<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 20, 1998
SYBRON INTERNATIONAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WISCONSIN 1-11091 22-2849508
(STATE OR OTHER JURISDICTION (COMMISSION FILE (I.R.S. EMPLOYER
OF INCORPORATION) NUMBER) IDENTIFICATION NO.)
411 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
-------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(414) 274-6600
---------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE> 2
ITEM 5. OTHER EVENTS.
A copy of the press release dated July 20, 1998 is filed herewith as
Exhibit 99.1 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
See Exhibit Index following the Signature page of this report,
which is incorporated herein by reference.
-2-
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SIGNATURE
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.
SYBRON INTERNATIONAL CORPORATION
Date: July 20, 1998 By: /s/Dennis Brown
--------------------------------
Dennis Brown
Vice President - Finance, Chief
Financial Officer & Treasurer
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<PAGE> 4
SYBRON INTERNATIONAL CORPORATION
(THE "REGISTRANT")
(COMMISSION FILE NO. 1-11091)
EXHIBIT INDEX
TO
FORM 8-K CURRENT REPORT
DATED JULY 20, 1998
<TABLE>
<CAPTION>
INCORPORATED
EXHIBIT HEREIN BY FILED
NUMBER DESCRIPTION REFERENCE TO HEREWITH
<S> <C> <C> <C>
99.1 Press Release, X
dated July 20, 1998
</TABLE>
EI-1
<PAGE> 1
EXHIBIT 99.1
SYBRON INTERNATIONAL ANNOUNCES THIRD QUARTER RECORD SALES AND
EARNINGS PRIOR TO SPECIAL CHARGES
MILWAUKEE, WI, July 20 / PR Newswire / -- Sybron International
(NYSE:SYB) announced today its financial results for the third quarter of fiscal
1998, the quarter ended June 30, 1998.
As explained more fully below, Sybron International's results for the
third quarter and first nine months of fiscal 1998 ended June 30, 1998, contain
charges with respect to the restructuring of its laboratory businesses, the
restructuring of certain operations of Sybron Dental Specialties relating
primarily to the consolidation of Ormco and "A" Company, and transaction and
integration charges associated with the merger with LRS, the parent of "A"
Company, collectively referred to as the "Special Charges". In addition, because
the LRS merger is accounted for as a pooling-of-interests, all prior period data
has been adjusted to reflect the historical results of LRS and "A" Company as if
the merger took place on the first day of the reporting period.
Excluding these Special Charges and prior period restatements, results
for the third quarter and first nine months were as follows:
Net sales for the third quarter of fiscal 1998 totaled $235.5 million
compared to $209.8 million for the same period of fiscal 1997, an increase of
12.3 percent.
Gross margins in the quarter were 52.1 percent compared with 51.3
percent in the third quarter of last year. Year-to-date gross margins were 51.6
percent, up from 50.4 percent a year ago.
Operating income for the third quarter of fiscal 1998 was $58.0 million,
an increase of 20.4 percent from $48.2 million in the same period of fiscal
1997. For the nine months to date, operating income was $162.5 million, an
increase of 26.3 percent over the prior year period.
Operating margins in the third quarter of fiscal 1998 were 24.6 percent
as compared to 23.0 percent in the corresponding quarter of fiscal 1997.
Operating margins year-to-date were 23.4 percent compared with 22.5 percent in
the same period last year.
Cash flow remained strong in the third quarter of fiscal 1998 as
earnings before interest, taxes, depreciation and amortization (EBITDA) totaled
$72.7 million, an increase of 18.8 percent from $61.2 million for the same
period of fiscal 1997. EBITDA year-to-date amounted to $205.1 million, an
increase of 24.7 percent.
Net income was $26.6 million for the quarter, up 22.0 percent from the
like period a year ago.
<PAGE> 2
Diluted earnings per share for the third quarter of fiscal 1998 were
$0.26, as compared to $0.22 (prior to a $0.01 per share charge in fiscal 1997
for an extraordinary item) in the corresponding 1997 period. Year-to-date
diluted earnings per share were $0.69 as compared to $0.60 in the corresponding
1997 period (prior to a $0.01 per share charge in fiscal 1997 for an
extraordinary item).
Sales of laboratory products for the third quarter of 1998 were up
13.0 percent while sales of dental products grew by 10.7 percent. Domestic sales
grew by 14.6 percent while international sales grew by 7.2 percent.
Special Charges
The Special Charges, which total $33.9 million ($22.8 million after
tax), consist of the following items:
(a) $9.4 million ($5.9 million after tax) relates to the realignment of the
Company's laboratory subsidiaries, including Nalge Nunc International
Corporation, Barnstead Thermolyne Corporation, and Erie Scientific Company,
under Sybron Laboratory Products Corporation (SLPC). This restructuring charge
consists primarily of severance expenditures associated with the consolidation
of certain functions, the restructuring of sales and marketing activities, and
costs associated with exiting certain product lines. Approximately $4.6 million
of these charges are cash expenditures.
The savings from these actions are expected to be approximately $6.1 million per
year.
(b) $14.5 million ($10.7 million after tax) relates to the consolidation of
Ormco Corporation and "A" Company activities after the LRS merger, and the
exiting of certain product lines on the dental side of the business. The charge
primarily includes severance costs and costs associated with the closure of
Ormco's sales office in Zurich, Switzerland. Approximately $8.0 million of these
charges are cash expenditures.
The savings from these actions are expected to be approximately $11.0 million
per year.
(c) $10 million ($6.2 million after tax) consists of transaction and merger and
integration costs associated with the LRS merger.
Net income in the third quarter of fiscal 1998 after the Special Charges
was $3.8 million. Diluted earnings per share after the Special Charges of $0.22
per share were $0.04 per share. For the nine-month period ended June 30, 1998,
net income after the Special Charges was $49.4 million and diluted earnings per
share after the Special Charges were $0.48.
Acquisitions
On July 3, 1998, a subsidiary of Sybron Dental Specialties,
<PAGE> 3
Ormco Corporation, purchased certain assets of Tycom Corporation and its
affiliate Tycom Dental Corporation, which will enable Ormco or its affiliates to
manufacture and supply Tycom Dental's line of endodontic instrumentation. Ormco
also has agreed to act as the exclusive worldwide manufacturer's representative
for Tycom Dental who will continue to supply customers with their products until
Ormco is producing the products. Annual sales of these products are
approximately $8.0 million.
Also on July 3, 1998, Sybron's laboratory equipment subsidiary,
Barnstead Thermolyne Corporation, purchased Electrothermal Engineering Ltd.
(Electrothermal), located in Southend-on-Sea, England. Electrothermal, which was
founded in 1940, has a very strong brand name in Europe and the U.S., and
manufactures a line of laboratory equipment including heating mantles and
controls. Annual sales for these products are approximately $5.4 million.
On May 22, 1998, a subsidiary of SLPC, Naugatuck Glass Company,
purchased Marks Polarized Corporation, a manufacturer of laminated filters,
polarizers, polarized filters, and other optical products. Annual sales revenues
are approximately $1.0 million.
On May 14, 1998, SLPC purchased the assets of Summit Biotechnology,
Inc., a business located in Fort Collins, Colorado, which processes and sells
fetal bovine serum used for cell culture and diagnostic purposes. Sales revenues
this year are expected to be approximately $2.0 million.
On April 24, 1998, one of SLPC's subsidiaries, Chase Scientific Glass,
Inc. (Chase), purchased the assets of SciCan Scientific (SciCan), a
Toronto-based manufacturer of laboratory glassware. SciCan's product line is
very similar to that of Chase, and it is our intention to promptly move the
operation and consolidate it with Chase's existing facility in Rockwood,
Tennessee. SciCan's annual sales revenues are approximately $5.5 million.
Commenting on the quarter, Kenneth F. Yontz, Chairman, President, and
CEO of Sybron said, "This has been a very productive quarter. We achieved our
earnings growth goals while at the same time reorganizing both the Laboratory
Products Group and the Dental Group to be better positioned for the future. Five
more acquisitions were completed, and our pipeline of opportunities continues to
be healthy." Yontz added that it was this diversity of growth sources and
attention to cost efficiency which assures the consistency of their earnings
growth.
Sybron International Corporation's subsidiaries design, manufacture, and
market laboratory and dental supply products worldwide. Products of Sybron
Laboratory Products Corporation include Erie Scientific laboratory microscope
slides and diagnostic products, Nalge Nunc International reusable and disposable
plastic labware, Barnstead Thermolyne precision heating and stirring apparatus,
and water purification systems
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for laboratories. Products of Sybron Dental Specialties include Ormco and "A"
Company orthodontic products and Kerr dental materials.
The Company's financial results are summarized below:
<TABLE>
<CAPTION>
3rd 3rd 3rd 3rd
Quarter Quarter Quarter Quarter
6/30/98 6/30/98 6/30/97 6/30/97
Prior to As Restated(1)
Special Originally
Charges Reported
(Millions of Dollars
Except Earnings per Share)
<S> <C> <C> <C> <C>
Net Sales $235.5 $235.5 $209.8 221.3
Gross Profit 122.6 116.2 107.6 114.5
SG&A Expenses 64.6 91.4 59.4 64.2
Operating Income 58.0 24.8 48.2 50.3
Income Before Taxes &
Extraordinary Item 44.0 10.8 36.1 37.3
Income Taxes 17.3 6.9 14.3 14.7
Income Before
Extraordinary Item 26.3 3.8 21.8 22.5
Extraordinary Item -
Write-off of Deferred
Financing Fees -- -- (.7) (.7)
Net Income 26.6 3.8 21.1 21.9
Basic Earnings per Share:
Earnings per Share Prior
to Extraordinary Item .26 .04 .23 .23
Extraordinary Item -- -- (.01) (.01)
Basic Earnings per Share .26 .04 .22 .22
Diluted Earnings per Share:
Earnings per Share Prior
to Extraordinary Item .26 .04 .22 .22
Extraordinary Item -- -- (.01) (.01)
Diluted Earnings per Share .26 .04 .21 .21
</TABLE>
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<TABLE>
<CAPTION>
First First First First
9 Months 9 Months 9 Months 9 Months
Prior to 6/30/98 6/30/97 6/30/97
Special As Originally Restated(1)
Charges Reported
(Millions of Dollars
Except Earnings per Share)
<S> <C> <C> <C> <C>
Net Sales $695.6 $695.6 $571.7 $605.4
Gross Profit 359.1 352.7 288.2 308.3
SG&A Expenses 196.6 223.4 159.6 174.3
Operating Income 162.5 129.2 128.6 134.0
Income Before Taxes and
Extraordinary Item 120.0 86.8 97.7 100.2
Income Taxes 47.9 37.5 38.9 39.8
Income Before
Extraordinary Item 72.2 49.4 58.8 60.4
Extraordinary Item -
Write-off of Deferred
Financing Fees -- -- (.7) (.7)
Net Income 72.2 49.4 58.1 59.7
Basic Earnings per Share:
Earnings per Share Prior
to Extraordinary Item .72 .49 .62 .62
Extraordinary Item -- -- (.01) (.01)
Basic Earnings per Share .72 .49 .61 .61
Diluted Earnings per Share:
Earnings per Share Prior to
Extraordinary Item .69 .48 .60 .59
Extraordinary Item -- -- (.01) (.01)
Diluted Earnings per Share .69 .48 .59 .58
</TABLE>
(1) Amounts are restated to include the merger with LRS Acquisition Corp.
accounted for as a pooling-of-interests.
-0- 7/20/98
/CONTACT: Dennis Brown of Sybron International, 414/274-6600.
(SYB)
