SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 1-4389
THE PERKIN-ELMER CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
New York 06-0490270
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
761 Main Avenue,
Norwalk, Connecticut 06859-0001
(Address of Principal Executive Offices, including Zip Code)
Registrant's Telephone Number,Including Area Code: (203) 762-1000
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 ____
Number of shares outstanding of Common Stock, par value $1 per
share, as of November 1, 1994: 42,478,866.
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THE PERKIN-ELMER CORPORATION
INDEX
Part I. Financial Information Page
Condensed Consolidated Statements of Operations for the 1
Three Months Ended September 30, 1994 and 1993
Condensed Consolidated Statements of Financial Position at 2
September 30, 1994 and June 30, 1994
Condensed Consolidated Statements of Cash Flows for the 3
Three Months Ended September 30, 1994 and 1993
Notes to Unaudited Condensed Consolidated Financial Statements 4
Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
Part II. Other Information 8
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THE PERKIN-ELMER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
unaudited
(Dollar amounts in thousands, except per share amounts)
Three months ended September 30,
1994 1993
Net revenues $ 247,278 $ 243,304
Cost of sales 129,028 129,725
Gross margin 118,250 113,579
Selling, general and administrative 73,681 72,170
Research, development and engineering 23,288 22,165
Operating income 21,281 19,244
Interest expense (2,388) (1,598)
Interest income 620 527
Other expense, net (1,064) (1,428)
Income before income taxes 18,449 16,745
Provision for income taxes 3,505 3,182
Income from continuing operations 14,944 13,563
Loss from discontinued operations
(net of income taxes) (12,465)
Net income $ 14,944 $ 1,098
Per share amounts:
Income from continuing operations $ 0.35 $ 0.30
Loss from discontinued operations (0.28)
Net income $ 0.35 $ 0.02
Dividends per share $ 0.17 $ 0.17
See accompanying Notes to Condensed Consolidated Financial Statements.
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THE PERKIN-ELMER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Dollar amounts in thousands)
<TABLE>
At September 30, At June 30,
1994 1994
<CAPTION>
(unaudited)
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 40,691 $ 25,003
Accounts receivable, net 228,038 231,564
Inventories 200,615 201,436
Prepaid expenses and other current assets 57,688 56,695
Total current assets 527,032 514,698
Property, Plant and Equipment, net 148,233 149,071
Other Assets
Other long-term assets 166,334 164,524
Net assets of discontinued operations 56,207
Total other assets 166,334 220,731
Total Assets $ 841,599 $ 884,500
Liabilities and Shareholders' Equity
Current Liabilities
Loans payable $ 71,188 $ 83,552
Accounts payable 65,920 73,221
Accrued salaries and wages 30,714 41,809
Accrued taxes on income 39,323 38,073
Other accrued expenses 128,379 141,643
Total current liabilities 335,524 378,298
Long-Term Debt 33,899 34,270
Other Long-Term Liabilities 184,967 181,500
Shareholders' Equity
Capital stock 45,600 45,600
Capital in excess of par value 178,739 178,739
Retained earnings 188,279 181,130
Cumulative translation adjustments 7,318 5,521
Net unrealized holding gain on available-for-sale securities 2,002
Minimum pension liability (36,259) (36,259)
Treasury stock, at cost (98,470) (84,299)
Total shareholders' equity 287,209 290,432
Total Liabilities and Shareholders' Equity $ 841,599 $ 884,500
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
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<PAGE>
THE PERKIN-ELMER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
unaudited
(Dollar amounts in thousands)
<TABLE>
Three months ended September 30,
<CAPTION>
1994 1993
<S> <C> <C>
Operating Activities
Income from continuing operations $ 14,944 $ 13,563
Adjustments to reconcile income from continuing
operations to net cash provided by operating activities:
Depreciation and amortization 9,928 10,666
Other, net 1,733 796
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 5,587 (1,573)
(Increase) decrease in inventories 2,420 (11,835)
Increase in prepaid expenses and other assets (2,685) (12,328)
Decrease in accounts payable and other liabilities (37,798) (13,461)
Net Cash Used by Operating Activities (5,871) (14,172)
Investing Activities
Additions to property, plant and equipment
(net of disposals of $425 and $711, respectively) (6,003) (6,732)
Net cash received from sale of assets 56,207 600
Net Cash Provided (Used) by Investing Activities 50,204 (6,132)
Financing Activities
Principal payments on long-term debt (591) (344)
Net change in loans and dividends payable (5,991) 28,181
Dividends declared (7,220) (7,456)
Purchase of treasury stock (16,027) (4,903)
Stock issued for stock plans, net of cancellations 1,309 2,332
Net Cash Provided (Used) by Financing Activities (28,520) 17,810
Effect of Exchange Rate Changes on Cash (125) 1,072
Net Change in Cash and Cash Equivalents 15,688 (1,422)
Cash and Cash Equivalents beginning of period 25,003 28,582
Cash and Cash Equivalents end of period $ 40,691 $ 27,160
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
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<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 (the Company's)
Annual Report on Form 10-K for the fiscal year ended June 30,
1994. Significant accounting policies disclosed therein have
not changed.
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) September 30, June 30,
1994 1994
Raw materials and supplies $ 25.0 $ 24.9
Work-in-process 22.0 22.4
Finished products 153.6 154.1
$ 200.6 $ 201.4
NOTE 3 - On September 30, 1994, the Company concluded the sale
of its Material Sciences segment, consisting of the Company's
Metco division (Metco) headquartered in Westbury, New York, to
Sulzer Inc., a wholly-owned subsidiary of Sulzer, Ltd.,
Winterthur, Switzerland. The Company received net cash proceeds
of approximately $56.2 million as a result of the sale. Metco
produces combustion, electric arc and plasma thermal spray
equipment and supplies. The Company recorded an after-tax loss
on the disposal of Metco of $7.7 million during the fourth
quarter of fiscal 1994, including a provision of $5.0 million
(less applicable taxes of $.8 million) for operating losses
during the phase-out period.
NOTE 4 - During the first quarter of fiscal 1994, the Company
sold the net assets of its Applied Science Operation (ASO) 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 of fiscal 1994 for proceeds of approximately
$5.0 million). The gain on the sale was reflected in other
income and was not material to the Company's first quarter
results.
NOTE 5 - During the first quarter of fiscal 1994, the Company
agreed to pay $15.5 million to settle potential claims related
to the Hubble Space Telescope mirror. This amount, which
included legal costs, was recorded in discontinued operations.
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<PAGE>
NOTE 6 - The Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" in the first quarter
of fiscal 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
shareholders' equity. Held-to-maturity securities with
maturities between 1 and 5 years have aggregate fair values of
$7.0 million. Those with maturities between 5 and 10 years have
aggregate fair values of $17.6 million. The aggregate fair
value of available-for-sale securities is $10.0 million with a
gross unrealized holding gain of $2.0 million recognized in
shareholders' equity. There was no impact to earnings as a
result of the adoption of SFAS No. 115.
NOTE 7 - The unaudited condensed consolidated financial
statements reflect, in the opinion of the Company'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. Certain amounts in the condensed consolidated
financial statements have been reclassified for comparative
purposes.
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<PAGE>
THE PERKIN-ELMER CORPORATION
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 21 -
25 of Registrant's 1994 Annual Report to Shareholders.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994
Consolidated net revenues were $247.3 million in the first
quarter of fiscal 1995, compared with $243.3 million in the
first quarter of fiscal 1994. Fiscal 1994's first quarter
included the results of two units, Applied Science Operation
(ASO) and the Physical Electronics Division (PHI), which were
divested during that year. The Company sold ASO during the
first quarter of fiscal 1994 and PHI as of the end of the third
quarter. These two businesses had net revenues in the prior
year quarter of $16.2 million. When measured on a comparable
basis, excluding the two units sold, net revenues increased 9%.
Currency effects increased net revenues by approximately $7.8
million, primarily from the weaker U.S. dollar compared to
European and Far East currencies. Revenues in all geographic
areas, with the exception of North America, increased over the
prior period. This was primarily the result of a strong opening
backlog in both traditional analytical instrument products (organic
and inorganic product lines) and life science products.
Gross margin, as a percentage of net revenues, was 47.8% in the
current quarter compared with 46.7% during last year's first
quarter. The improved gross margin percentage resulted from the
favorable effects of currency, a more favorable mix of
analytical instrument product sales, and a decrease in sales of
lower margin products resulting from the divestitures of ASO and
PHI.
Operating expenses were $97.0 million in the current quarter
compared with $94.3 million a year ago. Unfavorable currency
effects accounted for approximately $2.4 million of the increase
in expenses. On a comparable basis, excluding the two units
sold, increased worldwide marketing expenses were offset by
reductions in administrative expenses. Selling, general and
administrative expenses, as a percent of sales, were constant
with the prior year. Increased investment in life science
programs and the unfavorable effects of currency accounted for
the $1.1 million growth in research and development expense.
Interest expense in the first quarter of fiscal 1995 increased
$.8 million from the comparable period in fiscal 1994. The
increase was the result of higher interest rates and higher
borrowings in the quarter. Interest income in the first quarter
of fiscal 1995 of $.6 million was consistent with the amount in
the prior year's quarter.
Other expense, net, was $1.1 million in the quarter compared
with $1.4 million a year ago. The decrease was primarily the
result of lower carrying costs for idle real estate. In
addition, the first quarter of fiscal 1994 included the gain on
the sale of ASO, which was not material to the Company's
results. (See Note 4).
The effective income tax rate of 19% was constant with the prior
year.
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<PAGE>
DISCONTINUED OPERATIONS
On September 30, 1994, the Company concluded the sale of its
Material Sciences segment, consisting of the Company's Metco
division (Metco) headquartered in Westbury, New York, to Sulzer
Inc., a wholly-owned subsidiary of Sulzer, Ltd., Winterthur,
Switzerland. The Company received net cash proceeds of
approximately $56.2 million as a result of the sale. Metco
produces combustion, electric arc and plasma thermal spray
equipment and supplies. The Company recorded an after-tax loss
on the disposal of Metco of $7.7 million during the fourth
quarter of fiscal 1994, including a provision of $5.0 million
(less applicable taxes of $.8 million) for operating losses
during the phase-out period. Fiscal 1994's first quarter
included a $12.5 million loss from discontinued operations.
During the first quarter of fiscal 1994, the Company agreed to
pay $15.5 million to settle potential claims related to the
Hubble Space Telescope mirror. This amount, which included
legal costs, was recorded in discontinued operations. In
addition, Metco's first quarter fiscal 1994 results were
included in discontinued operations.
FINANCIAL RESOURCES AND LIQUIDITY
Cash used by operating activities was $5.9 million in the
current quarter. Decreases in accounts payable, payments made
to fund the Company's U.S. pension and profit sharing plans and
merger related payments were the primary contributors.
Capital expenditures were $6.4 million for the quarter ended
September 30, 1994 compared with $7.4 million in the previous
year's first quarter.
As previously mentioned, borrowings were higher during the
quarter when compared with the prior year. However, the end of
the period balance for short-term borrowings was reduced by a
portion of the net proceeds received from the sale of Metco.
Borrowings are maintained to fund capital expenditures, purchase
treasury stock and pay dividends to shareholders. In the first
quarter of fiscal 1995, the Company repurchased 542,700 shares
of its common stock totaling $16.0 million. Under existing
Board authorization, the Company is authorized to purchase
common stock when management deems such action to be in the best
interest of its shareholders and the Company, subject to certain
limitations.
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<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-
Holders.
The Company held its Annual Meeting of Shareholders on
October 20, 1994. At such meeting, the shareholders of the
Company reelected each of the Company's directors for a new
term and ratified the selection of Price Waterhouse LLP as
the Company's independent accountants for the fiscal year
ending June 30, 1995, each as described in the Notice of
Annual Meeting and Proxy Statement dated September 16, 1994.
The results of the voting of the shareholders with respect
to such matters is set forth below.
I. Election of Directors.
Total Vote Total Vote
For Each Withheld From
Director Each Director
Joseph F. Abely, Jr. 37,876,214 337,282
Richard H. Ayers 37,875,638 337,858
Jean-Luc Belingard 37,874,956 338,540
Robert H. Hayes 37,874,610 338,886
Gaynor N. Kelley 37,852,960 360,536
Donald R. Melville 37,869,006 344,490
Riccardo Pigliucci 37,858,189 355,307
Burnell R. Roberts 37,871,651 341,845
John S. Scott 37,873,649 339,847
Carolyn W. Slayman 37,873,348 340,148
Richard F. Tucker 37,870,668 342,828
II. Ratification of the selection of Price Waterhouse
LLP as the Company's independent accountants for the
fiscal year ending June 30, 1995.
FOR AGAINST ABSTAIN NO VOTE
38,110,086 44,429 58,981 0
Item 5. Other Events.
At a meeting of the Board of Directors of the Company
held immediately following the Annual Meeting of
Shareholders referred to in Item 4, above, the Board of
Directors elected the following persons as officers of the
Company:
Gaynor N. Kelley Chairman and Chief Executive Officer
Riccardo Pigliucci President and Chief Operating Officer
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<PAGE>
Peter Barrett Vice President, Worldwide Sales and Service
William F. Emswiler Vice President, Finance
Julianne A. Grace Vice President, Corporate Relations
Michael W. Hunkapiller Vice President, Strategic Business Units
Joseph E. Malandrakis Vice President, Worldwide Operations
Andre F. Marion Vice President and President, Applied Biosystems
Division
John B. McBennett Corporate Controller
Michael J. McPartland Vice President, Human Resources
William B. Sawch Vice President, General Counsel and Secretary
Rhonda L. Seegal Vice President, Treasurer
On November 1, 1994, Mr. William F. Emswiler, Vice
President, Finance, was killed in a helicopter accident in
Mexico. As of this date, no replacement for Mr. Emswiler
has been named.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
11. Computation of Net Income Per Share.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the
quarter for which this report is being filed.
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<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/ John B. McBennett
John B. McBennett
Corporate Controller
(Chief Accounting Officer)
Dated: November 14, 1994
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<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
11 Computation of Net
Income Per Share
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THE PERKIN-ELMER CORPORATION
COMPUTATION OF NET INCOME PER SHARE
(Amounts in thousands, except per share amounts)
Three months ended September 30,
1994 1993
Weighted average number of common shares 42,687 43,886
Common stock equivalents - stock options 482 865
Weighted average number of
common shares used in calculating
primary net income per share 43,169 44,751
Additional dilutive stock options
under paragraph #42 APB #15 121
Shares used in calculating fully
diluted net income per share 43,290 44,751
Calculation of primary and fully
diluted net income per share:
PRIMARY AND FULLY DILUTED:
Income from continuing operations 14,944 $ 13,563
Loss from discontinued operations (12,465)
Net income used in the calculations of
primary and fully diluted net income per share 14,944 1,098
PRIMARY per share amounts:
Income from continuing operations 0.35 0.30
Loss from discontinued operations (0.28)
Net income 0.35 0.02
FULLY DILUTED per share amounts:
Income from continuing operations 0.35 0.30
Loss from discontinued operations (0.28)
Net income 0.35 $ 0.02
EXHIBIT 11
