<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
------------------------
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
COMMISSION FILE NUMBER: 01-10920
FISHER SCIENTIFIC INTERNATIONAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER.)
<TABLE>
<S> <C>
DELAWARE 02-0451017
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE LIBERTY LANE, HAMPTON, NEW HAMPSHIRE 03842
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (603) 926-5911
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 [ ].
The number of shares of Common Stock outstanding at August 1, 2000 was
40,094,979.
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<PAGE> 2
FISHER SCIENTIFIC INTERNATIONAL INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2000
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I -- FINANCIAL INFORMATION:
Item 1 -- Financial Statements:
Introduction to the Financial Statements.................. 2
Statement of Operations -- Three and Six Months Ended June
30, 2000 and 1999...................................... 3
Balance Sheet -- June 30, 2000 and December 31, 1999...... 4
Statement of Cash Flows -- Six Months Ended June 30, 2000
and 1999............................................... 5
Notes to Financial Statements............................. 6
Item 2 -- Management's Discussion and Analysis of Results of
Operations and Financial Condition........................ 9
Item 3 -- Quantitative and Qualitative Disclosures About
Market Risk............................................... 11
PART II -- OTHER INFORMATION:
Item 4 -- Submission of Matters to a Vote of Security
Holders................................................... 12
Item 6 -- Exhibits and Reports on Form 8-K.................. 12
SIGNATURE................................................... 13
EXHIBIT INDEX............................................... 14
</TABLE>
1
<PAGE> 3
FISHER SCIENTIFIC INTERNATIONAL INC.
PART 1 -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
INTRODUCTION TO THE FINANCIAL STATEMENTS
The financial statements included herein have been prepared by Fisher
Scientific International Inc. ("Fisher" or the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. The
December 31, 1999 balance sheet is the balance sheet included in the audited
financial statements as shown in the Company's 1999 Annual Report on Form 10-K.
The Company believes that the disclosures are adequate to make the information
presented not misleading when read in conjunction with the financial statements
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1999.
The financial information presented herein reflects all adjustments
(consisting only of normal-recurring adjustments) that are, in the opinion of
management, necessary for a fair presentation of the results for the interim
periods presented. The results for interim periods are not necessarily
indicative of the results to be expected for the full year.
2
<PAGE> 4
FISHER SCIENTIFIC INTERNATIONAL INC.
STATEMENT OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- -------------------
2000 1999 2000 1999
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Sales.................................................. $650.0 $615.5 $1,291.9 $1,216.4
Cost of sales.......................................... 470.3 440.0 930.2 867.4
Selling, general and administrative expense............ 138.9 135.8 281.5 269.0
Loss from operations to be disposed of................. -- 2.1 -- 10.8
------ ------ -------- --------
Income from operations................................. 40.8 37.6 80.2 69.2
Interest expense....................................... 24.9 25.9 50.6 52.7
Other income, net...................................... 1.3 2.6 3.0 5.2
------ ------ -------- --------
Income before income taxes............................. 17.2 14.3 32.6 21.7
Income tax provision................................... 7.8 8.7 14.7 12.6
------ ------ -------- --------
Net income............................................. $ 9.4 $ 5.6 $ 17.9 $ 9.1
====== ====== ======== ========
Earnings per common share:
Basic................................................ $ 0.23 $ 0.14 $ 0.45 $ 0.23
====== ====== ======== ========
Diluted.............................................. $ 0.21 $ 0.13 $ 0.40 $ 0.21
====== ====== ======== ========
</TABLE>
See the accompanying notes to financial statements.
3
<PAGE> 5
FISHER SCIENTIFIC INTERNATIONAL INC.
BALANCE SHEET
(IN MILLIONS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 51.4 $ 50.3
Receivables, net.......................................... 276.5 286.1
Inventories............................................... 243.2 223.3
Other current assets...................................... 69.3 75.1
-------- --------
Total current assets.............................. 640.4 634.8
Property, plant and equipment, net.......................... 250.4 247.5
Goodwill.................................................... 342.1 356.2
Other assets................................................ 170.6 164.1
-------- --------
Total assets...................................... $1,403.5 $1,402.6
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Short-term debt........................................... $ 46.5 $ 41.7
Accounts payable.......................................... 305.0 307.6
Accrued and other current liabilities..................... 163.0 170.2
-------- --------
Total current liabilities......................... 514.5 519.5
Long-term debt.............................................. 1,003.0 1,011.1
Other liabilities........................................... 208.3 202.6
-------- --------
Total liabilities................................. 1,725.8 1,733.2
-------- --------
Commitments and contingencies............................... -- --
Stockholders' deficit:
Preferred stock........................................... -- --
Common stock.............................................. 0.4 0.4
Capital in excess of par value............................ 316.7 315.8
Accumulated deficit....................................... (576.7) (594.6)
Accumulated other comprehensive loss...................... (62.4) (51.6)
Treasury stock............................................ (0.3) (0.6)
-------- --------
Total stockholders' deficit....................... (322.3) (330.6)
-------- --------
Total liabilities and stockholders' deficit....... $1,403.5 $1,402.6
======== ========
</TABLE>
See the accompanying notes to financial statements.
4
<PAGE> 6
FISHER SCIENTIFIC INTERNATIONAL INC.
STATEMENT OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------
2000 1999
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $17.9 $ 9.1
Adjustments to reconcile net income to cash provided by
(used in) operating activities:
Depreciation and amortization.......................... 31.8 30.8
Loss (gain) on sale of property, plant and equipment
and write-off of assets............................... 0.6 (2.3)
Deferred income taxes.................................. 1.5 (0.4)
Changes in working capital:
Receivables, net..................................... (12.9) (11.5)
Inventories.......................................... (11.8) (5.6)
Payables, accrued and other current liabilities...... (5.6) (26.3)
Other working capital changes........................ 7.8 (1.5)
Net cash flow from operations to be disposed of........ -- 2.3
Other assets and liabilities........................... (6.5) (4.0)
----- ------
Cash provided by (used in) operating activities... 22.8 (9.4)
----- ------
Cash flows from investing activities:
Acquisitions, net of cash acquired........................ (22.3) (41.9)
Capital expenditures...................................... (12.5) (20.6)
Proceeds from sale of property, plant and equipment....... 0.5 5.7
Other investing activity.................................. (4.2) --
----- ------
Cash used in investing activities................. (38.5) (56.8)
----- ------
Cash flows from financing activities:
Proceeds from common stock options........................ 0.3 0.3
Proceeds from accounts receivable securitization, net..... 19.0 24.5
Proceeds from long-term debt.............................. 7.7 8.2
Payments of long-term debt................................ (10.0) (5.4)
Changes in short-term debt, net........................... 1.1 5.8
----- ------
Cash provided by financing activities............. 18.1 33.4
----- ------
Effect of exchange rate changes on cash..................... (1.3) (3.1)
----- ------
Net change in cash and cash equivalents..................... 1.1 (35.9)
Cash and cash equivalents -- beginning of period............ 50.3 65.6
----- ------
Cash and cash equivalents -- end of period.................. $51.4 $ 29.7
===== ======
</TABLE>
See the accompanying notes to financial statements.
5
<PAGE> 7
FISHER SCIENTIFIC INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- NATURE OF BUSINESS AND RESULTS OF OPERATIONS
Fisher Scientific International Inc. ("Fisher" or the "Company") was formed
in September 1991. The Company's operations are conducted throughout North and
South America, Europe, the Far East, the Middle East and Africa through one or
more subsidiaries, joint ventures, agents and dealers. The Company is managed in
three business segments: domestic distribution, international distribution, and
laboratory workstations. The domestic and international distribution segments
engage in the supply, marketing, service and manufacture of scientific,
clinical, educational, and occupational health and safety products. The
laboratory workstations segment manufactures and sells laboratory workstations,
fume hoods, and computer (LAN) furniture.
Certain prior year amounts have been reclassified to conform to their
current presentation.
NOTE 2 -- ACQUISITION
The Company entered into an Agreement and Plan of Merger dated June 21,
2000 with PSS World Medical Inc. ("PSS"), pursuant to which Fisher and PSS will
combine business operations and PSS will become a wholly owned subsidiary of
Fisher. Based upon a fixed exchange ratio of .3121 of a Fisher share for each
outstanding share of PSS common stock, Fisher will issue approximately 22.2
million shares of its common stock in the transaction. For accounting purposes,
the shares issued will be valued at $625 million or $28.22 per share, which
represents the weighted average closing price of the shares three days prior to
and three days following the announcement of the merger. The merger is subject
to various conditions, including approval by the shareholders of Fisher and PSS,
filings required by and compliance with securities and antitrust laws, the
financial and operating performance of PSS and certain other matters. The
transaction will be accounted for under the purchase method of accounting and is
expected to close in the fourth quarter of 2000.
NOTE 3 -- ACCOUNTING PRONOUNCEMENTS
In June 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities -- an Amendment of FASB Statement No.
133," which will be effective for the Company for fiscal years beginning January
1, 2001. The Company does not anticipate that the adoption of this statement
will have a material effect on the Company's financial statements.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
The Company is required to adopt SAB 101 in the fourth quarter of fiscal 2000.
The Company is currently evaluating the impact that the adoption of SAB 101 will
have on the Company's financial statements.
NOTE 4 -- INVENTORIES
The following is a summary of inventories by major category (in millions):
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
-------- ------------
<S> <C> <C>
Raw material................................................ $ 28.8 $ 21.8
Work in process............................................. 9.3 2.7
Finished products........................................... 205.1 198.8
------ ------
Total.................................................. $243.2 $223.3
====== ======
</TABLE>
6
<PAGE> 8
NOTE 5 -- INVESTMENTS
During the second quarter of 2000, the Company announced its participation
in an Internet health care exchange formed by Fisher, AmeriSource Health
Corporation, Cardinal Health, Inc. and McKesson HBOC, Inc. Fisher will initially
own approximately 13% of the new entity and has committed to invest
approximately $6.5 million over the next six to twelve months.
NOTE 6 -- COMPREHENSIVE INCOME
The following is a summary of comprehensive income for the three and six
months ended June 30, 2000 and 1999 (in millions). Comprehensive income
components included in stockholders' deficit include any changes in equity
during a period that are not the result of transactions with the Company's
stockholders.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -----------------
2000 1999 2000 1999
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Net income................................................ $9.4 $5.6 $17.9 $9.1
Foreign currency translation adjustment................... (3.3) (2.7) (12.3) (9.0)
Unrealized gains on securities............................ 1.5 -- 1.5 --
---- ---- ----- ----
Comprehensive income...................................... $7.6 $2.9 $ 7.1 $0.1
==== ==== ===== ====
</TABLE>
NOTE 7 -- EARNINGS PER SHARE
The following is a reconciliation of the shares used in the computation of
basic and diluted earnings per share for the three and six months ended June 30,
2000 and 1999 (in millions):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -------------------
2000 1999 2000 1999
------- ------- -------- --------
<S> <C> <C> <C> <C>
Weighted average shares of common stock outstanding used
in the computation of basic earnings per share.......... 40.1 40.0 40.1 40.0
Common stock equivalents (a).............................. 4.3 2.5 4.5 2.4
---- ---- ---- ----
Shares used in the computation of diluted earnings per
share................................................... 44.4 42.5 44.6 42.4
==== ==== ==== ====
</TABLE>
---------------
(a) The amount of outstanding antidilutive common stock options excluded from
the computation of diluted earnings per share for the three and six months
ended June 30, 1999 was 2.5 million and 2.6 million, respectively. Options
excluded from the calculation of diluted earnings per share for the three
and six months ended June 30, 2000 were insignificant.
NOTE 8 -- RESTRUCTURING
In the fourth quarter of 1999, the Company recorded a $1.5 million net
restructuring credit, which consisted of $2.1 million of restructuring charges
related to its long-term restructuring plan and a $3.6 million reversal of prior
period restructuring charges due to revised estimates. The 1999 charge related
to the consolidation of certain locations of the Company's German operations.
The balance of the restructuring accrual at December 31, 1999 was $2.1 million.
Spending against this accrual was $0.5 million during the six months ended June
30, 2000.
At December 31, 1999, the Company also had $7.9 million of accruals
remaining from restructuring charges recorded in years prior to 1999. These
plans were substantially completed at December 31, 1999. The remaining accruals
relate to long-term lease and severance obligations. Spending against these
accruals was $2.4 million during the six months ended June 30, 2000.
7
<PAGE> 9
NOTE 9 -- SEGMENT INFORMATION
Selected business segment financial information for the three and six
months ended June 30, 2000 and 1999 is shown below (in millions):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ --------------------
2000 1999 2000 1999
------- ------- -------- --------
<S> <C> <C> <C> <C>
Sales:
Domestic distribution..................... $538.6 $490.9 $1,061.3 $ 965.7
International distribution................ 109.2 112.1 228.2 232.1
Laboratory workstations................... 39.9 46.8 76.0 87.7
Eliminations.............................. (37.7) (34.3) (73.6) (69.1)
------ ------ -------- --------
Total............................. $650.0 $615.5 $1,291.9 $1,216.4
====== ====== ======== ========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ --------------------
2000 1999 2000 1999
------- ------- -------- --------
<S> <C> <C> <C> <C>
Income (loss) from operations:
Domestic distribution..................... $37.7 $33.8 $74.3 $66.4
International distribution................ 1.7 (1.2) 3.6 --
Laboratory workstations................... 1.6 7.4 2.8 13.3
Technology................................ -- (2.1) -- (10.8)
Eliminations.............................. (0.2) (0.3) (0.5) 0.3
----- ----- ----- -----
Total............................. $40.8 $37.6 $80.2 $69.2
===== ===== ===== =====
</TABLE>
Income (loss) from operations is revenue less related costs and direct and
allocated expenses. Intercompany sales and transfers between segments were not
material for the three and six months ended June 30, 2000 and 1999.
8
<PAGE> 10
ITEM 2-- MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
This Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward-looking statements. Certain factors that might
cause such a difference include those discussed in the section entitled
"Management's Discussion and Analysis of Results of Operations and Financial
Condition -- Cautionary Factors Regarding Forward-Looking Statements" contained
in the Company's Form 10-K for the year ended December 31, 1999. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in the report might not occur.
RESULTS OF OPERATIONS
The following table sets forth the Company's sales and income from
operations by segment for the three and six months ended June 30, 2000 and 1999
(in millions):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ --------------------
2000 1999 2000 1999
------- ------- -------- --------
<S> <C> <C> <C> <C>
Sales:
Domestic distribution..................... $538.6 $490.9 $1,061.3 $ 965.7
International distribution................ 109.2 112.1 228.2 232.1
Laboratory workstations................... 39.9 46.8 76.0 87.7
Eliminations.............................. (37.7) (34.3) (73.6) (69.1)
------ ------ -------- --------
Total............................. $650.0 $615.5 $1,291.9 $1,216.4
====== ====== ======== ========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ --------------------
2000 1999 2000 1999
------- ------- -------- --------
<S> <C> <C> <C> <C>
Income (loss) from operations:
Domestic distribution....................... $37.7 $33.8 $74.3 $66.4
International distribution.................. 1.7 (1.2) 3.6 --
Laboratory workstations..................... 1.6 7.4 2.8 13.3
Technology.................................. -- (2.1) -- (10.8)
Eliminations................................ (0.2) (0.3) (0.5) 0.3
----- ----- ----- -----
Total............................... $40.8 $37.6 $80.2 $69.2
===== ===== ===== =====
</TABLE>
Sales
Sales for the three and six months ended June 30, 2000 increased 5.6% and
6.2% to $650.0 million and $1,291.9 million, respectively, from $615.5 million
and $1,216.4 million for the comparable periods in 1999. Sales growth in the
domestic distribution segment was primarily due to internal sales growth. Sales
decline in the international distribution segment was primarily due to the
strengthening of the U.S. dollar against the major European currencies, which
resulted in a reduction in reported sales of $6.8 million and $12.5 million for
the three and six months ended June 30, 2000, respectively. Sales decline in the
laboratory workstations segment was due primarily to a slowdown in the
industrial research laboratory construction market. The Company anticipates this
trend in the laboratory workstations segment to continue for the remainder of
2000.
Gross Profit
Fisher's gross profit for the three and six months ended June 30, 2000
increased 2.4% and 3.6% to $179.7 million and $361.7 million, respectively, from
$175.5 million and $349.0 million for the comparable periods in 1999, primarily
as a result of increased sales volume. Gross profit as a percent of sales
decreased to
9
<PAGE> 11
27.6% and 28.0% for the three and six months ended June 30, 2000, respectively,
from 28.5% and 28.7% for the comparable periods in 1999. The reduction in gross
profit as a percent of sales is primarily the result of both a change in product
mix and increased pricing pressure stemming from the slowdown in the industrial
research laboratory construction market.
Selling, General and Administrative Expense
Selling, general and administrative expense for the three and six months
ended June 30, 2000 increased 2.3% and 4.6% to $138.9 million and $281.5
million, respectively, from $135.8 million and $269.0 million for the comparable
periods in 1999. The increase in selling, general and administrative expense in
2000 is primarily due to increased sales volume. Selling, general and
administrative expense as a percentage of sales was 21.4% and 21.8% for the
three and six months ended June 30, 2000, respectively, and 22.1% for the
comparable periods in 1999. The three and six month periods ended June 30, 1999
include $0.5 million and $1.2 million, respectively, of nonrecurring costs
associated with the temporary duplication of operations, relocation of
inventories and employees, hiring and training new employees and other one-time,
redundant costs.
The international distribution segment continues to have significantly
higher selling, general and administrative expenses as a percentage of sales as
compared with those of Fisher's domestic distribution segment.
On March 8, 2000, the Company announced that it had combined its e-commerce
activities into a new subsidiary, Alchematrix. The Company anticipates an
increase in operating expenses in the second half of 2000 associated with
Alchematrix as the Company increases its investment in e-commerce technology,
services, sales and marketing.
Loss From Operations to be Disposed of
In December 1998 the Company's Board of Directors approved a plan to
dispose of the Company's technology business segment. The disposition was
completed through the distribution to the Company's stockholders of ProcureNet
on April 15, 1999 and the sale of the UniKix Technology software business on
July 22, 1999. The results of operations of this segment are reported separately
in the statement of operations. Loss from operations to be disposed of includes
a $5.2 million write-off of in-process research and development costs associated
with an acquisition made during the first quarter of 1999.
Other Income, Net
Other income for the three and six months ended June 30, 2000 decreased to
$1.3 million and $3.0 million, respectively, from $2.6 million and $5.2 million
for the comparable periods in 1999. The decrease in income in 2000 was primarily
due to the inclusion of gains from the sales of property, plant and equipment
associated with the Company's consolidation plans in the 1999 periods.
Income Tax Provision
The income tax provision for the three and six months ended June 30, 2000
was $7.8 million and $14.7 million, respectively, compared with $8.7 million and
$12.6 million for the corresponding periods in 1999. The effective income tax
rate for the three and six months ended June 30, 2000 was 45% compared with 61%
and 58% for the corresponding periods in 1999, respectively. The decrease in the
effective tax rate in 2000 is primarily due to a reduction in foreign losses for
which no tax benefits are recorded and a reduction in one-time permanent
nondeductible items.
Net Income
Net income for the three and six months ended June 30, 2000 increased to
$9.4 million and $17.9 million, respectively, from $5.6 million and $9.1 million
for the comparable periods in 1999, due to the factors discussed above.
10
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 2000, the Company's operations
provided $22.8 million of cash compared with using $9.4 million of cash for the
same period in 1999. This change in cash provided by operating activities is
primarily due to higher net income earned in 2000, decreased income tax payments
in 2000, and a $12 million customer advance received in conjunction with an
acquisition during 2000.
During the six months ended June 30, 2000, the Company used $38.5 million
of cash for investing activities compared with $56.8 million for the same period
in 1999. The decrease in cash used for investing activities is primarily due to
a decrease in acquisition spending. During 2000, the Company acquired a
manufacturing facility for $22.3 million. During 1999, the Company completed two
acquisitions and acquired the remaining shares of Bioblock Scientific S.A. for
an aggregate net purchase price of $41.9 million. The acquisitions were funded
with cash on hand and through the sale of receivables under a receivables
securitization facility. The Company anticipates its 2000 annual capital
expenditures will be at a similar level as 1999 capital expenditures.
During the second quarter of 2000, the Company announced its participation
in an Internet health care exchange formed by Fisher, AmeriSource Health
Corporation, Cardinal Health, Inc. and McKesson HBOC, Inc. Fisher will initially
own approximately 13% of the new entity and has committed to invest
approximately $6.5 million over the next six to twelve months.
During the six months ended June 30, 2000, the Company's financing
activities provided $18.1 million of cash compared with $33.4 million of cash
for the same period in 1999. Financing activities in both periods primarily
relate to the sale of receivables under a receivable securitization facility.
The Company expects that cash flows from operations, together with cash and
cash equivalents on hand and funds available under existing credit facilities,
will be sufficient to meet ongoing operating and capital expenditure
requirements.
ITEM 3 -- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary interest rate exposures relate to its cash, fixed and
variable rate debt and interest rate swaps. The potential loss in fair values is
based on an immediate change in the net present values of the Company's interest
rate sensitive exposures resulting from a 10% change in interest rates. The
potential loss in cash flows and earnings is based on the change in the net
interest income/expense over a one-year period due to an immediate 10% change in
rates. A hypothetical 10% change in interest rates does not have a material
effect on the fair values, cash flows or earnings of the Company.
The Company's primary currency rate exposures are to its intercompany debt,
cash and foreign currency forward contracts. The potential loss in fair values
is based on an immediate change in the U.S. dollar equivalent balances of the
Company's currency exposures due to a 10% shift in exchange rates. The potential
loss in cash flows and earnings is based on the change in cash flow and earnings
over a one-year period resulting from an immediate 10% change in currency
exchange rates. A hypothetical 10% change in the currency exchange rates does
not have a material effect on the fair values, cash flows or earnings of the
Company.
11
<PAGE> 13
PART II -- OTHER INFORMATION
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of stockholders of the Company was held on May 9,
2000.
(b) At the annual meeting, Anthony J. DiNovi, Paul M. Montrone and Scott
M. Sperling were each elected as directors of the Company for a
three-year term expiring at the Annual Meeting in 2003.
(c) The results of the voting on the proposals considered at the annual
meeting of stockholders are as follows:
1. Election of Directors
<TABLE>
<CAPTION>
VOTES FOR VOTES WITHHELD
---------- --------------
<S> <C> <C>
Anthony J. DiNovi............................ 24,612,457 38,608
Paul M. Montrone............................. 24,161,857 489,208
Scott M. Sperling............................ 24,610,517 40,548
</TABLE>
2. Appointment of Independent Auditors
The appointment of Deloitte & Touche LLP as independent auditors for the
current year was ratified, and voting results were as follows:
24,639,903 FOR, 9,590 AGAINST, and 1,572 ABSTAIN
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 -- Financial Data Schedule
(b) Reports on Form 8-K:
The Company did not file any Current Reports on Form 8-K during the last
quarter covered by this report.
12
<PAGE> 14
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.
FISHER SCIENTIFIC INTERNATIONAL INC.
/s/ PAUL M. MEISTER
----------------------------------------
Paul M. Meister
Vice Chairman of the Board,
Executive Vice President and Chief
Financial
Officer and Director
Date: August 14, 2000
13
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
14
