NEW BRUNSWICK SCIENTIFIC CO INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K 405

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2004
Commission File Number 0-6994

NEW BRUNSWICK SCIENTIFIC CO., INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1630072
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(State of incorporation) (I.R.S. Employer Identification Number)

44 Talmadge Road, Edison, N.J. 08817
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(Address of principal office)

Registrant's telephone number: (732) 287-1200
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Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange
Title of each class on which registered
---------------------- ------------------------
None N/A

Securities registered pursuant to Section 12(g) of the Act:
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Title of class
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Common stock - par value $0.0625
Common stock Purchase Rights

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 _
-

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).Yes _ No X
-

The aggregate market value of the voting stock held by non-affiliates of the
Registrant was $41,366,000 as of February 17, 2005. This figure was calculated
by reference to the high and low prices of such stock on February 17, 2005.

The number of shares outstanding of the Registrant's Common stock as of February
17, 2005: 8,888,348.

DOCUMENTS INCORPORATED BY REFERENCE
Registrant's Proxy Statement to be filed within 120 days after the end of the
fiscal year 2004, is incorporated in Part III herein.

The EXHIBITS INDEX is on Page 63.

1

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PART I
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ITEM 1. BUSINESS
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RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------

On March 21, 2005, New Brunswick Scientific Co., Inc. announced that it
would restate previously issued financial statements to correct for the
misapplication of the Financial Accounting Standards Board ("FASB") Statement
No. 133 "Accounting for Derivative Instruments and Hedging Activities" as it
applies to three interest rate swaps that were entered into in 1999 and 2004 to
fix the interest rates on variable rate debt incurred primarily for acquisitions
in 1999 and 2003. The required adjustments did not affect income (loss) from
operations or cash flow for any period. As a result of these adjustments, the
Company restated the previously filed financial statements for the years ended
December 31, 2001, 2002 and 2003 including the interim periods for 2003 and the
interim periods ended April 3, 2004, July 3, 2004 and October 2, 2004.
Financial information included in reports on Form 10-K, Form 10-Q and Form 8-K
previously filed by the Company for these periods should not be relied upon and
are superseded by the information in this Annual Report on Form 10-K.

All financial information contained in this Annual Report on Form 10-K gives
effect to this restatement. Information regarding the effect of the restatement
on the Company's financial position and results of operations for 2004, 2003 and
2002 is provided in Notes 2 and 15 of the Notes to Consolidated Financial
Statements.

Also, see Item 6 - Selected Financial Data, for the effect of the
restatement on the Company's 2001 financial statements.

GENERAL
- -------

New Brunswick Scientific Co., Inc. and its subsidiaries ("NBS" or "the
Company") design, manufacture and market a variety of equipment used in
biotechnology to create, maintain, measure and control the physical and
biochemical conditions required for the growth, detection and storage of
biological cultures. This equipment is used in medical, biological, chemical,
and environmental research and for the commercial development of antibiotics,
proteins, hormones, enzymes, monoclonal antibodies, agricultural products,
fuels, vitamins, vaccines and other substances. The equipment sold by NBS
includes fermentation equipment, bioreactors, biological shakers, ultra-low
temperature freezers, CO2 incubators, nutrient sterilizing and dispensing
equipment, tissue culture apparatus and air samplers.

NBS was incorporated in 1958 as the successor to a business founded in 1946 by
David and Sigmund Freedman, its principal stockholders and, until August 31,
2003, two of its directors and executive officers. Sigmund Freedman retired as
a Director and as Treasurer of the Company effective August 31, 2003. The
Company owns its 243,000 square foot headquarters and primary production
facility located on 17 acres of land in Edison, New Jersey.

2

On November 14, 2003, the Company acquired all of the outstanding common stock
of RS Biotech Laboratory Equipment Limited (RS Biotech), a United Kingdom
corporation located in Irvine, Scotland. The purchase price consisted of
975,000 ($1,645,000 at the date of acquisition) in cash and 975,000 ($1,645,000
at the date of acquisition) in notes, payable 487,500 on the first and second
anniversary, respectively, of the acquisition with interest at the lower of 6%
or the base rate of the Bank of Scotland payable semi-annually. In addition, the
Company is obligated to pay up to an additional 300,000 if certain minimum unit
sales of CO2 incubators are achieved. RS Biotech is in the business of
designing, developing and manufacturing CO2 incubators for laboratories. The
acquisition has been accounted for by the purchase method and, accordingly, the
results of operations of RS Biotech have been included in the Company's
consolidated financial statements from November 14, 2003.

The Company has a less than 20% equity investment in Antyra, Inc. that is
carried at zero value on the Company's balance sheet. The Company provides no
funds to Antyra, Inc. but does provide laboratory space in exchange for equity
securities of Antyra, Inc. Under the terms of a lease with Antyra, Inc., the
Company receives shares of Antyra, Inc. preferred stock on a monthly basis in
lieu of rent payments on 5,200 square feet of space. For financial reporting
purposes, the Company is attributing no value to the shares received under this
arrangement.

PRODUCTS
--------

Fermentation Equipment and Bioreactors. A fermentor is a device used to
-----------------------------------------
create, maintain and control the physical, chemical and biochemical
environmental conditions required for growing bacteria, yeast, fungi and other
similar microorganisms. Bioreactors serve an identical purpose for the
propagation of animal, insect and plant cells. The Company's fermentors and
bioreactors range in size from small research models to larger systems that are
used in cGMP production facilities.

NBS has supplied fermentors and bioreactors to universities, biotechnology and
pharmaceutical company laboratories since the 1950's. NBS' fermentors and
bioreactors are used in applications using microorganisms engineered by
recombinant DNA techniques, immunology and the production of monoclonal
antibodies. Animal and plant cells as well as bacteria and viruses are usually
grown on a small scale for research purposes. As the process is scaled up
(i.e., replicated, using larger volumes), physical and chemical parameters, such
as pH, vessel pressure and chemical composition may change, and the equipment
used may require increasingly sophisticated control systems. Scale-up, which is
one of the important uses of the Company's pilot scale systems is a complex
technical procedure critical to successful commercialization of biological
processes. Pilot scale systems may be used to set parameters or to determine
the feasibility of production at greater volumes, depending upon the goal of the
customer. Particularly in the area of bioreactors, the Company has developed
unique designs and has been issued patents to protect its technology. The
Company's fermentors and bioreactors incorporate sophisticated instrumentation
systems to measure, record and control a multiplicity of process variables.

3

The Company manufactures digital instrumentation for control of fermentors
and bioreactors. This instrumentation significantly enhances the utility of any
size fermentor or bioreactor. Consisting of an operator display and a series of
microprocessor-controlled instrument modules, this control unit uses software
developed by the Company to simplify the operation of fermentors and bioreactors
while enhancing their performance. It automatically monitors, displays,
analyzes and makes immediately available, data concerning the culture process
and permits automatic modification of the various growth conditions without the
need of a host computer. This system is designed to replace manually operated
controls as well as more complex and more costly automatic systems.

Biological Shakers. Biological shakers perform a function similar to fermentors
- ------------------
and bioreactors, as they are also used in the process of propagating biological
cultures. Under controlled conditions, shakers agitate flasks containing
biological cultures in a liquid media in which nutrients are dissolved.
Nutrients are the source of energy needed for growth, while shaking provides the
dissolved oxygen needed to permit life processes to take place within the
microorganism. NBS Shakers are in worldwide use in biological laboratories for
research, development and in some cases, for production of various medical,
biological and chemical products. In addition, shakers are widely used in
microbiological and recombinant DNA research.

The Company manufactures an extensive line of biological shakers ranging in size
from portable laboratory benchtop models to large multi-tier industrial
machines. Some models of the Company's shakers are designed to agitate flasks
under controlled environmental conditions of temperature, atmosphere and light.
Each shaker incorporates a variable speed controller and may be equipped to
accommodate flasks of various sizes. To permit culture growth under constant
and reproducible conditions, shakers manufactured by NBS are precision
engineered and manufactured to agitate flasks uniformly and continuously over
prolonged periods.

The Company manufactures three distinct lines of shakers. Its INNOVA line,
which is its most sophisticated shaker, its C-Line which is intended primarily
for sale through distributors and its I-Series which is manufactured exclusively
for Fisher Scientific.

Ultra-Low Temperature Freezers. Ultra-low temperature ("ULT") freezers are
- --------------------------------
utilized in research, clinical and industrial applications. They are primarily
used to store or conserve biological products that include specimens (cells,
tissues), stock cultures (bacteria, viruses) and vaccines. ULT freezers have a
temperature range of -50 degrees C to -86 degrees C and come in both upright and
chest models of varying sizes.

The Company manufactures two distinct lines of ULT freezers. Five models in its
space-saving line, which utilizes thin vacuum insulation panels provide up to a
30% increase in storage capacity over traditionally insulated models in the same
footprint. The four models in our standard line offer an economical alternative
and make use of conventional urethane insulating techniques.

4

To maximize storage capacity, the Company's space-saving freezers utilize a
highly efficient thermal insulation to form thin vacuum insulation panels
thereby reducing the wall thickness resulting in increased storage capacity.
The optional RS-485 interface allows remote control and data-logging of all five
models in the space-saving range, which includes a "personal-sized" freezer for
use on or under the bench, as well as two large upright and two chest-style
units.

CO2 Incubators. The Company manufactures a complete range of direct heat CO2
- ---------------
incubators, which are used in the life science industry to control the culture
conditions of cells and tissues. The Company also manufactures a model specific
to the in-vitro fertilization market. The Company's most advanced systems
feature six-sided direct heating, accurate infrared CO2 sensing, and fanless
convection air circulation to optimize cell culture conditions, as well as a
variety of features to simplify routine operations and maintenance.

Nutrient Sterilizing and Dispensing Equipment. The Company sells devices that
- -----------------------------------------------
automatically sterilize biological nutrients and then maintain those nutrients
at the required temperature for subsequent use. As a complement to its nutrient
sterilizers, NBS also sells an apparatus which automatically fills culture
dishes with sterile nutrient.

Tissue Culture Apparatus. The Company manufactures an apparatus to rotate
- --------------------------
bottles and test tubes slowly and constantly for the purpose of growing animal
and plant cells as well as bacteria. Certain models of this apparatus may be
placed into an incubator and equipped to regulate the speed of rotation.

Air Samplers. The Company also manufactures air samplers which are used to
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detect the presence of spores and other microbial organisms in the environment.
These instruments can sample large volumes in environments having limited
contamination such as clean rooms, as well as sample smaller volumes in areas
with larger amounts of viable organisms.

Other Scientific Products. NBS distributes a line of centrifuges for separating
- -------------------------
cells from fermentation broth and is the exclusive North American distributor of
the NucleoCounter , an automated cell counting device for mammalian cells.

PRODUCT DEVELOPMENT
- --------------------

NBS designs and develops substantially all the products it sells. Its
personnel, who include biochemical, electrical, chemical, mechanical, electronic
and software engineers as well as scientists and technical support staff,
formulate plans and concepts for new products and improvements or modifications
to existing products. The Company develops specialized software for use with
its computer-coupled systems and all its microprocessor-controlled
instrumentation systems.

5

RESEARCH AND DEVELOPMENT
- --------------------------

Research and development expenditures, all of which are sponsored by the
Company, amounted to $3,597,000 in 2004, $3,281,000 in 2003 and $2,680,000 in
2002. Thirty-six (36) of the Company's professional employees were engaged full
time in research and development activities.

MANUFACTURING
- -------------

Manufacturing is conducted according to planning and production control
procedures primarily on a lot production basis rather than on an assembly line.
NBS fabricates its parts from purchased raw materials and components and
produces most of its subassemblies. These parts, components and subassemblies
are carried in inventory in anticipation of projected sales and are then
assembled into finished products according to production schedules. In general,
manufacturing is commenced in anticipation of orders. The manufacturing
processes for the Company's products range from two weeks to months, depending
upon the product size, complexity and quantity. However, a substantial portion
of orders received are for items in the process of being manufactured or in
inventory.

The raw materials used by the Company include stainless steel, carbon steel,
copper, brass, aluminum and various plastics. Some components are purchased
from others, including pumps, compressors, plumbing fittings, electrical and
electronic components, gauges, meters, motors, glassware and general purpose
hardware. Many of these components are built to the Company's specifications.
NBS is not dependent upon any single supplier for any raw material or component,
but delay in receipt of key components can affect the manufacturing schedule.

The Company's products are designed to operate continuously over long periods
with precision and regularity so that research and production may be conducted
under controlled, constant and reproducible conditions. The Company
manufactures its products from materials which it selects as having
characteristics necessary to meet its requirements. In addition, to ensure that
its manufacturing processes result in products meeting exacting specifications
and tolerances, NBS follows rigorous inspection procedures. NBS maintains a
quality assurance department which is responsible for inspecting raw materials
and parts upon arrival at its plants as well as inspecting products during
manufacture. NBS' products are serviced at its plants and at its customers'
premises by Company technicians or by distributors' technicians.

MARKETING AND SALES
---------------------

The Company sells its equipment to pharmaceutical companies, agricultural
and chemical companies, other industrial customers engaged in biotechnology and
to medical schools, universities, research institutes, hospitals, private
laboratories and laboratories of federal, state and municipal government
departments and agencies in the United States. While only a small percentage of
the Company's sales are made directly to United States government departments
and agencies, its domestic business is significantly affected by government

6

expenditures and grants for research to educational research institutions and to
industry. The Company regularly evaluates credit granted to customers.

Fisher Scientific is the exclusive U.S. distributor of the Company's C-Line
and I-Series biological shakers. While Fisher is the exclusive U.S. distributor
for these NBS shakers, NBS markets and sells its INNOVA shakers and other
products on a direct basis. Fisher also distributes a few selected INNOVA
models and is the exclusive U.S. distributor of the Company's CO2 incubators,
although the Company sells its CO2 incubators directly as well. Fisher
Scientific is also the exclusive distributor for the Company's C-Line shakers in
certain European countries and has a broader distribution arrangement with the
Company in Canada and France. Fisher Scientific accounted for approximately
16.0%, 15.9% and 18.9%, respectively, of consolidated net sales during the years
ended December 31, 2004, 2003 and 2002. The Company did not have net sales to
any other customer in excess of 10% of consolidated net sales in any year.

NBS also sells its equipment, both directly and through scientific
equipment dealers to foreign companies, institutions and governments. The major
portion of its foreign sales are made in Canada, Western Europe, China, Japan,
India, Taiwan and Brazil. NBS also sells its products in Eastern Europe,
Africa, Asia and Latin America. These sales may be substantially affected by
changes in the capital investment policies of foreign governments or by the
availability of hard currency. These sales may also be affected by U.S. export
control regulations applicable to scientific equipment. During 2004, net sales
to foreign customers, which have been in the 50% range for many years, amounted
to 55% of consolidated net sales.

For information concerning net sales in the United States and foreign countries,
long-lived assets located in the United States and foreign countries, and export
sales for each of the three years ended December 31, 2004, see Note 12 of Notes
to Consolidated Financial Statements. Export sales consist of all sales by the
Company's domestic operations to customers located outside the United States.
Hence, foreign sales include export sales.

Substantially all of the orders received by the Company's domestic operations,
including export orders are recorded in United States dollars. The Company's
wholly-owned European subsidiaries book orders for equipment in local currencies
and in some instances in United States dollars. The assets and liabilities of
the Company's European subsidiaries are valued in local currencies.
Fluctuations in exchange rates between those currencies and the dollar had a
substantial impact on the Company's consolidated financial statements, as
measured in United States dollars. During 2004 the weakening of the U.S. dollar
against the Pound and the Euro resulted in increases in accounts receivable and
inventories of $188,000 and $162,000, respectively, and also had the effect of
increasing net sales by $1,988,000.

Export sales are influenced by changes in the exchange rate of the dollar as
those changes affect the cost of the Company's equipment to foreign customers.
Certain countries may not be able to make substantial capital purchases in
dollars for economic or political reasons.

7

NBS maintains five European sales offices through wholly-owned subsidiaries, New
Brunswick Scientific (U.K.) Limited, in England, New Brunswick Scientific B.V.
in The Netherlands, New Brunswick Scientific GmbH in Germany, New Brunswick
Scientific NV/SA in Belgium and New Brunswick Scientific S.a.r.l. in France and
with three offices, also sells on a direct basis in China.

At December 31, 2004, NBS had a backlog of unfilled orders of $8,376,000,
compared with $9,018,000 at the end of 2003. NBS expects to satisfy all of its
existing backlog during the coming year. The decrease in the backlog resulted
from 2004 net sales exceeding 2004 net bookings due to reduced lead times to
manufacture various products.

COMPETITION
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The competitive factors affecting the Company's position as a manufacturer
of biotechnology equipment include availability, reliability, ease of operation,
the price of its products, its responsiveness to the technical needs and service
requirements of customers, and product innovation.

NBS encounters competition from approximately 11 domestic and 15 foreign
competitors in the sale of its products. The Company's principal competitors in
the sale of fermentation equipment and bioreactors both in the United States and
overseas are Sartorius BBI, a German company and Applikon, B.V., located in The
Netherlands. The Company believes that Sartorius BBI has substantially greater
financial resources than the Company.

The Company believes that it has the largest worldwide market share for
biological shakers. Barnstead International, a subsidiary of Fisher Scientific
and Thermo Electron Corporation in the United States as well as several
manufacturers in Europe are competitors of the Company in this market.

The Company, having begun in 2001 to sell ultra-low temperature freezers in the
U.S., has a relatively small market share there but believes it has a
substantial market share for freezers in the European market where it has been
selling freezers for over 20 years. The Company's main competitors in the sale
of freezers are Thermo Electron Corporation, Kendro and Sanyo.

The Company, through the acquisition of RS Biotech Laboratory Equipment Limited
in November 2003 began selling its own CO2 incubators. Since RS Biotech sold
its CO2 incubators primarily in the United Kingdom, the Company believes it has
a substantial market share in the UK and a relatively small market share in the
rest of the world. The Company's main competitors in the sale of CO2 incubators
are Thermo Electron Corporation, Kendro, Sanyo, NuAire, Sheldon and Binder.

NBS encounters substantial competition in the sale of most of its other
equipment where its sales do not represent major market shares.

8

EMPLOYEES
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NBS employs approximately 422 people, including 246 people engaged in
manufacturing and supervision, 38 in research, development and engineering, 103
in sales and marketing, and 35 in administrative and clerical capacities.
Manufacturing employees currently work a single shift, however, in certain areas
a second shift has been employed. The Company's New Jersey manufacturing
employees are represented by District 15 of the International Association of
Machinists, AFL-CIO under a contract which expires in December 2007. The
Company considers its labor relations to be good.

PATENTS AND TRADEMARKS
------------------------

NBS holds and has filed applications for United States and foreign patents
relating to many of its products, their integral components and significant
accessories. NBS also has certain registered trademarks. However, NBS believes
that its business is not dependent upon patent, trademark, or other proprietary
protection in any material respect.

WEBSITE ACCESS TO REPORTS
- ----------------------------

The Company makes its periodic and current reports available, free of charge, on
its website (www.nbsc.com) as soon as reasonably practicable after such material
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is electronically filed with the Securities and Exchange Commission.

FORWARD-LOOKING STATEMENTS
---------------------------

This document contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," "will" or words of similar
meaning and include, but are not limited to, statements about the expected
future business and financial performance of the Company. The forward-looking
statements involve a number of risks and uncertainties, including but not
limited to, changes in economic conditions, demand for the Company's products,
pricing pressures, intense competition in the industries in which the Company
operates, the need for the Company to keep pace with technological developments
and timely respond to changes in customer needs, the Company's dependence on
third party suppliers, the effect on foreign sales of currency fluctuations,
acceptance of new products, the labor relations of the Company and its customers
and other factors identified in the Company's Securities and Exchange Commission
filings. Forward-looking statements are based on management's current
expectations and assumptions, which are inherently subject to uncertainties,
risks and changes in circumstances that are difficult to predict. Actual
outcomes and results may differ materially from these expectations and
assumptions due to changes in global political, economic, business, competitive,
market, regulatory and other factors. The Company undertakes no obligation to
publicly update or review any forward-looking information, whether as a result
of new information, future developments or otherwise.

9

ITEM 2. PROPERTY
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The Company's executive, administrative, engineering and domestic sales
offices and its U.S. manufacturing operations, warehouse and other facilities
are located in a Company-owned 243,000 square foot one-story steel and concrete
block building situated on a 17-acre site in Edison, New Jersey. Approximately
50,500 square feet is office space, approximately 10,400 square feet is
laboratory space, approximately 5,200 square feet is leased to Antyra, Inc. and
the balance is devoted to manufacturing and warehouse facilities. The Company's
NBS B.V. subsidiary owns its 22,825 square foot building in Nijmegen, The
Netherlands.

The Company's wholly-owned European subsidiaries lease facilities as follows:
New Brunswick Scientific (UK) Limited - 3,002 square feet, NBS Cryo-Research
Limited - 24,664 square feet, RS Biotech Laboratory Equipment Limited - 12,600
square feet, NBS GmbH - 1,173 square feet and New Brunswick Scientific NV/SA -
1,990 square feet.

ITEM 3. LEGAL PROCEEDINGS
------------------

No material legal proceedings are currently pending.

From time to time, the Company is involved in litigation in the normal
course of business, which management believes, after consultation with counsel,
the ultimate disposition of which will not have a material adverse effect on the
Company's consolidated results of operations or financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-----------------------------------------------------------

None.

10

PART II
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ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SECURITY HOLDER
-------------------------------------------------------------------
MATTERS
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(A) The Company's Common stock is traded in the National over-the-counter
market (NASDAQ symbol NBSC). The following table sets forth the high and low
prices for the Company's Common stock as reported by NASDAQ for the periods
indicated.

HIGH LOW
----- -----
2003
First Quarter. . . . . . . . $5.75 $4.55
Second Quarter . . . . . . . 5.14 3.96
Third Quarter. . . . . . . . 5.83 3.90
Fourth Quarter . . . . . . . 6.43 4.01
2004
First Quarter. . . . . . . . $6.75 $4.90
Second Quarter . . . . . . . 6.85 5.11
Third Quarter. . . . . . . . 6.56 4.45
Fourth Quarter . . . . . . . 6.47 4.75
2005
First Quarter
(through February 17, 2005) $7.33 $5.53

(B) The number of holders, including beneficial owners, of NBS' Common stock
as of February 17, 2005, is 1,685.

(C) NBS paid a 10% Common stock dividend on May 15, 2003.

11

ITEM 6. SELECTED FINANCIAL DATA
-------------------------

The following table sets forth selected consolidated financial information
regarding the Company's financial position and operating results. This
information should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations and the Consolidated
Financial Statements and Notes thereto which appear elsewhere herein.

On March 21, 2005, the Company announced that as a result of the misapplication
of SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities"
as it applies to three interest rate swaps, it was recording adjustments to
interest expense to reflect the changes in the fair values of these instruments
for the years ended December 31, 2001, 2002 and 2003 and the previously released
2004 quarterly information. Accordingly, the selected financial data has been
restated, as indicated, see Note 2, "Restatement of Consolidated Financial
Statements", and Note 15, "Quarterly Financial Information (Unaudited)", of the
Notes to Consolidated Financial Statements.

The statement of operations data for the year ended December 31, 2001 and the
balance sheet data as of December 31, 2002 and 2001 are derived from unaudited
financial statements not included herein, as the previously issued financial
statements have also been adjusted (see Note (e) below).

The Company has not amended its annual reports on Form 10-K or quarterly reports
on Form 10-Q for the quarterly periods affected by the restatement. The
information that has been previously filed or otherwise reported for those
periods is superseded by the information in this Annual Report on Form 10-K, and
the financial statements and related financial information contained in such
reports should no longer be relied upon.

Year Ended December 31,
----------------------------------------
2004 2003 2002 2001 2000
------------- -------------- ------- ------- -----------
Restated (a)Restated (a) Restated (a)(e)
--------------- -------------- ------- ------- -----------
(In thousands, except per share amounts)
Net sales. . . . . . . . . . . . . . . . $ 62,124 $ 49,404 $57,226 $60,294 $ 49,864
Income (loss) before cumulative effect
of accounting change. . . . . . . . . . 1,931 (1,352) 2,412 2,094 (3,927)(c)
Net income (loss) (b). . . . . . . . . . 1,931 (1,352) 2,412 1,965 (3,927)(c)
Basic net income (loss) per share. . . . 0.22 (0.16) 0.29 0.24 (0.49)
Diluted net income (loss) per share. . . 0.22 (0.16) 0.28 0.24 (0.49)
Total assets (d) . . . . . . . . . . . . 53,795 51,531 45,543 44,707 43,006
Long-term debt, net of current
installments (d). . . . . . . . . . . . 6,022 7,675 5,213 6,751 694

(a) The Company restated its financial statements to correct for the
misapplication of SFAS No. 133 related to the accounting for an interest rate
swap. See Note 2 of the Notes to Consolidated Financial Statements.

12

(b) Includes pre-tax charges of $320,000 in 2003 related to the assignment
of the lease and relocation of certain UK operations and $346,000 in 2004 and
$260,000 in 2001 related to severance costs. Also includes a pretax charge of
$150,000 pertaining to a write-off in 2004 of inventory related to a
discontinued product.
(c) Includes a pre-tax charge of $950,000 related to the write-off of
investment in Organica, Inc.
(d) At year-end.
(e) The unaudited selected consolidated financial data for the year ended
December 31, 2001 has been revised to reflect an adjustment related to the
restatement described below under "Management's Discussion and Analysis of
Financial Condition and Results of Operations-Restatement of Consolidated
Financial Statements" and Note 2 of the Notes to Consolidated Financial
Statements. As a result of the adjustment, the Company reduced previously
reported income before cumulative effect of an accounting change by $117,000,
net of tax ($.01 per basic and fully diluted share). In addition, the Company
recorded a charge of $129,000, net of tax ($.02 per basic and fully diluted
share), for the cumulative effect of a change in accounting principle relating
to the adoption of SFAS No. 133 on January 1, 2001.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS
- -----------------------

The following is Management's Discussion and Analysis of
significant factors that have affected the Company's operating results and
financial condition during the years ended December 31, 2004 and 2003,
respectively, and should be read in conjunction with the consolidated financial
statements and the notes thereto included elsewhere in the Annual Report on Form
10-K.

As further described in Note 2 of the Notes to Consolidated Financial
Statements, on March 21, 2005, the Company announced that certain of its
historical financial statements required restatement. Consequently,
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the years ended December 31, 2003 and 2002 are being restated.

Specifically, the Company determined that the restatement was required
because of a misapplication of SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" as it applies to three interest rate swaps
that were entered into in 1999 and 2004 to fix the interest rates on variable
rate debt incurred primarily for acquisitions in 1999 and 2003.

The required changes affected the previously filed financial
statements for the years ended December 31, 2001, 2002 and 2003 as well as for
the 2003 quarters and the 2004 quarters through October 2, 2004.

The foregoing restatement adjustments did not affect the Company's
reported cash and cash equivalents, or related cash flows, or income (loss) from
operations in any of the above periods.

RESULTS OF OPERATIONS

EXECUTIVE OVERVIEW

During 2004 the Company experienced a significant
increase in net sales and achieved solid profitability compared with 2003 during
which it sustained a large net loss. 2003 was a difficult year for both the

13

Company and for the Life Science industry, however, the situation began to turn
around during the third quarter of 2003 and that trend continued throughout
2004. During 2004, the Company had pretax income of $3,267,000 after charges of
$346,000 for a severance payment to the Company's former European Managing
Director and a $150,000 write-down of inventory related to a discontinued
product. Increased government funding of research and the easing of capital
restraints on biotech companies helped the Company domestically and the weak
dollar played a role in significantly increasing the Company's export business.
In addition, the full year effect of the acquisition of RS Biotech, which was
acquired in November 2003, had a positive effect on 2004 results.

The Company is a leading provider of a wide variety of
research equipment and scientific instruments for the life sciences used to
create, maintain and control the physical and biochemical conditions required
for the growth, detection and storage of microorganisms.

The Company's products are used for medical, biological,
chemical and environmental research and for the commercial development of
antibiotics, proteins, hormones, enzymes, monoclonal antibodies, agricultural
products, fuels, vitamins, vaccines and other substances.

The Company sells its equipment to pharmaceutical
companies, agricultural and chemical companies, other industrial customers
engaged in biotechnology, and to medical schools, universities, research
institutes, hospitals, private laboratories and laboratories of federal, state
and municipal government departments and agencies in the United States. While
only a small percentage of the Company's sales are made directly to United
States government departments and agencies, its domestic business is
significantly affected by government expenditures and grants for research to
educational research institutions and to industry. The Company also sells its
equipment both directly (primarily in Western Europe) and through scientific
equipment dealers to foreign companies, institutions and governments. Foreign
sales may be affected by U.S. export control regulations applicable to
scientific equipment.

Fisher Scientific, the Company's largest customer, is the
exclusive U.S. distributor of the Company's C-Line and I-Series biological
shakers and is the exclusive dealer for the Company's CO2 incubators in the U.S.
Fisher Scientific is also the exclusive distributor of the Company's C-Line
shakers in certain European countries and has a broader distribution arrangement
with the Company in Canada and in France.

NET SALES AND BACKLOG INFORMATION

The following table summarizes consolidated backlog,
orders and net sales for the years ended December 31, 2004 and 2003 (in
thousands of dollars):

Increse %
2004 2003 (Decrease) Change
--------- -------- -------------------- -------
Backlog - beginning $ 9,018 $ 6,668 $ 2,350 35.2%
Add orders received. 61,482 51,754 9,728 18.8
Less net sales . . . 62,124 49,404 12,720 25.7
--------- -------- -------------------- -------
Backlog - ending . . $ 8,376 $ 9,018 $ (642) (7.1)%
========= ======== ==================== =======

14

Net sales increased 25.7% to $62,124,000 for the year
ended December 31, 2004 from $49,404,000 for the year ended December 31, 2003.
Net sales increased 14% in the U.S. and 37% internationally during 2004. The
increase in sales was due principally to higher unit volume aided by the
recovery in the economy, both in the United States and internationally, as the
market for Life Science equipment rebounded from the last couple of years and as
more government funding for research began to flow. Net sales also benefited
from the inclusion of $4.7 million in sales of RS Biotech, which was acquired in
November 2003. Foreign sales were positively affected by the weakness of the
U.S. dollar and $2.0 million resulted from the dollar's weakness when the net
sales of the Company's UK and European subsidiaries were translated into
dollars. Excluding the foreign exchange effect, international sales increased
29.1% for the year. The increase in net sales involved most of the Company's
product lines.

Orders increased during 2004 for the reasons discussed
above relating to the increase in net sales and due to the continued demand for
the Company's cell culture, shaker, CO2 incubator and freezer products.

The decrease in the backlog resulted from 2004 net sales exceeding 2004 net
bookings due to reduced lead times to manufacture various products.

The following table summarizes consolidated backlog, orders and net
sales for the years ended December 31, 2003 and 2002 (in thousands of dollars):

Increase %
2003 2002 (Decrease) Change
--------- --------- ----------- -------
Backlog - beginning $ 6,668 $ 10,381 $ (3,713) (35.8)%
Add orders received. 51,754 53,513 (1,759) (3.3)
Less net sales . . . 49,404 57,226 (7,822) (13.7)
--------- --------- ----------- -------
Backlog - ending . . $ 9,018 $ 6,668 $ 2,350 35.2%
========= ========= =========== =======

Net sales declined 13.7% during 2003 as compared with 2002 net sales,
however, the decline in orders in 2003 was 3.3% since net sales in 2002 were
bolstered by a significant reduction in backlog of $3,713,000 while net sales in
2003 were negatively affected by a $2,350,000 increase in backlog. The increase
in backlog in 2003 resulted from increased orders late in the year for the
Company's sterilizable-in-place fermentors, which require up to four months to
manufacture as well as other fermentation products and Innova 44 incubator
shakers. The reduction in backlog in 2002 was the result of improvements in
manufacturing efficiencies allowing the Company to substantially decrease
average lead times.

The major areas of decline in 2003 in net sales were in biological shakers with
a decrease of 27.5% in sales to Fisher Scientific accounting for a significant
portion of the decline (Fisher's sales of the Company's products to its
customers declined 11.6% but they substantially reduced their inventory of the
Company's products during 2003), and a decrease of 35% in sales of cell culture
equipment. All of the Company's operating units experienced lower sales during
2003 due to the lingering weakness in demand for Life Science equipment both in
the United States and in our export markets as a result of tight government

15

funding, reduced capital spending by pharmaceutical companies and by
significantly reduced spending by biotechnology companies due to their
difficulty in raising capital. However, towards the latter part of 2003 biotech
funding once again became available and capital spending by both industry and
government picked up resulting in a relatively strong year for the Company both
in shipments and in orders.

GROSS MARGIN

The following table shows gross profit and gross margin for the years ended
December 31, 2004, 2003 and 2002 (in thousands of dollars):

2004 2003 2002
-------- -------- --------
Net sales . . $ 62,124 $49,404 $57,226
Cost of sales 37,292 30,935 33,345
-------- -------- --------
Gross profit. $ 24,832 $18,469 $23,881
======== ======== ========
Gross margin. 40.0 % 37.4% 41.7%

The increase in gross margin to 40.0% for the year
ended December 31, 2004 from 37.4% in 2003 was due primarily to the effect of
increased absorption of manufacturing overhead due to greater manufacturing
activity as a result of higher sales volumes, partially offset by increases in
steel prices and higher transportation costs due to fuel surcharges and the
write-off of $150,000 of inventory related to a discontinued product.

Gross margin decreased to 37.4% during the year ended December 31, 2003
from 41.7% in 2002 due to the effect of unabsorbed manufacturing overhead as a
result of lower manufacturing activity, a less favorable product mix and
downward pressure on prices as a consequence of a number of competitors chasing
after a smaller amount of business.

SELLING, GENERAL AND ADMINISTRATIVE

Selling, general and administrative expenses increased
$1,451,000 to $17,493,000 for the year ended December 31, 2004 compared with the
year ended December 31, 2003. The increase was due primarily to the foreign
exchange translation effect of the weak dollar on the expenses of the Company's
European subsidiaries amounting to $761,000, the inclusion of the selling,
general and administrative expenses of RS Biotech acquired in November 2003, the
provision for incentive bonuses in 2004 vs. none in 2003 and a severance payment
to the Company's European Managing Director, which amounted to approximately
$346,000.

In 2003, selling, general and administrative expenses decreased $311,000 to
$16,042,000 from $16,353,000 in 2002. During 2003, the Company effected a
reduction-in-force, which resulted in the payment of $100,000 in severance costs
and also relocated certain operations and assigned the lease for one of its
United Kingdom facilities to another company incurring approximately $270,000 of
lease assignment costs in the process. The lease assignment relieved the
Company of the on-going expenses of the facility, which is expected to result in
annual savings of approximately $160,000, net of the costs of a new, smaller
leased facility. It should also be noted that as a result of the weak dollar,

16

expenses of the Company's European subsidiaries, when translated into U.S.
dollars at 2003 exchange rates were $694,000 higher than if exchange rates had
remained at 2002 levels. The primary reasons for the decrease were the fact
that in 2003 no incentive bonuses were accrued due to the Company having not
achieved its performance targets and from the savings realized from the
reduction-in-force and other belt tightening measures undertaken during the
year.

RESEARCH, DEVELOPMENT AND ENGINEERING

Primarily as a result of the inclusion of the expenses
of RS Biotech acquired in November 2003, R&D and Engineering expenses increased
$273,000 for the year ended December 31, 2004 compared with the year ended
December 31, 2003.

During 2003, the Company placed a great deal of emphasis on strengthening
its product engineering efforts and in this regard added to staff and incurred
higher costs for prototypes and consultants resulting in an increase of 18.9% in
2003 expenses compared with 2002.

INTEREST EXPENSE

Interest expense increased to $394,000 during the year
ended December 31, 2004 from $313,000 in 2003 due to the higher level of debt,
which was incurred during the latter part of 2003 to finance the acquisition of
RS Biotech and to the purchase of certain equipment. In addition, interest
expense was also affected by and includes the changes in the carrying value of
interest rate swaps which fixed the interest rates on certain variable rate
debt, which had not been designated as effective hedges. See Note 2 to the
Notes to the Consolidated Financial Statements. During 2003, interest expense
decreased to $313,000 compared with $747,000 for 2002 primarily as a result of
changes in the carrying value of one of the aforementioned interest rate swaps.
The change in value of the interest rate swaps had a favorable effect on
interest expense of $261,000 and $172,000 in 2004 and 2003, respectively, and an
unfavorable effect of $287,000 in 2002. The Company intends to appropriately
document and designate the three interest rate swaps as effective cash flow
hedges as soon as practicable.

OTHER EXPENSE, NET

The following table details other expense net for the years ended December 31,
2004, 2003 and 2002 (in thousands):

2004 2003 2002
------- ------ ------
Gain (loss) on assets sold, primarily property in 2003. $ (22) $ 207 $ 14
Gain (loss) on foreign currency transactions (a). . . . 3 (157) (29)
Write-off of U.K. leasehold improvements(b) . . . . . . - (50) -
Equity in operations of Antyra Inc. . . . . . . . . . . - - (150)
Bank fees . . . . . . . . . . . . . . . . . . . . . . . (46) (40) (44)
Other, net. . . . . . . . . . . . . . . . . . . . . . . (11) 2 24
------- ------ ------
Total other expense, net. . . . . . . . . . . . . . $ (76) $ (38) $(185)
======= ====== ======

17

__________________

(a) Realized foreign exchange gains and losses which relate primarily to
the settlement of purchases in the normal course of business
between the Company's United States and European operating companies.
(b) Write-off of leasehold improvements incurred in connection with the
relocation of certain U.K. facilities and assignment of the lease to
another company as described above in selling, general and
administrative expenses.

INCOME TAX EXPENSE

The Company's effective income tax rate of 40.9% for
the year ended December 31, 2004 is higher than might otherwise be expected due
to losses incurred by some of the Company's European subsidiaries for which no
financial statement tax benefit was provided due to the Company's inability to
carry back the losses.

Income tax expense for the year ended December 31, 2003 was $98,000 on a
pretax loss of $1,254,000, compared with income tax expense of $1,376,000 in
2002, an effective rate of 36.3%. The 2003 expense, in a situation where a tax
benefit would be usual, is principally due to the inability to carry-back losses
incurred by the Company's European subsidiaries resulting in no financial
statement tax benefit in 2003.

CURRENCY TRANSLATION
- ---------------------

During 2004 and 2003, the dollar weakened against the
currencies of the European countries where the Company has subsidiary
operations. The effect of balance sheet translation resulted in unrealized
currency translation gains of $833,000 and $2,345,000, respectively, which are
reflected as a component of accumulated other comprehensive loss in the equity
section of the consolidated balance sheets.

FINANCIAL CONDITION
-------------------

LIQUIDITY AND CAPITAL RESOURCES
CONTRACTUAL OBLIGATIONS

The Company's contractual obligations and
commitments at December 31, 2004 principally include obligations associated with
its outstanding indebtedness, future minimum operating lease obligations and
purchase obligations as set forth in the following table:

18

Payments Due by Period
------------------------
(In thousands)
------------------------ More
Less than. 1-3 4-5 than
Total 1 Year Years Years 5 Years
------------------------ ------ ---------- -------- -----
Long-term debt, obligations (a). . . $ 7,781 $1,759 $ 5,989 $ 33 $ -
Operating lease obligations (b). . . 3,981 903 1,672 638 768
Purchase obligations(c). . . . . . . 5,237 4,977 260 - -
Other long-term liabilities (d). . . 616 40 576 - -
------------------------ ------ ---------- -------- ----
Total contractual cash obligations. $ 17,615 $7,679 $ 8,497 $ 671 $768
======================== ====== ========== ======== ====

_____________________

(a) Consists primarily of debt incurred for acquisitions financed under the
Company's Bank Agreement and of notes due to the sellers of businesses
acquired by the Company (See Note 7 to the Consolidated Financial
Statements).
(b) Primarily reflects (on a gross basis before sublet income) lease
obligations for five premises in the United Kingdom, two of which
have been sublet. Both of the subleased premises have been sublet for
the entire terms of their leases. One has a lease expiration date of
2014 and an annual rental of 99,750 ($191,000 at December 31, 2004).
The second sublet premises has a lease expiration date of September 28,
2009 and an annual rental of 45,000 ($86,000 at December 31, 2004).
(c) Primarily includes commitments for raw materials and services related to
the Company's production of equipment at its various manufacturing
facilities.
(d) Represents a contingent liability for an earnout related to the
acquisition of RS Biotech provided a minimum number of units of CO2
incubators are sold. The Company believes that the payment of such
additional consideration is determinable beyond a reasonable doubt and
as such has recorded the amount as a liability and as additional
purchase price.

CASH FLOWS:

OPERATING ACTIVITIES

Cash and cash equivalents increased $310,000 to
$10,846,000 at December 31, 2004 from $10,536,000 at December 31, 2003. Net
cash provided by operating activities amounted to $2,456,000. The overall
factors primarily affecting operating cash flows during the year ended December
31, 2004 were (i) net income of $1,931,000 as adjusted for non-cash items such
as depreciation and amortization, deferred taxes and a gain from the change in
fair value of interest rate swaps, (ii) a decrease in inventories, (iii) an
increase in accounts payable and accrued expenses and (iv) a decrease in other
assets, partially offset by (i) an increase in accounts receivable, (ii) an
increase in prepaid expenses and other current assets, and (iii) a decrease in
other liabilities. The increase in accounts receivable during 2004 totalled
$1,069,000 and was primarily due to the increased volume of business during the
year. During 2004, the Company disposed of $1,084,000 of obsolete inventory and
charged that amount to a previously established reserve.

19

INVESTING ACTIVITIES

In 2004, net cash used in investing activities
of $1,344,000 was primarily as a result of normal additions to property, plant
and equipment.

FINANCING ACTIVITIES

In 2004, net cash flows used in financing
activities totaled $880,000 and primarily consisted of repayments of long-term
debt of $1,702,000 which was partially offset by proceeds from the issue of
shares under stock purchase and option plans which totaled $811,000.

BANK AGREEMENT

The Company and Wachovia Bank, National Association (the "Bank") are parties to
an agreement, which has had a number of amendments (the "Bank Agreement"), which
expires on May 31, 2005, which provides the Company with a credit facility for
acquisitions, equipment loans, working capital and letters of credit, and
foreign exchange transactions. The Company expects that the Bank Agreement will
be renewed prior to its expiration date. The maturity of the acquisition
portion of the credit facility with respect to a 1999 acquisition is December 1,
2006 and with respect to a 2003 acquisition is November 2008. There are no
compensating balance requirements and any borrowings under the Bank Agreement
bear interest at the Bank's prime rate less 125 basis points or Libor plus 125
basis points, at the discretion of the Company. At December 31, 2004, the
Bank's prime rate was 5.25% and LIBOR was 2.39%.

Since the Bank Agreement requires that all borrowings be at variable interest
rates, the bank provides the Company with a mechanism to fix interest rates on
borrowings by use of interest rate swaps. At December 31, 2004, the Company had
three interest rate swaps in place to fix the interest rates, primarily for debt
incurred for acquisitions in 1999 and 2003.

On September 26, 2003 the Bank Agreement was amended to temporarily ease the
financial ratio requirements under the negative covenant provisions of the Bank
Agreement and to reduce the acquisition line from $12.5 million to $10 million.
Among the changes was to omit the requirement to meet the debt service ratio
during the period ended September 27, 2003, a change in the minimum equity that
must be maintained, as well as the maintenance of a minimum $3 million cash
balance. In addition, the interest rate on new borrowings under the Bank
Agreement was increased by 50 basis points. At December 31, 2004, the Company
met the financial ratios that were in force prior to this amendment and all of
the terms, financial ratios and requirements as well as interest rates reverted
back to what they were prior to the September 26, 2003 amendment.

All of the Company's domestic assets, which are not otherwise subject to lien,
have been pledged as security for any borrowings under the Bank Agreement. The
Bank Agreement contains various business and financial covenants including among
other things, a debt service ratio, a net worth covenant and a ratio of total
liabilities to tangible net worth. The Company is in compliance with its
covenants pursuant to the Bank Agreement, at December 31, 2004 and currently
anticipates to be in compliance with such covenants during 2005.

20

PENSION CONTRIBUTION
- ---------------------

The Company's best estimate of its contributions to its defined
benefit pension plan is $1,022,000 for the year ending December 31, 2005.

RELATED PARTY TRANSACTIONS
- ----------------------------

Until December 15, 2003, David Freedman, Chairman of the Board of the
Company, was the owner of Bio-Instrument Ltd., a foreign firm that acted as an
agent for sales of the Company's products to customers in Israel, and earned
commissions on those sales. During 2003 and 2002, this firm earned commissions
in the amounts of $16,316 and $248,033, respectively, on purchases by customers
in Israel of the Company's products. These commissions paid by the Company to
Bio-Instrument Ltd. were comparable to commissions paid to unrelated
distributors and sales representatives. On December 15, 2003, Mr. Freedman sold
his ownership interest in Bio-Instrument Ltd. to an unrelated third party.

Carol Freedman, the daughter of David Freedman and the sister of Kenneth
Freedman (the son of David Freedman and a director of the Company), has been
employed by the Company in various capacities since 1979. Ms. Freedman is
currently the Customer Service Manager and is also an Assistant Treasurer of the
Company. Her compensation for 2004 and 2003 was $58,300 and $61,900,
respectively; she also received options to purchase 1,100 shares of the
Company's Common stock in 2003 under the Company's 2001 Stock Option Plan for
Officers and Key Employees.

CRITICAL ACCOUNTING POLICIES
- ------------------------------

No changes have been made in the Company's critical
accounting policies during the year ended December 31, 2004.

The Securities and Exchange Commission (SEC) has issued disclosure
guidance for "critical accounting policies". The SEC defines "critical
accounting policies" as those that require application of management's most
difficult, subjective or complex judgments, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods.

Management is required to make certain estimates and assumptions
during the preparation of consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America. These
estimates and assumptions impact the reported amount of assets and liabilities
and disclosures of contingent assets and liabilities as of the date of the
consolidated financial statements. Estimates and assumptions are reviewed
periodically and the effects of revisions are reflected in the consolidated
financial statements in the period they are determined to be necessary. Actual
results could differ from those estimates.

21

The significant accounting policies are described in Note 1 of the notes to
consolidated financial statements included in the Company's 2004 Annual Report
on Form 10-K. Not all of these significant accounting policies require
management to make difficult, subjective or complex judgments or estimates.
However, management considers the following policies to be critical within the
SEC definition.

REVENUE RECOGNITION
- --------------------

Revenue is recognized in accordance with the F.O.B. terms of orders,
generally when products are shipped. The Company's products are tested by its
quality assurance department prior to shipment. The Company has no other
obligation associated with its products once shipment has occurred except for
customary warranty provisions. Historically, returns have been immaterial to
the Company's consolidated financial statements and are projected to remain at a
consistent immaterial level in the future. The Company reports all amounts
billed to customers related to shipping and handling as revenue and includes all
costs incurred for shipping and handling as cost of sales. The Company also
provides certain contract fermentation services for which revenue is recorded at
the time the materials are shipped to the customer, in accordance with the terms
of the underlying purchase order. The purchase orders have historically had a
very low cancellation rate.

The Company's products carry limited warranties that in general do not
exceed one year from date of sale with the exception of ultra-low temperature
freezers that carry a 5-year warranty and certain shaker products that carry a
2-year warranty. The Company accrues estimated product warranty costs based on
historical trends at the time of sale and any additional amounts are recorded
when such costs are probable and can be reasonably estimated.

The Company periodically sells maintenance contracts to certain customers.
The value of such contracts is deferred and recognized into revenue on a
straight line basis over the term of the contract.

INVENTORIES
- -----------

Inventories are valued at the lower of cost (first in, first out or
average) or market value and have been reduced by an allowance for excess and
obsolete inventories. The estimate is based on managements' review of
inventories on hand compared to estimated future usage and sales. Cost includes
material, labor and manufacturing overhead.

LONG-LIVED ASSETS
- ------------------

Long-lived assets, such as property, plant, and equipment, are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to estimated undiscounted future cash flows expected to be generated by
the asset. If the carrying amount of an asset exceeds its estimated future cash
flows, an impairment charge is recognized by the amount by which the carrying

22

amount of the asset exceeds the fair value of the asset, which is generally
based on discounted cash flows.

Goodwill, which is not subject to amortization is tested annually for
impairment and more frequently if events and circumstances indicate that the
assets might be impaired. An impairment loss for goodwill is recognized to the
extent that the carrying amount of the company exceeds its fair value. The
tradename value, which is being amortized over 15 years, is tested for
impairment upon the occurrence of a triggering event as defined by SFAS No. 144.

DEFERRED INCOME TAXES
- -----------------------

A valuation allowance has been recorded for certain deferred tax assets
principally related to foreign net operating loss carryforwards, domestic
capital loss carryforwards and contribution carryforwards. In assessing the
realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled reversal of
deferred tax liabilities, projected future taxable income and tax planning
strategies in making this assessment.

ACCOUNTS RECEIVABLE
- --------------------

The Company estimates an allowance for doubtful accounts after considering
the collectibility of balances due, the credit worthiness of the customer and
its current level of business with the customer. Actual results could differ
from these estimates.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- ----------------------------------------------------------------

In the normal course of business, the Company is exposed to fluctuations in
interest rates as it seeks debt financing to make capital expenditures,
potential acquisitions and invest in cash equivalents and marketable debt
securities. Cash equivalents and other marketable investments are carried at
fair value on the consolidated balance sheets. The Company is also exposed to
certain foreign exchange risk. At times, management might employ specific
strategies, such as the use of derivative instruments or hedging to manage
interest rate, foreign currency or other exposures. Further, the Company does
not expect its market risk exposures to change significantly in the near term.
At December 31, 2004, the outstanding borrowings of the Company consisted
primarily of variable rate long-term debt (the large majority of which has been
fixed through interest rate swaps), which had a carrying value of $7,781,000 and
a fair value of approximately $9,320,000. Assuming other factors are held
constant, interest rate changes generally affect the fair value of fixed rate
debt, but do not impact the carrying value, earnings or cash flows.
Accordingly, assuming a hypothetical increase of 1% in interest rates and all
other variables remaining constant, interest expense would not change, however,
the fair value of the fixed rate long-term debt would decrease by approximately
$1,260,000.

23

In addition, as interest rates change, the fair value of the interest rate swaps
also changes. The changes in the fair value of the interest rate swaps, as
further discussed in Note 2 of Notes to the Consolidated Financial Statements,
are recorded as a component of interest expense in the statement of operations.

RECENTLY ISSUED ACCOUNTING STANDARDS
- ---------------------------------------

In December, 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"). SFAS 123R
addresses the accounting for transactions in which an enterprise receives
employee services in exchange for (a) equity instruments of the enterprise or
(b) liabilities that are based on the fair value of the enterprise's equity
instruments or that may be settled by the issuance of such equity instruments.
SFAS 123R supersedes APB No. 25 and requires that such transactions be accounted
for using a fair-value based method. SFAS 123R requires companies to recognize
an expense for compensation cost related to share-based payment arrangements
including stock options and employee stock purchase plans. The Company is
required to implement the proposed standard no later than July 1, 2005. The
cumulative effect of adoption, applied on a modified prospective basis, would be
measured and recognized on July 1, 2005. The Company is currently evaluating
option valuation methodologies and assumptions related to its stock compensation
plans. Current estimates of option values using the Black Scholes method may
not be indicative of results from valuation methodologies ultimately adopted.

In December, 2004, the FASB issued FASB Staff Position 109-2 "Accounting and
Disclosure Guidance for the Foreign Earnings Repatriation Provision within the
American Jobs Creation Act of 2004" ("FSP 109-2"), in response to the American
Jobs Creation Act of 2004 which was signed into law in October, 2004 and which
provides for a special one-time tax deduction of 85% of certain foreign earnings
that are repatriated (as defined). Based on the Company's decision to reinvest
rather than to repatriate current and prior year's unremitted foreign earnings,
the application of FSP 109-2 did not affect income tax expense in the period of
enactment or any related disclosures.

In November, 2004, the FASB issued SFAS No. 151, "Inventory Costs - an amendment
of ARB No. 43, Chapter 4" ("SFAS 151"). SFAS 151 is the result of a broader
effort by the FASB to improve the comparability of cross-border financial
reporting by working with the International Accounting Standards Board ("IASB")
toward development of a single set of high-quality accounting standards. The
FASB and the IASB noted that ARB 43, Chapter 4 and IAS 2, "Inventories," require
that abnormal amounts of idle freight, handling costs, and wasted materials be
recognized as period costs, however, the Boards noted that differences in the
wording of the two standards could lead to inconsistent application of those
similar requirements. The FASB concluded that clarifying the existing
requirements in ARB 43 by adopting language similar to that used in IAS 2 is
consistent with its goals of improving financial reporting in the United States
and promoting convergence of accounting standards internationally. Adoption of
SFAS 151 is required for fiscal years beginning after June 15, 2005. The
provisions of SFAS 151 will be applied prospectively and are not expected to
have a material impact on results of operations and financial position of the
Company.

24

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-----------------------------------------------

NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2004 and 2003

Consolidated Statements of Operations for the years ended December 31, 2004,
2003 and 2002

Consolidated Statements of Shareholders' Equity for the years ended December 31,
2004, 2003 and 2002

Consolidated Statements of Cash Flows for the years ended December 31, 2004,
2003 and 2002

Consolidated Statements of Comprehensive Income for the years ended December 31,
2004, 2003 and 2002

Notes to Consolidated Financial Statements

Schedule II - Valuation and Qualifying Accounts

25

Report of Independent Registered Public Accounting Firm
-------------------------------------------------------

The Board of Directors and Shareholders
New Brunswick Scientific Co., Inc.:

We have audited the consolidated financial statements of New Brunswick
Scientific Co., Inc. and subsidiaries as listed in the accompanying index. In
connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedule as listed in the accompanying
index. These consolidated financial statements and financial statement schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of New Brunswick
Scientific Co., Inc. and subsidiaries as of December 31, 2004 and 2003, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2004 in conformity with U.S. generally
accepted accounting principles. Also in our opinion, the related financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.

As discussed in Note 2 to the accompanying consolidated financial statements,
the consolidated balance sheet of New Brunswick Scientific Co, Inc. and
subsidiaries as of December 31, 2003, and the related consolidated statement of
operations, shareholders' equity, cash flows and comprehensive income for each
of the years in the two-year period ended December 31, 2003 have been restated.

/s/ KPMG LLP

KPMG LLP

Short Hills, New Jersey
March 28, 2005

26

NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2004 AND 2003
(Dollars in thousands, except share amounts)

2004 2003
------------ ---------
ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restated(1)
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . $ 10,846 $ 10,536
Accounts receivable, net of allowance for doubtful accounts,
2004 - $511 and 2003 - $603 . . . . . . . . . . . . . . . 11,332 10,012
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . 12,139 12,304
Deferred income taxes. . . . . . . . . . . . . . . . . . . . 1,089 299
Prepaid expenses and other current assets. . . . . . . . . . 1,143 1,049
------------ ---------
Total current assets . . . . . . . . . . . . . . . . 36,549 34,200
------------ ---------

Property, plant and equipment, net . . . . . . . . . . . . . . 6,495 6,478
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,769 8,147
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . 1,982 2,706
------------ ---------
Total assets . . . . . . . . . . . . . . . . . . . . $ 53,795 $ 51,531
============ =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt . . . . . . . . . . . $ 1,759 $ 1,661
Accounts payable and accrued expenses. . . . . . . . . . . . 7,592 7,260
------------ ---------
Total current liabilities. . . . . . . . . . . . . . 9,351 8,921
------------ ---------

Long-term debt, net of current installments. . . . . . . . . . 6,022 7,675

Other liabilities. . . . . . . . . . . . . . . . . . . . . . . 2,467 3,391
------------ ---------
Total liabilities. . . . . . . . . . . . . . . . . . 17,840 19,987

Commitments and contingencies

Shareholders' equity:
Common stock, $0.0625 par; authorized 25,000,000 shares;
issued and outstanding: 2004 - 8,866,262 shares;
2003 - 8,636,865 shares . . . . . . . . . . . . . . . . . 554 540
Capital in excess of par . . . . . . . . . . . . . . . . . . 52,793 51,817
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . (17,263) (19,194)
Accumulated other comprehensive loss . . . . . . . . . . . . (106) (1,585)
Notes receivable from exercise of stock options. . . . . . . (23) (34)
------------ ---------
Total shareholders' equity. . . . . . . . . . . . . 35,955 31,544
------------ ---------
Total liabilities and shareholders' equity. . . . $ 53,795 $ 51,531
============ =========

(1)See Note 2, "Restatement of Consolidated Financial Statements" of the Notes to
Consolidated Financial Statements.

See notes to consolidated financial statements.

27

NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(In thousands, except per share amounts)

2004 2003 2002
-------- --------- ------------
Restated(1) Restated(1)

Net sales. . . . . . . . . . . . . . . . . . . . . . . $ 62,124 $ 49,404 $ 57,226

Operating costs and expenses:
Cost of sales. . . . . . . . . . . . . . . . . . . . 37,292 30,935 33,345
Selling, general and administrative expenses . . . . 17,493 16,042 16,353
Research, development and engineering expenses . . . 3,687 3,414 2,872
--------- ------------ ------------

Total operating costs and expenses . . . . . . . . . . 58,472 50,391 52,570
--------- ------------ ------------

Income (loss) from operations. . . . . . . . . . . . . 3,652 (987) 4,656
--------- ------------ ------------

Other income (expense):
Interest income. . . . . . . . . . . . . . . . . . . 85 84 64
Interest expense . . . . . . . . . . . . . . . . . . (394) (313) (747)
Other expense, net . . . . . . . . . . . . . . . . . (76) (38) (185)
--------- ------------ ------------

(385) (267) (868)
--------- ------------ ------------

Income (loss) before income tax expense. . . . . . . . 3,267 (1,254) 3,788
Income tax expense . . . . . . . . . . . . . . . . . . 1,336 98 1,376
--------- ------------ ------------

Net income (loss). . . . . . . . . . . . . . . . . . . $ 1,931 $ (1,352) $ 2,412
========= ============ ============

Basic income (loss) per share. . . . . . . . . . . . . $ 0.22 $ (0.16) $ 0.29
========= ============ ============

Diluted income (loss) per share. . . . . . . . . . . . $ 0.22 $ (0.16) $ 0.28
========= ============ ============

Basic weighted average number of shares outstanding . 8,741 8,592 8,416
========= ============ ============

Diluted weighted average number of shares outstanding. 8,835 8,592 8,621
========= ============ ============

(1) See Note 2, "Restatement of Consolidated Financial Statement" of the Notes to
Consolidated
Finanical Statements.

See notes to consolidated financial statements.

28

NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(In thousands, except share amounts)

Notes
Receivable
Accumulated From
Capital Other Exercise
Common Stock In Excess Accumulated Comprehensive of Stock
Shares Amount of Par Deficit Loss Options
------------- ------------- --------------- ---------- ---------
Balance, January 1, 2002-
as previously reported . . . . . . . 6,761,892 $ 423 $ 40,124 $ (10,014) $ (4,180) $ (57)
Adjustments to opening
shareholders' equity . . . . . . . . - - - (246) - -
Balance at January 1, 2002 -
restated(1). . . . . . . . . . . . . 6,761,892 $ 423 $ 40,124 $ (10,260) $ (4,180) $ (57)
------------- ----------- ------------- --------------- ---------- ---------
Issue of shares under employee
stock purchase plan. . . . . . . . . 36,895 2 170 172
Issue of shares under stock option
plans. . . . . . . . . . . . . . . . 371,027 22 1,582 1,604
Tax benefits related to exercise of
stock options. . . . . . . . . . . . 303 303
Mature shares received as payment
in lieu of cash for exercised stock
options. . . . . . . . . . . . . . . (74,235) (4) (502) (506)
Payment on notes receivable from
exercise of stock options. . . . . . 12 12
10% stock dividend . . . . . . . . . . 695,217 44 6,282 (6,326) -
Net income - restated(1) . . . . . . . 2,412 2,412
Other comprehensive loss
adjustment . . . . . . . . . . . . . ________ ___ _____ _____ 177 ___
----------
Balance, December 31, 2002
-restated(1). . . . . . . . . . . . 7,790,796 $ 487 $ 47,959 $ (14,174) $ (4,003) $ (45)
Issue of shares under employee
stock purchase plan. . . . . . . . . 54,469 3 192
Issue of shares under stock option
plans. . . . . . . . . . . . . . . . 12,884 1 41
Tax benefits related to exercise of
stock options. . . . . . . . . . . . 6
Payment on notes receivable from
exercise of stock options. . . . . . 11
10% stock dividend . . . . . . . . . . 778,716 49 3,619 (3,668) -
Net loss - restated(1) . . . . . . . . (1,352)
Other comprehensive loss
adjustment . . . . . . . . . . . . . ________ ___ _____ ______ 2,418 __
----------
Balance, December 31, 2003
-restated(1) . . . . . . . . . . . . 8,636,865 $ 540 $ 51,817 $ (19,194) $ (1,585) $ (34)
Issue of shares under employee
stock purchase plan. . . . . . . . . 34,675 2 164
Issue of shares under
stock option plans . . . . . . . . . 194,722 12 633
Tax benefits related to exercise of
stock options. . . . . . . . . . . . 179
Payment on notes receivable from
exercise of stock options. . . . . . 11
Net income . . . . . . . . . . . . . . 1,931
Other comprehensive loss adjustment. . ________ ___ _____ _____ 1,479 ___
----------
Balance, December 31, 2004 . . . . . . 8,866,262 $ 554 $ 52,793 $ (17,263) $ (106) $ (23)
============= =========== ============= =============== ========== =========

Total
--------
Balance, January 1, 2002-
as previously reported . . . . . . . $26,296
Adjustments to opening
shareholders' equity . . . . . . . . (246)
Balance at January 1, 2002 -
restated(1). . . . . . . . . . . . . $26,050
--------
Issue of shares under employee
stock purchase plan 172
Issue of shares under stock option
Plans 1,604
Tax benefits related to exercise of
stock options 303
Mature shares received as payment
in lieu of cash for exercised stock (506)
options
Payment on notes receivable from
exercise of stock options 12
10% stock dividend -
Net income - restated(1) 2,412
Other comprehensive loss
adjustment . . . . . . . . . . . . . 177
--------
Balance, December 31, 2002
-restated(1). . . . . . . . . . . . $30,224
Issue of shares under employee
stock purchase plan 195
Issue of shares under stock option
Plans 42
Tax benefits related to exercise of
stock options 6
Payment on notes receivable from
exercise of stock options 11
10% stock dividend -
Net loss - restated(1) (1,352)
Other comprehensive loss
adjustment . . . . . . . . . . . . . 2,418
--------
Balance, December 31, 2003
-restated(1) . . . . . . . . . . . . $31,544
Issue of shares under employee
stock purchase plan 166
Issue of shares under
stock option plans 645
Tax benefits related to exercise of
stock options 179
Payment on notes receivable from
exercise of stock options 11
Net income 1,931
Other comprehensive loss adjustment. . 1,479
--------
Balance, December 31, 2004 . . . . . . $35,955
========

(1)See Note 2, "Restatement of Consolidated Financial Statements" of the Notes to Consolidated Financial Statements.
See notes to consolidated financial statements.

29

NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(In thousands)

2004 2003 2002
-------- ------------ ---------
Restated(1) Restated(1)
Cash flows from operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . . $ 1,931 $ (1,352) $ 2,412
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . 1,379 1,275 1,065
Gain on sale of property. . . . . . . . . . . . . - (201) -
Deferred income taxes . . . . . . . . . . . . . . 1,148 213 200
Change in value of interest rate swaps. . . . . . (261) (172) 287
Equity in operations of Antyra, Inc.. . . . . . . - - 150
Change in related balance sheet accounts,
excluding effect of acquisition:
Accounts receivable . . . . . . . . . . . . . . . (1,069) 1,163 3,260
Inventories . . . . . . . . . . . . . . . . . . . 358 435 3,373
Prepaid expenses and other current assets . . . . (1,902) 216 (363)
Other assets. . . . . . . . . . . . . . . . . . . 609 (19) 363
Accounts payable and accrued expenses . . . . . . 768 431 (1,222)
Advance payments from customers . . . . . . . . . 52 27 (1,558)
Other liabilities . . . . . . . . . . . . . . . . (557) (87) (550)
-------- ------------ ------------
Net cash provided by operating activities . . . . . . 2,456 1,998 7,417
-------- ------------ ------------

Cash flows from investing activities:
Additions to property, plant and equipment. . . . . . (1,317) (1,869) (1,203)
Proceeds from sale of property and equipment. . . . . 44 277 -
Acquisition of RS Biotech Laboratory Equipment
Limited, net of cash acquired. . . . . . . . . . . - (1,789) -
Increase in insurance cash surrender value . . . . . . (71) (179) (162)
-------- ------------ ------------
Net cash used in investing activities . . . . . . . . (1,344) (3,560) (1,365)
-------- ------------ ------------

Cash flows from financing activities:
Borrowings under long-term credit facility. . . . . . - 2,325 -
Repayments of long-term debt. . . . . . . . . . . . . (1,702) (470) (1,498)
Proceeds from issue of shares under stock
purchase and option plans . . . . . . . . . . . . . 811 237 1,270
Loan to Antyra, Inc.. . . . . . . . . . . . . . . . . - - (150)
Payments on notes receivable related to exercised
stock options . . . . . . . . . . . . . . . . . . . 11 11 12
-------- ------------ ------------
Net cash (used in) provided by financing activities. (880) 2,103 (366)
-------- ------------ ------------

Net effect of exchange rate changes on cash . . . . . . 78 277 238
-------- ------------ ------------
Net increase in cash and cash equivalents. . . . . . . 310 818 5,924
Cash and cash equivalents at beginning of year. . . . . 10,536 9,718 3,794
-------- ------------ ------------

Cash and cash equivalents at end of year. . . . . . . . $10,846 $ 10,536 $ 9,718
======== ============ ============

Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest. . . . . . . . . . . . . . . . . . . . . . . $ 686 $ 487 $ 497
Income taxes. . . . . . . . . . . . . . . . . . . . . 1,497 579 1,171
Exchange of mature shares upon exercise of options. . - - 506

(1) See Note 2, "Restatement of Consolidated Financial Statements" of the Notes to
Consolidated
Financial Statements.

See notes to consolidated financial statements.

30

NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(In thousands)

2003 2002
------ ------------
2004 Restated(1) Restated(1)
------

Net income (loss). . . . . . . . . . . . . . $1,931 $ (1,352) $ 2,412

Other comprehensive income (loss):
Foreign currency translation adjustment. 833 2,345 1,126
Minimum pension liability adjustment . . 646 73 (949)
------ ------------ ------------

Net comprehensive income . . . . . . . . . . $3,410 $ 1,066 $ 2,589
====== ============ ============

(1) See Note 2, "Restatement of Consolidated Financial Statements" of the Notes
to
Consolidated Financial Statements.

See notes to consolidated financial statements.

31

1. Nature of operations and summary of significant accounting policies:

Nature of operations:

New Brunswick Scientific Co., Inc. and its subsidiaries ("NBS" or "the Company")
design, manufacture and market a variety of equipment used in biotechnology to
create, maintain, measure and control the physical and biochemical conditions
required for the growth, detection and storage of microorganisms. This
equipment is used in medical, biological, chemical and environmental research
and for the commercial development of antibiotics, proteins, hormones, enzymes,
monoclonal antibodies, agricultural products, fuels, vitamins, vaccines and
other substances. The equipment sold by NBS includes fermentation equipment,
bioreactors, biological shakers, ultra-low temperature freezers, CO2 incubators,
nutrient sterilizing and dispensing equipment, tissue culture apparatus and air
samplers.

Principles of consolidation:

The consolidated financial statements include the accounts of New Brunswick
Scientific Co., Inc., and its wholly-owned subsidiaries (the Company). All
significant intercompany transactions and balances have been eliminated.

Translation of foreign currencies:

Translation adjustments for the Company's foreign subsidiaries are included
as a component of accumulated other comprehensive loss in shareholders' equity.
Transaction gains and losses are included in the consolidated statements of
operations as part of "Other expense, net".

Cash and cash equivalents:

The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents in the consolidated
statements of cash flows.

Trade accounts receivable:

Trade accounts receivable are recorded at the invoiced amount and do not bear
interest. The allowance for doubtful accounts is the Company's best estimate of
the amount of probable credit losses in the Company's existing accounts
receivable. The Company determines the allowance based on historical write-off
experience and other factors. The Company reviews its allowance for doubtful
accounts quarterly. Past due balances over 90 days, and over a specified amount
are reviewed individually for collectibility. Account balances are charged off
against the allowance after all means of collection have been exhausted and the
potential for recovery is considered remote. The Company does not have any
off-balance-sheet credit exposure related to its customers.

32

Inventories:

Inventories are stated at the lower of cost (first in, first out or
average) or market and have been reduced by an allowance for excess and obsolete
inventories. Cost elements include material, labor and manufacturing overhead.

Property, plant and equipment:

Property, plant and equipment are stated at cost. The cost of repairs,
maintenance and replacements which do not significantly improve or extend the
life of the respective assets are charged to expense as incurred.

Depreciation is provided by the straight-line method over the estimated
useful lives of the related assets, generally 33-1/3 years for buildings and 10
years for machinery and equipment.

Goodwill and acquired intangible assets:

The Company has one reporting unit as determined pursuant to SFAS No. 142. SFAS
No. 142 also requires that the Company perform an assessment of whether there is
an indication that goodwill is impaired based on the provisions of the
Statement. To the extent an indication exists that the goodwill may be
impaired, the Company must measure the impairment loss, if any. Under SFAS No.
142, goodwill impairment is deemed to exist if the net book value of a reporting
unit exceeds its estimated fair value. The Company performed an assessment to
determine whether goodwill was impaired as of December 31, 2004 and determined
that there is no impairment to its goodwill balance. The Company will test for
impairment at December 31 each year.

The Company's goodwill relates to acquisitions by the Company in the United
Kingdom in 2003 and in 1999. The changes in goodwill in 2004 and 2003 were
due to the acquisition of RS Biotech Laboratory Equipment Ltd (RS Biotech) in
2003 (see Note 5) and to translation adjustments, as shown in the following
table (in thousands):

2004 2003
---- ----
Balance at January 1 $8,147 $4,707
Add: Goodwill related to the
acquisition of RS Biotech - 2,742
Effect of foreign exchange
translation rates 622 698
------ ------
Balance at December 31 $8,769 $8,147
===== =====

33

Research and development:

Research and development costs are expensed as incurred. Research and
development expenditures, all of which are sponsored by the Company, amounted to
$3,597,000 in 2004, $3,281,000 in 2003 and $2,680,000 in 2002.

Income taxes:

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry-forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.

No provision has been made for federal income or withholding taxes which may be
payable on the remittance of the undistributed retained earnings of foreign
subsidiaries. These earnings have been reinvested to meet future operating
requirements and the Company has the ability to and intends to continue such
policy for the foreseeable future.

Income (loss) per share:

Basic income (loss) per share is calculated by dividing net income (loss) by the
weighted average number of shares outstanding. Diluted income per share is
calculated by dividing net income by the sum of the weighted average number of
shares outstanding plus the dilutive effect of stock options which have been
issued by the Company using the treasury stock method. Antidilutive options are
excluded from the calculation of diluted income (loss) per share. As the
Company had a net loss in 2003, the dilutive effect of stock options was not
considered in that year. Information related to dilutive stock options is as
follows (in thousands):

Year Ended December 31,
-------------------------
2004 2003 2002
---- ---- ----
Dilutive effect 94 - 204

Stock options to purchase 17,000, 317,000 and 138,000 shares of common stock are
excluded from the earnings per share calculation in the years ended December 31,
2004, 2003 and 2002, respectively, because their inclusion would be
antidilutive.

34

Stock option plans:

At December 31, 2004, the Company has stock-based employee compensation plans
which are described more fully in Note 11. The Company accounts for its stock
option plans in accordance with the provisions of Accounting Principles Board
(APB) Opinion No. 25, "Accounting for Stock Issued to Employees", and related
interpretations. As such, compensation expense is recorded on the date of grant
only if the current market price of the underlying stock exceeds the exercise
price. No stock-based employee compensation cost is reflected in net income
(loss), as all options granted under those plans had an exercise price equal to
the market value of the underlying common stock on the date of grant. The
Company has adopted the disclosure standards of Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation",
which requires the Company to provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants made in 1995 and
future years as if the fair-value-based method of accounting for stock options
as defined in SFAS No. 123 had been applied. The following table illustrates
the effect on net income (loss) and per share amounts if the Company had applied
the fair value recognition provisions of SFAS No. 123 to stock-based employee
compensation:

Year Ended December 31
-------------------------
2004 2003 2002
---- ---- ----
Restated(1) Restated(1)
(In thousands, except per share amounts)

Net income (loss) as reported $1,931 $(1,352) $2,412
Deduct: Total stock-based employee
compensation expense determined under
fair value based method,
net of related tax effects (309) (628) 424
----- ------ -------
Pro forma net income (loss) $1,622 $(1,980) $1,988
===== ======= =====

Net income (loss) per share:
Basic-as reported $ 0.22 $ (0.16) $ 0.29
====== ======== ======

Basic-pro forma $ 0.19 $ (0.23) $ 0.24
====== ======== ======

Diluted-as reported $ 0.22 $ (0.16) $ 0.28
====== ======== ======

Diluted-pro forma $ 0.18 $ (0.23) $ 0.23
====== ======== ======

(1) See Note 2, "Restatement of Consolidated Financial Statement" of Notes to
Consolidated Financial Statements.

35

The fair value of each stock option granted during the year is estimated on the
date of grant using the Black-Scholes option pricing model with the following
assumptions:

2004 2003 2002
---- ---- ----
Expected life (years) 6.0 6.0 5.2
Expected volatility 51.07% 75.80% 63.67%

Expected dividend yield - - -
Risk-free interest rate 4.09% 3.10% 4.34%

Weighed average fair value of options
granted during the year $6.07 $4.90 $3.09

Financial instruments:

The carrying values of the Company's financial instruments, principally
cash and cash equivalents, accounts receivable, accounts payable and certain
other assets and liabilities included in the Company's Consolidated Balance
Sheets approximated their fair values at December 31, 2004 and 2003. Fair
values were determined through a combination of management estimates and
information obtained from independent third parties using the latest available
market data. The approximate fair value of long-term debt was $9,320,000 at
December 31, 2004.

Impairment of long-lived assets and long-lived assets to be disposed of:

Long-lived assets, such as property, plant, and equipment, are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to estimated undiscounted future cash flows expected to be generated by the
asset. If the carrying amount of an asset exceeds its estimated future cash
flows, an impairment charge is recognized by the amount by which the carrying
amount of the asset exceeds the fair value of the asset, which is generally
based on discounted cash flows.

Comprehensive income (loss):

Comprehensive income consists of net income (loss), foreign currency translation
adjustment and the minimum pension liability adjustment and is presented in the
consolidated statements of comprehensive income. At December 31, 2004,
accumulated other comprehensive loss consists of $1,620,000 of a cumulative
foreign currency translation gain more than offset by a negative additional
minimum pension liability adjustment of $1,726,000 (which is net of tax of
$929,000) At December 31, 2003, accumulated other comprehensive loss consists of
$787,000 of a cumulative foreign currency translation gain more than offset by a
$2,372,000 additional minimum pension liability adjustment (which is net of tax
of $473,000).

36

Revenue recognition:

Revenue is recognized in accordance with the F.O.B. terms of orders, generally
when products are shipped. The Company's products are tested by its quality
assurance department prior to shipment. The Company has no other obligation
associated with its products once shipment has occurred except for customary
warranty provisions. Historically, returns have been immaterial to the
Company's consolidated financial statements and are projected to remain at a
consistent immaterial level in the future. The Company reports all amounts
billed to customers related to shipping and handling as revenue and includes all
costs incurred for shipping and handling as cost of sales. The Company also
provides certain contract fermentation services for which revenue is recorded at
the time the materials are shipped to the customer, in accordance with the terms
of the underlying purchase order.

The Company's products carry limited warranties that in general do not exceed
one year from sale with the exception of ultra-low temperature freezers that
carry a 5-year warranty and certain shaker products that carry a 2-year
warranty. The Company accrues estimated product warranty costs based on
historical trends at the time of sale and any additional amounts are recorded
when such costs are probable and can be reasonably estimated.

The Company periodically sells maintenance contracts to certain customers. The
value of such contracts is deferred and recognized into revenue on a straight
line basis over the term of the contract.

Derivative instruments and hedging activities:

The Company accounts for its derivative and hedging transactions in accordance
with SFAS No. 133, "Accounting for Derivative Instruments and Certain Hedging
Activities" and SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities". SFAS No. 133 and SFAS No. 138 require that all
derivative instruments be recorded on the balance sheet at their respective fair
values.

From time to time, the Company has entered into forward foreign exchange
contracts to hedge certain firm and anticipated sales commitments, net of
offsetting purchases, denominated in certain foreign currencies. The purpose of
such foreign currency derivatives is to mitigate the risk that the eventual cash
flows resulting from the sale of products to certain foreign customers (net of
purchases from applicable foreign suppliers) will be adversely affected by
fluctuations in exchange rates. The Company also enters into interest rate
swaps to mitigate interest rate risks from its variable rate debt (see Note 7).

37

The Company does not hold or issue derivative financial instruments for trading
or speculative purposes. At December 31, 2004 and 2003, the Company did not
have any derivative instruments outstanding with the exception of three interest
rate swaps utilized to fix the interest rates on certain debt incurred for
acquisitions and an equipment purchase. These swaps had a fair value of
$(263,000) as of December 31, 2004. Changes in the carrying value of these
swaps is recorded in interest expense as the swaps have not been designated as
effective hedges in accordance with SFAS No. 133 (see Note 2).

Recently issued accounting standards:

In December, 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"). SFAS 123R
addresses the accounting for transactions in which an enterprise receives
employee services in exchange for (a) equity instruments of the enterprise or
(b) liabilities that are based on the fair value of the enterprise's equity
instruments or that may be settled by the issuance of such equity instruments.
SFAS 123R supersedes APB No. 25 and requires that such transactions be accounted
for using a fair-value based method. SFAS 123R requires companies to recognize
an expense for compensation cost related to share-based payment arrangements
including stock options and employee stock purchase plans. The Company is
required to implement the proposed standard no later than July 1, 2005. The
cumulative effect of adoption, applied on a modified prospective basis, would be
measured and recognized on July 1, 2005. The Company is currently evaluating
option valuation methodologies and assumptions related to its stock compensation
plans. Current estimates of option values using the Black Scholes method may
not be indicative of results from valuation methodologies ultimately adopted.

In December, 2004, the FASB issued FASB Staff Position 109-2 "Accounting and
Disclosure Guidance for the Foreign Earnings Repatriation Provision within the
American Jobs Creation Act of 2004" ("FSP 109-2"), in response to the American
Jobs Creation Act of 2004 which was singed into law in October, 2004 and which
provides for a special one-time tax deduction of 85% of certain foreign earnings
that are repatriated (as defined). Based on the Company's decision to reinvest
rather than to repatriate current and prior year's unremitted foreign earnings,
the application of FSP 109 did not affect income tax expense in the period of
enactment or any related disclosures.

In November, 2004, the FASB issued SFAS No. 151, "Inventory Costs - an amendment
of ARB No. 43, Chapter 4" ("SFAS 151"). SFAS 151 is the result of a broader
effort by the FASB to improve the comparability of cross-border financial
reporting by working with the International Accounting Standards Board ("IASB")
toward development of a single set of high-quality accounting standards. The
FASB and the IASB noted that ARB 43, Chapter 4 and IAS 2, "Inventories," require

38

that abnormal amounts of idle freight, handling costs, and wasted materials be
recognized as period costs, however, the Boards noted that differences in the
wording of the two standards could lead to inconsistent application of those
similar requirements. The FASB concluded that clarifying the existing
requirements in ARB 43 by adopting language similar to that used in IAS 2 is
consistent with its goals of improving financial reporting in the United States
and promoting convergence of accounting standards internationally. Adoption of
SFAS 151 is required for fiscal years beginning after June 15, 2005. The
provisions of SFAS 151 will be applied prospectively and are not expected to
have a material impact on results of operations and financial position of the
Company.

Use of estimates:

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and revenue and expenses,
such as the valuation of accounts receivable and inventories, and the disclosure
of contingent assets and liabilities to prepare the consolidated financial
statements in conformity with accounting principles generally accepted in the
United States of America. Actual results could differ from those estimates.

Reclassifications:

Certain amounts in the 2003 and 2002 consolidated financial statements have
been reclassified to conform to the 2004 financial statement presentation.

2. Restatement of consolidated financial statements:

On March 21, 2005, the Company announced that certain of its historical
financial statements required restatement. Specifically, the Company determined
that the restatement was required because of a misapplication of SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities" as it applies to
three interest rate swaps that were entered into in 1999 and 2004 to fix the
interest rates on variable rate debt incurred primarily for acquisitions in 1999
and 2003.

The interest rate swaps were not previously disclosed or accounted for and
were not properly designated as effective cash flow hedges, as defined by SFAS
No. 133 which went into effect on January 1, 2001. The accounting rules require
that changes in the fair value of swaps not properly designated as effective
cash flow hedges be recorded as a part of interest expense in each period's
statement of operations.

The required changes affected the previously filed financial statements for
the years ended December 31, 2001, 2002 and 2003, as well as, for the 2003
quarters and the 2004 quarters through October 2, 2004. The foregoing
restatement adjustments did not affect the Company's reported cash and cash
equivalents or income (loss) from operations in any of the above periods.

39

The following table presents the impact of the financial statement
adjustments on the Company's previously reported consolidated statements of
operations for years ended December 31, 2003 and 2002 (in thousands):

2003 2002
-------------------------------------- --------------------------------------
Previously . . . . . . . . . . Previously
Reported . . Adjustments(1) As Restated Reported Adjustments(1) As Restated
- -------------------------------- --------------- ------------ ---------- --------------- -------------
(Loss) income from operations. . $ (987) $ - $ (987) $ 4,656 $ - $ 4,656
Other income (expense):
Interest income. . . . . . . . 84 - 84 64 - 64
Interest expense . . . . . . . (485) 172 (313) (460) (287) (747)
Other expense, net . . . . . . (38) - (38) (185) - (185)
------------ ---------- --------------- ------------- --------
(439) 172 (267) (581) (287) (868)
------------ ---------- --------------- ------------- --------

(Loss) income before income
tax expense. . . . . . . . . . (1,426) 172 (1,254) 4,075 (287) 3,788
Income tax expense (benefit) . . 29 69 98 1,491 (115) 1,376
------------ ---------- --------------- ------------- --------

Net (loss) income. . . . . . . . $ (1,455) $ 103 $ (1,352) $ 2,584 $ (172) $ 2,412
=============== ============ ---------- =============== ------------- ========

Basic (loss) income per share. . $ (0.17) $ 0.01 $ (0.16) $ 0.31 $ (0.02) $ 0.29
=============== ============ ========== =============== ============= ========
Diluted (loss) income per share. $ (0.17) $ 0.01 $ (0.16) $ 0.30 $ (0.02) $ 0.28
=============== ============ ========== =============== ============= ========
Basic weighted average
number of shares outstanding . 8,592 8,592 8,592 8,416 8,416 8,416
=============== ============ ========== =============== ============= ========
Diluted weighted average
number of shares outstanding . 8,592 8,592 8,592 8,621 8,621 8,621
=============== ============ ========== =============== ============= ========

(1) Reflects adjustments to interest expense and related deferred tax expense (benefit) to correct
for the misapplication of SFAS No. 133 as it applies to an interest rate swap entered into in
1999 to fix the interest rate on variable rate debt incurred for an acquisition in 1999.

40

The following table presents the impact of the financial statement adjustments
on the Company's previously reported consolidated balance sheet at December 31,
2003 (in thousands):

As Previously As
Reported Adjustments(1) Restated
--------------- --------------- ------------
ASSETS
Total current assets . . . . . . . . . . . . . . $ 34,200 $ - $ 34,200
Property plant and equipment, net. . . . . . . . 6,478 - 6,478
Goodwill . . . . . . . . . . . . . . . . . . . . 8,147 - 8,147
Other assets . . . . . . . . . . . . . . . . . . 2,496 210 2,706
--------------- --------------- ------------
Total assets. . . . . . . . . . . . . . . . $ 51,321 $ 210 $ 51,531
=============== =============== ============

LIABILITIES AND
SHAREHOLDERS' EQUITY
Total Curernt Liabilities. . . . . . . . . . . . $ 8,921 $ - $ 8,921
Long term debt, net of current installments. . . 7,675 - 7,675
Other liabilities. . . . . . . . . . . . . . . . 2,866 525 3,391
--------------- --------------- ------------
Total liabilities . . . . . . . . . . . . . 19,462 525 19,987
Shareholders' Equity:
Common stock . . . . . . . . . . . . . . . . . . 540 - 540
Capital in excess of par . . . . . . . . . . . . 51,817 - 51,817
Accumulated deficit. . . . . . . . . . . . . . . (18,879) (315) (19,194)
Accumulated other comprehensive loss . . . . . . ( 1,585) - ( 1,585)
Notes receivable from exercise of stock options. ( 34) - ( 34)
--------------- --------------- ------------
Total shareholders' equity . . . . . . . . 31,859 (315) 31,544
--------------- --------------- ------------
Total liabilities and shareholders' equity $ 51,321 $ 210 $ 51,531
=============== =============== ============

(1) Reflects the balance sheet adjustments to record the December 31, 2003 fair value of an
interest rate swap, and the related deferred tax effects, which was entered into in 1999 to
fix the interest rate on variable rate debt incurred for an acquisition in 1999.

3. Inventories at December 31 consist of:

2004 2003
------- -------
(In thousands)
Raw materials and sub-assemblies. $ 6,914 $ 5,194
Work-in-process . . . . . . . . . 1,366 2,088
Finished goods. . . . . . . . . . 3,859 5,022
------- -------
$12,139 $12,304
======= =======

41

4. Property, plant and equipment at December 31 consists of:

2004 2003
-------- --------
(In thousands)

Land . . . . . . . . . . . . . $ 780 $ 760
Buildings and improvements . . 4,499 4,336
Machinery and equipment. . . . 17,560 16,552
-------- --------
22,839 21,648
Less accumulated depreciation. 16,344 15,170
-------- --------
$ 6,495 $ 6,478
======== ========

5. Acquisition:

On November 14, 2003, the Company acquired all of the outstanding common stock
of RS Biotech Laboratory Equipment Limited (RS Biotech), a United Kingdom
corporation located in Irvine, Scotland. The purchase price consisted of
975,000 ($1,645,000 at the date of acquisition) in cash and 975,000 ($1,645,000
at the date of acquisition) in notes, payable 487,500 on the first and second
anniversary, respectively, of the acquisition with interest at the lower of 6%
or the base rate of the Bank of Scotland payable semi-annually. In addition, the
Company is obligated to pay up to an additional 300,000 if certain minimum unit
sales of CO2 incubators are achieved. The Company believes that the payment of
such additional consideration is determinable beyond a reasonable doubt and as
such, has recorded the amount as a liability and as additional purchase price.
The source of the cash consideration paid was the Company's line of credit for
acquisition purposes provided by Wachovia Bank, National Association, payable in
monthly principal installments of $17,858 plus interest. RS Biotech is in the
business of designing, developing and manufacturing CO2 incubators for
laboratories. The acquisition has been accounted for by the purchase method and,
accordingly, the results of operations of RS Biotech have been included in the
Company's consolidated financial statements from November 14, 2003. The excess
of purchase price over the fair value of net identifiable tangible assets
acquired of $3,142,000 has been recorded as $2,742,000 of goodwill and $400,000
for the trade name, which is included in other assets in the accompanying
consolidated balance sheets and has a life of 15 years (amortization expense of
$26,666 per year).

The acquisition of RS Biotech consisted of the following (in thousands):

Net cash paid $1,789
Debt incurred 2,151
Liabilities assumed 284
Fair value of tangible assets acquired (1,082)
Amount allocated to intangible assets acquired (400)
------
Goodwill $2,742
=====

42

6. Investment in Antyra, Inc.:

The Company had an equity investment in Antyra, Inc. that was written down to
zero in 2001. Antyra, Inc. was majority-owned and fully funded by the Company
until June 14, 2001 at which time Antyra, Inc. raised funds from an
institutional investor reducing the Company's ownership interest to 47%.
Antyra, Inc. has subsequently succeeded in raising additional capital.

The Company currently has a less than 20% equity investment in Antyra, Inc. that
is carried at zero value on the Company's consolidated balance sheet since the
continuing viability of Antyra, Inc. is dependent upon the raising of
additional capital, which is uncertain, for its continued existence. The
Company provides no funds to Antyra, Inc. but does provide laboratory space in
exchange for equity securities of Antyra, Inc. Under the terms of a lease with
Antyra, Inc., the Company receives shares of Antyra, Inc. preferred stock on a
monthly basis in lieu of rent payments. For financial reporting purposes, the
Company is attributing no value to the shares received under this arrangement.

7. Long-term debt and credit agreement:

The Company and Wachovia Bank, National Association (the "Bank") are parties to
an agreement, which has had a number of amendments (the "Bank Agreement"), which
expires on May 31, 2005, which provides the Company with a credit facility for
acquisitions, equipment loans, working capital and letters of credit, and
foreign exchange transactions. The Company expects that the Bank Agreement will
be renewed prior to its expiration date. The maturity of the acquisition
portion of the credit facility with respect to a 1999 acquisition is December 1,
2006 and with respect to a 2003 acquisition is November 2008. There are no
compensating balance requirements and any borrowings under the Bank Agreement,
bear interest at the Bank's prime rate less 125 basis points or Libor plus 125
basis points, at the discretion of the Company. At December 31, 2004, the
Bank's prime rate was 5.25% and LIBOR was 2.39%.

On September 26, 2003 the Bank Agreement was amended to temporarily ease the
financial ratio requirements under the negative covenant provisions of the Bank
Agreement and to reduce the acquisition line from $12.5 million to $10 million.
Among the changes was to omit the requirement to meet the debt service ratio
during the period ended September 27, 2003, a change in the minimum equity that
must be maintained, as well as the maintenance of a minimum $3 million cash
balance. In addition, the interest rate on new borrowings under the Bank
Agreement was increased by 50 basis points. At December 31, 2004, the Company
met the financial ratios that were in force prior to this amendment and all of
the terms, financial ratios and requirements as well as interest rates reverted
back to what they were prior to the September 26, 2003 amendment.

All of the Company's domestic assets, which are not otherwise subject to lien,
have been pledged as security for any borrowings under the Bank Agreement. The

43

Bank Agreement contains various business and financial covenants including among
other things, a debt service ratio, a net worth covenant and a ratio of total
liabilities to tangible net worth. The Company is in compliance with its
covenants pursuant to the Bank Agreement, at December 31, 2004.

The following amounts were outstanding and available under the Bank Agreement
(in thousands):

December 31, 2004 December 31, 2003
-------------------------- --------------------
Total
Line Available Outstanding Outstanding
---- --------- ----------- -----------
Acquisitions $10,000 $ 4,366 $5,634(a) $ 6,111(a)
Equipment loans 2,000 1,354 646(b) 811(b)
Working capital and
letters of credit 5,000 4,991 9(c) 150(c)
Foreign exchange
transactions 10,000 10,000 - -
------ ------ ------- --------
$27,000 $20,711 $6,289 $ 7,072
====== ====== ===== =======
_____________________
(a) $4,366,000 in 2004 and $4,629,000 in 2003 at fixed interest of 8% per
annum and $1,268,000 in 2004 and $1,482,000 in 2003 at fixed interest
of 4.46% per annum through the use of interest rate swap
agreements
(b) Interest fixed at 4.14% per annum through the use of an interest rate
swap agreement
(c) Letters of credit

At December 31, 2004 and 2003, the interest rate swaps referred to above had
aggregate negative fair values of $264,000 and $525,000, respectively, and are
included in Other Liabilities in the accompanying consolidated balance sheets.
The interest rate swaps have the same notional values as the related debt and
expire on the same dates as the related debt.

In November 1999, the Company issued notes in the amount of 250,000 ($392,500
at the date of acquisition) in connection with the acquisition of DJM
Cryo-Research Group. The notes bear interest at 6% which are payable annually
and principal is payable in five equal annual installments which commenced in
November 2003. At December 31, 2004 and 2003, the balance due on the notes was
150,000 ($288,000) and 200,000 ($357,000), respectively.

In November 2003, the Company issued notes in the amount of 975,000 ($1,645,000
at the date of acquisition) in connection with the acquisition of RS Biotech.
The notes bear interest, payable semi-annually at the lower of 6% or the base
rate of the Bank of Scotland and are payable 487,500 on the first and second
anniversary, respectively, of the acquisition. At December 31, 2004 and 2003,
the balance due on the notes was 487,500 ($936,000) and 975,000 ($1,741,000)
respectively.

44

The Company is a party to first and second mortgages on the facility of the
Company's Netherlands subsidiary, which bear interest of 5.50% and 5.45%,
respectively, per annum. During the terms of the mortgages, the Company is
obligated to make monthly payments of interest and quarterly payments of
principal. At December 31, 2004, $124,000 and $153,000 was outstanding under
the first and second mortgages, respectively, and at December 31, 2003, $144,000
and $170,000 was outstanding under the first and second mortgages, respectively.
Each mortgage requires 80 equal quarterly payments of principal.

Aggregate annual maturities of long-term debt are as follows:

Year ending December 31. Amount
- ------------------------ ---------------
(In thousands)

2005 . . . . . . . . . . $ 1,759
2006 . . . . . . . . . . 4,616
2007 . . . . . . . . . . 536
2008 . . . . . . . . . . 837
2009 . . . . . . . . . . 33
After 2009. . . . . . . -
---------------
7,781
===============

8. Accounts payable and accrued expenses at December 31, consists of:

2004 2003
------ ------
(In thousands)
Accounts payable-trade . . . . . . . . . . $2,429 $2,940
Accrued salaries, wages and payroll taxes. 2,327 1,564
Accrued warranties . . . . . . . . . . . . 866 355
Deferred maintenance contract income . . . 477 451
Commissions payable. . . . . . . . . . . . 522 709
Accrued income taxes . . . . . . . . . . . 79 433
Other accrued liabilities. . . . . . . . . 892 808
------ ------
$7,592 $7,260
====== ======

45

NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

9. Income taxes:

Year Ended December 31,
-------------------------
2004 2003 2002
------------------------- -------- -------
Restated- Restated-
Note 2 . Note 2
Income (loss) before income
tax expense (benefit):
Domestic . . . . . . . . . . . . . . . $ 3,019 $ (121) $3,532
Foreign. . . . . . . . . . . . . . . . 248 (1,133) 256
------------------------- -------- -------
$ 3,267 $(1,254) $3,788
========================= ======== =======
Income tax (benefit) expense consists of:
Federal-current . . . . . . . . . . . . $ (149) $ (237) $ 820
Federal-deferred. . . . . . . . . . . . 905 362 179
State-current . . . . . . . . . . . . . 6 (28) 338
State-deferred. . . . . . . . . . . . . 243 (11) (94)
Foreign-current . . . . . . . . . . . . 331 12 133
------------------------- -------- -------
$ 1,336 $ 98 $1,376
========================= ======== =======

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and liabilities at December 31, 2004 and 2003 are as
follows:

2004 2003
------ ---------
Restated-
Note 2
(In thousands)
Deferred tax assets:
Inventories. . . . . . . . . . . . . . . $ 805 $ 868
Allowance for doubtful accounts. . . . . 147 185
Accrued expenses . . . . . . . . . . . . 466 210
Foreign net operating loss carryforward. 988 933
Domestic capital loss and
contribution carryforwards. . . . . . 367 390
Other assets . . . . . . . . . . . . . . 1,060 724
------ ---------
Gross deferred tax assets. . . . 3,833 3,310
Less: valuation allowance . . . . . . . . 1,355 1,234
------ ---------
2,478 2,076
------ ---------
Deferred tax liabilities:
Accumulated depreciation . . . . . . . . 744 226
Pension. . . . . . . . . . . . . . . . . 872 681
------ ---------
1,616 907
------ ---------
Net deferred tax asset . . . . . $ 862 $ 1,169
====== =========

46

At December 31, 2004, the Company has current deferred tax assets of $1,089,000
and has a deferred tax liability of approximately $227,000, which is included in
other liabilities in the accompanying 2004 consolidated balance sheet. At
December 31, 2003, $299,000 of the deferred tax asset is in current assets and
$870,000 of the deferred tax asset is included in other assets in the
accompanying 2003 consolidated balance sheet.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Included above are the tax
effect of foreign net operating loss carryforwards of approximately $3,066,000,
which are covered by a valuation allowance. Based upon the projections for
future taxable income over the periods which the deferred tax assets are
deductible, management believes it is more likely than not the Company will
realize the benefits of these deductible differences, net of the existing
valuation allowance at December 31, 2004. The net change in the total valuation
allowance for the years ended December 31, 2004 and 2003 was an increase of
$121,000 and $411,000, respectively.

The Company's effective income tax rates for 2004, 2003 and 2002 differed from
the U.S. statutory Federal income tax rate of 34% as follows:

The provision for income taxes differs from the amount of taxes determined by
applying the U.S. Federal statutory rate to income (loss) before income tax
expense (benefit) as a result of the following (in thousands):

2004 2003 2002
----------- ------ -------
Restated-Restated-
Note 2. . Note 2

Computed "expected" tax expense
(benefit)
$ 1,111 $(426) $1,288
Increase (decrease) in taxes resulting
from:
State taxes, net of federal benefit . 179 (16) 144
Rate differential between U.S. and
foreign income taxes. . . . . . . . (22) 21 46
Change in valuation allowance
allocated to income tax expense . . 121 411 (85)
Other . . . . . . . . . . . . . . . . (53) 108 (17)
----------- ------ -------
Actual tax expense. . . . . . . . . . . . $ 1,336 $ 98 $1,376
=========== ====== =======

47

10. Pension plans and other liabilities:

The Company has a noncontributory defined benefit pension plan covering
qualified U.S. salaried employees, including officers. Additionally, the
Company made contributions to a union sponsored multi-employer defined benefit
plan, in the amount of $126,000, $130,000 and $138,000 in 2004, 2003 and 2002,
respectively.

The following table sets forth the U.S. defined benefit plan's projected benefit
obligation, fair value of plan assets and funded status at December 31, 2004 and
2003:

2004 2003
-------- ---------
(In thousands)
CHANGE IN PROJECTED BENEFIT OBLIGATION
Benefit obligation at beginning of year. . . . . . $ 8,433 $ 7,630
Actuarial (gain) loss. . . . . . . . . . . . . . . (9) 397
Service cost . . . . . . . . . . . . . . . . . . . 381 314
Interest cost. . . . . . . . . . . . . . . . . . . 481 483
Benefits paid. . . . . . . . . . . . . . . . . . . (418) (391)
-------- ---------
Benefit obligation at end of year. . . . . . . . . $ 8,868 $ 8,433
======== =========

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year . . $ 5,905 $ 4,846
Actual gain on plan assets . . . . . . . . . . . . 629 773
Employer contributions . . . . . . . . . . . . . . 1,040 769
Expenses paid. . . . . . . . . . . . . . . . . . . (81) (92)
Benefits paid. . . . . . . . . . . . . . . . . . . _(418) (391)
-------- ---------
Fair value of plan assets at end of year . . . . . $ 7,075 $ 5,905
======== =========

MISCELLANEOUS ITEMS AT END OF YEAR
Projected benefit obligation . . . . . . . . . . . $(8,868) $ (8,433)
Fair value of plan assets. . . . . . . . . . . . . 7,075 5,905
-------- ---------
Funded status. . . . . . . . . . . . . . . . . . . $(1,793) $ (2,528)
Unrecognized net transition obligation . . . . . . 34 53
Unrecognized prior service cost. . . . . . . . . . (6) (10)
Unrecognized net loss. . . . . . . . . . . . . . . 3,035 3,341
-------- ---------
Net amounts recognized . . . . . . . . . . . . . . $ 1,270 $ 856
======== =========

AMOUNTS RECOGNIZED IN FINANCIAL STATEMENTS
Accrued benefit cost . . . . . . . . . . . . . . . $(1,413) $ (2,031)
Intangible asset . . . . . . . . . . . . . . . . . 28 43
Accumulated other comprehensive loss
(reduction in shareholder equity, excluding the
deferred tax effect). . . . . . . . . . . . . . 2,655 2,844
-------- ---------
Prepaid pension. . . . . . . . . . . . . . . . . . $ 1,270 $ 856
======== =========

The accumulated benefit obligation for the U.S. defined benefit pension
plan was $8,488,000 and $7,936,000 at December 31, 2004 and 2003, respectively.

48

2004 2003 2002
------ ------- -------
(In thousands)
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost . . . . . . . . . . . . . . . . . . . . $ 381 $ 314 $ 287
Interest cost. . . . . . . . . . . . . . . . . . . . 481 483 449
Expected return on plan assets . . . . . . . . . . . (467) (386) (424)
Transition obligation. . . . . . . . . . . . . . . . 19 19 19
Amortization of prior service cost . . . . . . . . . (4) (4) (4)
Recognized net actuarial loss. . . . . . . . . . . . 217 259 165
------ ------- -------
Net periodic benefit cost. . . . . . . . . . . . . . $ 627 $ 685 $ 492
====== ======= =======

WEIGHTED-AVERAGE ASSUMPTIONS AND MEASUREMENT DATES 2004 2003 2002
----- ----- -----
Benefit obligations:
Discount rate. . . . . . . . . . . . . . . . . . 5.75% 5.85% 6.50%
Rate of compensation increase. . . . . . . . . . 3.00% 3.00% 3.00%
Measurement date - December 31 . . . . . . . . . 2004 2003 2002
Census data snapshot date - December 31 . . . . 2004 2003 2002
Net periodic pension cost:
Discount rate. . . . . . . . . . . . . . . . . . 5.85% 6.50% 6.50%
Rate of compensation increase. . . . . . . . . . 3.00% 3.00% 3.00%
Expected long-term return on plan assets . . . . 7.50% 7.50% 8.00%
Measurement date - January 1 . . . . . . . . . . 2004 2003 2002
Census data snapshot date - January 1. . . . . . 2004 2003 2002

The Company's best estimate of its contributions to the plan is $1,022,000
for the year ending December 31, 2005.

The expected benefit payments over the next ten years are (in thousands):

2005 . . . $ 475
2006 . . . 490
2007 . . . 501
2008 . . . 530
2009 . . . 570
2010-2014. 3,345
------
5,911
======

49

The asset allocation of plan assets at December 31, 2004 and 2003 were as
follows:

ASSET CATEGORY. . . . . . 2004 2003
------ ------
Cash and cash equivalents 2.6% 7.7%
Debt securities . . . . . 37.8 39.5
Equity securities . . . . 59.6 52.8
------ ------
Total . . . . . . . . . . 100.0% 100.0%
====== ======

The Company's overall investment objective is to maintain a balanced
portfolio focused on maintaining the inflation-adjusted value of the current
asset base while allowing for potential real growth in principal. The objective
is to have a 40% to 70% exposure to equities with the remainder in debt
securities. Coherent in this investment objective is the understanding that the
portfolio is subject to the risk of short-term principal volatility associated
with investing in stocks and bonds, including the potential loss of capital.

The plan's assets are managed by outside professionals. The investment
time horizon is at least 3-5 years. There are no regular cash flow requirements
from the portfolio and all income is reinvested into principal since the cash
needs of the plan are met by the Company's annual contributions. The Company is
not aware of any pending substantial liquidity needs from the plan. The
Company's minimum performance objective is to meet its assumed expected annual
return on plan assets of 7.5%. The plan is not permitted to invest in illegal
and not readily marketable securities or real estate.

Pension expense in 2004 was determined using a 5.85% discount rate
(consistent with the determination of liabilities at the end of 2003) and the
December 31, 2004 plan liability and other disclosure items using a 5.75%
discount rate. The discount rates were determined as [3x(a)+(b)]/4 where (a) is
the average Aaa (Moody's) long term corporate bond yield in December and (b) is
the average Baa (Moody's) long term corporate bond yield in December. The
expected long-term rate of return on plan assets is 7.5%. The Company employs a
building block approach in determining the long-term rate of return for plan
assets with proper consideration of diversification and rebalancing. Historical
markets are studied and long-term historical relationships between equities and
fixed income are preserved congruent with the widely-accepted capital market
principle that assets with higher volatility generate a greater return over the
long run. Current market factors such as inflation and interest rates are
evaluated before long-term capital market assumptions are determined. Peer data
and historical returns are reviewed to check for reasonability and
appropriateness. The annual salary increase assumption of 3% was selected based
on the Company's estimate.

The minimum additional pension liability in 2004 and 2003 are non-cash
items which are offset by a direct reduction to shareholders' equity of
$1,726,000 and $2,372,000, respectively.

50

The Company has a defined contribution plan for its U.S. employees, with a
specified matching Company contribution. The expense to the Company in 2004,
2003 and 2002 was $141,000, $127,000 and $164,000, respectively.

International pension expense in 2004, 2003 and 2002 was not material.
Foreign plans generally are insured or otherwise fully funded.

11. Shareholders' equity:

2001 NON-QUALIFIED STOCK OPTION PLAN

The 2001 Non-Qualified Stock Option Plan (the 2001 Plan) for officers and
key employees provides for the granting of options to purchase up to 462,000
shares of the Company's Common stock. Options generally may be exercised over
five years in cumulative installments of 20% per year and expire up to ten years
from the date of grant. The exercise price per share of each option may not be
less than the fair market value of the Company's Common stock on the date of
grant.

1999 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS

The 1999 Stock Option Plan for Nonemployee Directors (the 1999 Plan)
provides for the granting of options to purchase up to 246,410 shares of the
Company's Common stock. No options may be granted under the 1999 Plan after
March 17, 2009. Options generally may be exercised over five years in
cumulative installments of 20% per year and expire up to ten years from the date
of grant. The exercise price per share of each option may not be less than
eighty-five percent (85%) of the fair market value of the Company's Common stock
on the date of grant.

1998 STOCK OPTION PLAN FOR 10% SHAREHOLDER - DIRECTORS

The 1998 Stock Option Plan for 10% Shareholder-Directors (the 1998 Plan)
provides for the granting of options to purchase up to 294,151 shares of the
Company's Common stock. No options may be granted under the 1998 Plan after
March 17, 2008. Options generally may be exercised over five years in
cumulative installments of 20% per year and expire up to ten years from the date
of grant. The exercise price per share of each option may not be less than the
fair market value of the Company's Common stock on the date of grant.

STOCK OPTION AGREEMENTS

Stock option agreements were entered into in 1997 with the two
Shareholder-Directors of the Company for a grant of options to purchase 194,869
shares of the Company's Common stock. The options were issued at fair market
value on the date of grant, were exercisable in five equal annual installments

51

commencing one year after date of grant and were due to expire five years after
date of grant. All options granted under these agreements were exercised in
2002.

The following table summarizes the Company's activity in the aggregate, for
the aforementioned stock option plans and agreements:

Weighted
Stock Range of Average
Options Exercise Prices Exercise Price
---------- ---------------- ---------------
Outstanding, December 31, 2001 1,208,043 $ 2.25 - $5.26 $ 3.78
Granted. . . . . . . . . . . 224,840 4.49 - 5.67 4.53
Exercised. . . . . . . . . . (422,552) 3.08 - 5.26 3.42
Cancelled. . . . . . . . . . (42,173) 3.22 - 4.60 3.99
---------- ---------------- ---------------
Outstanding, December 31, 2002 968,158 2.25 - 5.67 4.10
Granted. . . . . . . . . . . 132,000 4.59 4.46
Exercised. . . . . . . . . . (12,884) 3.22 3.22
Cancelled. . . . . . . . . . (50,865) 3.22 - 4.60 4.46
---------- ---------------- ---------------
Outstanding, December 31, 2003 1,036,409 2.25 - 5.67 4.14
Granted. . . . . . . . . . . 15,000 6.07 6.07
Exercised. . . . . . . . . . (194,722) 3.10 - 4.60 3.31
Cancelled. . . . . . . . . . (136,031) 3.22 - 4.60 3.95
---------- ---------------- ---------------
Outstanding, December 31, 2004 720,656 $ 2.25 - $5.67 $ 4.45
========== ================ ===============

Information regarding stock options outstanding as of December 31, 2004 is as
follows:

Outstanding

Weighted Average Number of
Exercise. Number of Remaining Shares
Price . . Shares Contractual Life Exercisable
- --------- ---------------- ---------------- -----------
2.25 . . 6,655 2.28 3,993
3.08. . . 37,646 .66 37,646
3.10. . . 83,681 .21 83,681
4.45. . . 103,950 5.14 -
4.49. . . 121,726 3.01 48,400
4.59. . . 10,450 3.01 -
4.60. . . 154,524 1.58 122,417
4.64. . . 48,400 4.69 19,360
5.26. . . 136,424 .59 136,424
5.67. . . 2,200 3.94 880
6.07. . . 15,000 5.50 -
---------------- -----------
720,656 . 452,801
================ ===========

In the aggregate, related to the aforementioned stock option plans, there
were 468,023 additional shares available for grant at December 31, 2004.

52

In 1987, the Company adopted an Employee Stock Purchase Plan. Under the Stock
Purchase Plan, employees may purchase shares of the Company's Common stock at
85% of fair market value on specified dates. The Company has reserved 559,231
shares of its authorized shares of Common stock for this purpose. During 2004,
2003 and 2002, 34,675, 54,469 and 40,584 Common shares, respectively, were
issued under the plan.

On October 15, 1999, the Company declared a dividend of one Common share
purchase right (the Rights) on each share of Common stock outstanding. The
Rights entitle the holder to purchase one share of Common stock at $17.07 (the
Purchase Price) per share. Upon the occurrence of certain events related to
non-negotiated attempts to acquire control of the Company, the Rights: (i) will
entitle holders to purchase at the Purchase Price that number of shares of
Common stock having an aggregate fair market value of two times the Purchase
Price; (ii) will become exchangeable at the Company's election at an exchange
ratio of one share of Common stock per right; and (iii) will become tradable
separately from the Common stock. Further, if the Company is a party to a
merger or business combination transaction, the Rights will entitle the holders
to purchase at the Purchase Price, shares of Common stock of the surviving
company having a fair market value of two times the Purchase Price.

In 1989, the Company adopted an Employee Stock Ownership Plan and
Declaration of Trust (ESOP). The ESOP provides for the annual contribution by
the Company of cash, Company stock or other property to a trust for the benefit
of eligible employees. The amount of the Company's annual contribution to the
ESOP is within the discretion of the Board of Directors but must be of
sufficient amount to repay indebtedness incurred by the ESOP trust, if any, for
the purpose of acquiring the Company's stock. The Company made contributions to
the ESOP of $3,000, $3,000 and $11,000 during 2004, 2003, and 2002,
respectively.

Shareholders' Equity includes non-interest bearing notes receivable,
resulting from the exercise of stock options, from the Vice President, Finance
in the amount of $12,500 and from the Corporate Controller in the amount of
$10,000. Imputed interest on these loans amounted to $360, $517 and $1,258,
during 2004, 2003, and 2002, respectively.

12. Segment information:

Business segments are defined by SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("SFAS No. 131)" as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker assessing performance
and making operating and capital decisions.

The Company has one business segment, which consists of the manufacture and
marketing of equipment used in the pharmaceutical, medical, biotechnology,
chemical and environmental research fields throughout the world.

53

The Company sells its equipment to pharmaceutical companies, agricultural
and chemical companies, other industrial customers engaged in biotechnology and
to medical schools, universities, research institutes, hospitals, private
laboratories and laboratories of Federal, State and Municipal government
departments and agencies in the United States and abroad.

While only a small percentage of the Company's sales are made directly to
United States government departments and agencies, its domestic business is
significantly affected by government expenditures and grants for research to
educational research institutions and to industry. The Company regularly
evaluates credit granted to customers.

The following table sets forth the Company's operations by geographic area
for 2004, 2003 and 2002. The information shown under the caption "Europe"
represents the operations of the Company's wholly-owned foreign subsidiaries
primarily in The Netherlands, Belgium and Germany (in thousands):

United United Consol-
States Kingdom Europe idated
---------- ------- ------- ------
Net sales:
2004 $42,137 $11,819 $8,168 $62,124
2003 36,293 6,177 6,934 49,404
2002 43,075 6,821 7,330 57,226

Long-lived assets:
2004 $ 6,505 $ 9,812 $ 929 $17,246
2003 6,445 9,094 922 16,461
2002 5,357 5,379 860 11,596

Total sales by geographic area include both sales to unaffiliated customers
and transfers between geographic areas. Such transfers are accounted for at
prices comparable to normal unaffiliated customer sales. One multi-national
distributor, Fisher Scientific, based in the United States accounted for
approximately 16.0%, 15.9% and 18.9%, respectively, of consolidated net sales
during the years ended December 31, 2004, 2003 and 2002.

During 2004, 2003 and 2002, net sales from domestic operations to foreign
customers were $14,201,000, $11,824,000 and $11,564,000, respectively. Export
sales from the United States are made to many countries and areas of the world
including the Far East, India, the Middle East and South America with the most
significant sales going to Canada, Western Europe, China, Japan, India, Taiwan
and Brazil.

13. Related party transactions:

Until December 15, 2003, David Freedman, Chairman of the Board of the Company,
was the owner of Bio-Instrument Ltd., a foreign firm that acted as an agent for
sales of the Company's products to customers in Israel, and earned commissions

54

on those sales. During 2003 and 2002, this firm earned commissions in the
amounts of $16,316 and $248,033, respectively, on purchases by customers in
Israel of the Company's products. These commissions paid by the Company to
Bio-Instrument Ltd. were comparable to commissions paid to unrelated
distributors and sales representatives. On December 15, 2003, Mr. Freedman sold
his ownership interest in Bio-Instrument Ltd. to an unrelated third party.

Carol Freedman, the daughter of David Freedman, and the sister of Kenneth
Freedman (the son of David Freedman and a director of the Company), has been
employed by the Company in various capacities since 1979. Ms. Freedman is
currently Customer Service Manager and is also Assistant Treasurer of the
Company. Her compensation for 2004 and 2003 was $58,300 and $61,900,
respectively; she also received options to purchase 1,100 shares of the
Company's Common stock in 2003 under the Company's 2001 Stock Option Plan for
Officers and Key Employees.

14. Commitments and contingencies:

The Company is obligated under the terms of various operating leases.
Rental expense under such leases for 2004, 2003 and 2002 was $615,000, $655,000
and $644,000, respectively. As of December 31, 2004, estimated future minimum
annual rental commitments under noncancelable leases expiring through 2014 are
as follows (in thousands):

Obligation Sublease Rentals Net
----------- ----------------- ----

2005 . . . . . . . . . $ 903 $ 277 $626
2006 . . . . . . . . . 713 277 436
2007 . . . . . . . . . 505 277 228
2008 . . . . . . . . . 454 278 176
2009 . . . . . . . . . 439 278 161
After 2009 . . . . . . 967 959 8
----------- ----------------- ----

Total minimum payments
Required $ 3,981 $ 2,346 $1,635
=========== ================= =====

The Company is ultimately liable under two leases in the United Kingdom for
premises that have been sublet to third parties. One lease pursuant to which
the annual rent is 99,750 ($191,000 at December 31, 2004) expires in 2014 and
has been sublet for the entire remaining term of the lease. The second lease on
which the annual rent is 45,000 ($86,000 at December 31, 2004) runs until
September 2009 and is also sublet for the remainder of the lease term.

55

In June 2003, the U.S. Department of Commerce notified the Company that it
believed the Company may have failed to comply with certain export control
requirements in connection with certain equipment sales to Asia. The applicable
statutory framework gave the Commerce Department authority to impose civil
monetary penalties (up to a maximum of $176,000 based on the agency's
preliminary assessment) and other sanctions. The Company responded to the
agency's invitation to settle the matter informally and provided an explanation
of the transactions in question and information about the Company's compliance
measures. On August 30, 2004, the Company reached a settlement with the U.S.
Department Commerce and paid a civil penalty of $51,000, all of which had been
previously accrued by the Company.

From time to time, the Company is involved in litigation in the normal
course of business, which management believes, after consultation with counsel,
the ultimate disposition of which will not have a material adverse effect on the
Company's consolidated results of operations or financial position.

15. Quarterly financial information (unaudited) (in thousands, except per
share amounts):

On March 21, 2005, the Company announced that certain of its historical
financial statements required restatement. Specifically, the Company and its
audit committee determined that the restatement was required because of a
misapplication of SFAS No. 133 "Accounting for Derivative Instruments and
Hedging Activities" as it applies to three interest rate swaps that were entered
into in 1999 and 2004 to fix the interest rates on variable rate debt incurred
primarily for acquisitions in 1999 and 2003.

This selected quarterly financial information has been restated for the first
three fiscal quarters in 2004 from previously reported information filed on Form
10-Q, and for all quarters of fiscal year 2003 from previously reported
information filed on Form 10-Q and Form 10-K, as a result of the restatement of
the Company's financial results discussed in this Annual Report on Form 10-K.

FIRST QUARTER 2004 SECOND QUARTER 2004
----------------------------------------------------- -------------------

AS AS
PREVIOUSLY PREVIOUSLY
REPORTED ADJUSTMENTS(1) RESTATED REPORTED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
----------------------------------------------------- ------------------
QUARTERLY DATA:
YEAR ENDED DECEMBER 31, 2004
Net sales . . . . . . . . . . $14,622 $ - $ 14,622 $ 14,905
Gross profit. . . . . . . . . 5,931 - 5,931 6,022
Net income (loss) . . . . . . 308 (28) 280 296
Income (loss) per share:
Basic . . . . . . . . . . . $ 0.04 $ (0.01) $ 0.03 $ 0.03
Diluted . . . . . . . . . . 0.04 (0.01) 0.03 0.03

ADJUSTMENTS(1) RESTATED

QUARTERLY DATA:
YEAR ENDED DECEMBER 31, 2004
Net sales . . . . . . . . . . $ - $ 14,905
Gross profit. . . . . . . . . - 6,022
Net income (loss) . . . . . . 136 432
Income (loss) per share:
Basic . . . . . . . . . . . $ 0.02 $ 0.05
Diluted . . . . . . . . . . 0.02 0.05

56

THIRD QUARTER 2004
---------------------
AS FOURTH
PREVIOUSLY QUARTER
REPORTED. ADJUSTMENTS(1) RESTATED 2004
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
--------------------------------------------------------------
QUARTERLY DATA:
YEAR ENDED DECEMBER 31, 2004
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,192 $ - $ 15,192 $17,405
Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . 5,969 - 5,969 6,910
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . 234 (5) 229 990
Income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.03 $ - $ 0.03 $ 0.11
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.03 - 0.03 0.11

FIRST QUARTER 2003. . . . . . . . . . . . SECOND QUARTER 2003
------------------- -------------------
AS. . . . . . . . . . . . . . . . . . . . . . AS
PREVIOUSLY. . . . . . . . . . . . . . . . . . PREVIOUSLY
REPORTED. . ADJUSTMENTS(1) RESTATED REPORTED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
--------------------------------------------------------------
QUARTERLY DATA:
YEAR ENDED DECEMBER 31, 2003
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,585 $ - $ 11,585 $10,747
Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . 4,193 - 4,193 3,455
Net (loss) income . . . . . . . . . . . . . . . . (432) 11 (421) (1,195)
Loss per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.05) $ - $ (0.05) $(0.14)
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.05) - (0.05) (0.14)

ADJUSTMENTS RESTATED
-------------------------
QUARTERLY DATA:
YEAR ENDED DECEMBER 31, 2003
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $10,747
Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . - 3,455
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . (14) (1,209)
Loss per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ (0.14)
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . - (0.14)

THIRD QUARTER 2003 FOURTH QUARTER 2003
--------------------------------------- -------------------
AS AS
PREVIOUSLY PREVIOUSLY
REPORTED ADJUSTMENTS(1) RESTATED REPORTED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
----------------------------------------------------------------
QUARTERLY DATA:
YEAR ENDED DECEMBER 31, 2003
Net sales. . . . . . . . . . $11,478 $ - $ 11,478 $ 15,594
Gross profit . . . . . . . . 4,469 - 4,469 6,352
Net (loss) income. . . . . . (7,222) 55 (667) 894
(Loss) income per share:
Basic. . . . . . . . . . . $ (0.08) $ - $ (0.08) $ 0.10
Diluted. . . . . . . . . . (0.08) - (0.08) 0.10

ADJUSTMENTS(1) RESTATED
-------------------------

QUARTERLY DATA:
YEAR ENDED DECEMBER 31, 2003
Net sales. . . . . . . . . . $ - $ 15,594
Gross profit . . . . . . . . - 6,352
Net (loss) income. . . . . . 51 945
(Loss) income per share:
Basic. . . . . . . . . . . $ 0.01 $ 0.11
Diluted. . . . . . . . . . 0.01 0.11

(1) See Note 2, "Restatement of Consolidated Financial Statements"of the Notes
to
Consolidated Financial Statements.

57

ITEM 9. DISAGREEMENT ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONCLUSIONS ABOUT EFFECTIVENESS OF DISCLOSURE CONTROLS

As required by Rule 13a-15 under the Exchange Act, an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures was conducted by the Company's Chief Executive Officer along with
the Company's Chief Financial Officer. Based upon that evaluation as of the
evaluation date, the Company's Chief Executive Officer and the Company's Chief
Financial Officer concluded that the disclosure controls and procedures were
effective, except there existed a material weakness in the Company's disclosure
controls and procedures in 2004 and prior years, as detailed below. In March
2005 the Company's Chief Executive Officer and Chief Financial Officer have
further concluded that changes to the Company's internal control structure have
been made which they believe remediate the weakness.

As more fully described in Management's Discussion and Analysis of
Financial Condition and Results of Operations - Restatement of Consolidated
Financial Statements and in Note 2 of the Notes to Consolidated Financial
Statements, the Company announced on March 21, 2005, that it was restating its
previously issued financial statements for the years ended December 31, 2001,
2002 and 2003, including the interim periods for 2003, and the first three
interim periods of 2004, as result of the misapplication of SFAS No. 133 as it
applies to three interest rate swaps that were entered into in 1999 and 2004 to
fix the interest rates on variable rate debt incurred primarily for acquisitions
in 1999 and 2003.

These interest rate swaps were inadvertently not previously disclosed or
accounted for nor were they properly designated as effective cash flow hedges.
Accordingly, the accounting rules required the changes in the fair value of the
swaps to be recorded as a component of interest expense in each period's
statement of operations.

There were no changes in internal controls during the period ended December
31, 2004. There was a change in March 2005 to implement new internal controls
that would highlight and appropriately account for and disclose interest rate
swaps in accordance with the required accounting literature. Specifically, the
Company's Controller, under the supervision of the Company's Chief Financial
Officer, will be required to document the existence and purpose of each interest
rate swap agreement that the Company has entered into or enters into in the
future. Such documentation will be in accordance with SFAS No. 133 and will set
forth the accounting for and the disclosure required in the Company's
consolidated financial statements as required by SFAS No. 133. Such
documentation will be reviewed and updated quarterly or more frequently as
circumstances may warrant. Each quarter the Controller will provide a summary
of the required accounting entries to the Chief Financial Officer for inclusion
in the quarterly financial statement closing process. Furthermore, all new
interest rate swap agreements or other derivative instruments can be entered
into only by the Company's Chief Financial Officer with the approval of the
Company's Chief Executive Officer and President and Chief Operating Officer (or
the board of directors in certain circumstances) and may not be for speculative

58

purposes. Periodic reporting to the board of directors, summarizing the status
of all of the Company's derivative transactions will also be required. A formal
written policy with regard to the foregoing is in the process of being
developed.
..
Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in Company
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in Company reports filed under the Exchange
Act is accumulated and communicated to management, including the Company's Chief
Executive Officer and Chief Financial Officer as appropriate, to allow timely
decisions regarding disclosure.

59

------

PART III
--------

Certain information required by Part III is omitted from this Annual Report
on Form 10-K because the Registrant will file a definitive proxy statement
within one hundred twenty (120) days after the end of the fiscal year pursuant
to Regulation 14A (the "Proxy Statement") for its Annual Meeting of Stockholders
currently scheduled for May 24, 2005 and the information included in the Proxy
Statement is incorporated herein by reference.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item with respect to directors and
executive officers is incorporated by reference to the Proxy Statement.
Information regarding compliance with Section 16 of the Securities Exchange Act
of 1934, as amended, is incorporated by reference to the information under the
heading "Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy
Statement.

Registrant has a code of ethics for its Chief Executive Officer, President,
Chief Financial Officer and Corporate Controller, which has been posted on its
website at http://nbsc.com. Registrant will disclose on its website when there
---------------
have been any waivers of, or amendments to, the code of ethics.

At least one member of Registrant's audit committee is considered as an
audit committee financial expert. Registrant's audit committee consists of Joel
Jaffe, Peter Schkeeper and Ernest Gross.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item with respect to the compensation of
the Registrant's executive officers is incorporated by reference to the Proxy
Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated by reference to the
Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated by reference to the
Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information required by this item is incorporated herein by reference to
the Registant's Definitive Proxy Statement with respect to the 2005 Annual
Meeting of Stockholders to be filed with the SEC in April 2005, pursuant to
Regulation 14A.

60

PART IV
-------

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed as a part of this report:

1. Financial statements and supplementary data included in Part II of this
report:

New Brunswick Scientific Co., Inc. and Subsidiaries, consolidated
financial statements:

Consolidated Balance Sheets as of December 31, 2004 and 2003

Consolidated Statements of Operations for the years ended
December 31, 2004, 2003 and 2002

Consolidated Statements of Shareholders' Equity for the years ended
December 31, 2004, 2003 and 2002

Consolidated Statements of Cash Flows for the years ended
December 31, 2004, 2003 and 2002

Consolidated Statements of Comprehensive Income for the
years ended December 31, 2004, 2003 and 2002

Notes to Consolidated Financial Statements

2. Financial statement schedules included in part IV of this report:

Schedule II

Schedules other than those listed above have been omitted because they
are not applicable or the required information is shown in the
financial statements or notes thereto.

3. Controls and Procedures

4. Exhibits:
The Exhibits index is on Page 63.

61

Schedule II

NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(In thousands)

Additions
--------------------

Balance Charged to Balance
At Costs and Charged to At End
Beginning (Credited) to other of
of Period Expenses Accounts Deductions Period
------------ ---------- ---------- ---------- --------

Year ended
December 31, 2004
Allowance for
doubtful accounts $ 603 $(106) $ 38 $ 24 $511

Inventory valuation
allowance 2,658 883 107 1,084 2,564

Year ended
December 31, 2003
Allowance for
doubtful accounts 467 114 22 - 603

Inventory valuation
allowance 1,932 918 65 257 2,658

Year ended
December 31, 2002
Allowance for
doubtful accounts 466 1 - - 467

Inventory valuation
allowance 1,759 400 - 227 1,932

62

EXHIBIT INDEX
-------------

(3a) Restated Certificate of Incorporation, as amended is incorporated
herein by reference from Exhibit (4) to the Registrant's Registration Statement
on Form S-8 on file with the commission (No. 33-15606), and with respect to two
amendments to said Restated Certificate of Incorporation, to Exhibit (4b) of
Registrant's Registration Statement on Form S-8 (No. 33-16024).

(3b)* Restated By-Laws of the Company, as amended and restated.

(3c) Rights Agreement dated as of October 31, 1999 between New Brunswick
Scientific Co., Inc. and American Stock Transfer & Trust Company, as Rights
Agent, which includes the Form of Right Certificate as Exhibit A and the Summary
of Terms of the Rights Agreement as Exhibit B is incorporated herein by
reference to Registrant's Current Report on Form 8-K filed on October 29, 1999.

(3d) Amendment to the Restated Certificate of Incorporation of the Company
is incorporated herein by reference to Item 2 of Registrant's Proxy Statement
filed with the Commission on or about April 13, 1999.

(4) See the provisions relating to capital structure in the Restated
Certificate of Incorporation, amendment thereto, incorporated herein by
reference from the Exhibits to the Registration Statements identified in Exhibit
(3) above.

(10-2) Pension Plan is incorporated herein by reference from Registrant's
Form 10-K for the year ended December 31, 1985.

(10-3) The New Brunswick Scientific Co., Inc., 1989 Stock Option Plan for
Nonemployee Directors is incorporated herein by reference to Exhibit "A"
appended to the Company's Proxy Statement filed with the Commission on or about
April 22, 1989.

(10-4) Distribution agreement with Fisher Scientific dated February 2, 1990,
as amended and restated is incorporated herein by reference to Exhibit (10-5) of
The Registrant's Annual Report on Form 10-K for the year ended December 31,
1989.

(10-8) Termination Agreement with David Freedman is incorporated herein by
reference to Exhibit of the Registrant's Annual Report on Form 10-K for the year
ended
December 31, 1990.

(10-9) Termination Agreement with Samuel Eichenbaum is incorporated herein
by
reference to Exhibit (10-9) of the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1991

63

(10-10) Involuntary Termination Agreement with Samuel Eichenbaum is
incorporated
herein by reference to Exhibit (10-10) of the Registrant's Annual Report on Form
10-K for the year ended December 31, 2002.
(10-12) 1991 Nonqualified Stock Option Plan is incorporated herein by
reference to Exhibit (10-12) of the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1991.

(10-13) Indemnification Agreements in substantially the same form as with
all the Directors and Officers of the Company is incorporated herein by
reference to Schedule A to Exhibit (10-13) of the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1991.

(10-19) Credit Agreement between New Brunswick Scientific Co., Inc. and
First Union National Bank dated April 1, 1999 is incorporated herein by
reference to Exhibit (10-19) of the Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999.

(10-23) Indemnification Agreements with Kenneth Freedman and Peter
Schkeeper are incorporated herein by reference to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1999.

(10-24) Indemnification Agreements with Jerome Birnbaum and Lee Eppstein are
incorporated herein by reference to Exhibit (10-24) of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.

(10-25) Indemnification Agreements with James T. Orcutt and Daniel S. Van
Riper are incorporated herein by reference to Exhibit (10-25) of the
Registrant's Annual Report on Form 10-K for the year ended December 31, 2001.

(10-26) The New Brunswick Scientific Co., Inc., 1998 Nonqualified Stock
Option Plan for Ten Percent Shareholder - Directors is incorporated herein by
reference to Appendix "A" appended to the Company's Proxy Statement filed with
the Commission on or about April 10, 1998.

(10-27) The New Brunswick Scientific Co., Inc., 1999 Stock Option Plan for
Nonemployee Directors is incorporated herein by reference to Appendix "C"
appended to the Company's Proxy Statement filed with the Commission on or about
April 13, 1999.

(10-28) The New Brunswick Scientific Co., Inc. 2001 Nonqualified Stock
Option Plan for Officers and Key Employees is incorporated herein by reference
to Appendix "A" appended to the Company's Proxy Statement filed with the
Commission on or about April 17, 2001.

(10-29 Involuntary Termination Agreement with James T. Orcutt is
incorporated herein by reference to Exhibit (10-29) of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2002.

64

(10-31) Fifth Amendment to Credit Agreement between New Brunswick Scientific
Co., Inc. and First Union National Bank dated April 1, 1999 is incorporated
herein by reference to Exhibit (10-31) of the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2002.

(10-32) Involuntary Termination Agreement with Lee Eppstein is incorporated
herein by reference to Exhibit (10-32) of the Registrant's Annual Report on Form
10-K for the year ended December 31, 2002.
..
(10-33) Sixth Amendment to Credit Agreement between New Brunswick Scientific
Co.,
Inc. and Wachovia Bank, National Association (previously First Union
National
Bank) dated April 1, 1999 is incorporated herein by reference to Exhibit
(10-33))
of the Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 27, 2003.

(10-34)* Indemnification Agreement with Joel Jaffe.

(22) Subsidiaries of the Company appear on Page 66.

(24a)* Consent of KPMG LLP.

(31) Certification of Samuel Eichenbaum appears on Page 67.

(31) Certification of David Freedman appears on Page 68.

(32) Certifications of David Freedman and Samuel Eichenbaum
appear on Page 69.

* Filed herewith.

65

------
EXHIBIT 22

SUBSIDIARIES OF THE COMPANY
---------------------------

Percentage of
Name and Place of Incorporation Ownership
- ------------------------------------------------- ------------------

New Brunswick Scientific (U.K.) Limited
Incorporated in the United Kingdom 100%

New Brunswick Scientific B.V.
Incorporated in The Netherlands 100%

New Brunswick Scientific N.V.
Incorporated in Belgium 100%

New Brunswick Scientific GmbH
Incorporated in Germany 100%

New Brunswick Scientific of Delaware, Inc.
Incorporated in the State of Delaware 100%

New Brunswick Scientific International, Inc.
Incorporated in the State of Delaware 100%

New Brunswick Scientific West Inc.
Incorporated in the State of California 100%

New Brunswick Scientific S.a.r.l.
Incorporated in France 100%

NBS ULT Limited
Incorporated in the United Kingdom 100%

NBS Cryo-Research Limited
Incorporated in the United Kingdom 100%

RS Biotech Laboratory Equipment Limited
Incorporated in the United Kingdom 100%

66

EXHIBIT 31
CERTIFICATION
I, Samuel Eichenbaum, certify that:

1. I have reviewed this annual report on Form 10-K of New Brunswick
Scientific Co., Inc. (the "Registrant");

2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;

4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

c) disclosed in this report any change in the Registrant's internal control
over financial reporting that occurred during the Registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting;
and

5. The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
Registrant's auditors and the audit committee of the Registrant's board of
directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrant's ability to record, process,
summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal control over
financial reporting.

Date: March 29, 2005 /s/ Samuel Eichenbaum
-----------------------
Vice President, Finance,
Chief Financial Officer and Treasurer

67

EXHIBIT 31
CERTIFICATION
I, David Freedman, certify that:

1. I have reviewed this annual report on Form 10-K of New Brunswick
Scientific Co., Inc. (the "Registrant");

2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;

4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

c) disclosed in this report any change in the Registrant's internal control
over financial reporting that occurred during the Registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting;
and

5. The Registrant's other certifying officer and I have disclosed, based on
our most recent
evaluation of internal control over financial reporting, to the Registrant's
auditors and the audit committee of the Registrant's board of directors (or
persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the Registrant's ability to record, process,
summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal control over
financial reporting.

Date: March 29, 2005 /s/ David Freedman
--------------------
Chairman and
Chief Executive Officer

68

EXHIBIT 32

CERTIFICATIONS
--------------

I, David Freedman, hereby certify that the annual report being filed
herewith containing financial statements fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (16 U.S. C. 78m or
78o(d)) and that the information contained in said periodic report fairly
presents, in all material respects, the financial condition and results of
operations of New Brunswick Scientific Co., Inc. for the period covered by said
annual report.

March 29, 2005 /s/ David Freedman
--------------------
Name: David Freedman
Chairman and
Chief Executive Officer

I, Samuel Eichenbaum, hereby certify that the annual report being filed
herewith containing financial statements fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (16 U.S. C. 78m or
78o(d)) and that the information contained in said periodic report fairly
presents, in all material respects, the financial condition and results of
operations of New Brunswick Scientific Co., Inc. for the period covered by said
annual report.

March 29, 2005 /s/ Samuel Eichenbaum
-----------------------
Name: Samuel Eichenbaum
Vice President, Finance,
Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906 has been
provided to New Brunswick Scientific Co., Inc. and will be retained by New
Brunswick Scientific Co., Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.

69

SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) 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.

NEW BRUNSWICK SCIENTIFIC CO., INC.

Dated: March 29, 2005 By: /s/ David Freedman
--------------------
David Freedman
Chairman of the Board
(Principal Executive Officer) and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Dated: March 29, 2005 By: /s/ Adele Lavender
--------------------
Adele Lavender
Corporate Secretary

Dated: March 29, 2005 By: /s/ Samuel Eichenbaum
-----------------------
Samuel Eichenbaum
Vice President, Finance
Chief Financial Officer and Treasurer

Dated: March 29, 2005 By: /s/ James T. Orcutt
----------------------
James T. Orcutt
President and Director

70

Dated: March 29, 2005 By: /s/ Dr. Jerome Birnbaum
--------------------------
Dr. Jerome Birnbaum
Director

Dated: March 29, 2005 By: /s/ Kenneth Freedman
----------------------
Kenneth Freedman
Director

Dated: March 29, 2005 By: /s/ Ernest Gross
------------------
Ernest Gross
Director

Dated: March 29, 2005 By: /s/ Joel Jaffe
----------------
Joel Jaffe
Director

Dated: March 29, 2005 By: /s/ Dr. David Pramer
-----------------------
Dr. David Pramer
Director

Dated: March 29, 2005 By: /s/ Peter Schkeeper
---------------------
Peter Schkeeper
Director

Dated: March 29, 2005 By: /s/ Daniel S. Van Riper
---------------------------
Daniel S. Van Riper
Director

71