31 to June 30.
Therefore, the financial statements included herein reflect the
period from July 1, 1993 through December 31, 1993 for fiscal
1994 and the period from August 1, 1992 through January 31, 1993
for fiscal 1993.
NOTE 2 - Inventories are stated at the lower of cost (on a
first-in, first out basis) or market. Inventories are comprised
of the following major components:
(dollar amounts in millions) December 31, 1993 June 30, 1993
Raw materials and supplies $ 25.1 $ 27.9
Work-in-process 19.9 25.4
Finished products 147.6 125.8
$ 192.6 $ 179.1
NOTE 3 - Two major issues have been resolved and are included
in the six month results. First, the Company paid $15 million
to settle potential claims related to the Hubble Space Telescope
mirror. In 1989, the Company had sold the unit which performed
the work on the telescope to a subsidiary of Hughes Aircraft
Company. This settlement resulted in an after-tax charge of
$12.1 million and is recorded in discontinued operations in the
six month results. In the second issue, the Company received a
favorable ruling from the U.S. Tax Court upholding the Company's
pricing method on intercompany sales with respect to its
operations in Puerto Rico.
NOTE 4 - During the first quarter of fiscal 1994 the Company
sold the net assets of its Applied Science Operation to Orbital
Sciences Corporation. The Company received cash proceeds of
$600,000 and 320,000 shares of Orbital Sciences Corporation
common stock which were subsequently disposed of in the second
quarter. During the second quarter of fiscal 1994, the Company
sold its minority equity investment in MRJ, Inc.
-4-
<PAGE>
to MRJ Group, Inc. for $3.3 million in cash. In addition, two
subordinated notes due from MRJ, Inc. were repaid. The gains
from these sales are reflected in other income and were not
significant to the Company's results of operations.
NOTE 5 - The Company is required to implement Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" no later than fiscal
year 1995. This statement requires investments in equity
securities that have readily determinable fair values and all
investments in debt securities to be classified in three
categories: 1. held-to-maturity securities which are reported
at amortized cost, 2. trading securities which are reported at
fair value with unrealized gains and losses included in earnings
and 3. available for sale securities which are reported at fair
value with unrealized gains and losses excluded from earnings
and reported as a separate component of shareholder's equity.
The Company is currently analyzing the standard to determine the
timing and impact, if any, on its financial statements.
NOTE 6 - The unaudited condensed consolidated financial
statements reflect, in the opinion of Registrant's management,
all adjustments which are necessary for a fair statement of the
results for the interim periods. All such adjustments are of a
normal recurring nature. These results are, however, not
necessarily indicative of the results to be expected for the
full year.
-5-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following comments should be read in conjunction with
"Management's Discussion and Analysis" appearing on pages 19 -
21 of the Company's 1993 Annual Report to Shareholders.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
DECEMBER 31, 1993
Consolidated net revenues were $256.8 million in the second
quarter of fiscal 1994 compared with $270.2 million in the
second quarter of fiscal 1993. The prior year included $10
million in revenues from the Company's Applied Science Operation
which was sold in the first quarter of this fiscal year. The
effects of foreign currency translation reduced revenues by
approximately $7 million. Increased demand for life science
products, primarily higher unit volumes of DNA sequencers and
consumables continued during the second quarter. The U.S. and
Far Eastern markets continued to show improvement in the quarter
compared to a year ago, which helped offset the recessionary
European markets for analytical instruments.
Gross margin as a percentage of net revenues for the second
quarter of fiscal 1994 was 48.1% compared with 48.0% in second
quarter of fiscal 1993. Increased demand for life science
products at favorable margins was offset by pricing strategies
in the Far East, aimed at market share improvement. Decreases
in unit volume sales in Europe also reduced margins in the
quarter when compared with the prior year.
Operating expenses were $96.5 million in the current quarter
compared with $100.2 million a year ago. Selling, general and
administrative (SG&A) expenses decreased by $5.7 million;
favorable effects from currency and reductions in Europe were
the primary contributors. Research, development and engineering
(R&D) expenses increased $1.9 million in the current quarter.
The increase primarily reflects higher spending in the life
science business.
Interest expense decreased from $4.1 million a year ago to $1.9
million in the current quarter. The decrease resulted from
reduced short-term borrowing levels and lower interest rates.
Interest income was $.4 million compared with $2.0 million a
year ago. The decrease in interest income was the result of
lower long-term notes receivable in fiscal 1994.
Other income was $1.6 million in the current year compared with
$1.7 million in fiscal 1993. During the second quarter, the
Company sold its interest in MRJ, Inc. to MRJ Group, Inc. (see
Note 4). The gain on the sale of MRJ was recorded in other
income and was not significant to the results of operations.
See Results of Operations for the six months ended December 31,
1993 for discussion of the effective income tax rate.
-6-
<PAGE>
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1993
Consolidated net revenues were $500.1 million in the first six
months of fiscal 1994 compared with $521.1 million in fiscal
1993. This decrease of $21 million reflects the inclusion in
the prior year of $19.5 million of revenues compared to $5
million this year from the Company's Applied Science Operation,
which was sold in the first quarter of fiscal 1994, and the
effect of currency translation which decreased fiscal 1994 net
revenues by approximately $23 million. Operationally, the U.S.
and Far Eastern markets improved during the first six months of
fiscal 1994 as demand for life science products increased. In
the Far East, growing economies helped support the strong demand
for life science products and selective pricing strategies in
analytical instrument product lines resulted in higher unit
sales volumes from year to year. Net revenues in Europe
continued to decline from the weak economy and competitive
pricing pressures in traditional analytical instruments.
Gross margin as a percentage of net revenues was 47.4% for the
first six months of fiscal 1994 compared with 47.5% in fiscal
1993. Increased revenues for life science products at higher
returns were offset by reduced volumes in Europe, the effects of
currency and selective pricing strategies in the Far East.
SG&A expenses were $145.5 million for the first six months of
fiscal 1994 compared with $155.3 million a year ago. Favorable
currency effects of approximately $6.7 million and reductions in
administrative expenses in Europe were the primary contributors.
R&D expenses increased $2.7 million year to year as increased
expenditures for life science programs offset the favorable
effects of currency translation overseas.
Interest expense was $3.5 million in the six months ended
December 31, 1993 compared with $7.7 million for the six months
ended January 31, 1993. Reduced short-term borrowing levels and
lower interest rates were the primary contributors. Interest
income was $.9 million in the current year compared with $4.4
million in fiscal 1993. Reductions in long-term notes
receivable was the primary reason for the decrease.
The effective income tax rate was 19% compared with 32% in the
first six months of the prior year. During the first quarter of
this fiscal year the Company received a favorable ruling from
the U.S. Tax Court upholding the Company's pricing method on
intercompany sales with respect to its operations in Puerto
Rico. Resolution of this long-standing dispute with the U.S.
government and the additional tax benefits realized from the
inclusion of Applied Biosystems' results for a full year reduced
the Company's effective tax rate for fiscal 1994.
DISCONTINUED OPERATIONS
The Hubble Telescope pretax settlement of $15 million (see Note
3) and the results of the Company's Material Sciences
discontinued operation accounted for an after-tax loss of $12.5
million for the six months ended December 31, 1993.
-7-
<PAGE>
FINANCIAL RESOURCES AND LIQUIDITY
The Registrant's cash and cash equivalents aggregated $28.3
million at December 31, 1993, approximately the same level on
hand as fiscal year end. Net cash used for operating activities
was $.2 million compared to $1.8 million in the prior year. The
increase in loans payable of $29.6 million was primarily used to
settle potential claims related to the Hubble Space Telescope
mirror and to fund combination expenses associated with the
Applied Biosystems merger.
Capital expenditures were approximately $16 million in the
current year which was approximately the same level of spending
a year ago.
RECENTLY ISSUED ACCOUNTING STANDARD
See Note 5 to the Condensed Consolidated Financial Statements.
-8-
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
11. Computation of Net Income Per Share.
(b) Reports on Form 8-K.
The Company filed a Current Report on Form 8-K
dated October 6, 1993 relating to the announcement of
its settlement of potential claims related to the
Hubble Space Telescope mirror and its receipt of a
favorable ruling from the U.S. Tax Court with respect
to its pricing practices involving its Puerto Rican
operations.
-9-
<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.
THE PERKIN-ELMER CORPORATION
By:/s/ Gaynor N. Kelley
Gaynor N. Kelley
Chairman and
Chief Executive Officer
By:/s/ William F. Emswiler
William F. Emswiler
Vice President, Finance
Dated: February 11, 1994
-10-
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
11 Computation of Net
Income Per Share
THE PERKIN-ELMER CORPORATION
COMPUTATION OF NET INCOME PER SHARE
(Amounts in thousands, except per share amounts)
Six months ended
December 31, January 31,
1993 1993
Weighted average number of common shares 43,930 43,566
Common stock equivalents - stock options 899 1,214
Weighted average number of
common shares used in calculating
primary net income per share 44,829 44,780
Additional dilutive stock options
under paragraph #42 APB #15 159 99
Shares used in calculating fully
diluted net income per share 44,988 44,879
Calculation of primary and fully
diluted net income per share:
PRIMARY AND FULLY DILUTED:
Income from continuing operations 35,676 32,057
Income (loss) from discontinued operations (12,465) 2,259
Income before cumulative effect of
changes in accounting principles 23,211 34,316
Loss from cumulative effect on prior years of
changes in accounting principles (83,098)
Net income (loss) used in the calculations of
primary and fully diluted net income per share 23,211 (48,782)
PRIMARY per share amounts:
Income from continuing operations 0.80 0.72
Income (loss) from discontinued operations (0.28) 0.05
Income before cumulative effect of
changes in accounting principles 0.52 0.77
Loss from cumulative effect on prior years of
changes in accounting principles (1.85)
Net income (loss) 0.52 (1.08)
FULLY DILUTED per share amounts:
Income from continuing operations 0.79 0.71
Income (loss) from discontinued operations (0.28) 0.05
Income before cumulative effect of
changes in accounting principles 0.52 0.76
Loss from cumulative effect on prior years of
changes in accounting principles (1.84)
Net income (loss) 0.52 (1.08)
EXHIBIT 11
