OVERVIEW
We report financial results on the basis of three business segments:
domestic distribution, international distribution and laboratory
workstations. The domestic distribution segment manufactures,
sells and distributes products to three primary customer markets:
scientific research, clinical laboratory and industrial safety.
Additionally, this segment provides contract manufacturing,
chemical manufacturing and custom chemical synthesis, and pharmaceutical
services for Phase III and Phase IV clinical trials. The international
distribution segment sells and distributes products primarily
to the scientific research market. The laboratory workstations
segment engages in the manufacture and sale of laboratory furniture
and fume hoods to the scientific research market and the manufacture
and sale of consoles and enclosures in the technology, communication
and financial industries.
In January 2003, we issued and sold $200 million of 8 1/8 percent
senior subordinated notes due May 2012 pursuant to Rule 144A
and Regulation S of the Securities Act of 1933. The notes were
issued as a tack on to our existing 8 1/8 percent indenture
and sold at a premium, resulting in a yield of 7.4 percent.
In February 2003, we entered into a new credit agreement that
includes a five-year revolving facility that provides for initial
available borrowings of $175 million and a seven-year, $400
million term loan. The proceeds from the term loan, together
with proceeds from the senior subordinated notes, were used
to refinance our outstanding $600 million 9 percent senior subordinated
notes due in 2008. As a result of this refinancing, the Company
expects to incur a charge of approximately $45 million consisting
of $27 million of call premiums to be paid in cash and $18 million
of noncash deferred financing fees and other costs. In February
2003, we also entered into a new receivables securitization
facility that provides for the sale, on a revolving basis, of
certain accounts receivable of up to $225 million.
In November 2002, we acquired Maybridge Chemical Holdings Limited
(“Maybridge”) and Mimotopes Pty. Limited (“Mimotopes”).
Maybridge is a United Kingdom-based provider of organic compounds
and combinatorial libraries for use in drug discovery. Mimotopes
is an Australia-based manufacturer of custom peptides and peptide
libraries used in conducting scientific research. These acquisitions
had an aggregate net purchase price of $53.2 million and were
funded with cash on hand. The results of Maybridge and Mimotopes
have been included in our domestic distribution segment from
their respective dates of acquisition.
In July 2002, we acquired a Netherlands-based distributor operating
under the names Retsch and Emergo, further enhancing our position
in northern Europe. Retsch and Emergo are distributors of instruments,
equipment and supplies to the scientific research and industrial
markets. The net purchase price of $7.9 million was funded using
cash on hand. The results of Retsch and Emergo have been included
in the international distribution segment from the date of acquisition.
We are currently in the process of consolidating our existing
Netherlands-based operations with the acquired Retsch and Emergo
operations. This consolidation will be focused on the elimination
of operational inefficiencies created by redundancies in headcount,
systems and office and warehouse facilities.
In April 2002, we issued and sold $150.0 million of 8 1/8 percent
10-year senior subordinated notes pursuant to Rule 144A and
Regulation S of the Securities Act of 1933. We used the net
proceeds from this offering, together with proceeds from the
sale of accounts receivable through our receivables securitization
facility and cash on hand, to repay bank term debt totaling
$211.3 million. As a result of this refinancing, we recorded
an $11.2 million charge consisting of $7.1 million of fixed-swap
unwind costs and $4.1 million of deferred financing and other
costs associated with the term debt. In July 2002, we exchanged
these securities through an Exchange Offering with SEC registered
securities.
In November 2001, we acquired Cole-Parmer, a leading worldwide
manufacturer and distributor of specialty technical instruments,
appliances, equipment and supplies. The purchase price for this
acquisition was $208.5 million in cash. The results of Cole-Parmer
have been included in the domestic distribution segment from
the date of acquisition.
In February 2001, we acquired the pharmaceutical packaging services
business of Covance, which we renamed Fisher Clinical Services
Inc. (“FCS”). FCS enables pharmaceutical and biotechnology
companies and other customers to outsource the packaging, labeling
and distribution of prescription drugs used in Phase III and
Phase IV clinical trials. We paid an adjusted purchase price
of approximately $133 million in a cash transaction. The results
of FCS have been included in the domestic distribution segment
from the date of acquisition.
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