We were able to improve operationally in spite of
difficult conditions. In response to reduced mass spectrometry
revenues, and in order to address a long-term trend of product
convergence, we implemented a major restructuring to combine our
mass spectrometry and HPLC field organizations across the world.
This restructuring was substantially completed by the end of 2002
and prepares us to address the technology and product needs of
our customers in a unified fashion, as well as increase the overall
productivity of our field sales and service organizations.
Our operating focus continued to deliver good financial
performance in a difficult climate. In 2002, although sales grew
4%, earnings per share growth, excluding unusual items, was essentially
flat. We responded to the lower than expected sales growth with
cost reduction actions in 2002; however, the full effect of these
expense reductions wont be realized until 2003. Although
earnings per share didnt grow, free cash flow increased
significantly from $146 million in 2001 to $192 million in 2002.
Because of our financial strength, the Board of Directors authorized
a $200 million stock buyback in the third quarter and, by December
31st, we had acquired approximately $100 million of stock. Depending
on business and market conditions, the Board of Directors will
periodically reconsider whether additional stock buybacks are
appropriate.
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