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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Form 10-Q

Fisher Scientific International Inc.

Registrant’s telephone number, including area code:

      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 þ No o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act)     Yes þ No o

      The number of shares of Common Stock outstanding at April 26, 2004 was 64,016,513.

FISHER SCIENTIFIC INTERNATIONAL INC.

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2004

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FISHER SCIENTIFIC INTERNATIONAL INC.

INTRODUCTION TO THE FINANCIAL STATEMENTS

      The financial statements included herein have been prepared by Fisher Scientific International Inc. (“Fisher”, the “Company” or “we”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The December 31, 2003 balance sheet is the balance sheet included in the audited financial statements as shown in the Company’s 2003 Annual Report on Form 10-K. The Company believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

      The financial information presented herein reflects all adjustments (consisting only of normal-recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year.

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FISHER SCIENTIFIC INTERNATIONAL INC.

See the accompanying notes to financial statements.

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FISHER SCIENTIFIC INTERNATIONAL INC.

See the accompanying notes to financial statements.

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FISHER SCIENTIFIC INTERNATIONAL INC.

See the accompanying notes to financial statements.

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FISHER SCIENTIFIC INTERNATIONAL INC.

See the accompanying notes to financial statements.

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FISHER SCIENTIFIC INTERNATIONAL INC.

Note 1 — Formation and Background

      Fisher Scientific International Inc. (“Fisher” or the “Company”) was founded in 1902 and was incorporated as a Delaware Corporation in 1991. The Company’s operations are conducted throughout North and South America, Europe, the Far East, Australia, the Middle East and Africa directly or through one or more subsidiaries, joint ventures, agents or dealers. The Company reports results on the basis of three reportable segments: scientific products and services, healthcare products and services, and laboratory workstations.

	1. Scientific products and services segment provides products and services used for scientific-research, drug-discovery and drug-development applications. This segment manufactures and distributes a broad range of consumable supply products, scientific instruments and apparatus and safety products. In addition, this segment provides pharmaceutical services for clinical trials, contract manufacturing, custom chemical synthesis and a number of other value-added services.
	2. Healthcare products and services segment manufactures and distributes a wide array of diagnostic kits and reagents, consumable supplies, and medical devices to hospitals, clinical laboratories, and physicians’ offices. Additionally, this segment provides outsourced manufacturing services for diagnostic reagents, calibrators and controls to the healthcare and pharmaceutical industries.
	3. Laboratory workstations segment manufactures and sells laboratory furniture and fume hoods and provides lab-design services for pharmaceutical and biotechnology customers, colleges, universities and secondary schools, hospitals and reference labs.

      On March 17, 2004, the Company announced that the boards of directors of Fisher and Apogent Technologies, Inc. (“Apogent”) unanimously approved a definitive merger agreement to combine the two companies. Under the terms of the merger agreement, as amended on April 16, 2004, Apogent shareholders will receive 0.56 shares of Fisher common stock for each share of Apogent common stock owned resulting in a $3.7 billion transaction. Apogent designs, manufactures and sells life-science and laboratory products essential for scientific research and healthcare diagnostics. The merger is subject to approval by the shareholders of both Fisher and Apogent, as well as customary regulatory approvals, and there can be no assurance that the transaction will be consummated.

      In the first quarter of 2004, the Company acquired the remaining outstanding stock of Perbio Science AB (“Perbio”), a Swedish public company, in a public tender offer pursuant to the rules of the Stockholm Stock Exchange, resulting in the Company owning 100% of Perbio. Perbio manufactures and sells consumable tools for protein-related research and protein-based biopharma drug production, primarily to customers within the United States. The total purchase price was approximately $695 million in cash plus assumed net debt of approximately $44 million and was financed principally through the sale of $300 million principal amount of 2.50% convertible senior notes, the issuance and sale of $150 million principal amount of 8% senior subordinated notes and the borrowing of an additional $250 million of term loans under the Company’s senior credit facility. The cell culture and bioresearch divisions of Perbio have been included in the scientific products and services segment and the medical device division of Perbio has been included in the healthcare products and services segment from the date of acquisition.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

      The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the Perbio acquisition on September 8, 2003, the date of the acquisition, net of cash and debt acquired. The allocation of the purchase price for Perbio has been made based upon management estimates and third-party valuations that have not been finalized and revisions may be necessary.

      The allocation of the Perbio purchase price resulted in an allocation to identifiable intangible assets of $117.8 million. The Company valued intangible assets related to trademarks, trade names, customer lists, supplier agreements and core technology. A majority of the intangible assets acquired relate to trademarks and trade names.

      The following unaudited pro forma financial information presents the results of operations as if the Perbio acquisition had occurred at the beginning of 2003. The unaudited pro forma financial information is provided for information purposes only and does not purport to be indicative of the Company’s results of operations that would actually have been achieved had the acquisition been completed for the period presented, or that may be achieved in the future (in millions, except per share amounts).

      On March 1, 2004, the Company acquired Oxoid Group Holdings Limited (“Oxoid”). Oxoid is a United Kingdom-based manufacturer of microbiological culture media and other diagnostic products that test for bacterial contamination. The purchase price was approximately $330 million and was funded through the sale of an initial $300 million principal amount of 3.25% convertible senior notes and borrowings under the Company’s accounts receivable securitization facility and revolving credit facilities. The results of Oxoid have been included in the scientific products and services segment from the date of acquisition.

      The following unaudited pro forma financial information presents the results of operations as if the Oxoid acquisition had occurred at the beginning of 2003. The unaudited pro forma financial information is provided for information purposes only and does not purport to be indicative of the Company’s results of operations that

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NOTES TO FINANCIAL STATEMENTS — (Continued)

would actually have been achieved had the acquisition been completed for the period presented, or that may be achieved in the future (in millions, except per share amounts).

      The following is a summary of inventories by major category (in millions):

      The following is a reconciliation of changes in the carrying amounts of goodwill by reportable segment for the three months ended March 31, 2004 (in millions):

(a)	The allocation of the purchase price for the Oxoid and Perbio acquisitions have been made based upon management estimates and third-party valuations that have not been finalized. Accordingly, the purchase price allocations are preliminary and revisions may be necessary.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

      The following is a summary of other intangible assets that are subject to amortization (in millions):

      For the three months ended March 31, 2004 and 2003, the Company recorded amortization expense of $4.1 million and $2.0 million, respectively, related to amortizable other intangible assets.

      The estimated amortization expense for each of the five succeeding years and thereafter is as follows (in millions):

(a)	Amount represents estimated amortization expense for the remaining nine months ending December 31, 2004.

      As of March 31, 2004 and December 31, 2003, the Company had indefinite-lived intangible assets in the scientific products and services segment of $131.3 million and $130.8 million, respectively. As of March 31, 2004 and December 31, 2003, the Company had indefinite-lived intangible assets in the healthcare products and services segment of $12.1 million. Indefinite-lived intangible assets consist of tradenames acquired through the Company’s acquisitions of Cole-Parmer and MAS in 2001, Maybridge in 2002 and Perbio in 2003.

      The Company maintains a zero-balance cash management system for its U.S. accounts payable. Accordingly, included in accounts payable at March 31, 2004 and December 31, 2003, are approximately $87.6 million and $64.0 million, respectively, of checks that did not clear the bank.

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NOTES TO FINANCIAL STATEMENTS — (Continued)

      The following is a summary of debt obligations as of March 31, 2004 and December 31, 2003 (in millions):

      On February 12, 2004, the Company amended its existing $225 million receivables securitization facility extending the facility’s maturity date to February 2005. All other material terms and conditions remain unchanged from the receivables securitization facility entered into in February 2003.

      On March 3, 2004, the Company sold $300 million principal amount of its 3.25% convertible senior subordinated notes due 2023 and, on March 23, 2004, sold an additional $30 million principal amount of these notes due to the exercise of the over-allotment option by the initial purchaser of the notes. These notes are due March 1, 2024 and were sold under a “shelf” registration statement dated September 3, 2003. Interest on the notes is payable on March 1 and September 1 of each year. The notes may be converted into shares of the Company’s common stock under the following circumstances: (1) note holders may convert their notes in a conversion period on any date on or prior to March 1, 2019, if the closing sale price of the Company’s common stock for at least 20 trading days in the period of the 30 consecutive trading days ending on the first days of such conversion period was more than 120% of the then-current conversion price of the notes; (2) if, on any date after March 1, 2019, the closing sale price of the Company’s common stock is more than 120% of the then current conversion price of the notes, then note holders will have such conversion right at all times thereafter; (3) the Company has called the notes for redemption; (4) the Company distributes to all or substantially all holders of the Company’s common stock rights, options or warrants entitling them to purchase common stock at less than the closing sale price of the Company’s common stock on the day preceding the declaration for such distribution; (5) the Company distributes to all or substantially all holders of the Company’s common stock cash, assets, debt securities or capital stock, which distribution has a per share value as determined by the Company’s board of directors exceeding 10% of the closing sale price of the Company’s common stock on the day preceding the declaration for such distribution; or (6) during any period in which the credit rating of the notes assigned by Moody’s is Caa2 or lower and by Standard & Poor’s is CCC or lower, or neither Moody’s (or its successors) nor Standard & Poor’s (or its successors) continue to rate the

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NOTES TO FINANCIAL STATEMENTS — (Continued)

notes. Note holders may also convert their notes into shares of the Company’s common stock for the five business day period after any five consecutive trading day period in which the average trading price for the notes was less than 97% of the average conversion value for the notes during that period. Upon conversion, the Company has the right to deliver, in lieu of common stock, cash or a combination of cash and common stock. It is the Company’s current intention to satisfy the Company’s obligation upon a conversion of the notes first, in cash, in an amount equal to the principal amount of the notes converted and second, in shares of the Company’s common stock, to satisfy the remainder, if any, of the Company’s conversion obligation. The initial conversion rate is 12.4378 shares of common stock per each $1,000 principal amount of notes. This is equivalent to an initial conversion price of $80.40 per share.

      Once the notes become convertible, the dilutive effect of the convertible notes may be reflected in diluted EPS by application of the treasury stock method. By application of the treasury stock method, 1.1 million and 0.7 million shares would be included in the weighted average common shares outstanding used in computing diluted net income per share at a contingent conversion price of $56.95 and $80.40 for the 2.50% convertible senior notes and the 3.25% convertible senior subordinated notes, respectively.

      The Company has defined benefit pension plans available to substantially all employees that are either fully paid for by the Company or provide for mandatory employee contributions as a condition of participation. The Company funds annually, at a minimum, the statutorily required minimum amount as actuarially determined. During the quarter ended March 31, 2003, the Company made a voluntary contribution of $10 million to the U.S. plans. No contributions to the pension plans were required during the quarter ended March 31, 2004, and the Company does not currently expect to be required to contribute to its pension plans for the remainder of 2004.

      The net periodic pension benefit cost (income) and postretirement healthcare benefit cost (income) includes the following components for the three months ended March 31, 2004 and 2003 (in millions):

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NOTES TO FINANCIAL STATEMENTS — (Continued)

      The following table sets forth basic and diluted earnings per share computational data for the three months ended March 31, 2004 and 2003 (in millions):

(a)	The weighted average amount of outstanding antidilutive common stock options and warrants excluded from the computation of diluted net income (loss) per common share was 0.4 million and 1.4 million as of March 31, 2004 and 2003, respectively.

The Company has $300 million of 2.50% convertible senior notes and $330 million of 3.25% convertible senior subordinated notes outstanding as of March 31, 2004. Upon conversion, the Company has the right to deliver shares of its common stock, cash or a combination of cash and shares of its common stock. The notes are not yet convertible. Once the notes become convertible, the dilutive effect of the convertible notes may be reflected in diluted EPS by application of the treasury stock method. By application of the treasury stock method, 1.1 million and 0.7 million shares would be included in the weighted average common shares outstanding used in computing diluted net income per share at a contingent conversion price of $56.95 and $80.40 for our $300 million 2.50% convertible senior notes due 2023 and our $330 million 3.25% senior subordinated notes due 2024, respectively.

      The Company measures compensation expense for its stock-based employee compensation plans using the intrinsic value method. The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure,” an amendment of FASB Statement No. 123 (“SFAS No. 148”); therefore, no compensation expense was recognized for the Company’s stock option plans. Had compensation expense for the Company’s stock option plans been determined based on the fair value at the grant date for awards under the Company’s stock plans, consistent with the methodology prescribed under SFAS No. 148, the Company’s net income (loss) and net

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NOTES TO FINANCIAL STATEMENTS — (Continued)

income (loss) per common share would have approximated the pro forma amounts indicated below (in millions, except per share amounts):

      The fair value of the Company’s stock options included in the preceding pro forma amounts were estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:

      The Company reports financial results on the basis of three reportable segments: scientific products and services, healthcare products and services and laboratory workstations. Selected segment financial information for the three months ended March 31, 2004 and 2003 is presented below (in millions):